经贸专业英语报刊阅读教程 第一课 Good policy, and bad

Good policy, and bad

Some mitigation policies are effective,some are efficient, and some are neitherDec 3rd 2009 | from the print edition

GREENHOUSE-GAS emissions targets can be implemented through three sorts ofpolicy instruments—regulation, carbon-pricing and subsidies. Governmentsgenerally like regulation (because it appears to be cost-free), economists likecarbon prices (because they are efficient) and businesses like subsidies (becausethey get the handouts).

Regulation can be useful where the market is not working well. Buildings are rarelydesigned to save energy, because those who put them up do not usually pay thebills and those who occupy them choose them for their views or their looks, not theirenergy-efficiency. The same goes for appliances, most of which do not use enoughenergy to affect consumers' choices. Small regulatory changes (see box, next page)can cut energy consumption without distorting the market much. According toMcKinsey, around one-third of the required greenhouse-gas reductions will actuallysave money.

In this special report

Getting warmer

Is it worth it?

The green slump

»Good policy, and bad

Vampires on a diet

Cap and tirade

Who cares?

A long game

Closing the gaps

What needs to change

Unpacking the problem

Sources & acknowledgementsReprints

Related topics China

Solar energy

European Union

Alternative energy

Europe

The European Union's Emissions-Trading Scheme, which started up in 2005, is theonly large-scale attempt so far to set a carbon price. Under the ETS, EU countriesget national allocations which they then parcel out to over 11,500 factories in fivedirty industries. Companies can buy and sell allocations amongst themselves, andcan also buy “certified emission reductions” from developing countries to meet theircaps through Kyoto's “clean development mechanism”.

Europe's flagship

The ETS makes up the vast bulk of the global carbon market, which will be wortharound $122 billion this year. It is the principal way of financing the shift from high-to low-carbon power and industrial processes in the developing world. A wind farmin India; a methane-capture scheme for pig farms in Brazil; a forestry project inIndonesia; equipment to capture industrial gases in China—the ETS can financethem all.

Although it is still young, the ETS has had some impact on emissions. According toa 2008 study at the Massachusetts Institute of Technology, in its first three years itprobably reduced them by 120m-300m tonnes, or 2-5% a year, below what theywould otherwise have been.