A Critical Conversation on Climate Change ... - Green Choices

lessons unlearned 205147 Adam B. Jaffe et al., ‘Environmental Policy andTechnological Change’, Environmental and ResourceEconomics 22, 2002, pp. 41–51, p. 51; Richard B.Stewart, ‘Controlling Environmental Risks throughEconomic Incentives’ (1988), Columbia Journalof Environmental Law 13, 1988, p. 160. Under theEU ETS, companies are not formally allowed tobank leftover allowances from one phase of theprogramme to the next. However, they can achievethe same effect through what traders call ‘tradingthe spread’: selling, say, their 2007 allowances whilebuying 2008 allowances. See ‘Backwardation Allowsand Incentivises EUA Banking into Phase Two’,Point Carbon, 23 September 2005, http://www.pointcarbon.com.148 See, e.g., Jeff Romm, Cool Companies, Island Press,Washington, 1999; F. Krause, ‘The Cost of MitigatingCarbon Emissions: A Review of Methods andFindings from European Studies’, Energy Policy24, 10/11, pp. 899–915; Ernst von Weizsacker andAmory B. Lovins, Factor Four: Doubling Wealth,Halving Resource Use, Earthscan, London, 1997. TheUS Department of Energy has found that the UScould cut its predicted energy consumption by 20per cent by 2020 and its carbon dioxide emissionsby a third, bringing them close to 1990 levels,all the while saving USD 124 billion on its energybill (US Department of Energy, Office of EnergyEfficiency and Renewable Energy, ‘Scenarios for aClean Energy Future’, Washington, 2000. See alsoP. Raeburn, ‘It’s Perfect Weather to Fight GlobalWarming’, Business Week, 11 December 2000, p.36). According to energy expert Amory Lovins, theUS is failing to make many reductions in carbonemissions not because they would be expensivebut because of capital misallocation, organisationaland regulatory failures, lack of information, perverseincentives, and so on. See ‘Climate Protection forFun and Profit’, Rocky Mountain Institute Newsletter,13, 3, Fall/Winter 1997, p. 3 and Amory B. Lovins,‘More Profit with Less Carbon’, Scientific American,September 2005, pp. 74–82.149 Working Group III contribution to Third AssessmentReport, IPCC, Cambridge University Press,Cambridge, 2001.150 Henrik Hasselknippe and Kjetil Reine, eds., Carbon2006: Towards a Truly Global Market, Point Carbon,Copenhagen, 2006, http://www.pointcarbon.com/wimages/Carbon_2006_final_print.pdf.151 David A. Malueg, ‘Emissions Credit Trading andthe Incentive to Adopt New Pollution AbatementTechnology’, Journal of Environmental Economicsand Management 16, 1987, p. 52; A. Denny Ellermanet al., op. cit. supra note 93, p. 14. .152 Ibid.153 Margaret Taylor et al., ‘Regulation as the Mother ofInvention: The Case of SO 2 Control’, Law and Policy27, 2005, pp. 348–78, p. 372.154 Ruth Greenspan Bell, ‘What to Do about ClimateChange’, Foreign Affairs 85, 3, June 2006, availableat http://www.weathervane.rff.org/solutions_and_actions/International/What_to_Do_About_Climate_Change.cfm.155 Greenspan Bell, op. cit. supra note 1, pp. 28, 30.156 ‘Statement of G8 Climate Change Roundtable’,World Economic Forum and Her Majesty’sGovernment, UK, London, 9 June 2005. Even theoil corporation Shell admits that carbon efficiencymeasures are more likely when market solutionssuch as emissions trading are limited, globalisationhas been restricted in favour of national laws andstandards, and cross-border economic integrationis limited. Under a regime of greater cross-borderintegration, regulatory harmonisation and voluntarycodes, it concludes, there may be higher economicgrowth, but an ‘absence of security-driveninvestment in indigenous renewable energy sources’(Royal Dutch Shell, ‘The Shell Global Scenarios to2025. The Future Business Environment: Trends,Trade-Offs and Choices’, 2005, www.ukerc.ac.uk/component/option,com_docman/task,doc_download/gid,346/). It was for such reasons that the lowemissionsvehicle program enacted by several USstates to stimulate innovation and secure emissionsreductions didn’t require merely that emissionsstandards be met. That goal could have beenachieved merely by tweaking existing technologythrough, for instance, introducing very efficientcatalysts. Rather, the program recognised that someeconomically-’unjustified’ zero-emissions vehicleshad to be introduced as well, in order to jumpstartmore serious technological change. The mostefficient short-term solution, it was understood,would not necessarily deliver environmentallysuperiortechnological innovation (David M. Driesen,‘Does Emissions Trading Encourage Innovation?’,Environmental Law Reporter News and Analysis 33,2003, p. 10094).157 Margaret Taylor et al., op. cit. supra note 153; DavidPopp, ‘Pollution Control Innovations and the CleanAir Act of 1990’, Journal of Policy Analysis andManagement 93, 2003, p. 390.158 David M. Driesen, Syracuse University School ofLaw, personal communication, 2005. But see alsoCurtis A. Moore, op. cit. supra note 61, p. 11, whostates that the market did have a role, but writesdryly that the ‘innovation’ it stimulated was ‘in newrailroad tracks, on- and off-loading systems andother ways of bringing lower-sulphur coal from thePowder River Basin to market’.