Climate policy

Over at VoxEU, a bunch of economists challenge the current consensus in climate policy circles and suggest a range of policies that may actually reduce emissions.

In the forthcoming ESRI Research Bulletin, David Anthoff and I offer some thoughts on how a country may set a carbon tax.

30 replies on “Climate policy”

Any attempt to mitigate climate change, will unfortunately result in the increased use of fossil fuel.
New technology is created by the application of fossil fuel to the problem.

Planting trees is an excellent idea—-hope it will be done using manual labour, however I doubt it.

Carbon taxes will only make people work harder to keep up their disposable income, and youve guessed it, this will lead to an increased use of fossil fuel.

How about us all doing with less work, less money, less travel, and a much lower standard of living ?—–don`t think you`ll win any elections promising that, however that is what the future is going to bring us whether we like it or not.

“Any attempt to mitigate climate change, will unfortunately result in the increased use of fossil fuel.”

That’s just not true. To take an easy example, imagine replacing an aged coal-firing plant with a new, efficient CCGT.

Thank you for your reply Marcus.
The coalfired plant will be scrapped, resulting in the loss of the embodied energy that went into its construction.
The new CCGT plant will take fossil fuel to build, and more fossil fuel will be used to build an infrastructure with which to supply it with gas, eg pipelines, gas terminals, new liquid gas transport ships, increased drilling for gas wells, and on and on.
The same goes for every new technology that we try to adopt to mitigate climate change, from wind turbines to electric cars.
It is a no win situation all around, and we had better start to realise it, and change our whole way of life and expectations of life, or Nature will do it for us, in a most heartless and unpleasant way.

@Denis there are also nuclear technologies, there is enough uranium and thorium in this world to power the whole world for hundreds of years (longer with breeding), maybe we crack commercial fusion by then, by cracking I mean making more energy than putting in, it already works, just a matter of engineers and scientists being left to research and improve the technology.
The technology in some cases is decades old and safe.

Will changing our whole way of life and expectations of life be enough or will we also have to sign up to your flaky anthropomorphism of the Earth and related fantastic eschatology?

@ Denis: Well said. Funny how folk misunderstand the difference between primary, high density, easily accessible energy sources (coal, crude and gas) and miss the mandatory connection of these fuels to electricity generation.

Electricity will not – I repeat will not, replace or substitute for any of these three. When was the last time you saw a steam-powered plane? Or a steam-powered 30 ton truck powering down a motorway at 90 kph? Steam-power could replace some of our current liquid-powered heavy construction machinery, but there would be limitations, and unfortunately consequences.

Trees are good. Fruit ones are best. I have 10 hectares of semi-mature forest – but I am 100% reliant on petrol and liquid lubricants for my saws and machinery! Without liquid fuel I would need several stout lads to do the manual labour. Good exercise, but the pay would suck!

@ Debt Slave: Please spend a few hours reading the archives over on Interesting, informative and somewhat worrisome.


@ Brian Woods;

I’ve been reading The Oil Drum for over a year and I’m also familiar with their archives. It seems that agents of the oil industry believe that their oil is worth loads because energy is scarce. They sometimes seem to think that windmills and photovoltaics are a good idea. The two may or may not be related. Could you be specific on what I should look for in their archives?

It’s my understanding that there’s many decades worth of coal and a couple of centuries worth of natural gas. I’m confident that humanity can come up with something before that runs out. Unless artificial scarcity is imposed on the world in the name of charlatan science and a vengeful earth mother goddess.

Pongo—-I too believe in NP, however there are some doubts that the present technology can really deliver enough Net energy to power our society and keep us in the energy state that we presently enjoy.
However, it is the only energy producing technology that shows any promise for the future, and the only one worth working on.
All other mechanical systems trying to capture diverse natural energy such as wind wave, and tide are a total waste of valuable resources.
Ditto for sun—-energy storage will render it totally un energy economic.

Debt Slave—-sorry, don`t know what you are talking about.
Maybe you could write in ordinary English ?

@ Debt Slave: “It’s my understanding that there’s many decades worth of coal and a couple of centuries worth of natural gas.

Very glad to hear you are a regular on theOilDrum. Archives. ‘pends what you are interested in. Its a very broad church. Try oldfarmermac, westtexas, Nate Hagens and David Murphy.

WRT your quote above. Try Albert Bartlett. Best be sitting down when you read him!

“I’m confident that humanity can come up with something before (that) runs out.” I wish you the very best of good luck on this one. Really.


@Brian Woods;

Okay, I sat down while I was studying Albert Bartlett. He’s a Malthusian. His dire population forecasts are already wrong according to the UN. All the Malthusians before him were completely wrong too. I can’t understand why anyone still listens to such discredited nonsense.

There’s a couple of centuries worth of fossil fuels left that we know about and most of the Earth’s crust has yet to be explored.

Over $30 billion has been spent on global warming research in the last twenty years. God only knows how much has been spent on green technology and carbon-counting bureaucracies.

