Climate Policy to Defeat the Green Paradox

Publisher's full text
Stefan Fölster

Carbon dioxide emissions have accelerated since the signing of the Kyoto Protocol. This discouraging development may partly be blamed on accelerating world growth and on lags in policy instruments. However, it also raises serious question concerning whether policies to reduce CO(2) emissions are as effective as generally assumed. In recent years, a considerable number of studies have identified various feedback mechanisms of climate policies that often erode, and occasionally reinforce, their effectiveness. These studies generally focus on a few feedback mechanisms at a time, without capturing the entire effect. Partial accounting of policy feedbacks is common in many climate scenarios. The IPCC, for example, only accounts for direct leakage and rebound effects. This article attempts to map the aggregate effects of different types of climate policy feedback mechanisms in a cohesive framework. Controlling feedback effects is essential if the policy measures are to make any difference on a global level. A general conclusion is that aggregate policy feedback mechanisms tend to make current climate policies much less effective than is generally assumed. In fact, various policy measures involve a definite risk of 'backfiring' and actually increasing CO(2) emissions. This risk is particularly pronounced once effects of climate policies on the pace of innovation in climate technology are considered. To stand any chance of controlling carbon emissions, it is imperative that feedback mechanisms are integrated into emission scenarios, targets for emission reduction and implementation of climate policy. In many cases, this will reduce the scope for subsidies to renewable energy sources, but increase the scope for other measures such as schemes to return carbon dioxide to the ground and to mitigate emissions of greenhouse gases from wetlands and oceans. A framework that incorporates policy feedback effects necessitates rethinking the design of the national and regional emission targets. This leads us to a new way of formulating emission targets that include feedback effects, the global impact target. Once the full climate policy feedback mechanisms are accounted for, there are probably only three main routes in climate policy that stand a chance of mitigating global warming: (a) returning carbon to the ground, (b) technological leaps in zero-emission energy technology that make it profitable to leave much carbon in the ground even in Annex II countries and (c) international agreements that make it more profitable to leave carbon in the ground or in forests.

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