Political deals on climate change
by Peter Maniloff -- December 14th, 2009
We may be able to effectively reduce emissions by multilateral agreements beyond the COP/MOP framework.
This afternoon I attended an IETA meeting on fossil fuel subsidies and the impacts of their repeal. Featured speakers included Billy Pizer, Deputy Assistant Secretary of Treasury and His Excellency Jose Maria Figueres Olsen, former President of Costa Rica.
Pizer discussed the recent G-20 summit in Pittsburgh. At that summit, member countries agreed to eliminate fossil fuel subsidies in their countries. These subsidies range from tax breaks and favorable treatment of depreciation in the US to government price subsidies and price caps in some exporting nations, and eliminating them has the potential to reduce worldwide greenhouse gas emissions by 10% (according to the OECD). That’s a dramatic reduction that can come in to force quickly and shows the potential for effective environmental policy outside the treaty process.
His Excellency President Olsen discussed the practical political problems of such policies – entrenched subsidies are popular, especially those that are central to national identity. Politicians don’t want to mess with that. He told a story from his time in office, when he suggested eliminated subsidies to an inefficient national railway and using the funds to buy computers for schoolchildren. He thought this was a no-brainer! He’d get to eliminate a broken utility, help the environment, and give kids computers. But the National Railway System was a symbol of pride and he was assailed in the press.
Moral of the story? Cautious optimism – there are lots of ways to implement good policy, but real constraints exist.