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THE ECONOMIST – 17/06/2010
This article highlights the frequently raised concerns about the impact of a carbon tax on business competitiveness and the economy, and suggests such a tax may not help to address issues of energy security and supply. It does also, however, emphasise the benefits of a carbon tax. Not only would it be simpler and more predictable than the existing system of tax breaks, trading schemes and purchasing obligations, but it would also provide businesses with the assurance they are seeking to encourage investments in greener technologies. Read the article…
OECD PRESS RELEASE – 09/06/2010
A new OECD analysis, using data from the International Energy Agency, suggests that ending fossil fuel subsidies could cut global greenhouse gas emissions by 10% from the levels they would otherwise reach in 2050 under ‘business as usual’, and highlights the business sense of doing so as governments strive to cut budget deficits. IEA estimations indicate that subsidies to fossil fuel consumption in emerging developing countries amounted to US$ 557 billion in 2008. Estimates for developed countries are harder to obtain as they are often transferred in indirect ways. Subsidies include preferential tax treatment for oil and gas production, special loan guarantees, and tax exemptions for fuel use in some sectors or to some consumer groups. Many subsidies are inefficient in achieving their intended objectives of supporting the poor in countries without adequate social security systems, often serving to benefit the rich rather than the poor. Whilst reforming fossil fuel subsidies is politically challenging, key lessons can be drawn from experiences in countries like Poland, France and UK, who have successfully introduced coal production subsidy reform. Read the full OECD press release…
UNEP PRESS RELEASE – 02/06/2010
A new report, ‘Environmental Impacts of Consumption and Production: Priority Products and Materials’, produced by the International Panel for Sustainable Resource Management’ calls for dramatic changes to the energy and agriculture sectors in order to generate significant environmental, social and economic returns. The report highlights that much of this reform can start at the level of the household, such as through improvements in household patterns of energy and food use including heating and cooling systems, gadgets and appliances and people’s travel behaviours. Achin Steiner, UN Under-Secretary General and Executive Director of the UN Environment Programme, highlights that ‘smart market mechanisms, more intelligent fiscal policies and creative policy-making are among the options for internalising the costs of unsustainable patterns. Some tough choices are signalled in this report, but it may prove even more challenging for everyone if the current paths continue into the coming decades’. Read the press release…
THE BBC – 11/05/2010
A group of 14 academics from Europe, North America and Japan have produced a report, the Hartwell Paper, arguing that climate change can best be ameliorated by pursuing ‘politically attractive and relentlessly pragmatic options that also curb emissions’. They highlight that the failure of the UN process and the ‘ClimateGate’ issue necessitate a significant reframing of the climate change issue. One of the authors, Mike Hulme, writes ‘climate change has been represented as a conventional environmental ‘problem’ that is capable of being ‘solved’. It is neither of these. Yet this framing has locked the world into the rigid agenda that brought us to the dead end of Kyoto, with no evidence of any discernable acceleration of decarbonisation whatsoever’. The group advocate an initial focus on short-term fixes for greenhouse gases or other warming agents, such as black carbon, followed by the implementation of a hypothecated carbon tax in developed economies to fund the research, development and roll-out of low carbon energy technologies. Meanwhile, rather than providing new climate adaptation funds to developing countries, all developed countries should be bound to meet the internationally agreed target of contributing 0.7% of their GDP to overseas aid.
Others, such as the German Potsdam Institute for Climate Impact Research, however, argue that ‘the paper’s focus away from CO2 is misguided, short-sighted and probably wrong’.
