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The Plain Bad Economics of Today’s Energy Prices

Christine Lagarde, Managing Director of the IMF, recently launched the latest book in a series on what good fiscal policy should look like in a world of environmental externalities.

The message was clear: Ministers of finance and economics should design their tax systems skillfully so as to tax bad things, like pollution and congestion, rather than good things like work and profit. Not to do so is plain, bad economics.

3 Key Themes from the Bonn Climate Talks

After nearly two weeks of UN Framework Convention on Climate Change (UNFCCC) negotiations in Bonn, the pathway to Paris and the new international climate agreement to be agreed there at the end of 2015 is beginning to emerge.

At this mid-year negotiating session held between the annual summits that take place in December, climate negotiators began to discuss key issues, particularly the framework for the national offers that individual countries will make (their “intended nationally determined contributions”).

4 Takeaways from IPCC Report Reveal Worsening Impacts of Climate Change

The first installment of the Intergovernmental Panel on Climate Change’s (IPCC) Fifth Assessment Report (AR5)—released in September—confirmed the overwhelming scientific consensus that the world is warming, largely due to human activities. The Working Group II (WGII) report, released today, takes this finding a step further: Not only is climate change happening, but every continent on earth is now experiencing its impacts.

Global Leaders Highlight Actions Needed to Achieve Climate Justice

It’s not every day that several former Heads of State, the leader of the global trade union movement, an organizer of urban slum dwellers, a business leader, and a number of other leaders and advocates all come together on the same page.

But last week it happened. And even more strikingly, it was their common concern about climate change that brought them together.

A diverse group of global leaders launched the Declaration on Climate Justice to highlight the impacts of climate change on world’s most vulnerable people and the urgent need to build a “just transition” to low-carbon and climate-resilient societies. The Declaration outlines the priority actions needed to achieve a climate-just society in the near- and long-terms. (See our backgrounder for more information on the issues raised in the Declaration.)

World’s Carbon Budget to Be Spent in Three Decades

EDITOR'S NOTE 11/18/13: After this blog post was published, the IPCC updated its Summary for Policymakers. The figures in this blog post have been updated to reflect new information.

The Intergovernmental Panel on Climate Change’s (IPCC) Fifth Assessment Report (AR5) has delivered an overwhelming consensus that climate change impacts are accelerating, fueled by human-caused emissions. We may have just about 30 years left until the world’s carbon budget is spent if we want a likely chance of limiting warming to 2 degrees C. Breaching this limit would put the world at increased risk of forest fires, coral bleaching, higher sea level rise, and other dangerous impacts.

When Will Our Carbon Budget Run Out?

The international community has adopted a goal for global warming not to rise above 2°C compared to pre-industrial temperatures. Scientists have devoted considerable effort to understanding what magnitude of emissions reductions are necessary to limit warming to this level, as the world faces increasingly dangerous climate change impacts with every degree of warming (see Box 1).

IPCC AR5 summarizes the scientific literature and estimates that cumulative carbon dioxide emissions related to human activities need to be limited to 1 trillion tonnes C (1000 PgC) since the beginning of the industrial revolution if we are to have a likely chance of limiting warming to 2°C. This is “our carbon budget” – the same concept as a checking account. When we’ve spent it all, there’s no more money (and the planet’s overdraft fees will be much more significant than a bank’s small charges for bounced checks).[^1]

The New Climate Economics

This post was written by Lord Nicholas Stern, president of the British Academy, and Felipe Calderón, former president of Mexico and a WRI Board member. It originally appeared on Project Syndicate.

This Friday, in its latest comprehensive assessment of the evidence on global warming, the United Nations Intergovernmental Panel on Climate Change will show that the world’s climate scientists are more certain than ever that human activity – largely combustion of fossil fuels – is causing temperatures and sea levels to rise.

In recent years, a series of extreme weather events – including Hurricane Sandy in New York and New Jersey, floods in China, and droughts in the American Midwest, Russia, and many developing countries – have caused immense damage. Last week, Mexico experienced simultaneous hurricanes in the Pacific and in the Gulf of Mexico that devastated towns and cities in their path. Climate change will be a major driver of such events, and we risk much worse.

This puts a new debate center stage: how to reconcile increased action to reduce greenhouse gas emissions with strong economic growth.

Bringing together some of the world’s foremost economic experts to contribute to the global debate about economic policy, and to inform government, business and investment decisions.

Greenhouse Gas Mitigation in Australia

An Overview of the Current Policy Landscape

This report provides an overview of major policies in Australia that are likely to make a measurable reduction in greenhouse gas (GHG) emissions. The paper discusses a carbon-pricing mechanism, renewable energy target, and other existing and emerging policies, as well as the implications of the...

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