TV4 (Swedish)

This morning I was interviewed by TV4 about the op-ed in Dagens Nyheter (see below). The clip can be viewed here:

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How to use 100bn climate change euros

Today I and Martin Ådahl publishes an on-ed in prominent Swedish newspaper Dagens Nyheter. The article discusses tax shifting, fiscal vs. corrective taxes and how governments can sensibly use the billions in new income that will soon start to flow in from the auctioning of emission permits in the European Emissions Trading Scheme.

We argue that corrective green taxes are to their nature temporary and that governments should therefore not treat the income as permanent income fit to fund permanent reforms, but rather use it for temporary tax breaks and subsidies for making the transition away from environmental pollution less costly.

If a government is able to set the corrective tax at it’s “Pigovian” level and by doing so internalize the full social cost in products and services, the income should be used where it could yield the most benefit in a first best scenario. If, however, the tax for different reasons (e.g. industry lobbying or other political pressures) can’t be set at this level, the revenue recycling (the use of the tax income) should be made in such a way that it further encourages emission reductions beyond what the tax itself can produce. For example by giving tax breaks for investments in clean technology, energy efficiency programs in buildings and for purchases of clean vehicles.

Today it rather looks like the income from emission allowance auctions across the EU will be used as a way  fill fiscal gaps in national budgets and for recycling back to industry with no strings attached. This is bad policy and it’s important to now put pressure on policymakers to declare what they intend to use these funds for, some €20bn in total in the EU in 2013 and then quickly growing up towards €40-100bn.

If we are to take global warming seriously, emissions will be almost phased out by 2050 and the funds discussed above will decrease in size rapidly after 2020. Governments should therefore not view this as “free money” but rather shift it intelligently and in order to support the transition to a low-carbon economy.

After the financial crisis: Green Growth?

ELF

On June 20 I’m speaking at an event in London organized by the European Liberal Forum. I’ll present alongside some very prominent speakers, as a matter of fact I’m replacing the UK Secretary of State for Energy and Climate Change (Rt Hon Chris Huhne) who had to cancel. Big shoes to fill indeed!

The other speakers are; Tom Burke, E3G, James Cameron, Climate Change Capital and Dimitri Zengelis, Chatham House.

We’ll speak to an audience of politicians about the prospects of achieving “Green Growth” in the EU. This is an outspoken aim of the union, but is it practically possible and does the ambition carry any substance as “Green Growth” is an ill-defined concept? I’m looking forward to the event since FORES is working on these very issues and there is a lot to be said (and done!).

If you are in London next week, drop me an e-mail and I’ll invite you to the seminar.

Almedalsveckan

At the 2010 edition of the prime political event in Sweden-Almedalsveckan-no less than 1396 events are registered during the debate-packed week. The top five topics this election year is:

Health and welfare (180 events)
Climate/environment (159)
Jobs/Unemployment (156)
International issues (144)
Enterprise/Business (135)

I’m taking the ferry to Gotland tonight and will arrive Monday morning. FORES has a packed schedule of events (see program [Swedish]) and I’ll speak on Monday between 16-17 at “Energispektrum” (more info [Swedish]) and on Tuesday between 15:30-16:30 at an event about green taxation (more info [Swedish]).

A Bretton Woods for the Climate

A Bretton Woods for the Climate

I can now call myself a published author!

At a recent World Bank conference in Stockholm FORES published the book “A Bretton Woods for the Climate” co-authored by me and two colleagues. In two parts and just over 200 pages we go through the key issues of the global negotiations on climate change; Institutions, governance, targets and timetables, burden sharing, financing, cap and trade, adaptation and mitigation and non-compliance mechanisms.

We try to sketch up a model for how to solve these issues and how to, in a cost effective and credible way, build a global framework that ensures countries take on strong commitments and follow though on them.

The book is a result of a thought process started at the Copenhagen climate summit when we (as well as the rest of the world) disappointedly watched world leaders fail to agree on how to solve the greatest problem facing the planet today. Perhaps, we thought, it’s not political will that’s lacking, but rather institutions fit for the tasks? Perhaps a different model than the 194 country, consensus based, setup of the UNFCCC should be explored?

This book suggests so and can be downloaded free of cost at: http://fores.se/assets/144/FORES_A_Bretton_Woods_for_the_Climate.pdf

Remember the cold winter?

During this past winter climate change skeptics in Europe and the US had the time of their life as temperatures dropped deep and the general public started to ask themselves where global warming was. When global data for the winter has been compiled and analyzed, it turned out however that the rest of the world wasn’t really freezing as much as we did. Below are data on temperature anomalies during the winter from NOAA (National Oceanic and Atmospheric Administration).

Data highlights for the whole year of 2009:

• Global land and ocean annual surface temperatures through December tied with 2006 as the fifth warmest on record.

• The 2000-2009 decade is the warmest on record, with an average global surface temperature of 0.54°C (0.96°F) above the 20th century average.

• Ocean surface temperatures (through December) tied with 2002 and 2004 as the fourth warmest on record.

• Land surface temperatures through December tied with 2003 as the seventh warmest on record.

Data highlights for January-April 2010:

Bretton Woods for the climate

I’ve been busy the last couple of weeks with finalizing a study on a Bretton Woods style institutional setup which could be a workable way to control global greenhouse gas emissions. The study goes through emission reductions in the industrialized world, emission offsets, funding projects in developing countries, trade issues, the political science of the negotiations and much  more. It actually seems to turn out more like a book than a study and hence perhaps I’ll publish my first book soon, that would be cool!

Anyway, the product should be out in the end of May and in conjunction with a conference where FORES will organize a session on carbon markets with some really fancy guests. The day before I’ve managed to get two Nobel Prize winners to an event in Stockholm so May seems to become an awesome month!

Climate consensus?

How much will it cost to quit the carbon habit?

No one really knows, but judging from history it’s safe to assume it’ll be cheaper than we believe. Below are the cost estimates before implementation of two environmental control schemes and the actual costs measured after the implementation.

Why is this the case? Well, we tend to analyze costs in a fairly static manner and not take into account the cost reductions produced by technological innovation and substitution. If you ask someone, or a company, how much it’ll cost and how painful it’ll be to change habits, the response will often be exaggerated. But when the change is forced through we generally find cheap and simple ways to adapt.

Source: http://www.theclimategroup.org/_assets/files//BTCDJune08Report.Fin.pdf

IPCC in numbers

Some interesting statistics on the U.N. Intergovernmental Panel on Climate Change (IPCC) and the recent critique against the science.

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The last (fourth) assessment report:

People from 130 countries participated, 2 500 reviewers submitted 90 000 comments, 450 lead authors worked together with 800 contributing authors from all over the world. The report consists of 3 000 pages and 18 000 references.

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The critique:

After three years of intense scrutiny two errors have been found and out of the 18 000 references a handful have been questioned for accuracy.

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The critique and the media reports on it has the last few months contributed to a dramatic shift in public opinion on climate change. It a weird world we’re living in.