2i April 2013

 In this review of recent developments in the decline of the "dangerous anthropogenic global warming" scartemongering, the UK's authoritative Scientific Alliance explains what has happened and why, concluding: "But momentum has been lost and it will be difficult to get any new system up and running. The failure that is climate mitigation policy has run out of steam. Let us hope that this gives governments a breathing space to change direction, to work for the prosperity of today’s voters rather than trying ineffectually to minimise the hypothetical impacts of climate change on their grandchildren."

The Scientific Alliance, UK

19 April 2013

The failure of climate change mitigation policy

At the turn of the century, climate change was arguably the single biggest issue around the world, or so it seemed in Europe. There had been a rising trend of global average surface temperature from the mid-1970s. The Kyoto protocol had been adopted by the signatories to the UN Climate Change Convention (although difficulties with ratification meant that it was 2005 before it finally came into force). The IPCC had already published two mammoth assessment reports and the third came out in 2001. This featured the striking ‘hockey stick’ graph produced by Professor Michael Mann, showing an essentially flat temperature line for hundreds of years, followed by a remarkably steep and sudden rise in the 20th Century. The IPCC, the scientific establishment and the environmentalist lobby had worked hard for action and it seemed to be paying off.

The difference in 2013 is striking. First, the jury remains out on what is driving climate change and what its future effects may be. Although it is now rare to hear anyone say that the IPCC is understating the severity of the issue (and, hard though it may be to believe now, we heard a number of such voices only a few years ago), the argument from those who retain faith in the enhanced greenhouse hypothesis is that additional heat is being absorbed in the lower levels of the oceans. According to this view, the heat will be released into the atmosphere at some stage and quickly push average temperatures up to what they would have been if the warming trend of the late 20th Century had persisted.

On the other hand, the Mann hockey stick has now been comprehensively discredited and the reality of the (still unexplained) Roman and Medieval Warm Periods acknowledged. Sceptics point to the lack of any warming for the last 15 years (despite an accelerating trend in CO2 emissions), the influence of a period of reduced sunspot activity and the possible imminence of the next Ice Age. They point to the failure of climate modellers to allow for the significant impact of clouds on average temperatures and for the need to introduce a variety of fudge factors (such as aerosols) into their calculations to match modelled hindcasts with observed reality. The only credible argument to support the demands of the climate change lobby is that there remains a small chance of catastrophe, which behoves governments to take some effective action on a precautionary basis.

But this action has been a failure. The second difference between now and 2000 is that, in contrast to the ardent hopes of activists, no over-arching global agreement on emissions reduction has actually been agreed, beyond a second (pending but not implemented) commitment period for the Kyoto protocol. Once headline news items, the regular climate summit meetings (Conferences of the Parties, or COPs), taking thousands of delegates to (often exotic) venues to agree on new targets, policies and funding, have been relegated to the inside pages after the fiasco of COP15 in Copenhagen in 2009. There may still be targets galore, a continuing round of meetings and a forthcoming IPCC Fifth Assessment Report (AR5), but no-one really expects a breakthrough in international cooperation.

Third, the flagship European Emissions Trading System (ETS) is apparently in terminal decline. The decision-makers in the European Union, in their wisdom, decided that a straightforward carbon tax was not sufficient to reduce emissions. Instead, they introduced the ETS, with Member States allocating permits for a certain level of emissions to energy companies and other large fossil fuel users. These are tradable, so that organisations not using their full allowance could sell them to others whose emissions were higher. The intention was that total emissions would be capped, market forces would set a carbon price and fossil fuel use would decline as users sought less costly alternatives. There are a plethora of additional interventions, including obligations to use a proportion of renewable energy, subsidies for biomass and feed-in tariffs for wind and solar energy, but the ETS was trumpeted as the lead policy, a model for the rest of the world.

But, despite the aims of its founders, the ETS has been beset by problems since it started in 2005. It has been plagued by fraudulent trading at various times (after all, this is an artificial market in an entirely notional commodity, conducted purely via computer networks, and weaknesses have been there to be exploited), but the main problem has been too low a price to make it worthwhile cutting back on coal and gas use.

A crucial requirement for it to be effective was to issue an appropriate number of permits so that there would be a degree of scarcity and their price would rise. Too many permits were issued in the first phase, perhaps not surprisingly considering that Member States were keen to have sufficient in circulation to minimise costs to their domestic industries. Things seemed to  be heading in the intended direction after these early hiccups, with the price rising above €20 per tonne of CO2 by 2008, quite sufficient to encourage the use of less gas and coal. But after that, things went downhill, as the EU economy hit a rocky period. This illustrates two points: that contrived schemes such as the ETS are too inflexible to cope with changing circumstances and that a recession is the best way to reduce emissions.

More recently, the decline has accelerated. The third phase, which started in January, has introduced an auction of permits rather than their previously free allocation. The continued economic problems have reduced demand and, not surprisingly, the price of permits has slumped (closing at €6.67 at the end of 2012). The Commission’s solution to this was to allow ‘backloading’, or the deliberate holding back of permits from the auction until later years. When the European Parliament’s Energy and Industry Committee voted against this earlier in the year, the price fell as low as €2.81.

For those who thought it could not get any worse, the entire EP also voted down the proposed backloading in this week’s plenary session. It seems that the already foundering ETS is now holed below the waterline. The motives of MEPs are difficult to fathom at the best of times, so what lies behind this may be more than simply a desire not to disadvantage the European economy unnecessarily (which was what drove the Energy Committee decision). It could be that the scheme will be revived, but it is difficult to see this happening effectively.

It is more likely that all parties recognise that this failed scheme is beyond hope. The political class overall continues to be committed to the stringent emission reduction targets previously agreed, at least they do in public. Behind the scenes there is a spectrum of relative enthusiasm. The keener ones will certainly try for a new policy which actually works. But momentum has been lost and it will be difficult to get any new system up and running. The failure that is climate mitigation policy has run out of steam. Let us hope that this gives governments a breathing space to change direction, to work for the prosperity of today’s voters rather than trying ineffectually to minimise the hypothetical impacts of climate change on their grandchildren.

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