Emissions Scenarios - IPCC

156 Scenario Driving Forces
contribute to national goals for security, food and energy
supply, high employment, and long-term economic growth
(Maddison, 1995). The encouragement may take many forms,
such as direct subsidies and protection from foreign
competition, public investment in infrastructure, training, or
R&D, and support for collaborative development programs
and information networks (OECD, 1997a). If governments
support sectors that are fossil-fuel intensive, the tendency to
increase GHG emissions is clear. However, protectionist
policies may also reduce national economic efficiency, which
dampens income growth and tends to restrict growth in GHG
emissions. Conversely, if governments support the
development of rapid-growth sectors, the tendency may be to
promote long-term economic growth, increase household
income and consumpfion, and hence increase GHG
emissions.
Over a period of 100 years the policies that most influence the
development of GHG emissions are probably those that
contribute to the processes of technical and social innovation,
which themselves contribute to economic development.
Innovation policies mostly emphasize the development of
technologies that improve intemational competitiveness with
new products and improved performance or reduced costs of
existing products. The policies are not usually designed to
achieve these and other (e.g., environmental and social)
objectives in an integrated way (OECD, 1998b). Hence, their
impact on GHG emissions is hard to predict, but as cunently
constituted many national systems for innovation could tend to
increase emissions by sfimulating economic growth.
3.7.2.3. Energy, Agriculture and Other Resource Management
Policies
Government policies on energy and agriculture have, on the
whole, paralleled global trends during the 20* century. Early in
the century there was a move toward protectionism, which
aimed to secure national self-sufficiency, especially in food and
energy. Govemments established import quotas and tariffs,
subsidies for domestic production, and research and investment
programs to improve agricultural productivity and develop new
energy sources. During the 1980s policy emphasis shifted in
many countries, and has continued into the 1990s, toward open
borders and reduced subsidies and R&D. Nonetheless,
numerous energy and agricultural policies persist that
influence production and trade pattems and hence also GHG
emissions.
3.7.2.3.1. Energy policies
Various policies exist to promote energy efficiency and the
adoption of energy-efficient technologies and practices.
Govemment standards, such as appliance efficiency standards,
motors standards, and the automobile fuel economy standards
in the US, prescribe the energy consumption levels of
particular commodities. Residential and commercial building
standards require the use of energy-efficient construction
practices and components. Information dissemination
programs, such as the Green Lights program in the USA or
similar programs in other countries, provide consumers with
the information required to make purchase decisions as well as
to install and operate energy-efficient equipment. Subsidy or
investment credit programs are often used to promote the
adoption of a particular technology; combined heat and power
was promoted in The Netherlands through such a program in
the 1980s (Parla and Blok, 1995). Other energy efficiency
policies or programs include audits and assessments, rebate
programs, govemment procurement programs, benchmarking
programs, labeling programs, and technology demonstration
programs (Worrell etal., 1997).
Many reports point to govemment subsidies as a major
impediment to cleaner production of energy (Bumiaux et al,
1992; Larsen and Shah, 1992; de Moor and Calamai, 1996;
Roodman, 1996; Greenpeace, 1997). In addition to direct
subsidies, govemments use a wide variety of measures to
support domestic or regional industries, or to protect legal
monopolies. These policies inhibit innovation and can lead to
higher levels of pollution or resource intensity than would
occur in a less constrained market. A recent OECD study found
that reform of supports to coal, electricity, and transport could
substantially reduce COj and acid rain emissions in some
countries (OECD, 1997a). In other countries, subsidy reform
would have minimal direct environmental benefits, but would
increase the effectiveness or reduce the cost of environmental
policies such as eco-taxes and emission limits. Where subsidies
support nuclear power or other non-fossil energy sources, their
reform could conversely lead to increased GHG emissions.
Energy taxes also have an important influence on energy
demand and hence GHG emissions. The majority of energy
taxes are intended as a pure fiscal instrument or, in the case of
road fuel taxes in some countries, to raise funds for road
provision and maintenance. Many countries are raising these
taxes, or considering doing so.
3.7.2.3.2. Agriculture policies
Agricultural policy reform has received more attention than
energy policy reform in recent years. Most OECD countries
support domestic agriculture, whether through direct subsidies,
import tariffs, or price controls. The general trend is toward a
reduction in these supports, in part as a result of tiade
negotiations, but also as part of the broader trend toward
policies that reduce budget deficits and improve market
efficiency. Supports are also being reformed to reduce their
linkage to production volumes. Where subsidies are linked to
the volume of production, they provide an incentive to increase
output beyond the level of demand, which leads to surpluses.
This incentive may tend to increase GHG emissions as a result
of soil carbon depletion and oxidation, excessive use of
nitrogen fertilizer leading to N2O emissions, and over-intensive
animal farming that results in excess CH^ emissions from
manure and from the animals themselves (OECD, 1997b;
Storey, 1997). The overall impact of agriculture subsidy
reforms on GHG emissions will depend on associated fiscal
changes in other parts of the economy.