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Archive for the ‘literature’ Category

In our last post we talked about the possible reasoning behind George Osborne failing to commit to stringent climate change targets and how this is affecting firms who want to invest in low-carbon technologies, and how this in turn will affect the UK economy.  In this post we talk about the long-term impacts of this failure to commit – the increasing costs of climate change.

George Osborne’s perspective is surely a case of short term political thinking trumping the strategic planning required when considering the impacts of long term environmental change. Without investment in low carbon technologies, their costs will remain high and Osborne can continue to claim that lower carbon targets will be a burden on business. Only by investing in research and development will the costs of low carbon technologies be reduced as we learn more about them and discover new and cheaper ways to implement them.

The time taken for cost reductions in low carbon technologies due to higher research spending on their development is unclear, but as the Stern review[1] (a 2006 review of the economic costs of climate change) illustrates, we are on a path to increasing costs of climate change given a business as usual situation. Therefore, although the Chancellor may not be imposing any additional costs on businesses in the short term, the longer the government fails to promote the low carbon renewable technology cause, the higher the costs of climate change become in the future as its impacts increase.

A likely retort from climate change sceptics is that the academic literature is unclear on the best timing and extent of investment in climate change mitigation and some such as Nordhaus[2] recommend waiting before committing the kind of large scale investments Stern’s review advocates. However, this essentially means waiting until the costs of climate change become large enough to justify the investments in low carbon technologies. The question then becomes are we willing to take that risk given the potentially irreversible consequences of inaction?

George  Osborne’s reluctance to commit to low carbon targets seemingly stems from his desire to keep business on board and his view that there’s a choice between ‘environment’ and the ‘economy’ played out in policy terms through either ‘going green’ or ‘gaining growth’. Therefore perhaps the most convincing argument for the government to implement the CCC’s policy recommendation is the demand from UK businesses for greater government commitment on carbon. In a letter co-ordinated by the Aldersgate Group, over 50 businesses including ASDA, Sky and Anglian Water[3], call for the inclusion of such a decarbonisation target in the Energy Bill. Furthermore, John Cridland Director General of the CBI, has also recently voiced his support for greater government commitment to the green economy recognising the benefits that can be had to business and the economy in the long term[4].

Business leaders, politicians (including Mr Davey, the Lib Dem Energy Secretary) and the public seem to be increasingly excited about the potential for ‘green growth’ and prepared for the short term cost of a transition to a low carbon economy. Given what we know about the need to act swiftly in response to climate change, wouldn’t it be a shame if we were unable to reach our greenhouse gas emissions targets because of a failure on the part of the government, not the market, to recognise the long term benefits of early action on climate change.


[1] Stern, N (2006) The Economics of Climate Change.

[2] Nordhaus, W. (2007) A Review of the Stern Review on the Economics of Climate Change

[4] Cridland, J. (2012) Business needs to look at decarbonising their products and services

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Away from the pasture for the holidays, I’ve been doing some reading…Chekhov plays. I knew he was a visionary, but I didn’t know environmental issues were his bag. So imagine my surprise when I read this little exchange in the play Uncle Vanya – Scenes from Country Life in Four Acts written in 1897!

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Sonya: ….He [Astrov] says that forests embellish the earth, they teach man to understand beauty, they inspire ideals in him. Forests alleviate a climate’s harshness. In countries with a gentle climate less energy is spent on the struggle with nature, and so man is gentler there, more delicate; people are handsome, versatile, easily aroused, their speech is refined, their movements graceful. The arts and sciences flourish among them, their philosophy isn’t gloomy, their attitude to women is fine and noble.

Voynitsky [laughing]: Bravo, bravo!…all that is charming but unconvincing, so [Astrov] my friend, you must let me go on stoking stoves with logs and building sheds with wood.

Astrov:  you can burn peat in your stove and build your sheds of stone. Well I grant you can cut down forests out of need, buy why destroy them? The forests of Russia are being wiped out by the axe, thousands of millions of trees are dying, the homes of animals and birds are being laid waste, river levels are dropping and drying up, wonderful scenery vanishes forever, and all because lazy man hasn’t the sense to bend down and pick up fuel from the ground….One has to be a mindless barbarian to burn such beauty in a stove, to destroy what we cannot create. Man is endowed with reason and creative power in order to increase what he is given, but hitherto he has not created but destroyed. There are fewer and fewer forests…rivers are drying up, game is becoming extinct, the climate is damaged and every day the earth is becoming poorer and uglier. You are looking at me ironically and thinking all I am saying isn’t serious, and…perhaps this really is just craziness, but when I go past the peasants’ woods, which I’ve saved from destruction, or when I hear the hum of my young trees, which I planted with my own hands, I know the climate is a little in my control, and if in a thousand years if man is happy, the responsibility for that will in a small way be mine. When I plant a birch and then watch it come into leaf and sway in the wind, my spirit fills with pride and I…However….I must go. All this is probably craziness after all. I bid you farewell!

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Well, farewell 2010…wishing us all more compelling arguments in favour of the environment in 2011!

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