Read the article…
THE STAR – 04/10/2010
This article comments on the delays in putting environmental pledges into action across America, Australia and Canada. It indicates increasing calls in both America and Australia for carbon levies/taxes rather than cap and trade schemes in light of the current economic situation, but highlights the difficulties faced by Stéphane Dion in Canada when he tried to win an election campaign whilst promising the introduction of a ‘Green Shift’. Having said that, British Columbia Premier, Gordon Campbell was re-elected last year following the implementation of such a tax. The article emphasises the simplicity of a carbon tax and calls for Canadian politicians to revisit the proposal; ‘rebrand it, rename it, recycle it. Call it an ‘interim carbon levy’ or a ‘pollution surtax’’. Read the article…
THE BBC – 04/12/09
This article explores the factors underlying the rise in use of green cars; that is cars powered by alternative fuel sources. It suggests this trend may result from the introduction of legislation and higher taxes to penalise drivers of gas guzzling vehicles, and that an additional factor could be the rise in the range of available eco-friendly cars. These include hybrid cars which have a combination of petrol engines and electric motors, fully battery-powered electric vehicles, and a handful of experimental designs e.g. cars running on algae. Read the article…
THE ECONOMIST – 03/01/09
This article draws on public opinion polls conducted in America to highlight that support for carbon mitigation policies is influenced by three key factors. The first is price sensitivity; in a poll in August, 58% respondents said they would support a cap-and-trade system that increased monthly electricity bills by $10, but this dropped to 39% for an increase of $25. Secondly, there seems to be a distinct lack of awareness and understanding about cap-and-trade policies and what these would entail; 55% of respondents in October’s Pew poll had never heard of cap-and-trade. Thirdly, scepticism seems to be on the rise, with the Pew poll showing a fall in the proportion of Americans that believe there is solid evidence of rising temperatures, from 71% in April 2008 to 57% in October 2009. The proportion of respondents blaming rising temperatures on human activity also fell by 11% over that period. Polls elsewhere – e.g. in the EU and Australia – have also shown shifts in attitudes, possibly as a result of recession. A poll published by the European Commission, for example, showed a fall in the number of EU citizens who saw climate change as the world’s gravest problem from 62% in spring 2008 to 50% in July 2009. Read the article…
THE ECONOMIST – 03/12/09
This article discusses the negotiations that need to happen in Copenhagen and, in particular, emphasises that reaching an international agreement at Copenhagen is only the first step to emissions cuts. It highlights that national targets need to be implemented through domestic policies which encourage businesses to invest in clean products and processes, and discourage them from investing in carbon-intensive products and processes. The article suggests that a good policy framework would include some regulation in areas where the market doesn’t work well, a degree of subsidy for research into technologies that are still far from marketable (e.g. carbon capture and storage), but that it would need to rely largely on putting a price on carbon in order to send a clear signal to business. Read the article…
Another article (http://www.economist.com/research/articlesBySubject/displayStory.cfm?story_id=14994818&subjectID=348924&fsrc=nwl) explores the advantages and disadvantages of regulation, carbon-pricing and subsidies in more detail, highlighting that governments generally like regulation, economists like carbon prices (when set at the right level), and business like subsidies.
THE TELEGRAPH – 02/12/09
This article highlights Lord Stern’s recent report findings that it is still possible for the world to keep global temperature rise below 2˚C but only if world leaders agree to significant cuts in global emissions at next week’s UN Climate Summit in Copenhagen. The report emphasises that the world must be prepared to spend money on tackling climate change through both public finance and a new raft of carbon taxes. Stern suggests the European Union should agree to cut emissions by 30% by 2020 and that the UK should cut greenhouse gas emissions by more than 40% over the same period, through: the decarbonisation of electricity by switching to nuclear or renewables, replacing petrol cars with electric vehicles, and insulating more homes. He has also advocated individuals to ‘do their bit’ by eating less meat, flying less and recycling more. Wealthier nations will be required to assist less developed countries in switching from dirty coal-fired power stations to new technologies like wind and solar, and poorer countries will need finances to adapt to the effects of climate change, including flooding and droughts. Read the article…
THE ECONOMIST – 19/11/09
This article discusses the suggestion that manufacturers in countries with tighter carbon emissions limits and carbon reduction policies will face added costs which foreign competitors do not, and the argument that this may cause them to relocate some of their production to ‘carbon havens’ where the cost of polluting is lower. It highlights, however, a new study by economists at the World Bank and the Peterson Institute for International Economics which finds that although some production would migrate, the net increase in emissions in poor countries would be small. The article discusses suggestions for carbon-based tax adjustments on exports from countries that benefit from low carbon prices, but fears these would have adverse implications for trade, particularly for developing countries. Read the article…
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