The Economics of Climate Policy

Economics has played an increasingly important role in shaping policy, in the United States and elsewhere. This paper reviews some of the dimensions of the economic approach to analyzing, understanding, and developing solutions to the problem of climate change. We then turn to the issue of designing regulatory instruments to control the problem. The paper concludes with a discussion of the political economy of greenhouse gas control in an international context.climate change, climate policy design, integrated assessment, environmental policy coordination

Economic Analysis and the Formulation of U.S. Climate Policy

Economic analysts within government agencies as well as outside government has played a noticeable and increasing role in formulating U.S. climate policy. However, that role has remained limited; in particular, economic analysis has largely been ignored and occasionally even derided in the context of setting targets for GHG control. This paper explores this uneasy relationship between analysis and policy during several U.S. administrations. Some of these problems stem from the incompleteness of the economic analyses themselves, and economic analysts sometimes have not been the most effective advocates for their own findings. However, I think one of the biggest obstacles to more effective use of economic analysis in climate policymaking has been a basic lack of desire among many policymakers for the fruits of the analyses. This reluctance has been especially marked when the economic analysis clashes with strongly held preconceptions – from either side – about what climate policy ought to be.climate change, Kyoto Protocol, Council of Economic Advisers

Communication Across Cultures: From Cultural Awareness to Reconciliation of the Dilemmas

In this globalising world there is a growing need for understanding different types and forms of interaction between people in intercultural environments, i.e. working places, cities, etc. This implies that people refer more and more to various communication models and practices to fully master communication across cultures. These models ultimately lead to applying best practices in intercultural communication. One of the most popular models in the one developed by Trompenaars & Hampden-Turner. In this paper we first review the concept of culture related to this model. Second, we present the 7 dimensions of the model. Finally, we review the reconciliation theory as presented by Hampden-Turner & Trompenaars.Intercultural communication, Reconciliation model, Dilemmas, Intercultural context

Computational Framework for Optimal Carbon Taxes Based on Electric Supply Chain Considering Transmission Constraints and Losses

A modeling and computational framework is presented for the determination of optimal carbon taxes that apply to electric power plants in the context of electric power supply chain with consideration of transmission constraints and losses. In order to achieve this goal, a generalized electric power supply chain network equilibrium model is used. Under deregulation, there are several players in electrical market: generation companies, power suppliers, transmission service providers, and consumers. Each player in this model tries to maximize its own profit and competes with others in a noncooperative manner. The Nash equilibrium conditions of these players in this model form a finite-dimensional variational inequality problem (VIP). By solving this VIP via an extragradient method based on an interior point algorithm, the optimal carbon taxes of power plants can be determined. Numerical examples are provided to analyze the results of the presented modeling

POST 2012 CLIMATE CHANGE AGREEMENT

Addressing climate change requires a thorough and sincere communication not only as to the scale of the challenge the world faces but also as to the international cooperation possibilities and countries willingness to commit to the challenge. Taking the lead in this group, European Union has acknowledged the fact that climate change is a serious social, political and economic challenge. Following the indications provided by the scientific rationale as to the urgent action that is required, European Community has involved itself in fight against the phenomena by engaging in working on a feasible solution to this problem. European Commission in particular has been taking upon its shoulders much of the workload in this field and has proved its dedication especially by involving stakeholders in constant dialogue on the subject. Sharing the ambitions of the European Commission in creating a cleaner world, the major goal of this paper is to provide the Commission with a series of recommendations from a development/political, environmental and economic perspective to ensure that the ambitions become a reality, and therefore a success. Accordingly, this paper provides an overview of sectoral and general approaches' effectiveness in terms of their economic and environmental as well as compliance prospects. Conclusion wraps up the paper providing a number of recommendations stemming mainly from stakeholders input's analysis

Emission Permits as a Monetary Policy Tool: Is it Feasible? Is it Ethical?

