The first Insights blog of the new year continues to emphasise a central theme of earlier pieces: the dangers of taking an overly narrow view of policy challenges, whether that be the result of failure to recognise wider, salient features of a broader context, or of taking unduly narrow view of target outcomes in policy responses to the challenges. The same theme is to be found in earlier RPI critiques of ‘pixelation’ in regulatory assessment, grounded in an analogy with perceptions of a digital picture which are drawn to a relatively small bloc of pixels and focus disproportionately on it, to the neglect of all else. The blog contains a striking quotation from Keynes, who was ever unpixelated.
In this short paper, Gerard Fox and George Yarrow argue that, in the context of climate change policies, the nature and significance of any potentially problematic economic externalities are functions of strategic policy choices: that is, they vary according to the particular policy strategy chosen. The traditionally identified externality – that the benefits of carbon abatement efforts by any one country are mostly enjoyed by other countries – comes from strategies that are conceptualised in terms of determining quantities (of carbon emissions or abatement), an approach to economic policy that was adopted in Soviet-style central planning. By leading to external effects that then call for difficult-to-achieve correction, in effect the quantitative planning system establishes self-created obstacles to attaining that which is desired. Science and technology policy approaches based on sharing of knowledge and know- how are shown to have very different implications for the nature and significance of any associated externalities. The development of the Oxford/AstraZeneca Covid vaccine is given as an example of the possible, alternative, strategic approaches.
Regulation and public interest outcomes in energy and water: moving beyond compliance and towards a ‘Sustainable Licence to Operate’ for a disrupted world
Delivered as part of ‘Regulation and public interest ourcomes in energy and water: moving beyond compliance and towards a sustainable ‘licence to operate’ for a disrupted world”, Hertford Seminar in Regulation 2018
At the 2013 Beesley Lecture on climate change policy, David Kennedy, Chief Executive of
the Climate Change Commission (CCC), discussed the role of the Commission in providing
support for promising but not-yet-economic technologies. The last CCC budget report identified these technologies as: wind power (especially off-shore wind), tidal range, geothermal, solar and potentially CCS (carbon capture and storage). As described by David Kennedy, current CCC and government policy is to provide support for
these technologies until they can float off into commercial operation without government
support. But, what happens if they don’t successfully graduate? Who will pull the plug? When,
how and on what basis?
This year’s (2011) series of Beesley lectures was opened by Dieter Helm’s wide ranging examination of the UK government’s Electricity Market Reform (EMR) proposals and closed by Paul Dawson’s focused dissection of the carbon price support policy that has been developed alongside the EMR programme.
The opening lecture and the discussion that followed it illustrated the rather unusual state of affairs that exists in energy policymaking at the moment: there appears to be a consensus among leading economists familiar with the energy sector that the EMR proposals are badly flawed, and that they can be expected to fail.