#EnvironmentalEconomics

[hpcaatcop29]

“There's been this surge of industrial policy, especially in advanced economies just since 2021. I think there's been like 2,500 new industrial policies, many, if not the vast majority are trade distortive.  The reason is because they contain trade-related climate measures like conditional subsidies with localization requirements, local content requirements, export controls, domestic and export subsidies, and so on and so forth. This interferes with the trade system." --Michael Mehling, Professor of Law at Strathclyde University and Deputy Director, Center for Energy and Environmental Policy Research, MIT, speaking at the HPCA Side Event at COP29, 'Industrial Policy, Trade, and the Political Economy of Decarbonization,' Nov. 14, 2024. Read more about the discussion: http://bit.ly/4hSSLpO.

[surveycircle]

Tweeted

Participants needed for online survey! Topic: "Assessing and predicting consumer demand for electric vehicles" https://t.co/Rrq0UjXKth via @SurveyCircle #ConsumerBehaviour #ConsumerDemand #ElectricVehicles #EnvironmentalEconomics #survey #surveycircle https://t.co/D9zIUoOZu6

— Daily Research @SurveyCircle (@daily_research) Mar 29, 2023

[hpcaatcop27]

“The choice between [carbon taxes and cap-and-trade] is less important than the actual design of the one that we choose to use.”

Robert Stavins, speaking in the China Pavilion, Day 8, COP27, Sharm El Sheikh, Egypt

[hpcaatcop26]

[Jeju Island is] taking action immediately with policies, with technologies, with real implementation. And that’s why other parts of the world – the mayor of New York City, the mayor of Paris, the local officials who have been making impressive statements about their targets and objectives for the long term – can look to Jeju Island to actually see what they can do tomorrow

-- HPCA Director Robert Stavins discussing Jeju Island climate measures at COP26 panel discussion at the Republic of Korea Pavilion, November 8, 2021

[candiedisland42-blog]

Amazed the nerdlets with this sweet blanket fort so that I can study today. Now back to studying derivatives and elasticity of supply and demand. #parentingwin #momlife #studentmomlife #environmentaleconomics #saturdays

[johnsmithusa-love]

[hpcaatcop29]

Experts Discuss ‘Industrial Policy, Trade, and the Political Economy of Decarbonization’ at COP29 Side Event Co-sponsored by the Harvard Project on Climate Agreements

Experts from academia, non-governmental organizations, and the private sector gathered Thursday (Nov. 14) for a side event, “Industrial Policy, Trade, and the Political Economy of Decarbonization,” at the Twenty-Ninth Conference of the Parties (COP-29) of the United Nations Framework Convention on Climate Change (UNFCCC) in Baku, Azerbaijan. The event was co-sponsored by the Harvard Project on Climate Agreements (HPCA) and moderated by HPCA Director Robert Stavins, the A.J. Meyer Professor of Energy & Economic Development at Harvard Kennedy School.

The other panelists were Daniele Agostini, Head of Energy and Climate Policies, Enel; Chantal Line Carpentier, Head of the Trade, Environment, Climate Change, and Sustainable Development Branch at the United Nations Conference on Trade and Development (UNCTAD); Michael Mehling, Professor of Law at Strathclyde University and Deputy Director, Center for Energy and Environmental Policy Research, MIT; and Joyashree Roy, Distinguished Professor at the Asian Institute of Technology.

Mehling launched the discussion with an overview of an HPCA Discussion Paper he wrote titled “Good Spillover, Bad Spillover? Industrial Policy, Trade, and the Political Economy of Decarbonization,” which examines the myriad ways in which spillovers can impede or advance climate actions in both intended and unintended ways.

“There's protectionist bias in trade policy that favors with tariffs, [that is] lower tariffs, upstream commodities to help keep domestic higher added value industries more competitive that further stimulates these emission transfers,” he said. “And if you consider the global carbon budgets report released yesterday that [in] each year still consistently adding to the annual emissions into the atmosphere, this is a problem that needs to be addressed.”

Mehling argued that we are beginning to see a “fundamental change in the paradigm of climate policy in major economies,” which could create some serious problems in the decades ahead.

“There's been this surge of industrial policy, especially in advanced economies just since 2021. I think there's been like 2,500 new industrial policies, many, if not the vast majority are trade distortive.  The reason is because they contain trade-related climate measures like conditional subsidies with localization requirements, local content requirements, export controls, domestic and export subsidies, and so on and so forth,” he remarked. “This interferes with the trade system and…part of my argument in this paper is that the positive spillovers of learning by doing of technology transfer, knowledge transfer, and eventually technology diffusion may be inhibited by the kind of policies that we now see emerging in reaction to many, many different drivers, many of which are absolutely justified and need to be dealt with.”

