CARBON MITIGATION POLICIES, DISTRIBUTIONAL DILEMMAS AND SOC - PowerPoint Presentation

Slide1

CARBON MITIGATION POLICIES, DISTRIBUTIONAL DILEMMAS AND SOCIAL POLICIES 

Ian Gough

CASE, LSESlide2

Goals of paper

Contemporary policies to reduce emissions of greenhouse gases

will have distributive

consequences

Thus

implications for the scope and remit of

‘social policy’.

This

paper studies current carbon mitigation policies and their distributive impacts. It considers a range of current and proposed social programmes to ameliorate these impacts, before proposing alternatives

.Slide3

The triple injustice

Developed first to explain global environmental injustice, but can be applied within countries (

Pye

at

al):

households

situated in the upper part of the income distribution contribute more to CO2 emissions in absolute terms than lower income households;

poor

households suffer most from environmental degradation;

common

environmental policy measures tend to have regressive effects, burdening lower income households more Slide4

Goals

My research is on climate change and

carbon mitigation policies (CMPs

).

Ignore

the second of

Pye’s

three aspect - the direct impacts of climate change within the UK, such as flood risks, drought risks and heat waves, and their unequal

distribution

Thus:

Climate mitigation policies ->

distributional dilemmas -> countervailing social policiesSlide5

From ‘PAP’ to ‘CAP’

This argument is pursued in two

parts

a

production

accounting framework (PAP) – the current

Kyoto policy

framework

a consumption

accounting framework (CAP):

study all

GHGs emitted by

UK consumers

, whether

direct

or embodied in goods and

services

It makes a big difference:

UK ‘consumes’ 17%-36% more CO2 emissions than it produces

China consumes at least 18% less than it producesSlide6

Growing case for CAP

Ethical: responsibilities for GHGs should rest with consumers not producers

Political: moving to CAP would

ease the emissions problems facing large exporters and thus the potential conflict between climate change and socio-economic

development, and the obstacles to global agreement on GHG emissionsSlide7

Social policy implications of CAP

To target consumption-based emissions in the West requires more

radical policies to modify preferences and behaviour, and to constrain total consumption demand.

Speculate

on

ways to combine these goals with social

equity.

Conclude this will require

novel forms of policy

integration: new

proactive,

investment-focussed

eco-social

policiesSlide8

1. PAP: current CMPs in the UK

3 main goals:

explicit

pricing of

emissions

promoting

clean

energy

improving

energy

efficiency –

my main focus

.

Main programmes here: A few direct government programmesMajority ‘oblige’ energy companies to promote energy efficiency with some targeting of lower income groups

Total spending 0.24% of GDP in 2010-11 (less than cost of Winter Fuel Payments)Slide9

PAP policies: distributional consequences

In a word regressive, especially when financed by bills paid by domestic energy consumers

Offset by energy cost savings – but these will mainly accrue to higher income households

Hills Report provides much evidence

Eg

. Green Deal with modest Energy Company Obligation (ECO) will likely increase fuel povertySlide10

PAP: ameliorative social policiesHills’ three alternatives

1. Better compensation

Can do better than WFPs but not much due to heterogenous dwellings and households

2. Variable energy prices

Eg

. new

Warm Home

Discount

: ‘challenging’

Why not rising block tariffs?

3. Energy efficiency policies: the only secure way forward which can combine sustainability and equity goals. But how?Slide11

Green Deal or Green New Deal?

The government’s

Green Deal

is ambitious, but will shift costs still further on to private sector.

Much criticised by Committee on Climate Change, Hills Report etc

W

ill

require direct tax-financed

subsidy and more regulation to avoid social inequity: Power on German example

Will require justification using an alternative political economy, emphasising investment leverage (Stern), Green New Deal (UNEP, ILO etc)Slide12

2. From PAP to CAP: our studyCASEPaper 152

L

inks

together data from two datasets: the Stockholm Environment Institute’s (SEI’s) Resources and Energy Analysis Programme (REAP) which calculates UK carbon emissions at a per capita level, and the UK 2006 Expenditure and Food Survey.

Reveals scale of total embodied emissions

Shows direct household emissions only one fifth of totalSlide13

Composition of total household emissionsSlide14

Distribution of CAP emissions by income, and emissions per £ of income:Slide15

CAP: distributional implications

So the usual picture; but regressivity varies: less so for consumer

goods and services

and transport

Ratios of emissions of top to bottom decile:

Energy, food: 1.8:1

Consumer goods and services: 3.6-3.8:1

Transport (

incl

foreign holidays): 4.5:1

Thus moving from PAP to CAP reduces, but does not remove, conflict between sustainability and equity. Slide16

Policies to reduce CAP emissions

Price based:

Broad-based carbon taxes: now waning and usurped by

Cap and trade: the EU Emissions Trading System and others

This will be less regressive than current policies

Directly influencing consumer behaviour:

Providing information

Nudging

Citizen engagement

Regulation

‘Why retreat to nudge, where other influences may shape choices?’ (

Taylor-

Gooby

)Slide17

3 policies for equitable carbon reduction

Taxing consumption,

eg

. Frank.

Inequitable unless selective taxes on ‘luxuries’

2. Personal carbon allowances and trading

Directly progressive (though still some low income losers)

Direct impact on consumer behaviour likely

But would require carbon labelling of thousands of goods (and services?); Tesco experience suggests unlikely without regulation Slide18

3 policies for equitable carbon reduction (cont)

3. Reduced working hours (

Schor

)

Likely ‘scale effect’ on emissions, but also ‘composition effect’

Incremental by taking out productivity increases in ‘leisure’:

Change in annual hours of work 1980-2010: US -33 hours, Germany -300 hours

Some European examples

Belgian Time Credit Scheme

But would require ancillary ‘traditional’ social programmes to avoid low pay and ‘time inequality’Slide19

Summary of policiesSlide20

Conclusions: Reconciling equity and sustainability (re climate change)

In the household sector, radical energy

saving

policies only secure solution, but

Will require more subsidy and regulation

Will entail different economic model (Green

New

Deal)

and a switch in arguments for public spending from compensation to eco-social investment

An

ethical and political case for monitoring and targeting the total consumption-based emissions of rich countries like the

UK

These would challenge consumer sovereignty and economic growth

Again

a move from compensatory social policies to integrated eco-social programmes.