Author: Richard Tol

Draft submission on climate bill

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.

First estimates of the costs of the climate bill

As another sign of the rushed introduction of the climate bill, the first estimates of the costs of the climate bill are published in a newspaper. O Gallachoir’s estimates are based on a model which is still under active development (rather than on a model which has been vetted and peer-reviewed — this is due to the starting date of the modelling project). Note that UCC is way ahead of the ESRI here: We still have to figure out how to estimate the economic impacts of targets this deep; the measures included in our model are not sufficient. The regulatory impact assessment has no cost estimates.

So, we are essentially asked to sign up to something we do not understand.

UPDATE: The IFA argues, rightly, that it is peculiar to introduce the climate bill next Wednesday when the public consultation is still ongoing. This reminds me of the waste bill, also imminent, for which the results of consultation are still not made public. Which is the party again that “believe[s] […] in a political system that is transparent“? (Hint: click the link.)

Poolbeg again

In the Netherlands, if a government falls, it continues on as a caretaker government until the new government is formed. Any member of parliament can declare as controversial a particular piece of legislation and regulation, and the caretaker government cannot make any decisions on these subjects. If it tries nonetheless, the senate will block this — and if it doesn’t, the queen will.

Ireland is different. Just prior to electoral defeat, a number of initiatives are being rushed through. There should be checks and balances to prevent this sort of thing. I’ll return to the climate bill later this week.

Poolbeg is back in the news. Although the public consultation on waste policy is still so recent that the department has yet to publish the submissions (at least one of which raised fairly fundamental concerns), if the Irish Times is to believed, new legislation will be introduced this month that would give the Minister of the Environment the power to set punitive levies on incineration and landfill.

Instead, waste levies should reflect the externalities of waste disposal. The maximum incineration levy is much higher than the two available estimates of the external cost of incineration.

The draft waste policy was far from ready. Instead of rushing through immature legislation, the government should have the grace to pass this dossier to the next government. ATMs will continue to work.

UPDATE: The story heats up again. See Times, Independent, and Independent again (with a reference to the EER2010).

UPDATE2: The Times claims that the bill will be published today (Jan 7). At 8.44 am, the submissions to the public consultation are still not online.

Climate Change Response Bill 2010

The Climate Change Response Bill 2010 was published today for consultation, together with an explanatory memorandum.

Art 1-3 are preliminaries. Art 4 has the emission reduction targets:

  • Emission reduction should be 2.5% per year on average between 2008 and 2020. The bill seems to say that 2020 emissions should be 28% below 2007 emissions (i.e., 52 mln tCO2eq). The memorandum says that 2020 emissions should be 26% below 2008 emissions (i.e., 50 mln tCO2eq).
  • 2030 emissions should be 40% below 1990 emissions.
  • 2050 emissions should be 80% below 1990 emissions.

(In fact, the base year is 1995 for the F-gases and 1990 for the other greenhouse gases. Between 1990 and 1995, emissions of F-gases rose from 0.06 mln tCO2eq to 0.20 mln tCO2eq so the dual base year just complicates things.)

The 2030 target seems to follow from the fact that 2030 is halfway between 2010 and 2050 and 40% is halfway between 0% and 80%. Annual emission reduction is to be 2.5% between 2010 and 2020, 3.9% between 2020 and 2030, and 5.3% between 2030 and 2050.

Art 5 creates a National Climate Change Plan. Art 6 establishes an annual statement to the Dail. Art 7-10 create a National Climate Change Expert Advisory Body. (The memorandum clarifies that no new expert will be hired.)

Art 11 orders public bodies to have regard for the climate bill and report progress to the Minister of the Environment.

Compared to the Oireachtas bill (discussed here), the Government bill creates much less bureaucracy. That is a good thing. Like the Oireachtas bill, the Government bill has nothing on how the targets are to achieved. This is a serious omissions. It is all good and well to announce a target, but there is more to policy.

The targets are very ambitious, as discussed here. Fortunately, the memorandum assures us that “[t]his Bill does not have immediate significant financial implications for the Exchequer.” The crucial word is “immediate”. The 2020 targets are notably more stringent than the EU targets, and we’re well on track to miss those (at least, according to the EER2010).

UPDATE:

ETS emissions are controlled by the EU rather than by the Irish government. That implies that the additional emission reduction effort for 2020 will fall entirely on the non-ETS sectors. The EU targets are to reduce ETS emissions by 21% in 2020 (relative to 2005) and non-ETS emissions by 20%. The government target is to reduce non-ETS emissions by 37% in 2020 (relative to 2005).

In 2008, non-ETS emissions were about 48 mln tCO2eq, 38% in agriculture, 30% in transport, 16% in households, 9% in services, and 7% in manufacturing.

Note that I assume throughout that LULUCF is as defined for the Kyoto Protocol. Note also that the climate bill is silent on this.

UPDATE 2: See Times, Independent, Examiner

UPDATE 3: There is a Regulatory Impact Assessment, which contains the gem that if you raise energy prices through a carbon tax it would affect the vulnerable and competitiveness, but if you raise energy prices through other means there would be no such impact.

Assessing business schools and scholars (4)

The working paper is now available. Conclusions are by and large as before (2, 3), but details are different. This is the abstract:

The research performance of business scholars on the island of Ireland is evaluated based on their number of publication, number of citations, h-index and the same divided by the numbers of years since the first publication. Data were taken from Scopus. There is a large variation in both life-time achievement and annual production. Almost half of the 748 scholars have not published in an academic journal. Men perform better than women. More senior people perform better. There are distinct differences between disciplines, with accountancy performing poorly. On average, scholars in Northern Ireland perform better than scholars in the Republic. However, Trinity College Dublin has the top rank among the eleven business schools; Queen’s University Belfast and University College Dublin share the second place; and NUI Galway and the University of Ulster share the fourth spot. Irish business schools specialize in particular research areas so that mergers would lead to schools that can support a broader range of cutting-edge education.

This is the last opportunity to correct the data. (UPDATE: One name removed because of a legal threat.)