Tuesday, July 01, 2008

Kyoto2

George Monbiot reviews Kyoto 2 by Oliver Tickell. I am on record praising the book too (e.g. here), and stand by this.

I have also said that one needs to think hard about the challenges that setting up a system like Kyoto2 presents. How, for example, would producers of fossil fuels (from, say, Saudi Aramco and PDVSA to Gazprom and those seeking to exploit the Athabasca tar sands), plus the governments who control or tax them be convinced that it is their least bad option? What if they cannot be? What if they engage in world-class delaying tactics? How to win round those who are already heavily invested in, for example, a continuation of the current emissions capping and trading regime(s)?

As Nick Stern makes clear in a recent interview, he still buys the case for cap-and-trade, and believes it should be a key part of the Copenhagen agreement in 2009. I wonder if he dismisses an idea like Kyoto2 (if he does) on the grounds of expediency -- "We have to make an agreement with the institutions we have got now" -- or others? And I wonder what a champion of auctions such as Paul Klemperer thinks of the idea.

It looks likely that, rightly or wrongly, Tickell's proposal will continue to run into (and where policies are decided be defeated by) the 'standard' argument which in outline goes roughly, 'it's taken at least fifteen years to get to the current arrangement. There are significant flaws in, for example, the ETS and CDM, but the good news is that we can now learn lessons from what has gone wrong, catch the cheats, fix the flaws and move forward. What *really* matters is to get political agreement on emission reductions, and on that hard challenge Kyoto2 offers no more of a solution than anyone else'.

I'd like to see a stronger riposte to this standard argument than I have seen to date.

[Stern is most conspicuously challenged from the 'right' by people who think he wants to spend more money now to protect present and future lives from the impacts of climate change than the economics warrants, but he is also attacked from the 'left' by, for example, George Monbiot here. See also No polar bear left behind, Tax not Trade and To cap or to tax .]

1 comment:

Oliver Tickell said...

Thanks for this. Of course K2 is cap and trade, just "global upstream cap auction trade invest"....

In answer to other Q, there is a WTO-friendly mechanism for countries to levy import taxes on goods entering a K2 zone. You can get this up and running without all countries signing up in other words. And of course countries not signing up would be out of the game as far as spending is concerned, so probably better in than out.