POLICY RESPONSES TO CLIMATE

CHANGE
Mitigation
 Climate change mitigation
• Climate change mitigation is action to limit
climate change.
– This action either reduces emissions of
greenhouse gases or removes those gases from
the atmosphere.
• IPCC defines mitigation of climate change as
"a human intervention to reduce emissions or
enhance the sinks of greenhouse gases"
 Mitigation by sector
• Electricity
– Wind and sun can provide large amounts of low-carbon energy
at competitive production costs.
– To deliver reliable electricity from variable renewable energy
sources (wind and solar), electrical power systems must be
flexible.
– Most electrical grids were constructed for non-intermittent
energy sources such as coal-fired power plants.
– The integration of larger amounts of solar and wind energy
into the grid requires a change of the energy system
– The IPCC estimates that these two mitigation options have the
largest potential to reduce emissions at low cost.
– Other well-established renewable energy forms include
hydropower, bioenergy, nuclear and geothermal energy.
– Hydroelectricity is electricity generated by hydropower.
• there are geographical limits and environmental issues.
– Bioenergy, in particular biogas, can provide dispatch-
able electricity generation.
• While burning plant-derived biomass releases CO2, the plants
withdraw CO2 from the atmosphere while they grow.
– Geothermal power is electrical power generated from
geothermal energy.
– Nuclear power could complement renewables for
electricity.
• On the other hand, environmental and security risks could
outweigh the benefits.
• Transport
– Increasing the use of public transport, low-carbon freight
transport and cycling are important components of
transport de-carbonization.
– Walking, cycling and sharing vehicles can reduce urban
emissions.
• Bicycles have almost no carbon footprint
• Personal cars are extremely inefficient at moving passengers.
– Electric vehicles and electric trains help to reduce the
consumption of fossil fuels.
– Ship operators must switch from heavy fuel oil to more
expensive oil-based fuels, implement flue gas treatment
technologies or switch to liquefied natural gas engines.
– Airlines contribute to climate change by emitting
carbon dioxide, nitrogen oxides and particulates.
• The aviation industry has become more fuel efficient.
But overall emissions have risen as the volume of air
travel has increased.
• Short-haul flight bans, train connections, taxation on
flights can lead to fewer flights.
• Electric aircraft or hydrogen-powered aircraft may
replace fossil fuel-powered aircraft.
• Buildings
– Most of the energy used in buildings is for space and
water heating.
– Refrigeration and air conditioning contribute much for
the global CO2 emissions caused by fossil fuel-based
energy production and the use of fluorinated gases.
– Building insulation can reduce the primary energy
demand significantly.
– Heat pumps may also provide a flexible resource that
can participate in demand response to integrate variable
renewable resources into the grid.
• Heat pumps efficiently heat buildings, and cool them by air
conditioning.
– Solar water heating uses thermal energy directly.
– Sufficiency measures include moving to smaller houses,
mixed use of spaces and the collective use of devices.
– Construct new buildings using passive solar building
design, low-energy building, or zero-energy building
techniques.
• It is possible to design buildings that are more energy-
efficient to cool by using lighter-colored, more reflective
materials in the development of urban areas.
– Urban forestry, lakes and other blue and green
infrastructure can reduce emissions directly and
indirectly by reducing energy demand for cooling.
• Agriculture
– Climate-smart agriculture
• It is an integrated approach to managing land to help
adapt agricultural methods, livestock and crops to the
effects of climate change and, where possible,
counteract it by reducing greenhouse gas emissions
from agriculture, while taking into account the growing
world population to ensure food security
– Limiting food waste is an effective way to reduce
greenhouse gas emissions.
– Changes to a diet less reliant on animal products
such as plant-based diets are also effective.
– Important mitigation options for reducing the
greenhouse gas emissions from livestock include
• genetic selection
• introduction of methanotrophic bacteria into the
rumen
• vaccines
• feeds
• diet modification and grazing management.
– Other options are diet changes towards ruminant-
free alternatives, such as milk substitutes and
meat analogues. Non-ruminant livestock, such as
poultry, emit far fewer GHGs.
• Industry
– Industry is the largest emitter of greenhouse gases
– Electrification can reduce emissions from industry.
– Green hydrogen can play a major role in energy-
intensive industries for which electricity is not an
option.
– The de-carbonization of cement production
requires new technologies, and therefore
investment in innovation.
– Bio-concrete is one possibility to reduce
emissions.
• Coal, gas and oil production
– Methane leaks at oil and gas wells and processing
plants are cost-effective to fix in countries which
can easily trade gas internationally.
• Methane may continue leaking even after the mine has
been closed. But it can be captured by drainage and/or
ventilation systems.
• Fossil fuel firms do not always have financial incentives
