A new report compiled by Belgium think tank, Bruegel, claims that current policy aimed at solving climate change in a way that is ultimately equitable is sure to fail. According to the lead authors of this study, two from Harvard University and another from the University of Leuven, policies like cap-and-trade, carbon taxation, and "climate reparations" for developing countries fail to address the core issues that will spur the "clean revolution" that activists are hoping for. According to the report, current plans would have a severely detrimental effect to global quality of life that wouldn't break even with the avoided consequences of climate change for about 30 years. Only with extensive programs to seek out the "backstop technologies" that do not yet exist will bring about a steady growth and a paradigm shift toward environmentally friendly consumption.
According to the environmental policy brief, "current approaches to green growth are oversimplified and largely disregard the innovation factor." The environmental policy brief puts context to a new environmental impact model created via joint research from Harvard and MIT researchers, and submitted to the National Bureau of Economic Research. AABH, abbreviated from Acemoglu, Aghion, Bursztyn, and Hemous, the authors of the model, disregards the current model's assumption that innovation "just happens." AABH codifies that innovation happens from within, and has the most influential impact on economic growth and environmental protection.
The model allows for a snapshot of the transition between "dirty technologies" and their clean equivalents, even defining the elasticity between old and new. The AABH model also accounts for environmental decline and its effects on human and mechanical productivity, and the environment's ability to regenerate.
Put simply, the AABH model and the Bruegel environmental policy brief splits the green movement into two separate needs: the need to equitably reduce damage to our environment, and the need to develop the technologies that will allow for continued social and economic growth. According to the policy brief, a single tool like cap-and-trade or a pollution tax are woefully insufficient to achieve both goals. Only by providing large public stimulus to research programs will the future technology be realized, says the brief.
Some form of pollution taxation is important to limit environmental damage, though the precise moment these controls go into effect and how steeply they charge will have a huge impact on global human capital. The report points out that immediate, steep taxation could have disastrous effects on the global growth vector, especially if the advent of future-tech and the private clean-energy industry comes on sooner than expected.
The report advocates the use of carbon-tariffs to eliminate the competitive advantage that "pollution-havens" in developing and emerging economies would offer, and suggests that those that decry trade protectionism could be sated if the funds collected by the importing country were allocated to investing in clean-energy projects that improve the quality of life in the pollution-haven, but provide the short-term economic benefit to the importing country. The report acknowledges that the "South" (presumably Southern Hemisphere) typically lags behind the "North" in terms of research and novel technology. Admitting that this trend is likely to continue indefinitely, the report suggests that the economic advantage conferred to southern pollution-havens will allow for a humane growth vector, while border tariffs (or the threat of them) from the North and subsequent reinvestment into projects below the equator will allow for greater short-term economic gain.
Visit ecofactory on Twitter and visit us anytime at twitter.com/ecofactory !
