combating global warming

Debate in America

America's quieter greens have been successfully lobbying powerful interests. Many companies have come round to the view that they would do better with a single federal system than a patchwork of state-level rules. Farmers have bought the idea that they can make money out of biofuels. Christians have been persuaded that they need to be better stewards of the earth. Defence hawks have been arguing that America needs to reduce its dependency on the Middle East. But two powerful groups have remained determinedly sceptical: energy-intensive manufacturers and organised labour, who fear the effects of higher energy costs in America and their impact on jobs.

Policy Decisions

In order to combat global warming, there seems to be to policy issues that are debated

Ideally, the world would set a global carbon price (through a tax or a cap-and-trade system) that charged industries for the damage they do to the environment and thus shifted the economy away from carbon.

1.  Carbon tax -  Supporters of a tax on emissions, an alternative to cap-and-trade advocated by many economists, are few and far between. Michael Bloomberg, the mayor of New York, who is rumoured to be considering an independent run for president, supports one, as does John Dingell, a prominent congressman. But most politicians are certain that no policy involving the word “tax” will prosper.

On the first argument, if America establishes a carbon price, an energy-intensive industry such as aluminium would very likely choose to expand capacity elsewhere. Yet it is not clear that, in the long run, environmental regulation does much to suppress economic growth. After all, California imposes tighter rules on companies than do most other American states, but its long boom suggests that greenery and growth can coexist comfortably.

2.  Cap and trade systems  - the government sets an overall limit on emissions and then sells or gives away an equivalent number of tradeable permits to pollute. This allows the firms that find it cheapest to reduce their emissions to do so, leaving those for which cuts would be costlier to buy permits.

regional and industry specific regulations

A patchwork of local, sectoral rules risks piling on layers of regulations that distort incentives, raise costs excessively and prove hard to sweep away if and when a better system eventually emerges.

An international agreement to replace the Kyoto protocol, which runs out in 2012, does need to be reached. But negotiations will get nowhere until 2009, when this American administration will probably make way for one that takes climate change seriously.

The glacial pace of progress towards a global agreement contrasts with what is happening in Europe. After a row last year with carmakers, which had failed to meet voluntary emissions targets, the European Commission is about to force them to limit the carbon intensity of their fleets (see article). Europe is particularly hard on its car industry; but other countries are picking on road transport. China has imposed fuel-economy regulations, and America's Congress has just approved a bill tightening its own. By 2020 California will require all the petrol sold there to meet a low-carbon standard.

However, as Bali showed, politics has a habit of undermining economics. A global carbon price remains a distant hope, and the planet is getting warmer. In its absence, targeting dirty industries is a stop-gap. And the experience of cutting sulphur emissions in America in the 1990s argues that second-best solutions can give way to the best: regulations on power stations were eventually superseded by a successful cap-and-trade scheme that cleared the stuff out of America's air.

Europe's carmakers, of course, are not best pleased with the commission's plan. Although the French and Italians, with their lighter cars, are shrugging their shoulders, the Germans, with their hefty gas-guzzlers, are furious. That's understandable. Meeting these regulations is bound to be uncomfortable now. But there will be an upside: when some future Bali really does produce an historic agreement to cut global emissions, greener companies of all sorts will be better placed to compete in a low-carbon world.

source:  economist

Links

carbon trading , and other methods of

 - is a market where countries can go to trade the rights to pollute.  Very interesting stuff. 

green business models

- here we are going to highlight some innovative companies around the globe that are doing their part to innovate green business models. 

green accounting

-  the need for ways in which to measure greenhouse gas emisions, and "greeness"  of industry.  This is a new industry that is emerging to fill the accounting needs,  which are especially relevant if we go to a "cap and trade"  system of combating global warming....