Draft submission on climate bill

This post was written by Richard Tol

As the introduction of the climate bill may be imminent, I thought it would be appropriate to make public at least part of the consultation. Our latest draft is here. It omits one crucial part as we’re still trying to get our heads around estimating the costs of the proposed targets.

All comments are welcome.

This is the summary: [W]e are grateful for the opportunity to comment on the draft Climate Change Response Bill 2010. There are a few ambiguous statements in the draft bill that will need to be clarified in the next version, particularly with regard to the emissions target for 2020 and the definition of carbon sinks. A unilateral adoption of a 30% emission reduction target for 2020, as proposed in the draft bill, would be problematic, as EU legislation would oblige Ireland to bridge the gap between the EU target (-20%) and the Irish target (-30%) through emission reduction in the domestic non-ETS sectors (mostly agriculture, households, small and medium-sized enterprises, and transport). The proposed targets for 2030 and 2050 are extraordinarily ambitious. The draft bill omits to introduce an appropriate framework for policy measures to meet the proposed targets. The establishment of a National Climate Change Expert Advisory Body is a welcome proposal but the climate bill should guarantee that the people on the body are indeed experts and that the body is independent. The Regulatory Impact Assessment adds little to our understanding of the impact of the proposed climate bill.

We recommend the following changes to the Climate Change Response Bill 2010:

  • Adopt the EU target of a 20% emission reduction by 2020.
  • After 2020, the target should be to intensify climate policy such that the (nominal) marginal abatement costs of emission reduction increases with the rate of discount (i.e., the nominal interest rate) until carbon dioxide emissions are zero.
  • Create a framework for policy interventions of greenhouse gas emissions, with single regulation and equalization of marginal abatement costs as important criteria.
  • Guarantee that the National Climate Change Expert Advisory Body is independent and has the required expertise.

Furthermore, we recommend that the impacts of the proposed climate bill will be assessed before the bill is introduced.

UPDATE: Interesting comments in today’s Irish Times. Ciaran Cuffe may need to check his math.

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35 Responses to “Draft submission on climate bill”

  1. Eoin Says:

    *National Climate Change Expert Advisory Body is independent and has the required expertise.

    That rules you out so Richie.

  2. Michael Smith Says:

    In the current Village Magazine Adrian Kelleher takes a robust look at the ESRI and Richard Tol’s stance on climate change: http://www.villagemagazine.ie/index.php/2011/01/our-deluded-esri/

  3. Oliver Vandt Says:

    “…we’re still trying to get our heads around estimating the costs of the proposed targets.”
    Shades of the bank guarantee.

    “A unilateral adoption of a 30% emission reduction target for 2020.”
    Again it sounds like a green bank guarantee. But as it’s not irrevocable it’s anything but.

    “The proposed targets for 2030 and 2050 are extraordinarily ambitious.”
    Well, why not I suppose.

    “Adopt the EU target of a 20% emission reduction by 2020.”
    A no brainer if this was part of a rational policy making process. Are the GP demanding 30% in the hope they get 15%?

    “The establishment of a National Climate Change Expert Advisory Body.”
    Tol’s relationship with the Green movement is irretrieveably broken but I hope they appoint at least one economist. Everyone would gain.

  4. Debt Slave Says:

    Good morning Professor Tol,

    I’m distraught to hear from your commentator that your “relationship with the Green movement is irretrieveably(sic) broken”.

    I guess the “the Green movement” will have to make do with Philo “I think I’ll delete the file rather than send to anyone” Jones and Mickey “logic chopper” Mann.

    I’m off for a “green movement” myself after re-reading Oliver’s treacherous statement:

    ‘If Gormley had said, “we have a massive deficit. We must raise taxes. I am legislating for a progressively increasing tax on emissions, it’s the right thing to do”, he would have been successful, I believe. He could have done this years ago in return for NAMA.’

    I’m always reminded of the Green movement for an instant just before I flush my brown movements.

