Monday, March 5, 2012

Environmental Economists Present "Schelling Consensus"

A group of leading environmental economists has published what is being referred to as the "Schelling consensus" on tackling climate change. This 10-point consensus (named for Nobel Prize-winning economist and game theorist Tom Schelling) calls for an innovative, reinvigorated approach to climate change, making use of the full spectrum of available policy options:

1. Economic analysis suggests that Governments have underinvested in mitigation relative to the level of effort that would be economically efficient.
2. All serious options for addressing climate change should be considered – including controlling greenhouse gas emissions, removing CO2 ,adaption and geo-engineering.
3. International agreements are needed, but need not include all countries or sectors.
4. New approaches that pass a benefit-cost test should be tried, but not necessarily in a single comprehensive agreement; e.g. individual greenhouse gasses could be handled in separate agreements.
5. Putting a price on greenhouse emissions by taxing them or using emission caps would be desirable because it would help consumers, businesses and governments to account for the full social cost of their behaviours. Many countries already have explicit implicit prices on greenhouse gas reductions. The large revenue streams that result should be used productively by reducing other taxes that distort economic activity.
6. Climate stabilization requires that net CO2 emissions decline significantly. Achieving that goal will require a technical revolution. This is one reason why R and D in energy technologies should be a priority, though policies should also ensure innovative efforts are socially productive.
7. R and D is also needed in technologies for removing CO2 from the atmosphere and for managing solar radiation, even though these technologies may not be deployed for decades. Efforts should begin now to develop governance arrangements for the appropriate use of geo-engineering.
8. Businesses need appropriate incentives for innovation, investment and behavioural change.
9. The incentives for consumers, firms and governments to adapt are strong because they will bear most of the costs if they do not. The poorest countries will need assistance from industrialised countries, which may be best targeted to more economic development.
10. There are great uncertainties about how best to manage the various components of the climate change problem. These uncertainties should be acknowledged by adopting a flexible approach to decision making that responds to new knowledge about climate change. Uncertainty should not be used as a rationale for inaction.

These points are generally unremarkable and relatively uncontroversial. Nevertheless, it is significant that geoengineering is treated on equal terms with mitigation and adaptation, as one tool among many that should be considered in the overall effort to avoid dangerous climate change. Such characterizations provide added legitimacy to the field of geoengineering, and promote its increasing acceptance as a normal part of the climate change discourse.

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