Wise policy always respects the balance of contemporary scientific evidence. If the data shows a health risk from a product according to the great majority of experts, a few dissenting voices will not save it.
While there are climate change sceptics, there are not very many and the accumulation of research, stretching back 30 years and more, has convinced policymakers that the combustion of fossil fuels is a factor in altering the earth’s climate. Atmospheric concentrations of carbon dioxide and other greenhouse gases are continuing to rise and the scientific advice is to stabilise, and then reduce, those emissions which are controllable.
This does not have to be done tomorrow and emissions do not have to be eliminated but they must be reduced from current levels if damaging and perhaps catastrophic consequences are to be avoided. Instead, they are rising and delay in taking action makes the ultimate adjustment more difficult.
National policies are ultimately pointless – no nation has its own atmosphere
The worldwide political response has been incoherent, mainly because of the global nature of the climate challenge. National policies are ultimately pointless – no nation has its own atmosphere and the problem of climate change is inescapably global. Since every tonne of carbon emitted makes the same impact on the global climate, and since just one tonne out of 500 of global carbon emissions is produced in Ireland, even the complete elimination of Irish emissions would make no appreciable difference.
A coordinated worldwide response is the only practical approach. While virtually all major governments have pledged to limit emissions, the UN-sponsored global agreements, the most recent concluded in Paris in December 2015, have been a failure.
Incentive
Each country has an incentive to avoid the costs of reducing emissions, in the hope that others will do what is necessary. Economists call this the ‘free rider’ problem. Why pay if you can hitch a lift for free?
The greatest commitment has been shown in Europe, which has allocated emission caps to each EU member state. But per capita emissions in Europe are lower than in other highly developed parts of the world, about half the US figure for example, and the European measures have not been notably effective.
There is a problem anyway, in a globalised world, in the EU’s focus on carbon production by country. It would be far more logical to focus on consumption of carbon-intensive goods, wherever produced. Commentators on China point to that country’s exports of steel and other carbon-intensive items to developed countries, whose heavy industries have been in decline. Why, they ask, is it a signifier of virtue to have lower emissions in these countries when their production of carbon emissions has been outsourced to China?
A carbon tax would be easier to monitor, and less likely to set countries against one another
A worldwide carbon tax on the consumption, rather than the production, of the various products is the only way to limit emissions without arbitrary trade distortions. Economists have also argued that a carbon tax would be easier to monitor, and less likely to set countries against one another.
Ireland is an EU member and thus subject to the EU’s policy regime, which is based on production-related quotas. For a country with a comparative advantage in livestock industries and large export opportunities, this is highly disadvantageous.
The EU regime divides emissions into what is called the ETS (Emissions Trading Scheme) group and the rest. The ETS group covers about 30% of the Irish total, mostly in electricity generation and a few industrial sectors like cement. Producers must hold certificates entitling them to emit and these are tradable. For the rest of the economy, there is a national emission limit and Ireland may breach its 2020 target as set by the EU, even though Ireland’s overall emissions are down about 15% over the last decade.
Price of carbon
Aside from the inappropriate selection of production rather than consumption as the base for EU emission limits, the ETS policy, applicable to almost one-third of carbon output, has been poorly designed. Most studies of emission reduction policies suggest that the price of carbon, ideally levied as a tax, should be no lower than $30 per tonne, and some studies point to higher figures. The tradable permits issued by the EU to the electricity generators and others are currently trading at about $7, far too low and evidence that the EU has simply issued too many permits.
Meanwhile, Ireland and several other EU countries are scrambling to promote costly carbon-reducing policies in all sectors to avoid fines for exceeding Brussels limits. These are the main instrument of a policy which is not working.
Differing views for Citizens Assembly from IFA and environmentalists