  5. Debt Slave Says:

    Incidentally, the “Carbon Capture Report” reckon that economy.ie has a mildly green overall tone.

    http://climatechange.carboncapturereport.org/cgi-bin//profiler?key=irisheconomy_ie&pt=4

    As opposed to the extremely green overall tone of the decidedly red Mary Robinson Foundation for the Spread of International Maoism (sponsored by the Rockefeller foundation aka Standard Oil of New Jersey).

    http://climatechange.carboncapturereport.org/cgi-bin//profiler?key=mary_robinson_foundation&pt=3

    ‘Cos them rockerfellahs are big into helping the poor and stuff, right?

  6. toby Says:

    @Richard,

    Good submission. I see nothing to add at the moment.

    RE: Village article. Your connection with fringe figures of the climate change debate has been already noted. Any comments?

    PS Have a study been carried out on the potty training of climate change deniers? They have an affinity for imagery associated with flatulence, faeces and bowel movements. Anally retentive? Or its opposite?

  7. hoganmahew Says:

    @toby
    No studies as far as I’m aware. Maybe they could twin it with the “green party supporters are the only believers” autism study…

  8. Edward Says:

    I don’t think this is the proper venue for R Tol to comment on the article.

    I happen to think that the High Court might be better. However, knowing how incompetently-run the left-wing Village magazine has been in the past, it’s probably not worth suing.

  9. bg Says:

    “Guarantee that the National Climate Change Expert Advisory Body is independent and has the required expertise.”

    A good independent, balanced expert group might look like this:

    John Gormley (former Environ. Min,)
    Eamon Ryan (former Ener. Min.)
    John Gibbons (PR, media)
    Prof. Frank Convery (economist, spreadsheets etc)
    Trevor Sargent (impacts of global warming on organic vegetables)
    Werner Kruckow (CEO Siemens Ireland with expertise in sale of planet saving machinery)

  10. Ger Says:

    Like the submission. Would add the following.

    THE BAD
    Not only are the economic effects of this legislation unclear, but the legal effects of it are similarly mysterious.

    Unilaterally commiting to a more punishing target than our European partners is undesirable. While I would advocate that we strive to outperform our peers, putting barely achievable targets in legislation is only creating a stick with which to beat ourselves later on (seemingly this is the objective i.e. a political one).

    There are signs of a bubble emerging in renewables (esp. wind), and if such a bubble bursts it will do more harm to the renewables industry than anything else. In Mayo there is planning permission to build ten times the wind capacity that is already installed.

    This Board seems to be nothing more than jobs for the Green boys. Continuing the Green parties absolutely shameless patronage of their supporters past their term in office.

    THE GOOD
    It will create some legal certainty for private investment in renewables.

    It will provide political cover for more environmental taxation, especially the Carbon tax, which is the most painless way to encourage change.

    It could give green issues a role in court judgments (though I’m dubious as to how much impact this might have).

    ASSESSMENT
    While it’s not all bad, the targets should not be greater than what is agreed at European level. That would still provide certainty to investors, and mobilise the State machine to making those targets happen, without binding ourselves to a target we will scarcely meet.

    I am opposed to the creation of this quango as I think it’s nothing more than a platform for Green party supporters to draw State money (and they have done enough of that since 2007).

    I would be very careful about agriculture. I know that the Greens don’t draw a lot of support from agriculture, but the Irish Economy does. We need only look back at the abyss we faced during the foot and mouth crisis to appreciate that as farming goes, so goes Ireland. The Smart economy is sexy and its workers receive generous State subsidies, but unsexy farming is the underpinning of a massive chunk of our economy.

    To clarify, I am a green (with a small “g”).

  11. Richard Tol Says:

    @Toby
    Which fringe figures in the climate debate would that be? I met Pachauri today, had dinner with Hedegaard the other day, and recently discussed UK energy policy with the man who slayed King Coal.

  12. Paul Hunt Says:

    Could we please, please move on from this ad hominem stuff. For me the key passage in this draft is:
    “Current regulation of greenhouse gas emissions is suboptimal. There are tradable permits for about one-third of emissions. However, there are also price guarantees for renewable electricity, differentiated by source for no apparent reason, and implicit capital subsidies in grid reinforcement and interconnect. At the same time, priority dispatch for peat stations is an implicit subsidy to increase emissions. Another third of emissions is regulated through a range of instruments. Some fuels for home heating are subject to a carbon tax, but coal and peat are exempted even though emissions are highest for these fuels. There are subsidies for renewable heating, differentiated by energy source rather than by emission reduction, and subsidies for house insulation, differentiated by household type rather than by emission reduction. Transport energy use is regulated by a carbon tax, excise duties which are differentiated in an ad hoc way, motor and vehicle registration taxes which differentiate for potential rather than actual emissions, and an (EU-wide) bilinear tax on fuel inefficiency. One third of emissions is unregulated. As a result, emission reduction is substantially more expensive than needed.

