Geoscience Reference
In-Depth Information
I will put aside for the moment one special category of program,
research and development. These policies attempt to foster new low-
carbon technologies or basic energy sciences. New technologies play a
central role in a transition to a low-carbon world. As discussed in Chap-
ter 23, the need to encourage fundamental science and technology in
energy effi ciency is a central part of any strategy to reduce CO
2
emis-
sions over the long run, with or without carbon-pricing policies.
Most of the policies in the list above have been carefully analyzed
and have been shown to be ineffi cient and ineffective ways to slow
global warming. These alternative approaches can supplement and but-
tress more comprehensive greenhouse-gas emissions limits or carbon
taxes. However, they are ineffi cient because they require spending sub-
stantial sums for minimal impacts. Some are small and modestly effec-
tive; others are just expensive; while some are counterproductive and
actually increase emissions.
I cannot review the alternatives in a comprehensive manner. Rather,
I focus primarily on regulatory alternatives, which have been most
widely used. I illustrate the major diffi culties raised by alternatives,
which is that they tend to be expensive and ineffective relative to more
direct approaches to limiting greenhouse-gas emissions. The fi rst part
of this chapter looks at some alternative approaches, while the second
part examines a special kind of myopia that looms over different policy
proposals.
MAJOR ALTERNATIVE APPROACHES TO CLIMATE POLICY
A central issue examined in this chapter is the relative effi ciency
of different approaches. Public fi nance economists have developed the
idea of “deadweight loss” to measure the ineffi ciency of different poli-
cies. Measuring deadweight loss sounds complicated, but the idea is
simple. The deadweight loss is the net loss to society in terms of fore-
gone goods and services. For example, in the estimates of the cost of
slowing climate change discussed in Chapter 15, I estimated that the
costs (really deadweight losses) were generally on the order of 1 percent
of world income. This is equivalent to a reduction in potential con-
sumption by that amount.