Mehling mentioned that the European Union’s Carbon Border Adjustment Mechanism (CBAM) can have harmful spillover effects on trade policy through carbon leakage which can offset emissions reductions in one country with higher emissions in another. He also spoke of the so-called “green paradox” in which the anticipation of more restrictive climate policies in the future can provide incentives to oil and gas companies to boost their extraction of fossil fuels over the short term.

Roy spoke of decarbonization efforts in India through market-based policies that reward companies for reducing emissions. These voluntary efforts, she remarked, were spawned by the nation’s Energy Conversation Act, first introduced in 1991 and revised in subsequent years. Among other things, she explained, the Act created a “perform, achieve, and trade” platform, analogous to emissions trading policies elsewhere, in which companies were rewarded with certificates when they reduced their CO₂ emissions.

“They had to consistently reduce the fossil fuel intensity of their output to get the energy certificate, and the price of the energy certificate was related to the oil price so they always wanted to compare the fossil fuel price, how it is moving in the international market, and what price they have to pay and then what was the energy fossil fuel cost of their output,” she said.

Agostini, affiliated with Italy’s largest energy company, spoke of the ways in which Mehling’s paper stimulates the debate over how a wide range of climate policies intersect and sometimes intervene with global trade and economic efficiencies.

“As a company, we often look at what happens, and of course we espouse the cause of global trade economic efficiency, and we think everything should work accordingly. But then our scenario is [often] wrong because things don't [always] go that way,” he remarked. “We've seen that especially with carbon markets lately in this arena. So, papers and research that try to better understand why that doesn't happen and what we can do to optimize the process [are helpful]. But most of all for the private sector who needs to do the investments, [we want to] make the entire outlook more predictable because we need predictability.”

Agostini also argued that the private sector has an important role to play in ensuring that climate policy best practices are promulgated.

“The faster we spread good practices among policymakers, the faster the world is going to be more predictable. [Having a more] predictable investment context for the private sector will allow the private sector to upscale its investment. And in terms of spreading good practices, again the policy toolbox is key. More and more governments are starting to realize that it's not about constraining versus supportive, but it's getting the two to work together,” he stated.

Finally, Carpentier spoke of recent UNCTAD research conducted in collaboration with the International Monetary Fund (IMF), the World Bank, and the Organization of Economic Cooperation and Development (OECD), focusing on developing a deeper understanding of the different carbon pricing metrics and climate change mitigation policies to inform policymakers and policymaking.

“What we find is that developed countries, the OECD countries, have moved from regulation to standards to subsidies and then to carbon pricing,” she remarked. “They have not [immediately] jumped into carbon pricing... The price would be so outrageous, it would be politically unacceptable. So, you kind of start and then the policy mix [will] be different country by country depending on the environment, depending on the institutional capacity, and several other facts.”

Carpentier argued that better coordination is needed amongst countries and regions seeking effective CBAMs, and greater technical assistance is necessary to enhance the pace of global emission reductions.

“There is an effort within… the G-20 Plus [countries], the 35 largest greenhouse gas emitters that represent 85 percent of all the greenhouse gas emission. And the idea is probably for those larger countries and larger emitters, perhaps they should have a carbon price and if they're going to have a carbon price, they will have a border adjustment most likely. How do we work with them?,” she asked.  “Some of them, like Indonesia, have already asked the UN to help them because if you're going to put a carbon price, how do you go about it? What are the best practices? And we have several requests from several countries on that.”

Following their remarks, the panelists responded to questions from audience members, ranging from how to create larger markets where lower carbon products are more profitable to how to ensure that CBAM revenues can be more fairly distributed to impacted countries.

Stavins, reflecting on the session, commented that “climate change policy and trade policy can complement or conflict, and attempts to minimize conflicts can have unintended consequences, which is at the heart of current controversy regarding the new CBAM in Europe.  Whereas many of the more wealthy countries see the CBAM as a positive step possibly leading eventually to a carbon-pricing club, people from developing countries tend to see the CBAM as little more than environmental protectionism.” 

The side event was co-sponsored by the Harvard Project on Climate Agreements, the Enel Foundation, Massachusetts Institute of Technology, and Foundation Environment - Law Society.  

[austene3]

"By encouraging value creation rather than distributional conflict, competitive markets produced more of what people want (goods and services) from less of what they don’t want (environmental degradation, for example)"

[surveycircle]

Participants needed for online survey! Topic: "Consumer reactions to price incentive on takeaway beverage cups" https://t.co/EWa11dnTjz via @SurveyCircle#ConsumerBehavior #EnvironmentalEconomics #PlasticPollution #taxation #survey #surveycircle pic.twitter.com/6c3EKH57ET

— Daily Research (@daily_research) November 1, 2019

[hpcaatcop27]

Prof. Stavins meeting with Michael Jung, MPP 2002, at COP27. 