    The current hotchpotch of regulation does not have large and negative implications as, because of the economic recession, the emission reduction targets for 2008-2012 under the Kyoto Protocol are very close to what emissions would have been without regulation (Devitt et al. 2010). The proposed emission targets for 2020, 2030, and 2050, on the other hand, would require substantial policy intervention.

    The climate bill should specify which policy instruments will be used to meet the targets, the circumstances under which those instruments may be deployed, the procedures, standards and criteria for ex ante impact assessment and ex post evaluation, and the processes to avoid multiple and counterproductive regulation.”

    I can understand why you (Richard and Paul Gorecki) are having difficulty “trying to get our heads around estimating the costs of the proposed targets”. But why should that be your responsibility, unless you have been commissioned to do so? Surely it for the Government and the relevant Departments to present their estimates of these costs? There would then be an opportunity for critique, scrutiny and the evaluation of alternative options.

    Any self-respecting parliament would throw this draft legislation out at the first reading and demand a full assessment of the costs and impacts before another reading would be considered.

    But we all know what is likely to happen - similar to the enactment of the legislation that permitted, encouraged and facilitated the current economic and financial crisis - and any critique presented here is ’saothar in asice’.

  13. hoganmahew Says:

    @Paul Hunt
    “why should that be your responsibility, unless you have been commissioned to do so? Surely it for the Government and the relevant Departments to present their estimates of these costs?”
    Come now Paul, we tried that approach with the bubble and the banks. Not anyone’s job to do it, except those who didn’t want any ‘trouble’.

    Unasked for estimates, critiques, policy options have the effect of putting it up to those responsible to come up with their own answers. If they were not provided, those responsible could and, from past experience, would provide nothing.

  14. Paul Hunt Says:

    @hogan,

    Valid points, but we need to be clear about where the problem lies. And that is in the Dail. We have a system of ‘government in parliament’ and I don’t think anyone wishes to change that. But we need to understand - and, more importantly, TDs need to understand - that government is a creature of parliament, with the factions comprising government having a popular mandate to do certain things, that needs to be kept in check at all times. It is for parliament to demand that policy proposals of the executive are accompanied by a quantitative impact assessment and relevant supporting evidence. And parliament should have the power and resources to commission its own research to advance its proposals, but, more importantly, to contest and, where necessary, rebut, government proposals.

    I have been critical of the ESRI, but only because its sources of revenue prevent it doing policy analysis ‘without fear or favour’. I applaud Richard Tol’s and Paul Gorecki’s efforts, but my understanding is (and I may be wrong) that these are their personal opinions and analysis, that what they are doing does not have the official imprimatur of the ESRI and that no specific funds have been earmarked by the ESRI to finance this effort.

    My question, however, stands. Why should they feel obliged to do what government should be doing? I would much prefer they had the opportunity to critique proposals accompanied by evidence and analysis - rather than the flim-flam that has been offered.

  15. hoganmahew Says:

    @Paul Hunt
    I agree with you that government should be doing it. However, even if it was, would you take those figures at face value? Or would you be looking for a second opinion?

    That the second opinion is coming out before the first one is what is wrong, not that there is a second opinion.

    With two sets of figures (assuming we get any from the government), the differences between them become a valid basis for discussion.

  16. Tecumseh Says:

    @Richard

    Many thanks for your trojan work. It really is a pity that your opponents continue with childish ad hominen attacks.

    @Ger

    “There are signs of a bubble emerging in renewables (esp. wind), and if such a bubble bursts it will do more harm to the renewables industry than anything else.”

    When that entirely predictable bubble bursts the government & media will turn around and say nobody told us etc etc - probably some international wind event equivalent to Lehman Brothers caused the crash not our crazy policies!

