Random Targets And Excessive Profits: Climate Change Policies Not Working

The “plethora of initiatives, directives and interventions has not been matched with outcomes,” while the EU’s 2020 emissions reduction target is unsound and ignores the increasing use of coal, Smith School Associate Professor, Dieter Helm says.

A second paper by Dr Cameron Hepburn, an economist at the Smith School, says the funding scheme for clean energy projects in the developing world - the Clean Development Mechanism (CDM) - should be altered to enable more schemes to go ahead.

“The CDM has actually been one of the success stories of the Kyoto regime,” with more than 4,600 projects in the pipeline, Dr Hepburn says. But some of the projects it suits, such as the elimination of hydrofluorocarbons and other gases, have given investors huge profits. The CDM “is poorly suited to…forestry, agriculture, transport, and building efficiency, where there has been hardly any progress,” he adds.

Publication of the two studies September 3 marks the launch of Climates of Change, the Smith School’s new series of research papers. The two studies are also part of a book being published later this year, edited by Professor Helm and Dr Hepburn.

In his paper, Professor Helm says the EU’s choice of 20 per cent cuts by 2020 is a random target not backed by credible evidence.

“There may be much cheaper ways [of cutting emissions], for example by preserving tropical rainforests or decarbonising China and India’s rapid coal-based economic growth,” he says.

The EU is relying on renewables, which are underdeveloped and reduced demand, which could rise if incomes increase, to meet its 2020 target, Professor Helm adds. Its policy “is based on carbon production, not consumption, thereby sidestepping Europe’s responsibilities towards the developing world…It is not clear what impact, if any, it will have on the concentration of carbon in the atmosphere,” he adds.

Dr Hepburn says the CDM has generated around US $7bn for emission-reduction projects. But the amount needed by developing countries is more like “tens of billions, if not greater,” if the CDM is to fulfil its potential.

Green projects need private sector money because public funds are in short supply following bank bailouts and the recession.

Dr Hepburn says the CDM should be reformed to improve its efficiency and integrity. Currently, it does too little to encourage green developments in poor nations and give a fair return to investors. “It is critical that the carbon financial framework operates at the service of developing countries,” he concludes.

Dr Mick Blowfield, Editor of Climates of Change, said: "The research we publish could help produce the innovations so essential to switching our economies from carbon dependence to carbon independence. We will leave no stone unturned with chemistry and philosophy, law and physics among the diverse areas of study the series will highlight.

"Climates of Change will take the Smith School to the forefront of environmental and sustainability research. We will be focussing on the most critical and topical sustainability issues of today."