Saturday, November 03, 2007

Getting Real about Climate Change

Writing in the New Zealand Herald, economics columnist Brian Fallow comes close to summarising, in punchier and more coherent form, my own, dilettante-ish musings on climate change issues. Namely:

1. The obsession with the 'costs' of responding to climate change by moving to a lower-carbon economy fails to pay enough attention to the potential gains, some of which may be very large for the countries, companies and individuals who can come up with new technologies or ways of doing things.

2. As also argued by the likes of Bjorn Lomborg, developing countries have other important priorities to do with improving the material wellbeing of their citizens. Although developing countries will have to be brought within an emissions-reduction framework in the medium-term, rich countries need to do more, earlier. To take the attitude of 'we won't commit to anything until China does' is at best hypocritical.

3. The distinction, beloved by the likes of the Business Rountable's Roger Kerr, between the 'bureaucratic regulations' of Kyoto, and 'technological solutions', is a false one. The Kyoto targets and their associated bureaucratic systems are what incentivises the development of new and innovative technologies, by setting the market conditions in which innovations are rewarded. Picking winners, such as subsidising ethanol made from corn, is the real example of bureaucratic meddling, apparently intended more to protect current interests than to address the problem.

3 comments:

Anonymous said...

Tragedy of the Commons.

Simon said...

Some good points raised there. I think number 2 is especially pertinent. In the case of China, even if something gets decided at the Beijing level, implementation of that decision is fraught with difficulties due to local bureaucracy and the sort of "relationships" that make things work in China.

There is a saying that a tractor from Beijing is worth a chicken in the village which sums it up quite nicely.

Simon Bidwell said...

Interesting point...although to a certain extent that's true in all countries I suppose. Witness the inability of the NZ government to make their first two attempts at climate change measures stick. Speaking of tractors, one got driven up the steps of parliament (by a serving MP no less) in response to the proposed 'fart tax' on animal methane emissions