    I hope this blog is archived so that in years to come we can show that Prof. Tol and others gave ample warnings concerning the complete lack of cost-benefit analysis of our environmental policies but the Irish chose to ignore it.

    What are the qualifications of those who actually write these bills ? Do they actually understand the impact of what they are writing e.g. do they pause and think how much this will cost (or save) ? What are the qualifications of those who check and approve these documents ? Are they civil servants, lobbyists, advisors etc etc???

  17. Paul Hunt Says:

    @Hogan,

    Not wishing to extend this exchange unnecessarily, but what we are dscussing goes right to heart of the problem about our system of governance. (And it is a problem that arises thoughout the EU, though some member-states have developed, and are developing, mechanisms that go some way towards resolving it.)

    In this case, it’s not that the second opinion has emerged before the first (as you put it). Indeed I very much welcome the effort that Richard Tol and Paul Gorecki have put in. It’s that the first ‘opinion’ lacks any meaningful quantitative analysis, which leaves Richard and Paul in the unenviable position of struggling to come up with some sort of quantitative analysis. My view is that the case they have made in the passage I quoted in my 11:52 comment is sufficient. The onus is on the Government - and should be frimly imposed on the Government.

    But we know how this will play out. Even if Richard and Paul succeed in coming up with plausible quantitative estimates, the Government spin-machine will go into overdrive to demolish them and to distract attention from the Government’s failure to produce any. And the legislation, most likely, will be whipped through (unless certain affected interests persuade a handful of FF TDs to vote against or abstain).

    I think you are, uncharacteristically, being a tad naive. Believe me, I know. I have been at the receiving end in other so-called ‘public consultations’. I’m sure Richard and Paul will form their own view on how far they wish to push this, but my view is that, already, they have perfromed a valuable public service. I would encourage them to avoid exposing themselves to the kind of personal and professional attacks they will attract if they pursue this. I believe it would be more effective for them (and for all of us) to call on the TDs to do their duty in the public interest.

  18. Ryano Says:

    @Richard

    I note from your post that you’ve decided not to acknowledge the clarifications on the 2020 target provided on this site and elsewhere (the fact that the 2.5% annual reduction is compounded, the fact that it’s a whole-economy target rather than just non-ETS, the fact that it allows for sinks to be counted unlike the EU2020 target). You might legitimately look for further clarification on these questions, but to pretend you’ve never heard of them is rather odd to say the least.

  19. hoganmahew Says:

    @Paul Hunt
    I accept all that you eloquently say.

    But if nobody does the analysis and waits around for the government to fail to do it (however much pressure is put on), then the government (of whatever colour) will once again be in the position to say “nobody saw it coming”.

    I fear it is you who is being naive in expecting that quantative analysis will be produced for ideologically inspired policies (however much one might agree with the casus belli if not the conduct). Sectional politics works by feeding their own trolls while feigning ignorance to opposing trolls and giving them little to bite on. Any ideologue can ignore calls to prove something; it is calls to disprove something that are much harder to resist - with numbers in place, a government has to put up or shut up or be bitten on the bum when the problems come back to haunt them.

  20. toby Says:

    @Richard,

    Someone slayed (slew? slated?) King Coal. Tell me about it!

    I presume that’s not Christopher Monckton.

    Lomborg, Peiser … the whole GWPF thingy. Could you not ask them to get an honest logo, I mean one that does not tell a lie. And is now out of date, BTW. What’s the betting they get a “new” logo now that 2010 was warmer than all the other years of the decade globally? Kinda embarrassing, that.

  21. pongo Says:

    I wonder what having a countryside covered in windmills will do to our dying tourism sector…

  22. Brian J Goggin Says:

    @pongo:
    “wonder what having a countryside covered in windmills will do to our dying tourism sector…”

    It provides a new opportunity for activity holidays: Rocinante Tilting Inc.

    bjg

  23. Richard Tol Says:

    @ryano
    That’ll be the day: Climate Bill published; refers to IrishEconomy.ie for clarification and assessment.

  24. pongo Says:

    Hmm or agriculture for that manner considering we are on an island full of farm animals producing methane which is a much worse greenhouse gas, cant wait for the farmers to find out that this will hit them hard.

    They will either get an exemption for methane (making the bill pointless)
    Or they will sink it altogether.

