“If the deficit has little to with the wellbeing of our children and grandchildren, global warming has everything to do with it. We run the risk of handing them a planet without many of the fascinating features that we had the opportunity to enjoy (for example, coral reefs that are dying, plant and animal species that are becoming extinct, landscapes that are being transformed). Far more seriously, we face the likelihood of handing them a planet in which hundreds of millions of people risk death by starvation due to drought in central Africa, or through flooding in Bangladesh and other densely populated low-lying areas in Asia, as a result of human caused global warming.”

The point is that, in Baker’s words, “the main factor that will determine the economic wellbeing of our children and grandchildren will be the strength of the economy that we pass down to them”. A crucial part of this strength will be the state of the natural environment, which will in turn depend on the kinds of investments we make now.

Put these arguments together – (i) borrowing does not create a net burden, (ii) future welfare depends on the state of the economy, which is strongly influenced by investments today and (iii) the need to make investments that do not erode natural resources (what Partha Dasgupta calls genuine investment) – and you have the idea that Duncan Foley has put forward, that we can borrow now to cover the additional costs of low carbon investments. Future generations will be better off, even with the higher levels of debt, and we will not have to reduce consumption today. Overall, Foley’s position is that ”global warming presents no novel issues of the distribution of economic welfare between generations that are not already inherent in other investment choices”. The key issue in how far to pursue this approach is the value future generations place on a lower stock of GHGs in the atmosphere relative to conventional (high carbon) capital stock.

Foley’s approach may offend the moral principles of some – isn’t it wrong that future generations should have to pay for cleaning up the mess that we have made? However, the point is that future generations would still be better off than if we did nothing, and if borrowing makes it politically possible to act, then that has to be better than expecting additional costs to come out of the pockets of today’s consumers and hitting a political brick wall.

The new research cited by Harvey turns out to be a document called The Carbon Plan, basically yet another strategy document looking ahead to 2020, 2030 and 2050. Chris Huhne’s foreword does seem to put a similar gloss on the numbers: “By 2020 we will complete the ‘easy wins’ that have helped emissions to fall by a quarter since 1990.”

But this is really a piece of spin. Drilling down into the underlying figures (also available from the UK government), we find a slightly different story.

First, while greenhouse gas emissions emitted from within the UK are down by over 25% since 1990, carbon dioxide emissions are down by less than 17%, on the provisional 2010 data.  It is widely known that overall greenhouse gas emissions in the UK are down substantially since 1990, and it has been apparent that we would exceed our Kyoto target easily, but it has also long been thought that we would miss our own domestic target of 20% reduction in CO2 by 2010, and so it has proved (would have been worse without the recession). There is clearly some sleight of hand here, picked up by the Guardian and reproduced as “emissions fell by 25.2%”. This might sound like pedantry – surely its GHG emissions that count, so who cares? But the difference matters because it has proven much easier to cut other GHG (mostly methane) emissions in the past (down 54% 1990 to 2010), whereas it is carbon dioxide emissions that we really have to cut in the future. It is the latter that have to be cut if we want to show leadership. And of course the figures reported in the plan don’t include shipping and aviation. The other point on targets, as we have mentioned before, is that UK CO2 emissions on the more appropriate consumption basis (as opposed to the official production figures) are well  up since 1990, of the order to 20-30%.

A second issue is that, while there has indeed been some decarbonisation in the power sector, this all happened in the 1990s, the dash for gas period. Greenhouse gas emissions (almost all CO2) from power stations fell by almost 28% between 1990 and 1999. This was pre-emissions trading, and largely the result of privatisation and changes in the relative price of coal and gas. Since 1999, and over the period when climate policy started to come in more seriously, emissions from the power sector rose again by around 20% to the pre-recession height in 2007. Sure, we have built more renewables, but it hasn’t been enough to offset the resurgence in coal use.