The price of emission permits is deemed too low to mitigate climate change. In three studies, policy approaches to pricing carbon in a market setting are examined. First, the emission permit market is analyzed comparatively to how the ethanol mandate impacted prices in the corn market. This leads to the realization that the marketization of carbon is more like a currency than a physical commodity. The next study examines emission permits as a monetary policy tool. Emissions correlate GDP output, thus central banks can use emission permits as forward guidance, as a means to optimize the price for climate change mitigation, and as an alternative to interest rates. Opinions of thought leaders are used to question the acceptability of emission permits as a monetary policy tool. The final study is an ethical analysis using deontology, utilitarianism and virtue ethics within a pragmatic philosophical context, analyzing carbon as a monetary policy tool. In order for carbon as a monetary policy tool to be considered ethically acceptable, it must satisfy the temporal, spatial and institutional dilemmas of climate change articulated in Stephen Gardiner’s Perfect Moral Storm. Under this ethical standard, it is found that using carbon as a monetary policy tool can help address these concerns, but not solve them alone. This research is presented using transdisciplinary methods which provide a unique and holistic approach to policy formation not yet presented in the literature. This research is relevant to policy makers in central banking, the IMF and World Bank

SOME REFLECTIONS ON CLIMATE CHANGE, GREEN GROWTH ILLUSIONS AND DEVELOPMENT SPACE

Many economists and policy makers advocate a fundamental shift towards “green growth” as the new, qualitatively-different growth paradigm, based on enhanced material/resource/energy efficiency and drastic changes in the energy mix. “Green growth” may work well in creating new growth impulses with reduced environmental load and facilitating related technological and structural change. But can it also mitigate climate change at the required scale (i.e. significant, absolute and permanent decline of GHG emissions at global level) and pace? This paper argues that growth, technological, population-expansion and governance constraints as well as some key systemic issues cast a very long shadow on the “green growth” hopes. One should not deceive oneself into believing that such evolutionary (and often reductionist) approach will be sufficient to cope with the complexities of climate change. It may rather give much false hope and excuses to do nothing really fundamental that can bring about a U-turn of global GHG emissions. The proponents of a resource efficiency revolution and a drastic change in the energy mix need to scrutinize the historical evidence, in particular the arithmetic of economic and population growth. Furthermore, they need to realize that the required transformation goes beyond innovation and structural changes to include democratization of the economy and cultural change. Climate change calls into question the global equality of opportunity for prosperity (i.e. ecological justice and development space) and is thus a huge developmental challenge for the South and a question of life and death for some developing countries (who increasingly resist the framing of climate protection versus equity).

Chapter 2 - Integrated risk and uncertainty assessment of climate change response policies

This framing chapter considers ways in which risk and uncertainty can affect the process and outcome of strategic choices in responding to the threat of climate change

Environmental Realpolitik: Joint Implementation and Climate Change

Professor Heller\u27s article discusses why there has been little progress after the Rio Earth Summit in developing the Framework Convention on Climate Change. He argues that, beyond the scientific uncertainties about climate change and its economic impacts, agreement on the legal structure of a comprehensive regime has been hampered by institutional factors. These include: the political discounting of damage to future populations, the diverse risks of global warming in different regions, and the distrust in many nations with market instruments, like taxes or tradable permits, that are favored by many industrial nations dependent on fossil fuels. Resolving these problems will be particularly difficult in multilateral negotiations under the auspices of the United Nations. This is due to the conflation of environmental issues with a broader, contested agenda of North-South issues. Unless this impasse is overcome in the near term, key nations, essential to a successful mitigation regime, may abandon collective solutions and invest in local adaptations to climate change. Heller argues that Joint Implementation (JI), a type of tradable permit system, can help to break this deadlock. However, investment in JIprojects has been slow due to political opposition and to confusion about the nature of an international market in environmental services. The article concludes with an outline for the development of a JI market that does not require a prior multilateral consensus

New Labour, new environment? An analysis of the labour government's policy on climate change and biodiversity loss

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