The Stern Review: Business as usual?

Sir Nicholas Stern gave a lecture in Oxford tonight about the government’s economics and climate change review. The review started last summer/autumn and he billed the talk as a chance to hear some of the early thoughts from the inquiry as it begins to frame its investigation.

In some ways, it was quite promising. From the outset, he emphasised that there is no doubt that climate change is a problem that must be addressed and that science has an on-going role to play in informing any economic response (e.g. how might a particular climatic change affect future growth forecasts and hence mitigation strategies?). It was noted that climate change will have to be dealt with as a collective action issue, not as an externality problem (e.g. like many traditional forms of pollution), and that persuasion has a major role to play alongside instruments and their supporting institutions (in other words, enlisting governments to climate change action will require an appeal to their self-interest).

This is clearly all sensible stuff and should set the foundation for a competent review of the economics of climate change – as the name says! However the talk started with the following quote:

“Economics should be at the heart of any serious discussion about how to proceed [on climate change]“

Certainly economics is a significant part of any discussion about climate change but as the question and answer session went on, it became clear that the assumptions underlying such an economic analysis were not really on the table. Stern did say that the problem shouldn’t be considered as “a horse race” between economics and other disciplines but, for example, when a question was asked about the ethical considerations of making changes at home or making cheaper changes abroad, there was no hesitation in the response: the cheapest option wins (cue snickering from the economics department audience that anyone could countenance another response). Furthermore when a brilliant question was asked, hinting that the review was asking the wrong questions – i.e. can economics find a solution if the problem extends beyond the economic system? – there was a vague, don’t-worry-about-it answer.

There’s no doubt that the Stern Review will provide some excellent suggestions on how climate change might be dealt with, in language that will please the Cabinet Office and Treasury (who are sponsoring the report). However the feeling one gets from the presentation was that, intentionally or not, the economics review is likely to be too technical and that by trying to find the right mechanisms and institutions, more serious questions about whether the current system can deliver at all are being neglected.

For more information, there is a pdf available from the Review’s website outlining the key issues the economics of climate change. The final report is due in Autumn 2006.

Pictures from East and West

I got back from India last night and spent most of today in a jet-lagged stupor. However I did update the site with some pictures from our Christmas trip to California and this week’s final medicinal plants jaunt to India and Nepal. Which was very interesting by the way, given all the recent trouble in Nepal.

Surfer at Laguna Beach

Joined-up government?

In my recent interviews on the PV industry in the UK, it became clear that the “government” could refer to any number of departments. For industry though, government is widely taken to be unified actor capable of taking almost any action once the appropriate decision is made. Respondents therefore concluded that poor progress on microgeneration can be blamed largely on a lack of committment in Whitehall.

There’s certainly an element of truth to this but reading I’ve been doing on “joined-up goverment” (JUG) makes it clear that even if one department (or the executive) wanted to push ahead with microgeneration, it would still have to convince a number of other agencies within government, each with their own concerns and priorities. It’s not simply a matter of calling up the relevant department and saying “please”.

However one of the promises of New Labour was that government would be transformed into a lean, mean, multi-tasking machine capable of addressing this kind of cross-cutting issue with ease. Unfortunately this hasn’t really happened in energy policy (or other areas of policy) with the exception of the creation of SEPN. 1

In the case of microgeneration, industry respondents indicated three possible policies that could lead to significant growth in the microgeneration sector. As the table below shows, each policy requires the cooperation of at least one other department even if the DTI decided to push ahead.

Policy Department
Feed-in tariff Ofgem, Treasury
Large grant programme Treasury
Building regulations2 ODPM

There will be other parties involved as well but it’s important to note the central role of the Treasury: as Exworthy and Powell put it, ‘not just first among equals, but the sun around which other spending departments revolve’. Arguably this is where lobbying efforts should be directed rather than talking to other departments which may already be committed in principle.

1 For the more academically minded out there, the following are good analyses of joined-up government in the UK:

2 See this post for a recent obstacle to the building regulations approach.

Curious ODPM report

The Office of the Deputy Prime Mininster recently published its final report on low or zero carbon energy sources and controversially concludes that no LZC technologies are cost-effective and hence they should not be considered for mandatory inclusion in part L of the building regulations.

The website provides full details on the calculations used and you can even download the spreadsheet to play around with the figures for yourself. While I don’t really agree with their numbers (electricity prices not going to rise in the next 25 years?!), at least the numbers are there for inspection. Points scored for openness in government, right?

Maybe not. The report also states:

It is recommended that the cost-effectiveness assessments are not made available as part of any consultation exercise since they have served their purpose within this report and could easily be misinterpreted outside the context this purpose.

In other words, any debates about possible policies based on these calculations shouldn’t be able to challenge the underlying figures. Very disappointing – the UK desperately needs a serious debate about low energy housing and this report seems to designed to ensure as little change as possible.

Positive and negative politeness

I just finished reading Kate Fox’s Watching the English. She’s an anthropologist and unlike those who go to far away lands and study exotic cultures, she focuses on life here in England. Although this means there are no headhunters or anything, the book is great, both insightful and very very funny.

One of the most interesting things she highlights is the English preference for `negative politeness’, compared to the American style `positive politeness’:

“[Negative politeness] is concerned with other people’s need not to be intruded or imposed upon (as opposed to `positive politeness’, which is concerned with their need for inclusion and social approval)”

It’s a pretty simple concept and it explains so many English behaviours. The book talks about some of the main ones (e.g. automatically saying sorry when someone bumps into you) but I’d like to suggest another. Ever wonder why on earth Hugh Grant is considered funny? It’s because his bumbling “Oh sorry I, err, rather, I mean, I didn’t want to offend…” routine is negative politeness writ large. So while people from other cultures find this just plain awkward and embarassing to watch, many English find his exaggeration of a national foible really funny.

Of course, some still find him irritating.