The Design of Climate Policy

The Design of Climate Policy is an aberration of sorts; it is definitely not of the fare I usually review. The book is one in a series that explores policy issues in economics largely from European researchers and scholars. This text provides some fascinating insight, considering that the European Union is notable for its effort to stem climate change. The European Union fell considerably short of its goal, however, by setting emission targets too high, and not taking into account the lack of systematic enforcement in climate policies.

For environmentalists, this book is a must read, especially if you consider the "cap and trade" system of the Kyoto Protocol inadequate. A caveat: no ordinary dilettante will have the stomach to read this without a background in calculus and some familiarity with the international agreements on climate change and carbon emissions.

My favorite piece was the succinct article from Resources for the Future's William Pizer entitled "Economics versus Climate Change." Pizer believes that a coordinated international agreement is not necessary, and may even be initially counterproductive to effective action on climate change. He also places developing countries in the context of this debate. Pizer says, "[There is] a view that emission caps, however generous at the outset, could eventually be used to limit development and growth, and that climate change is simply not a priority when viewed alongside poverty, hunger, and education. I worry that the strength of this view among developing countries may be underestimated among economists theorizing about global trading."

I cannot help but agree. This is a point that needs to be considered when developing climate policy. I have to admit, though, that this book is for economists and by economists. It is regretful how often the sort of useful information contained in this book becomes diluted in the hands of policy advisors.

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