    Excellent! now where is my pitchfork.

  25. toby Says:

    My God, another one. A denier with flatulence obsession!

  26. Debt Slave Says:

    @toby

    You know what’s really funny?

    You’ll go to your grave without apologising for calling people deniers.

  27. Al Says:

    Surely Minister Ryan can create more green jobs in the development of a Bovine anal exhaust catalytic converter.
    And with our innovative and smart economy we may be able to develop a dual use one for politicans also.
    Which end of a politican would it work best on….

  28. pongo Says:

    @toby

    Are you always so quick to label people?

    This Bill will have real consequences for the economy (good and bad) somehow I am being labelled a global warming (or is that climate change now?) denier for pointing out the smelly animals in our green fields that provide so much economic good to this country.

    This government rushed into a Guarantee, then NAMA and now this. Its like a train wreck in slow motion, god forbid someone shouts “stop”.

  29. Oliver Vandt Says:

    @Debt Slave
    Ah, the old spelling gambit. Guilty as charged.

    If I was in the GP I couldn’t defend participation in this government without legislation of this kind. It’s the equivalent of the Anglo Irish Agreement for the Fitzgerald coalition. Imagine if FF bring down the government before this goes through? No wonder they were in such a panic to originally announce their (now Sinatra like) retirement.

    As for the ESRI, they should have conducted an open debate on their role in the crisis, and they had a widely read forum to do it. I expect that would have lead to scrutiny of the board, funding, purpose etc. Some senior personnel would have been faced strong questions. They didn’t and as a result their work will continue to be contaminated by the bubble legacy.
    The most damning thing in the article is the last sentence.

    For Richard Tol, I think what really irks him is environmental measures undertaken without considering economics i.e. cost. If the situation was reversed environmental experts would be equally irritated. He gets into the arena and makes some unwise comments in the heat of the moment. His comments on frank banking discussions in the ESRI pre-collapse were a gaffe i.e. true - and we all know they are true - but embarassing to be revealed. In fact I’m glad they are true for the ESRI’s sake, otherwise they’d deserve to be wound up. We need more gaffes and more plain speaking and more revelations. I really hope he doesn’t sue. The Climate Change Bill process is a vindication of all his criticisms of how environmental policy is conducted in Ireland. Actually he has been quite mild in his response!

  30. EWI Says:

    For Richard Tol, I think what really irks him is environmental measures undertaken without considering economics i.e. cost.

    If that’s the case, why has Tol used this forum in the past to pass along any piece of nonsense being propagated by his colleagues in the denialist business?

    Also, still waiting on a retraction and apology on his allegations about Pachauri that were relayed with obvious pleasure a while back.

  31. Paul Hunt Says:

    @Hogan,

    Yes, we are agreed on the ‘casus belli’, but seem to diverge a tad on the conduct of the ‘bellum’. I think our respective attributions of naivete are motivated by a desire to avoid the enactment of legislation authorising stupid and costly policy decisions. While I don’t disagree with your “a government has to put up or shut up or be bitten on the bum when the problems come back to haunt them” contention in the normal course of events, the factions in this government simply don’t care as they both know neither will finger the levers of power for a long time. If enacted, the outcome will ‘bite the bum’ of the next government - and, very likely, the one after that.

    The game that’s being played now is the trading of desired pieces of legislation between the factions to extend their time in office. The quality of legislation and the public interest are the last things on their minds.

    The longer they play these games the more damage will be done to the public support for parliamentary democracy.

  32. Ryano Says:

    @Richard

    So you ignored it because it was posted on irisheconomy.ie? Probably not a bad policy.

  33. toby Says:

    @pongo,

    Apologies if I called you a “denier”. Personally, I want to see this Government run out of office, ClimateChange Bill or not. I would also like to see AGW become a cross-party issue. Climate change is being all-too-easily framed as a “radical environmentalist” issue, which it is not.

  34. Richard Tol Says:

    @toby
    Indeed. The targets in the draft climate bill or so onerous that the Green Party risks creating a backlash against climate policy in particular and environmental policy in general.

  35. Paul Hunt Says:

    @Richard,

    Can we expect a post on recently announced changes in Dutch energy/climate change policy?

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