Another odd thing is about the residential sector. Despite all the action on insulation and boilers, emissions from the residential sector are higher in 2010 than they were in 1990. This may have been due to the cold winter in the latter year, but pre-crash emissions were still about the same level as they were in the early 1990s. There has been some decline since the early 2000s, but it’s not earth-shattering.

The one sector that really has seen big declines in CO2 emissions (20% between 1990 and 2007) is the business sector.  According to a recent UK Energy Research Council study, this fall has been due to improvements in efficiency rather declining output or the loss of heavy industry (which had mostly happened by 1990). Unlike the power sector, most of the fall has been in the 2000s, not the 1990s. This is in fact the only part of the economy where the UK may have a claim to be walking the walk (transport emissions flatlined).

This is not a bad achievement in itself, but it gets lost in the noise. Government will spin the figures to exaggerate policy impact and protect its reputation. Environmentalists and various industry lobbies will also be selective and look for stats that make performance look bad. The recent exchange on the costs of offshore wind as a proportion of household energy bills is a good example. What we need is good reporting that can cut through both sets of bias and tell it like it is.

So far, so familiar. Indeed, the dramas of individual COPs have now become so repetitive, that it is surely worth standing back and reminding ourselves of why we already know, really deep down, before the event what will happen at Durban. It is also worth reflecting on the fundamental dynamics of the climate change  negotiations. For me, the best way of doing this is to turn to Scott Barrett’s essential analysis.

His account is pretty simple. To work, binding environmental agreements have to involve an incentive to participate. In the case of the Montreal Protocol, addressed at stopping the growth of the hole in the ozone layer and on which the Kyoto protocl was modelled, the incentive for North American and European leaders was political pressure from publics worried about skin cancer. For the developing world, it was the (relatively small) side-payment they got for phasing out CFCs and HFCs over time. In the case of climate change, it’s not at all so clear what the incentives are. As we have frequently said in the past, concern about climate change is widepread, but not a priority (outside of the climate community). Future generations will be the worst affected, and they don’t have a vote. Latterly, countries like China and maybe India have started to see some benefit to exporting clean energy technologies to a global market driven by an agreement, but they are not quite ready to sign up, and obviously the US is worried about ending up importing all that kit (looks like a two-way action in the WTO is looming).

A second issue is enforcement, which for Barrett is the most important factor. He noted that “the focus of the Kyoto negotiations was on the setting of targets and timetables. When the treaty was first negotiated, little attention was given either to compliance or participation”, and the same looks like it will be true of any successor. Again, the Montreal Protocol tied compliance to trade sanctions. Barrett argues that this same approach would not work for a climate agreement. the main contender for a mechanism, border trade (or carbon) adjustments are too open to political manipulation, accusations of protectionism in disguise and would rub up against the WTO.

Where does that leave the prospects for an agreement, now and in the future? As for the now, we seem to have lapsed into a dynamic that the eminence grise of game theory, Thomas Schelling, actually recommended as long ago as 1998:

Thomas Schelling’s proposal is characteristically singular in its approach. It explicitly eschews international enforcement. It would also abandon the targets and timetables approach, relying instead on the implementation of policies and measures—that is, on actions rather than outcomes. Schelling would invite countries to pledge to adopt policies and measures, and open these to international review. The policies and measures proposed might create a kind of yardstick by which countries would be judged—providing a small incentive, perhaps, for mitigation beyond the non-cooperative level. Without international enforcement, however, his proposal cannot effect substantial mitigation.

Barrett’s answer is different. With very weak incentives, he argues, the only solution is to reduce costs, and the way to do this is through technological development. As he argues, an agreement dominated by targets, like Kyoto, cannot do this on its own:

Like Montreal, Kyoto is meant to provide a “pull” incentive for R&D. In capping emissions, Kyoto raises the cost of polluting, and so creates a demand for carbon-saving technologies, just as Montreal created a demand for CFC substitutes. The difference between the two situations, as already shown, is that the cost of substituting for CFCs was low. The cost of climate change mitigation will be much higher, and this matters. When the costs of supplying a global public good are high, the incentive not to participate is high, and the burden on enforcement very great. If the treaty cannot support that burden, the result will be very weak incentives for innovation and diffusion of new technologies.

