Ian Gough CASE LSE 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 ID: 269572
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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.