[hpcaatcop26]

HPCA Director Robert Stavins Offers Perspectives on Jeju Island Climate Measures and Article 6 at COP26 Panel Discussion

Jeju Island, the 707 square mile self-governing province off the south coast of South Korea which is making ambitious strides toward its goal of becoming carbon neutral by 2030, serves as a potential important demonstration for other sub-national entities that seek to reduce their global climate footprint. That was one perspective voiced Monday (November 11) by Robert Stavins, director of the Harvard Project of Climate Agreements, during an insightful panel discussion hosted at the Republic of Korea Pavilion at the 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC). 

Stavins, who served as senior advisor to the Jeju Carbon Free Island policy initiative, highlighted the island government’s climate efforts to date and its plans moving forward. Jeju Province currently ranks first for renewable energy and electric vehicles (EVs) among the 17 major cities and provinces in the country. Its installed renewable energy capacity is already greater than 30 percent, and there are nearly 24,000 registered EVs on the island. In coming years, solar photovoltaics (PV) and offshore wind installations are expected to dramatically increase renewable energy output, and the number of EVs on the island is expected to greatly increase when a ban on internal combustion engines takes effect in 2030. 

“So much of what we hear is just talk – targets for the year 2050. It’s easy to state a target that is that far in the future. A target for 2030 requires more credibility, but even more than that, [Jeju Island is] taking action immediately with policies, with technologies, with real implementation,” Stavins remarked. “And that’s why other parts of the world – the mayor of New York City, the mayor of Paris, the local officials who have been making impressive statements about their targets and objectives for the long term – can look to Jeju Island to actually see what they can do tomorrow.”   

Ian de Cruz, the global director for Partnering for Green Growth and Global Goals 2030 (P4G), an organization pioneering market-based partnerships to build sustainable and resilient economies, cited the tremendous potential to replicate and scale up the innovative climate policies being implemented on Jeju Island to other parts of the world. 

“How do we take the Jeju Island example in the Republic of Korea potentially into some our other partner countries, whether that’s in Bangladesh…Colombia…Ethiopia, as an example?  Can we reduce emissions, impact the number of people who can get access to things like mobility, energy, water, and also leverage the significant scaling of private sector investment? And not only do it at the national level, but through sub-national and city-to-city cooperation. That’s the challenge, but that’s [also] the opportunity,” de Cruz said. 

De Cruz emphasized the need to scale up cutting-edge innovation taking place in Korea to developing countries, in Africa and elsewhere, such that it aligns with the host country’s priorities, ultimately creating commercial and investable models. 

“Working with these developing and emerging economies together in terms of how you can localize that experience,” he said. “Building jobs and industries in those countries with them is very important.” 

Stavins commented on how sub-national jurisdictions like Jeju Island might take advantage of the cooperative mechanisms established in Article 6 of the Paris Agreement, working across borders to implement their nationally determined contributions (NDCs) and achieving emission reduction goals. 

“National and sub-national governments can form linkages internationally across borders so that one party can facilitate – through finance or other means – emissions reductions by other parties, because it might be less costly. So that brings down overall cost, and lowering cost facilitates greater ambition,” Stavins stated. “Once those linkages are in place, a company in Seoul, in principle, can get involved in an exchange with a company in Beijing, San Francisco, or Glasgow, [or] anywhere else, under the linkage that’s been established.” 

A somewhat critical assessment of the Jeju Island climate vision was delivered by Joojin Kim, managing director and founder of Solutions for Our Climate, a Seoul-based climate advocacy group. The island, he said, is “a very important battleground between fossil fuel generation and renewables,” but profit margins, he argued, are sometimes driving climate decisions, slowing the pace of the transition to renewable power sources. 

“Who will lose money if the renewable power plants are curtailed less, and fossil fuel generators are curtailed more? The answer is pretty obvious,” he said. “The gas power plants and diesel power plants down there are owned 100 percent by Korea Electric Power Corporation, our only national-owned utility,…[and it] will lose money.”  

Koo Man-sub, the Acting Governor of Jeju Province, delivered closing remarks at the session: “As we embark on the implementation of the Paris Agreement this year, cooperation and partnership between and among nations and cities are imperative. This is our last chance to save the earth. To tackle climate change, cities need to come forward and take action. We need to act together for our families and our children,” he stated. 

Yoon Hyeong-seok, the director of Jeju’s Future Strategy Bureau, and Anna Lising, senior climate advisor to Washington State Governor Jay Inslee, also participated in the discussion, which was moderated by Kim Sang-Hyup, president of the Jeju Institute and chair of the Jeju Green Big Bang Committee.  

[candiedisland42-blog]

Getting a head start on next semester's reading #uottawa #studentmomlife #onvacation #economics #environmentaleconomics #books #philosophy #warmsocks #whyisncsocold (at Mount Airy, North Carolina)

[kingdomekush-blog]

Slow death by economics/mathematics, can't wait until I defeat this double headed monster! #environmentaleconomics #monster #death #selfimprovement #wayoflife