Insights about Climate Change Policy from Europe, New Zealand, and the USA

Suzi Kerr, the chief economist at the Environmental Defense Fund (EDF) and founder of Motu Economic and Public Policy Research, a think tank in her home country of New Zealand, shares her perspectives on climate change policy in the latest episode of our podcast, “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program.”  I hope you can find time to listen to our conversation here.

In these podcasts, I converse with leading experts from academia, government, industry, and NGOs.  I’m pleased to say that my long-time colleague and friend (and former student), Suzi Kerr, fits well in this group with her abundant experience in academia and NGOs.

Dr. Kerr was involved in the early design of New Zealand’s successful emissions trading system (ETS), which began in 2008, and is similar in some ways to California’s cap-and-trade system, about which I have written many times at this blog and elsewhere.

“It was the second [ETS] in the world and it’s economy wide. It’s what we call upstream, so it covers…basically all fossil fuels and most other emissions in New Zealand. And one of the highlights I think is that it covers the forestry sector, and New Zealand is still probably the one that covers that most comprehensively.  A lot of what we were trying to do was experiment and learn so that others could learn from our experience.”

As Europe prepares to begin implementation in 2023 of its Carbon Border Adjustment Mechanism (CBAM), intended to mitigate carbon leakage and protect competitiveness while remaining in compliance with World Trade Organization (WTO) rules, Kerr expresses her belief that while the CBAM is lower cost to taxpayers and provides advantages over output-based allocation measures, there are many challenges standing in its way.

“The logistical issues of bringing in a CBAM are huge. If we all had carbon pricing, it would be pretty easy, but we don’t. We have a whole mix of policies in different countries. Some have carbon pricing, but [other nations have] other policies. That complexity is huge, and the other issue is equity across countries. Does it really make sense for us to be charging countries who have low policy stringency because they’re very poor?,” she says. “I think it’s critically important that the EU couple any introduction of CBAM with really active support for the poorest countries so that they are supported to have a climate transition rather than expected to do that entirely on their own.”

In the U.S., the Biden Administration has announced its new nationally determined contribution (NDC) under terms of the Paris Agreement, with a pledge to cut greenhouse gas emissions by 50 to 52 percent below 2005 levels by 2030.  I ask Suzi Kerr whether this target is achievable, given domestic U.S. politics.  She responds that she judges the pledge to be credible, but difficult to achieve.

“The research and the modeling all says it can be done. It’s certainly possible and a lot of it can even be done at very low cost. Whether it will be done is a much more challenging question and that’s where it gets really hard – actually implementing the policies that are effective. Even if you have the political will, that’s a difficult thing,” she remarks. “In general, history teaches us that policies are almost always less effective than we think they’re going to be.”

My complete conversation with Suzi Kerr is the 27th episode in the Environmental Insights series, with future episodes scheduled to drop each month.  You can find a transcript of our conversation at the website of the Harvard Environmental Economics Program.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunes, Pocket Casts, Spotify, and Stitcher.

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Obama’s Science Advisor Speaks Out on Biden’s Climate Policy

John Holdren, former director of the White House Office of Science and Technology Policy, expresses his optimism regarding the Biden Administration’s approach to climate change policy in the latest episode of “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program,” a podcast produced by the Harvard Environmental Economics Program.

You can hear our complete conversation in the podcast here.  

In these podcasts, I converse with very well-informed people from academia, government, industry, and NGOs.  John Holdren fits very well in this group, with significant experience in academia, government, and the NGO world.

            John Holdren is a Research Professor, and until recently was the Teresa and John Heinz Professor of Environmental Policy at the Harvard Kennedy School, and a professor in the Department of Earth and Planetary Sciences at Harvard.  He took an extended leave of absence from Harvard, from January 2009 to January 2017 to serve in the Obama administration as the President’s Science Advisor and as Director of the White House Office of Science & Technology Policy, and was the longest-serving Science Advisor to the President in the history of the position.  Before coming to Harvard, he was a long-time faculty member at the University of California, Berkeley, where he co-founded the Energy Resources Group.

During his time as the President’s Science Advisor, the Obama Administration unveiled its ambitious Climate Action Plan (June 2013), and in 2015, nearly 200 countries signed onto the Paris Climate Agreement.  In our conversation, John Holdren tells me that those were two of the high points during his time in Washington. 

“The biggest low point I would say is that we were not able to get the budget increases for research and development that President Obama had committed himself to at the very beginning of his administration,” Holdren remarks. “We didn’t get there, not from lack of interest, but from lack of ability to persuade the Congress to boost those budgets.”

While his work in Washington was rewarding, it was also very high-pressure:

“It was 24/7/365,” he says. “When you’re what is called a commissioned officer of the president, you are on duty all the time. You can never be out of touch. You can’t go anywhere without having a way for the White House to reach you immediately if the president wants you, and there is such a continuing flow of issues that need your immediate attention.”