Nuclear fusion was achieved in laboratories in the 1950’s. I’m very sure we’d have plans for fusion power plants now if climate research money had been spent on that technology instead. I’d be amazed if we didn’t have it working 100 years from now – unless we spend all our money and resources on windmills.


When you say “. . . Nature will do it for us, in a most heartless and unpleasant way.” it makes you sound crazy.

@Debt Slave
We do not know how much fossil fuel is left, maybe 20 years, maybe 200, but what is known is that if we continue to use up this fossil fuel, we will most certainly permanently alter the climate of the earth, probably for the worse, and I think that most people would agree with that .
Glad to see that we have some common ground wrt windturbines.

@ Debt Slave:

Note your comments. We clearly disaggree. I’m with Denis on this.

The empirical evidence, and future time, will dictate the outcome irrespective of which one of us is closer to the ‘truth’, or what passes for such.

I respectfully suggest you forget about named personalities: Its distracting. Please concentrate on the validity, or otherwise, of their math and the absolute finetness of global resources to sustain populations.

We have inarguable archaeological evidence of past civiliziation diebacks. So what will prevent it in future? Food? Water? Energy? All three? Take your pick. I would opt for malnutrition and disease.

There is an author: Robert Jervis. He writes about the complex nature of systems (he is a political scientist). There is another: Charles Perrow (Normal Accidents). Their concern is that we may be bumping up on the limits of our technology – specifically our abilities to control highly integrated complex systems. Systems, which if they fail, cause very disaggreable suprises (Deepwater Horizon). I know that there are several articles in theOilDrum about the limits of technology. I will have to go through my files to see if I can locate them.

WRT Nuclear: Lets assume fuel restraints are indeed negligible. Can you assume the same about the energy costs of build-out, maintenance , repair and replacement of the plant? The safe storage of any waste products? I fancy not. Its the constraint on energy cost you have to deal with, not the money cost. The latter is a virtual, fiat entity – it may be conjurged up at will. Energy is a different matter. It takes energy to produce energy!


Like @DebtSlave I do not buy any of this we need to retard to the middle ages arguments. I care about the environment but I absolutely despise the Luddite/Malthusian streak running among the “green” movement who nostalgically look backwards instead of optimistically looking forwards.

@ Pongo.

How about ‘we’ attempt to reduce first? That’s us, in Advanced Economies. Might be a somewhat different scenario in other spots.

As I advised Debt Slave, concentrating on names and ideological isms is distracting. You must concentrate on the reliability of the data. This can indeed be fudged and frauded, but the logical arguments of math and statistics will (or should that be should?) reveal any chicanery. Now the nature of conclusions that follow from data: that’s another matter entirely.

Glad to hear about Thorium and all. No embedded energy there? Reactors have a half-life of how long? What is the ratio of energy in to energy out? And the nature of the various energy inputs: what are these?

Aviation kerosene is a fractional distillate – it can be made by thermal cracking, but the input feedstocks are liquid fuels themselves. Lets play a mind game.

In a decade, av kero is in short supply. Who gets to use it? Passenger, commercial transport, or the military and emergency services? Do you think that a significant reduction in passenger and transport aviation would have any economic effect? And in what direction?

Now play same game with liquid fuel for land (inc. agriculture) and sea transport. Rationing? What happens to ‘Just-in-Time’?

Highly integrated, closely coupled complex systems have a nasty habit of providing very unpleasant suprises. Be very sceptical of ‘brave-new-world’ technological ‘fixes’. Subject them to very careful analysis.

You be right: There be lots of snake-oil salespersons abroad these days. I understand that the latest product is fully organic, GM free, environmentally friendly and – is de-riguer, green in color! Whoda thunk!

Any, back to Political Economy. The nexus of debt + energy + population for the maintenance of aggregate economic activity. Is debt money? If the AEs experience ‘flatline’ economic activity for any extended time period – the outcomes are … …


I am neither a Luddite or a Malthusian, but I want technological innovation in the field of energy production, to be based on science, and an energy analyses –EROEI–that will inform the investigators as to the possible efficacy of the technology under scrutiny.

This would be a much more intelligent way of proceeding, rather than going off half cocked, as the current Green Party has done, wasting huge amounts of money and resources on installing an energy producing system [in this case wind turbines and the rollout of electric cars], that even a cursory analyses would show, to be totally impractical and unable to meet in any way, our future energy and transport needs.

What we have here is the technically illiterate, leading the technically gullible—-a sure receipe for an energy disaster.

I believe as well as Debt Slave that NP, possibly using thorium, is the only energy producing technology that is worth pursuing, but an energy analyses has to be applied to that as well.

This article, again from The Oil Drum, shows the type of analyses that needs to be employed.