to tackle methane leakage.
 Climate change mitigation policies
• Climate change mitigation policies can have a large and
complex impact on the socio-economic status of individuals
and countries
• It is important to design policies well and make them inclusive.
• Types of national policies that would support climate change
mitigation include:
– Carbon Taxes
– Tradable permits
– Regulatory standards
– Voluntary agreements
– Informational instruments
– Adding or removing subsidies
– A Green Marshall Plan
• Carbon Taxes: A standard economic remedy for
internalizing external costs is a per-unit tax on
the pollutant.
– In this case, a carbon tax is levied on carbon-based
fossil fuels in proportion to the amount of carbon
associated with their production and use.
– Such a tax will raise the price of carbon-based energy
sources and so give consumers incentives to conserve
energy overall (which would reduce their tax burden),
as well as shifting their demand to alternative sources
of energy that produce lower carbon emissions (and
are thus taxed at lower rates).
• Tradable Permits: Each emitting firm would be allocated
a specific permissible level of carbon emissions.
– The total number of carbon permits issued would equal the
desired national goal.
– Firms are able to trade permits freely among themselves.
– Firms whose emissions exceed the number of permits they
hold must purchase additional permits or else face penalties.
– Meanwhile firms that are able to reduce their emissions
below their allowance at low cost will seek to sell their
permits for a profit
• Regulatory standards: These set technology or
performance standards.
– One example is fuel-efficiency standards for cars.
• Voluntary agreements: These are agreements
between governments, often in the form of public
agencies, and industry.
– Agreements may relate to general issues, such as
research and development. In other cases they may
involve quantitative targets.
• Informational instruments: Poor information is a
barrier to improving energy efficiency or reducing
emissions.
– Examples: increasing public awareness of energy
saving with home heating and insulation or emissions
from meat and dairy products.
• Adding or removing subsidies: A subsidy for
greenhouse gas emissions reductions
– Phasing-out of unhelpful subsidies. Examples are
subsidies in the agriculture and energy sectors
• A Green Marshall Plan.
– This calls for global central bank money creation
to fund green infrastructure.
 International agreements
• Historically efforts to deal with climate change have taken
place at a multinational level.
• They involve attempts to reach a consensus decision at the
United Nations, under the United Nations Framework
Convention on Climate Change (UNFCCC)
• The Montreal Protocol in 1987 is a precedent that this
approach can work.
– But some critics say the top-down framework of only utilizing
the UNFCCC consensus approach is ineffective.
• The Kyoto Protocol to the UNFCCC adopted in 1997 set out
legally binding emission reduction commitments for
member countries.
• Paris Agreement: Adopted in 2015, the agreement covers
climate change mitigation, adaptation, and finance.
– The Paris Agreement's long-term temperature goal is to keep
the rise in mean global temperature to well below 2°C (3.6 °F)
above pre-industrial levels, and preferably limit the increase
to 1.5°C (2.7 °F), recognizing that this would substantially
reduce the effects of climate change.
– Emissions should be reduced as soon as possible and reach
net zero by the middle of the 21st century.
– To stay below 1.5 °C of global warming, emissions need to be
cut by roughly 50% by 2030.
– Under the agreement, each country must determine, plan,
and regularly report on its contributions.
 Group assignment

• Form six groups with members of seven/eight students

1. What is the main evidence of global climate change? How serious is the
problem, and what are its primary causes? What issues does it raise
concerning global equity and responsibility for dealing with the problem?
2. Do you think that the use of cost-benefit analysis to address the problem
of climate change is useful? How can we adequately value things like the
melting of Arctic ice caps and inundation of island nations? What is the
appropriate role of economic analysis in dealing with questions that affect
global ecosystems and future generations?
3. What goals would be appropriate in responding to climate change? Since
it is impossible to stop climate change entirely, how should we balance
our efforts between adaptation and prevention/mitigation?
4. Which economic climate change policy do you prefer: a carbon tax
or a capon-trade system? Why? What are the main barriers to
effective policy implementation?
5. Climate change policies can focus on changing behaviors or
changing technology. Which approach do you think could be more
effective? What policies can be used to encourage changes in
each?
6. The process for formulating and implementing international
agreements on climate change policy has been plagued with
disagreements and deadlocks. What are the main reasons for the
difficulty in agreeing on specific policy actions? From an economic
point of view, what kinds of incentives might be useful to induce
countries to enter and carry out agreements? What kinds of “win-
win” policies could be devised to overcome negotiating barriers?