Instead, argues Barrett, we should be aiming for an agreement that commits countries to serious support to R&D for low carbon technoloogies and action in areas such as technological standards, making an agreement look less like the Montreal protocol and more like the MARPOL agreement on shipping pollution.

Many people in the climate world will have read Barrett’s book, so why are they at Durban? Maybe it is just the buzz, getting to watch Bono and Angelina doing their thing, and hitting the surf afterwards. Precisely because they are so stark and simple, the underlying dynamics of the UNFCCC aren’t nearly so sexy, but we forget them at our peril.

Nice bit of satire from the delightfully named Men With Day Jobs – thanks to John Macgrath via Duncan Green.

All the best

Andrew and Matthew

Last week’s Mail splash was a mash-up of two stories, both essentially from the same source; the Global Warming Policy Foundation. One part, which is of less interest, is based on a paper by Lord Andrew Turnbull, an economist and trustee of GWPF who served as Cabinet Secretary during the Blair years.

Turnbull’s is the tone of a climate sceptic. And while it would be a mistake to dismiss his views as irrelevant, there is strong evidence that recent controversies have had little impact on public confidence in climate science. But the other part of the Mail’s story should be of more concern, not least because it positioned right on the fault line between climate change policy and the state of the economy (or at least people’s experiences at the household level).

Using GWPF data, the Mail claimed that ‘cash strapped families pay an average of £200 a year in stealth levies to subsidise Britain’s massive expansion of wind farms, solar panels and ‘environmentally friendly’ heating schemes.’

This claim is at least partially debunked on fullfact.org and it’s worth noting that incentives for renewable heat are in fact funded from general taxation rather than by a levy on energy companies that is passed onto consumer in their bills (which makes a difference because the burden falls less on the shoulders of poorer households than had the policy been paid for energy consumers). But at a time when bills are rising – and rising dramatically – and household incomes are falling in real terms, the truth that a not insignificant proportion of people’s bills fund renewable energy is a hard fact to swallow.

There is also a kernel of political truth at heart of the Mail’s hyperbole. The same Cardiff University/Ipsos-MORI polling that shows public acceptance of climate science holding firm also sees 78 per cent of people questioned being ‘fairly’ or ‘very’ concerned that electricity will become unaffordable in the future. The lion’s share of future increases in people’s bills is almost certain to come from rising fossil fuel prices, but politicians may find it increasingly difficult to pile more climate policy costs onto domestic bill-payers; the Coalition has already backed off from doing this in the case of the RHI. But paying through taxation at a time when such stringent public spending cuts are being made also may be hard to sustain.

How then do we defend paying for renewable energy infrastructure at a time when the truth – or a somewhat distorted version thereof – is proving convenient for climate naysayers and fossil fuel lobbyists alike? There are three elements to this.

The first involves stressing the co-benefits. Unless economic growth in Asia grinds to a halt, demand for fossil fuels can only increase and even coal prices are likely to be high. Renewable energy will be essential in ensuring the UK has an affordable and secure supply of energy in future even if it is costly now. There are strong signs that after years of subsidy, solar power is now becoming competitive with fossil fuels; the cost of solar cells has fallen by 60% in the last 5 years, bringing solar to near grid parity at peak demand in the US.

The second involves innovation. In 1984, a well-known consultancy firm advised a well-know US telecommunications company not to bother developing wireless technology because there would never be a sizeable enough market. The same is now being said of some of the key renewables. And yet if we were to apply the same focus to new energy as we have to communications technologies, the costs may reduce much faster than has been the case with solar. In addition, the ability of economies to innovate is key to their future growth.