Assessing the Biden Administration’s early efforts to shape climate policy, Holdren says he would give it a grade of A-, complimenting the President’s selection of respected officials for key positions, including Secretary of State Tony Blinken, U.S. Special Presidential Envoy for Climate John Kerry, White House National Climate Advisor Gina McCarthy, Office of Science and Technology Policy Director Eric Lander, and Deputy Director for Climate and Environment in the White House Office of Science and Technology Policy Jane Lubchenco.

“[President] Biden has put together just a superb team. I think it’s by far the strongest team on climate change that’s ever been assembled in a government,” Holdren says. “And when asked what’s the most important thing in achieving success in science and technology policy in government, or indeed any other domain of government activity, I always answer the single most important thing is people. The single most important thing is having an absolutely top-flight team in terms of relevant competencies and their ability and willingness to work seamlessly together. That is what President Biden has put in place.”

When I ask Holdren what he expects from U.S. climate policy over this decade, Holdren surprisingly predicts that the United States will institute a significant carbon tax by 2024.

“It will happen for a couple of reasons, one of which is that the impacts of climate change are now so conspicuous that it is becoming impossible for people to, with any credibility at all, deny that this is an immense challenge to well-being on the planet,” he remarks. “People are coming to understand in larger and larger numbers that this is a challenge that society must rise to meet. And I think the deniers and the wafflers are in retreat. And that’s one of the reasons I think we will get at least quite a lot of what we need in the next few years.”

My complete conversation with John Holdren is the 25th episode in the Environmental Insights series, with future episodes scheduled to drop each month.  You can find a transcript of our conversation at the website of the Harvard Environmental Economics Program.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunes, Pocket Casts, Spotify, and Stitcher.

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Reflecting on Economics, Politics, and Climate Policy

Addressing climate change with meaningful policy action will be neither cheap nor easy, but presently the greatest barrier to action in the United States is not technological, nor perhaps even economic, but fundamentally political.  This becomes a theme in my latest podcast, where I engage in a wide-ranging conversation about economics, politics, and climate change with Gernot Wagner, Clinical Associate Professor at New York University, and former staff economist at the Environmental Defense Fund.

You can hear our complete conversation in the podcast here.

In these podcasts – “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program – I converse with very well-informed people from academia, government, industry, and NGOs.  Gernot Wagner fits well in this group, with experience in academia, industry, and the NGO world.

Wagner, whose career also includes time spent as a consultant at the Boston Consulting Group and a journalist at the Financial Times, brings to his thinking about the economics of climate change policy a rich and varied set of perspectives gained through his years of multi-sectoral experience.  

He is a graduate of Harvard College, where he took my environmental economics course as a freshman (and then proceeded to receive the highest grade in the class).  In addition, I had the privilege of serving as chair of Gernot’s dissertation committee when he received his Ph.D. in Political Economy and Government from Harvard in 2007.

Gernot Wagner is author of two books, “But will the Planet Notice: How Smart Economics Can Save the World?,”and “Climate Shock: The Economic Consequences of a Hotter Planet,” which he co-wrote with the late Harvard Professor Martin Weitzman, whom he had met his first week on the Harvard campus as a freshman in 1998.

“I went to meet Marty on a Thursday that week,” Wagner recalls in our podcast conversation. “I remember Marty sitting me down and first of all, taking me seriously…much like you did. You did try to dissuade me from taking your class, but then I ended up taking it later that year. But Marty sat me down and guided me through, maybe in an attempt at dissuading me frankly of wanting to become an environmental economist or academic.”

In my podcast conversation with Gernot, we turn to the topic of current-day climate policy, and Wagner sounds cautiously optimistic about the chances that the United States will meet the Biden Administration’s recently announced commitment to reduce CO2 emissions by 50-to-52 percent below 2005 levels by the year 2030, saying that it would be technically and economically feasible, although politically difficult.

“I’d like to think I can make a cogent argument for why it will happen, and this administration is uniquely positioned to make it happen. And the approach it is taking seems to be on the right path,” Wagner says, while also admitting that it will be a challenge for the administration to get any meaningful climate policy through a divided Congress.

Wagner also expresses his hope for establishing a carbon price of between 60 and 300 dollars per ton to provide incentives for companies and industries to reduce CO2 emissions. Exxon, he notes, has recently come out in support of a carbon price of 50 dollars per ton, but Democrats in Washington are not satisfied with that proposal.

“The progressives in the House wants something that has a higher price equivalent. The Biden Administration might be slightly less ambitious on that front,” he says. “All of it is still much more ambitious than the…simple 50 dollar per ton of CO2 carbon tax.”

At the end of our conversation, I ask Wagner for his thoughts on the youth climate movements that became prominent in 2019.

“What we do see is amazing action in the right direction, on a whole lot of different dimensions,” Gernot remarks. “Now we are back to – what should this movement push for? And frankly, now we are back to the raw politics of it all. It’s very, very difficult to see – the one simple approach that will just solve it all. That basically doesn’t exist. It exists in theory, maybe. Not in practice.”

My complete conversation with Gernot Wagner is the 24th episode in the Environmental Insights series, with future episodes scheduled to drop each month.  You can find a transcript of our conversation at the website of the Harvard Environmental Economics Program.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunes, Pocket Casts, Spotify, and Stitcher.

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