Bryan Lawrence : The Stern Way Forward

Bryan Lawrence

... personal wiki, blog and notes

The Stern Way Forward

Yesterday I waded through the first two thirds of the Executive Summary ... I thought it best to finish it today, otherwise I would be at risk of not only not reading the whole thing, but not making it through the executive summary :-)

The way forward he proposes depends on three pillars:

  • Establishing a price for Carbon,

  • A Technology Price

  • The removal of barriers to behavioral change.

In terms of pricing Stern recommends use of one or more of tax, trading or regulation, with the mix depending on choices within specific jurisdictions. I have to say, without reading the main text, I don't understand how he can argue that different jurisdictions can achieve carbon prices in different ways (surely it would lead to some form of carousel fraud) ... but I'm no economist, so ok ...

Policy incentives include

... technology policy, covering the full spectrum from research and development, to demonstration and early stage deployment ... but closer collaboration between government and industry will further stimulate the development of a broad portfolio of low carbon technologies and reduce costs.

I find it (amusing, sad, worrying) that the report suggests that existing policy incentives to support the market should only increase by two to five times. This at a time when the UK incentives run out half way through the year. That suggests to me that an order of magnitude increase is necessary (after all, the take up is relatively low, and even with incentives one has to be pretty wealthy to get into home generation).

In terms of behavioural change, he makes the point that:

Even where measures to reduce emissions are cost-effective, there may be barriers preventing action. These include a lack of reliable information, transaction costs, and behavioural and organisational inertia. ... Regulatory measures can play a powerful role in cutting through these complexities, and providing clarity and certainty. Minimum standards for buildings and appliances have proved a cost-effective way to improve performance, where price signals alone may be too muted to have a significant impact.

The clear message throughout is that the market can't do this alone! From the obvious point that carbon costs are an "externality" (the producer of carbon dioxide does not themselves pay the costs), through to the reality that regulation and taxation are going to be necessary to begin to change minds - I reckon hearts will follow (if they're not already there!)

Another obvious (to me) point is that we need to start thinking and planning about adaptation now! We have some decades of climate change ahead of us, regardless of what we can achieve in changing emissions!

We hear a lot about how there is no point in the UK doing anything because it contributes only 2% of the global emmissions. However, it was good to read

... China's goals to reduce energy used for each unit of GDP by 20% from 2006-2010 and to promote the use of renewable energy. India has created an Integrated Energy Policy for the same period that includes measures to expand access to cleaner energy for poor people and to increase energy efficiency.

It would be nice to hear concrete proposals from the U.S. and Australia!

I'll leave the last word to Stern:

Above all, reducing the risks of climate change requires collective action. It requires co-operation between countries, through international frameworks that support the achievement of shared goals. It requires a partnership between the public and private sector, working with civil society and with individuals. It is still possible to avoid the worst impacts of climate change; but it requires strong and urgent collective action. Delay would be costly and dangerous.

Categories: environment

This page last modified Tuesday 31 October, 2006
DISCLAIMER: This is a personal blog. Nothing written here reflects an official opinion of my employer or any funding agency.