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2013-01-08 | News

Effective climate policy instruments highlighted by Sterner at IPCC Working Group meeting

Carbon taxes are clearly progressive and can easily cut a country’s vehicle emissions by more than half. Support to solar and wind technologies are as important, though also tricky to design, said Professor Thomas Sterner, Coordinating Lead Author of IPCC Working Group III at the Allied Social Science Associations (ASSA) meeting in San Diego, January 4th.

During a roundtable session at the ASSA meetings Thomas Sterner (left) and other lead authors of different chapters of the upcoming IPCC Fifth Assessment Report highlighted important, interim insights from the process and substance. The purpose of this roundtable session was to bring the audience up to date on the process and the substantive highlights from Working Group III of the IPCC Fifth Assessment Report, "Mitigation of Climate Change”, which is scheduled to be completed in April 2014.

“Important national policies for climate change mitigation include carbon taxes as well as feed-in tariffs or other support to new technologies like solar or wind. Thanks to such subsidies there has recently been a dramatic increase in supply across numerous different countries such as Germany or China,” said Sterner.

Sterner presented some conclusions on the design of national policy instruments. He underlined that there are a number of policy instruments that we do know are effective for mitigating climate change. Examples include carbon taxes in some European countries, fuel taxes (carbon taxes on transport fuels) in Europe, Japan and a few more countries. Such taxes have a big effect and can cut a countrys vehicle emissions easily by more than half.

“Carbon taxes are often resisted on the grounds that they are regressive but research shows that this is wrong – they are in fact strongly and clearly progressive, at least in low income countries,” said Sterner.

Other important policies include support to new technologies like solar or wind. Technology policy however is also very tricky to design, and can be counterproductive, according to Sterner.

“If you can’t do it well then may be better to do nothing.  Voluntary actions can in some context, for example in Japan, be an efficient instrument. Even old-fashioned regulation – of the mileage of cars or performance of buildings and fridges can be an effective instrument,” Sterner said.
 
In addition to choosing instruments we need to remember that from the viewpoint of the climate, the most crucial fact concerns the stringency of the instrument chosen. If it is a tax it must be high enough and if a permit scheme – the number of permits should be low.

“Because of strong lobbying against climate policy, instruments tend to be set too lax at first. Thus there is a need for need mechanisms to tighten the level of stringency of the instrument,” Sterner said.

Sterner also emphasized that we need to realize that instruments tend to come in flocks. It is important to be able to judge packages of instruments. An important characteristic is the way in which instruments interact. Cap and trade for instance, does not interact well.

“If we had a carbon tax that was too low, this could to some extent be counteracted by having a subsidy on say biofuels. If however we have a cap and trade system that is lax, it is more difficult to complement this with subsidies on various alternatives since all the effects risk being cancelled by the existence of the cap.”
 
The IPCC Working Group III assesses all relevant options for mitigating climate change through limiting or preventing greenhouse gas emissions and enhancing activities that remove them from the atmosphere.

These panelists presented insights from the process and substance of their respective chapters:
 
Howard Kunreuther, University of Pennsylvania (Coordinating Lead Author, Chapter 2 – Integrated Risk and Uncertainty)
 
Charles Kolstad, Stanford University (Coordinating Lead Author, Chapter 3 – Social, Economic, and Ethical Concepts)
 
Marc Fleurbaey, Princeton University (Coordinating Lead Author, Chapter 4 – Sustainable Development and Equity)
 
Leon Clarke, Joint Global Change Research Institute (Coordinating Lead Author, Chapter 6 – Assessing Transformation Pathways)
 
Robert Stavins, Harvard University (Coordinating Lead Author, Chapter 13 – International Cooperation)
 
Thomas Sterner, Environmental Defense Fund (Coordinating Lead Author, Chapter 15 – National and Sub-National Policies)
 
Ray Kopp, Resources for the Future (Lead Author, Chapter 16 – Finance)

Richard Richels, Electric Power Research Institute (Lead Author, Chapter 5 – Drivers, Trends, and Mitigation)

More information at http://www.ipcc-wg3.de/