Finally, since renewable energy is highly capital intensive and running costs generally low, we should reduce the burden on current bill and taxpayers by borrowing to pay for energy infrastructure. Lest this should be dismissed as barking mad at a time when deficit reduction is the only game in town, then note that it is not only think tank wonks that are proposing this, but also avowed capitalists.

Faced with the green energy backlash, we can bury our heads in the sand, continue to incant the mantras about the long term risks of climate change or face up to the energy challenge and acknowledge that while most people are not in doubt about climate change, neither are they likely to prioritise spending money on climate change policy while their incomes fall.

An earlier version of this article was published on the Liberal Conspiracy blog.

The city of Leipzig has been playing host to the International Transport Forum’s annual summit whose background paper this year focuses on the challenge of meeting the travel needs of a future world population of 9 billion.

This graphic showing the distribution across different income groups of vehicle use in the US caught the eye of a colleague to whom I sent the paper:

It tells two stories.

First, that car travel grows as incomes increase (music to the ears of those that have pilloried us for our pieces on growth and climate change). But the paper goes on to explain:

‘…if average income growth is distributed very unevenly, with high growth at the high end and limited, zero or negative growth at the low end, then average income growth does not lead to more travel as the growth accrues only or mainly to those income classes that have already reached the saturation point.’

However, the aggregate picture (told in the figure that is shown before this one in the paper) misses a very important story. In the top three income brackets, total car use has increased in the past decade – almost doubled in the case of those who earn more than $100,000 – whereas in all other income brackets bar the very lowest, car use has decreased.

Before the anti-growthers revisit the comment box below, this isn’t a growth story per se. In fact the suggestion is that there’s a saturation point for people on middle incomes (I’ve written about the peak car phenomenon elsewhere). However, it does show that the rich (of whom there are now a lot more hence in average terms the picture looks better) are consumers of a disproportionately high number of vehicle miles – to a quite staggering extent.

While perhaps a growing number of people can feasibly travel on public transport, car journeys are likely to remain a still relatively high if apparently declining part of this picture. So perhaps those on the right-hand-side of the chart above should be the ones who pay to decarbonise travel for those on the left-hand-side. In national climate policy hitherto, such as cap and trade and carbon tax, the transaction tends on the whole to happen in reverse.

Framing and its relationship to policy (i.e. does the way an issue is framed have implications for the way policy is designed – we think so) is thus of a high order of importance.

Partly out of naked self interest, as I’m chairing the event, I thought I’d flag a public debate taking place next Monday afternoon, 16 May, at UCL which focuses precisely on how to frame and communicate climate change. Some big hitters, such as Professors Chris Rapley and Mark Maslin of UCL and Prof. Nick Pidgeon of Cardiff are taking part.

I know from conversations with the science community that it has been badly bruised in recent debates. But it would be a shame if this event focuses only on the problems scientists face in taking a complex and not fully resolved (although not inconclusive) scientific enquiry into the public arena. Perhaps the more interesting questions (that it will be up to the audience to raise along with me in the chair) are those concerning how we frame and execute climate change policy now that people are beginning to understand its costs and how they will fall.

Here’s the cast list for the afternoon:

The role of science in the climate change debate

Professor Mark Maslin,UCL Geography and Co-Director, UCL Environment Institute

Response from Professor Nick Pidgeon, Director, Understanding Risk Research Group, University of Cardiff

Public attitudes to climate change

Professor Chris Rapley, UCL Earth Sciences

Response from Dr Jane Gregory, UCL Science and Technology Studies

Climate change and the policy context

Professor Maria Lee, UCL Laws

Response from Dr Slava Mikhaylov , UCL Political Science

Summing up from Professor Yvonne Rydin (Director, UCL Environment Institute)

Roberts’s main target is the authors of The Death of Environmentalism (TDOE), Michael Shellenberger and Ted Nordhaus, who subsequently set up The Breakthrough Institute (BTI). As Roberts puts it, TDOE was a “combustible mix” of good ideas about the need for technological innovation in clean energy and an attack on a green Establishment that was “the fount of all error”. He goes on:

“If S&N had come forward with nothing but a positive agenda for the future of clean energy, they likely would have been politely ignored by the mainstream media just like dozens of earnest green agenda-bearers before them…But S&N capitalized on an insight that had been ignored by their forebears: nothing, but nothing, draws media interest like liberals bashing liberals”

Roberts’s point is that this creates a perverse incentive structure: “the wonky stuff – and BTI cranks out some genuinely good wonkery – doesn’t get clicks. What gets the attention…are the attacks on hippies doing it wrong.”

