Emissions reduction policy

Emissions reduction policy is still the main plank of global and individual government approaches to cope with climate change.

The idea is that if greenhouse gas emissions from human activities are reduced then we will have less global warming. This is thanks to the greenhouse effect that comes about because certain gases in the atmosphere let through short-wave radiation but absorb some long wavelength energy that has bounced off the earth's surface.

Holding onto the energy in the atmosphere is what heats things up. Without this process the Earth would be a frigid ball of ice.

The emissions reduction policy logic is that given an increase in the proportion of greenhouse gases in the atmosphere will trap solar energy, making the world heat up, if we slow production of these gases it should limit human induced global warming [sometimes called anthropogenic climate change]. And if emission reduction slows warming it will also reduce the overall effects of climate change.

However, greenhouse gases are released (emitted) as a result of our normal business activity all the time. And production since the start of the industrial revolution has been enough to increase the proportion of these gases in the atmosphere. More greenhouse gas should mean more energy trapped and an overall warming.

Predicting exactly

  1. how much warming and
  2. what the consequences of that warming will be,

has been what all the fuss is about. 

If warming is a problem and if humans cause even some of it, then emissions reduction policy is an obvious solution. That is changing what we do so that our activities produce fewer greenhouse gases. This works for those who believe global warming is a problem and for those who are not sure but would like to take precautions.

It is also a classic engineering solution.

Humans are uncannily good at believing we can fix anything. We are drawn towards policies that sound like we are going to fix the problem — when the car has broken down we pride ourselves on getting it started again.

Interestingly we have figured out plenty of engineering solutions for emissions reduction policy from clean energy and energy efficiency to offset projects that sequester carbon into the landscape. We even invented a new cap and trade market mechanism to help speed things along.

So why, despite many great inventions and pockets of enthusiasm for emissions reduction policy around the world, has nothing much happened?

The emissions reduction policy challenge

It turns out that the volume of greenhouse gas emissions track economic activity quite closely. When growth or economic activity dips, such as in the global financial crisis, then emissions dip also. 

This is not surprising given how fundamental fossil fuels are to our economic activity.

Most greenhouse gases from human activity are released when we burn oil, coal and gas to power industry, services and our homes. Agricultural activity makes up most of the rest.

No government wants to limit economic activity. Doing so makes almost everyone unhappy.

A weak economy has trouble providing jobs for all those that want one, tax revenues decline making government services harder to deliver, and everyone suffers from a kind of malaise. Greece in 2012 was a classic example.

A strong economy generates a sound tax base, creates jobs, is buffered from external shocks and generates a kind of levity in the population. The Scandinavian countries have been like this for a while and, despite a serious blip during the GFC, Iceland is too.

It is easy to see which type of economy will get you elected (or re-elected).

When it comes to emissions reduction policy this link between economic growth and emissions creates a policy challenge. The challenge is that any emissions reduction policy tends to put a dent in economic activity, not surprising given that it is economic activity that generates the emissions in the first place.

It is also a double whammy because changing activity also costs money, an impost on production that can further slow growth.

So how do you legislate for emissions reduction policy without hurting the economy?

You could impose a tax. That is a direct charge on emissions payable to the government.

No tax is ever popular, especially a new one. It is also difficult to know what rate would be effective or who to levy. Should government tax the big emitters of greenhouses gases such as the coal-fired power stations, steel mills, aluminum smelters or other heavy fossil fuel users? Or should the tax be applied across the board, say on each gallon of gasoline?

This is clearly a tough call — especially so for countries where tax is also seen as reducing personal spending that is itself an essential driver of the economy.  

Also there is no point in raising revenue unless it is spent on emission reduction. So any tax on emissions would need a public spending program to deliver genuine emission reduction. This means that before the tax is introduced politicians will need to explain why a new tax will not increase the services such as health, education, law enforcement, and infrastructure that taxes usually pay for. Politicians are challenged when they try to explain the benefits of risk management.

An alternative to tax is to try and let the market even everything out.

This is the cap-and-trade option that forces emitters into a market for emission permits, then caps permit volume to raise the market price and so make emissions increasingly more expensive.

The choice for the emitter is to keep buying ever more expensive permits or change activities to achieve emission reduction. If emitters act rationally and the permit price is high enough they will save power, switch to alternative energies, invest in efficient technologies, and a host of other innovations for emission reduction because it is profitable to do so.

The problem is that the government has to set the permit requirements and so impose an additional cost on business. It must set the market rules and then manipulate them so that permit prices rise. This is never popular.

It is also a fine line between allowing transition and sending emitters broke. The tension is palpable.

Emissions reduction policy solution to date

Once emissions reduction policy was chosen as the option to tackle climate change it set a fundamental challenge — how to reduce emissions without hurting the economy when just about everywhere emissions track economic activity.

The default choice for government to regulate is difficult because any regulatory mechanism as edict, tax, or market cap and trade, has an impact on business.

And until it is more profitable to use clean energy sources and to grow food without clearing land or using nitrogen based fertilizers [nitrous oxide is a potent greenhouse gas] then in the absence of regulation these activities will continue as individuals and businesses seek profit.

The national and multinational rhetoric is that governments are taking on this challenge but the reality is that global anthropogenic emissions of greenhouse gases in 2009 were over 20% higher than the 1990 benchmark proposed by the Kyoto protocol.

And even though rates of emissions have slowed, that looks a lot like a policy failure.

Emission reductions | the real reason 

Emission reduction has become the main plank of climate change policy around the world. Except that staving off future climate change might not be the real reason we should do it 

Emission reduction is a preventative measure, a way to reduce what we believe is the cause of our current warming phase of climate change. This might help in not making the problem worse but it cannot do anything about the greenhouse gases already emitted [save a small amount we might claw back through carbon sequestration]. It also does nothing to help us cope with climate change already locked in.

It is, of course, an engineering solution that pampers to our “we can fix it” view of everything. And we like that. It helps us feel like we are in control.

The problem is that our economies have been built on the energy stored in fossil fuels. When this energy is released to power our vehicles, buildings and mobile devices [yes, in many countries electricity still comes from coal] so greenhouse gases are emitted. And when economic activity goes up, so do emissions.

Immediately we set up conflict between those who want to see the climate change solution delivered by emission reduction and those who want to see economic growth.  You can’t have both unless economies transition to energy sources that do not emit greenhouse gases, the so-called clean energy solutions 

And this is the real reason for emission reduction, to help push economies towards and then through the transition away from fossil fuels.

Not because there is any benefit to tackling climate change but because fossil fuels will either run out or security of supply will be compromised beyond the limits of economic tolerance. Eventually we will have to use less fossil fuel so we need to start getting used to it now. Emission reduction for climate mitigation is just a handy bonus.

We are not allowed to mention this reason. Perhaps this is because political leaders feel we are not able to cope with what it means — that our economies are far more fragile than we think. Or perhaps it is the fuel and energy corporations who want it kept quiet. They want to control the transition for maximum profit [much money will be made as fossil fuels become scarce and less will be made if the transition to alternatives is swift].

Emissions reduction policy will happen and there will be emissions reduction. There will be a transition to alternative energy sources that will either be forced upon us or as a result of a managed transition. Either way it will not be because of climate change mitigation.  

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