The folly of ‘magical solutions’ for targeting carbon emissions

Climate policy is in the midst of a dynamic very similar to that in budget policy in the 1980s and 1990s. Policies such as the Kyoto Protocol, the UK Climate Change Act, and the US cap-and-trade (Waxman-Markey) bill are each “magical solutions” with considerable symbolic heft but precious little effect (actual or potential) on emissions. The poor actual or expected performance of these policies is presently rationalised in terms of the need to take the first tentative steps to put in place institutions that can eventually be focused more directly on the problem.

Emissions reduction has its own simple arithmetic. In the context of modest economic growth, emissions are reduced when energy efficiency improves and/or when energy supply is decarbonised. A direct approach to efficiency and expansion of low-carbon energy is much preferable to the indirect approach enshrined in current policies. A low carbon tax (priced as high as politically possible) could be used to raise funds to invest in technological innovation and deployment. While there are lessons to be learned from past policies (in places such as Japan on efficiency, France on nuclear power, the EU on wind and gas, and so on), the reality is that no one knows how to rapidly decarbonise a major economy or how fast decarbonisation can actually take place. So there is merit in trying different approaches in different places.

Ultimately, depending on the relative success of mitigation policies, we may decide in a few decades to adopt a more brute-force approach to removing carbon directly from the atmosphere. In the meantime, however, we should take advantage of every opportunity to learn from efforts to decarbonise economic activity, with particular attention to realistic approaches and costs, such as contained in the Japanese proposal.

In contrast, policies focused on targets and timetables for emissions reductions avoid questions about the realism and costs of the steps actually needed to reduce emissions. As Stanford’s David Victor explains, “setting binding emission targets through treaties is wrongheaded because it ‘forces’ governments to do things they don’t know how to do. And that puts them in a box, from which they escape using accounting tricks (e.g., offsets) rather than real effort.” Until policies focus more directly on improving efficiency and decarbonising supply, accounting tricks will dominate the policy response, just as occurred in budget policy.

Symbolism is of course both necessary and important in politics. But when symbolism becomes a substitute for meaningful actions, as shown by the dismissive responses to Japan’s emissions reductions proposal, then policy making runs the risk of becoming nothing more than an opportunity to bear witness to cherished values. For climate policy to actually succeed in reducing emissions, it must move beyond “magical solutions” to those that actually work. This means closing the large gap between aspirational goals and actual policy implementation. The global reaction to Japan’s climate policy proposals indicates that this implementation gap remains very large and unlikely to close any time soon.