We’ve got a lot of time for Michael and Ted over at BTI, and they have been very successful in raising some important issues in a sharp way, creating debate and a profile. Indeed, we see ourselves as a somewhat paler, more polite and lower profile British version (and without the funding to have an Institute or do the wonkery). But Roberts’s argument did give us pause for thought.

It’s definitely true that our critiques of green hippies - particularly of the anti-growth literature produced by the likes of the New Economics Foundation and Tim Jackson – are what have brought us by far the largest audiences on this blog. By comparison, we get pretty low numbers of hits when we’re talking about low-carbon innovation and technology policy. An unavoidable conclusion is that you good people out there prefer a scrap between lefties and greenies to serious discussion about what we need to do to save the planet.

So we thought about that, but what we concluded was that there are still two problems that remain.

One is that we still think the greenies (by which we mean the anti-growth camp) are wrong. It may be wrong to give in to the temptation to court attention by picking  fights on these issues, but that doesn’t change the arguments. In other words, we still think that we need a story on tackling climate change that is economically and politically credible. But the fact is that, these days even Greenpeace thinks that, so it’s probably not that controversial any more.

The second problem is more serious (and is actually where we’d throw down the gauntlet to the environmental campaigning groups). This is that Roberts is right about the wonkery. It doesn’t get attention. Another way of saying this is that, even though the arguments about the need for a LOT more support to low-carbon innovation, surprisingly few people are interested. Even Stephen Chu (US Energy Secretary) makes those arguments, but no one listens to him (apparently he’s fed up and wants to go back to academia; let me tell you Stephen, I’ve done that - think again, mate). In the UK the Climate Change Committee said it, partly to ward off the spending cuts. Some good defensive lobbying by the Green Alliance and others managed to keep most programmes alive, but a massive expansion of support to low-carbon innovation, which is what we need,  is simply not on the agenda.

At first glance, this is surprising. Surely this should be appealing to governments who are supposed to like technological solutions (“ecological modernisation” in the jargon), and surely there are plenty of big business interests out there to lobby for the money.

But our view is that this is part of the problem. Everyone is vaguely in favour of more low-carbon innovation, but no major interest is really fighting for it. Innovative low-carbon businesses are usually quite small, or are part of large conglomerates that also do high carbon (think Siemens, which builds wind turbines but also turbines for coal-fired power stations), and so aren’t going to lobby that aggressively for the next industrial revolution. In any case, the business lobby can always be dismissed as chasing the “technology pork barrel” , as Dieter Helm so charmingly puts it.

Meanwhile, none of the big environmental groups will commit to a major campaign for a huge boost to investment in low-carbon innovation. There are probably two reasons for this. One, amongst some of the campaigners, is an underlying  cultural suspicion of the technological route to sustainability. The other is that it doesn’t make for good campaigning. There is no clear baddie in the way that there was (the energy company E.ON) in the campaign back in 2008-09 to oppose new coal, the last really successful environmental campaign in Britain.

So where does that leave us? It’s probably a good idea to give up bashing the anti-growthers, as it isn’t that productive. It may also be a good idea to make the techno-stuff less geeky, and try to make the case for its importance in a much more basic and visceral way. And if we can’t find a classic, evil corporate target for a campaign for a new Manhattan Project-style technology push (and yes, we know that’s not the right analogy, but you know what we mean…), maybe we can make people see that a complacent government makes a target that’s still good enough.

Expect more along these lines from this blog in the future.