Michael Grubb
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Climate change progress and Paradox

20 Dec 2023 | Commentaries

As a complement (antidote?) to the relative pessimism of my post on the constraints of the COP process, “COPped out” – I’m happy to point to two journal publications on actual progress, and the policy approaches to delivery, published last month.

First, experience. The IPCC Sixth Assessment (Mitigation) saw sometimes vibrant debate between a majority narrative on the clear inadequacy of global trends and apparent paucity of effort – “everything much change” – and others looking more closely at the substructure – to learn and “broaden, deepen and accelerate what works”.  One oddity was how relatively little academic work focuses on evaluating what has been done, and what is has delivered – though it was sufficient to get the statements into the IPCC Summary for Policymakers on the extent to which those efforts had already shaved several billion tonnes off the growth of global emissions by 2016.

In November 2023 the Annual Review of Environment and Resources published our in-depth and updated review of this evidence, with the major work led by the brilliant combination of  Janna Hoppe and Ben Hinder: Three Decades of Climate Mitigation Policy: What Has It Delivered?.  We estimate that policies to date have reduced global emissions by 2-7 GtCO2/yr, but argue also that more attention must be given to other indices, including the remarkable progress in low carbon technologies, and enhanced efficiency, as well as land use.

In the run-up to COP, some big guns – the heads of three major international institutions – combined forces in the FT to call for no more business as usual: the case for carbon pricing.  One can sympathise with much of what they say in principle, and yet still be perplexed at the naivety of the message (and the theory).  It is sad but perhaps telling that after such an urging, the negotiations on market instruments were the one main element of the COP negotiations that failed to reach agreement.

One thing our mega review stressed was that, after 30 years of advocacy, no country has relied solely, or even predominantly, upon the standard economic recommendation of carbon pricing.  All have used a mix of policies, sometimes after struggling and failing with efforts to implement a carbon price.   A second paper, just published in the Oxford Review of Economic Policy, gives theoretical foundations for understanding this reality and, indeed, precisely why a mix of policy instruments makes economic as well as political sense.

Building upon the book Planetary Economics, we articulate fundaments for understanding Policy complementarity and the paradox of carbon pricing, emphasising that different policies can and must reinforce each other, not compete. The paradox is simple: carbon pricing cannot succeed unless its advocates are more humble and embrace the contributions that other instruments make to a successful transition strategy.

But for carbon pricing sceptics, one word of warning: it is the combination that counts. As my Indian IPCC colleague Shreekant Gupta remarked: if prices in an economy don’t reflect the strategic goals – including the imperative to cut emissions – then everything else will ultimately be harder.

A broad conclusion from these, and related works under the programme Economics of Energy Transition and Systems Transition, is that in economic and policy terms the world can, and now has the knowledge of how, to hugely accelerate global progress after the Global Stocktake – however strong, or weak, one views the COP28 decision to be.

My own broad submission to the Global Stocktake, available at https://unfccc.int/documents/627224, offered a brief take on some international lessons and possible implications for the international agenda.  But as one seasoned participant in the COP process remarked to me: the real world of implementation, ‘what works’, and the economics of the opportunities arising in the transition, increasingly seem like a different world from the ‘burden-sharing’ mindset of the COP negotiations.

 

More Outreach

COPped out?  The Global Stocktake on Mitigation and and its implications

The Mitigation section of UEA Consensus on the Global Stocktake avoids the issue that should lie at the heart of a robust international agreement: what should be done if the “nationally determined” offers don’t add up to the agreed goals (they don’t – as acknowledged) and won’t (as is obvious). Understanding why is crucial for understanding what the COP can and cannot do – and hence the need to look beyond.

Discussions on REMA: Splitting the wholesale market

Following on from their first REMA seminar in May where Locational Marginal Pricing (LMP) was discussed, BIEE held a second seminar on Tuesday 26 September to discuss another of the Government’s proposed electricity market reforms – splitting the wholesale market in...