Transcript Climate Policy beyond Copenhagen

James F. Casey
Associate Professor of Economics and Environmental Studies
Williams School of Commerce, Economics and Politics
Washington and Lee University
[email protected]
Beyond Copenhagen
 What happened?
 Copenhagen Accord



2 °C a global temperature guardrail
commitment to significant funding for developing nations
targets from all of the major emitters, including emerging
economies.
 Where are we going?
 Cancun, Mexico
 Expiration of the Kyoto treaty in 2012
 Cap or a Price?
My Humble Opinion
 BRIC countries, OECD countries, Everybody else
Adaptation
 Change is already occurring – how will we adapt?
 Sea level
 Agriculture
 Extreme weather events
 it will cost $75 - $100 billion each year (in developing
countries)to adapt to climate change from 2010 to
2050 (The World Bank).
Mitigation
 $78b to $106b/year to 2020 to reduce carbon
emissions 20%, (McKinsey).
 CCS – carbon capture and storage
 Reduce deforestation
 Alternative energy
Moral Imperatives
 ’Climate change is one of the greatest challenges facing humanity,
and it is the world’s most vulnerable populations who are most
immediately at risk. The actions of the wealthiest nations—those
generating the vast majority of greenhouse gases—have tangible
consequences for people in the rest of the world, especially in the
poorest nations.’
Michael R. Bloomberg
Mayor of the City of New York
 The world’s poor and future generations cannot afford the
complacency and prevarication that continues to characterize
international negotiations on climate change. (United Nations)
 “the cost of stabilization can be limited to around one percent of
global GDP a year” – Sir Nicholas Stern
Domestic Policy
 Cap and Trade
 The idea



Set a limit on CO2 emissions
Issue permits (Auction)
Allow trading
 The reality



Limits will be influenced by politics
Permits allocation subject to politics
Supply and demand uncertainty (price fluctuations)
Again, My Humble Opinion
 Tax CO2 emissions
 2011 - $5/Ton
 2020 - $50/Ton
 The Pigou Club
 http://gregmankiw.blogspot.com/2006/10/pigou-club-manifesto.html
Resources
 http://rff.org/focus_areas/Pages/Energy_and_Climate.aspx
 http://www.ft.com/indepth/copenhagen-climate-
conference
 http://www.nature.com/climate/2010/1002/full/clim
ate.2010.09.html
 http://www.rff.org/rff/Publications/upload/31809_1.
pdf