Politicians tend to choose the most expensive options first

In an interview with Nature Reports Climate Change, Oxford economist Dieter Helm discusses some of the ideas in the upcoming The Economics and Politics of Climate Change. Part of their focus is on why we have accomplished so little since Kyoto.

First, we are looking at GHG production instead of consumption. Shifting industry to China makes the numbers look better, but hasn’t even caused a blip in actual emissions increase.


What we have learnt is that politicians tend to choose the most expensive options first. Faced with climate change, what’s our solution? In Europe, it’s to devote most of our energies to a rapid build-out of wind power. This is the sort of thing that makes nuclear power look cheap. Climate change is about the massive increase of coal burning internationally, especially the growth of China and India fuelled by coal-based energy — and America too, where the Obama plans are also small relative to the problem.

What exactly will windmills across Europe do to address that overwhelmingly dominant effect? Of course they’ll play some role, but it’ll probably take a couple of weeks for China to add sufficient new coal power stations to cancel out any renewables effort in Britain. It’s time to grow up. It’s time to realize that coal is where the core of the problem lies, and to think cleverly about solutions towards that…

The problem we have in Europe is that people are obsessed by 2020, and that’s a time period in which actually we can’t do much on the technological front. By putting all our emphasis onto the technologies we can get in place by 2020, we’re missing longer-term opportunities like nuclear power, and carbon capture and storage.

And there is the stimulus:

The American government and the British government are spending something like 12 per cent of gross domestic product (GDP) to prop up consumer spending. My view is the level of consumption is far too high in the US and the UK, both for the macroeconomic cycle and for the environment. We’re living beyond our means. I would have taken the money that’s been used to prop up demand and put it into investment — and climate change can fit within the investment component.

See The Economics and Politics of Climate Change and the rest of the interview.

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