The ’10 commandments’ issued by the ‘great and the good’ in the VoxEU piece are eminently sensible, but, unfortunately, they are coming a bit late to the fray. One astute analyst and commentator with much knowledge and experience of the European energy and climate change policy scene recently responded to my fears about a consumer and citizen backlash to the costly nonsense being formulated by the EU and national governments by observing
“It appears to be that nobody across the political spectrum can afford to be anti-carbon reduction whatever the cost. Whether they do anything about it is another matter, but they apparently cannot afford to justify their likely inaction by saying that it doesn’t matter and that the more/most important aim should be not to load more costs on consumers who are already suffering from recession.”

It sometimes seems that the lunatics have taken over the asylum. It may have something to do with the decline in the popular support for, and relevance of, left-of-centre politics since the fall of the Wall in 1989 and the emergence of the deeply-flawed ‘Washington Consensus’. It seems that many of those pre-disposed to the left channelled their anti-capitalist energies through the ‘Green Agenda’.

In addition, so much politcial capital has been expended in frightening citizens into believing that climate change will result in the end of civilisation as we know it that there isn’t enough left to craft, persuade citizens of the benefits of and implement rational, effective and efficient policies.

It’ll take a lot of time and effort to beat back the nutters and to secure widespread popular support for rational and proportionate action.

There’s always hope. The public has lost interest in climate change and with that most of the politics is gone too. That means that there is now an opportunity for competent people to take over climate policy.


I’m not sure I understand the basis for your contention that “[t]he public has lost interest in climate change”. I sense that many are being repelled by proposals to implement silly and costly policies with the unfortunate effect of diminishing popular support for very necessary and sensible policies. I’m confident that you’re not advocating technocratic control without appropriate democratic consent, but these ‘competent people’ must be able to explain and persuade.

Media attention for climate dropped off a cliff in 2010.

There should of course be democratic oversight over climate policy. But the details should be left to people who are competent and pay attention. Effective and cheap climate policy does not consist of a series of photo opportunities.

Thank you. I take your point. I’ll leave it at that as we run the risk of immersing ourselves in the deep waters of political governance…and that would push the economists here too far out of their comfort zones.

@ Richard, hope you don’t mind but I took the liberty of rewriting your last comment …

There should of course be democratic oversight over (climate) policy. But the details should be left to people who are competent and pay attention. Effective and cheap (climate) policy does not consist of a series of photo opportunities.

@Brian Woods

see the video linked in my post, another article from AEPon subject here >

to summarize 1GW reactor would produce only 100grams of radioactive waste in one year, as added bonus these reactors could be used to recycle plutonium waste from other reactors and reduce them to nothing harmful

1ton of thorium has same energy content as 200 tons of uranium
the reason the world went with uranium was because it was better suited to producing nuclear weapons, also thorium is alot more abundant, hell we even have it granite rocks in Donegal.

anyways to answer all the questions your raised see the videos linked

forgot to add, if oil does become scarce then alternative methods will replace conventiional drilling such as coal to oil or gas to liqiuds, not like the technologies are anything new the Germans nearly took over most of europe on coal to oil tech

It wont be cheap but we wont be running out, if oil gets expensive then the decision as to whether to fly planes or power cars will be made by the markets and the consumers, anyways higher oil prices will only lead to alternative solutions and there are plenty

I dont buy this whole “the world will end in 2012” scaremongering, if a resource becomes scarce then it will be replaced, something the economists here have seen before in the past, and would be better qualified than me to comment.
Alternatively we can waste dozens of billions we dont have carpeting the country in windmills only for new or existing technologies to come along and make our investment (with mostly expensive borrowed money) a waste

@ pongo: Many thanks for your comments and the site refs.

“anyways higher oil prices will only lead to alternative solutions and there are plenty”. I will part company with you on this one.

“If a resource becomes scarce then it will be replaced, something the economists here have seen before in the past, and would be better qualified than me to comment.”

I agree that susbtitutions are (may be) possible, though they are not equivalent and may be (likely) of inferior quality. You pay more for less.

However with energy sources the situation is somewhat different as energy sources are difficult to equate with each other. The specific low molecular weight unsaturated hydrocarbons present in transport fuels are chemically unique – they have no substitutes. All economies have very little elasticity with regard to these fuels. If we cannot obtain them: the economy regresses significantly.

Thanks again for the refs.


You’re getting there Brian
The world without oil will be much smaller

Your blithe belief in a miracle oil-alternative is inspiring. I look forward to the economists making it a reality


It wont be economists who be making it a reality, the same economists made wild starry predictions before (for the most part) and we ended up with the opposite of what was predicted > an economic collapse

It be scientists and engineers working for companies and research bodies who will solve our problems one way or another.
It will be green idealists who will try to stop progress in their quest to retard humanity to their romantic vision of people toiling in the fields without any of the modern comforts and productivity tools

@ pongo: “It will be green idealists who will try to stop progress in their quest to retard humanity to their romantic vision of people toiling in the fields without any of the modern comforts and productivity tools.”



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