…environmental economics and the implications of environmental policy

Archive for the ‘nature’ tag

The Climate Policy Realists Speak… “optimistic at best and unachievable at worst”

with one comment

Well I have been a one armed economist for some time now, courtesy of a skiing accident, but am now on the mend and ready to get back at posting. And what got my thoughts flowing this morning is a number of articles in response to this piece from Nature (here):

The article is co-authored by Chris Green, a Canadian economist from McGill who has some quirky thoughts on climate policy that just so happen to be insightful (see my post here on an earlier response to Chris’s article in the Globe “that wacky economist”).

What I really like about the article is it’s focus on technology deployment and what is really required to get the job done. Yes we need broad-based carbon pricing and yes we need technology standards, but those are just the start. The sheer scale of the technology roll-out to hit deep and medium-term targets is truly astounding and will need a whole host of policies and programmes to enable the transition. The article quotes:

Enormous advances in energy technology will be needed to stabilize atmospheric carbon-dioxide concentrations at acceptable levels. If much of these advances occur spontaneously, as suggested by the scenarios used by the IPCC, then the challenge of stabilization might be less complicated and costly. However, if most decarbonization does not occur automatically, then the challenge to stabilization could in fact be much larger than presented by the IPCC.

Now some folks see demons in this sort of analysis, and some provide rather visceral responses (see here).

I am not so cynical to think that the authors of “Dangerous Assumptions” are climate skeptics using the techno-boondoggle argument to delay action. Quit the contrary, they are advocating a real wake-up call for policy to respond to the challenge. So the conclusions of the Nature piece seem to make sense:

There is no question about whether technological innovation is necessary — it is. The question is, to what degree should policy focus directly on motivating such innovation? The IPCC plays a risky game in assuming that spontaneous advances in technological innovation will carry most of the burden of achieving future emissions reductions, rather than focusing on creating the conditions for such innovations to occur.

In looking Canadian climate policy, what is the value of this sort of article? Well, a lot actually. It reminds us of the sheer scale of the challenge ahead. A recent CCS Taskforce called for $2 billion in federal funding and the same from the private sector to gain about 5 MT of CCS (see article here). But, modelling suggests that under Turning the Corner (-20% below 2006 in 2020) CCS deployment will need to be upwards of 75MT and under the Bali targets 150 MT (-25% below 1990). And this investment and deployment will need to occur in the Alberta capital projects world characterized by labour and materials shortages with rising costs. Yikes.

So, once again a little more climate policy reality is revealed. I know, the truth hurts.

Written by Dave Sawyer

April 3rd, 2008 at 3:52 pm