On Tuesday 28th November, St Mary’s welcomed influential Environmental Economist Professor Michael Finus as part of the Sixth Form Lecture Programme to speak to staff, students and guests in a talk entitled Obstacles of a Successful Climate Agreement: Can We Avoid Disaster?
Professor Michael Finus holds a Chair in Environmental Economics and is Head of Department at the University of Bath. He has previously held appointments at the Universities of Exeter, Stirling and Hagen, Germany. Michael was President-elect and Past President-elect of the German Association of Environmental Economists, and a Lead Author of the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), released in 2014.
Michael began his talk by overviewing the scientific evidence of climate change and clearly setting the problem in context, explaining that there is a free-rider problem in terms of global emissions. He showed that the four main drivers of greenhouse gas emissions were population, affluence, energy intensity and carbon intensity. Thus, even if there is only moderate population growth and moderate economic growth, the energy intensity of GDP and the carbon intensity of energy will need to drop radically in order to stabilise the climate. Therefore a strategy for green growth is a must.
He then explored the history of governance with respect to climate change, looking particularly at the Kyoto Protocol of 1997 and the Paris Accord of 2015, and then explored the reasons why efforts until now have failed. He talked about the difficulty enforcing countries' compliance, the conflict of objectives between using renewable energy sources at the expense of international competitiveness and the 'green paradox'; that threatened efforts by developed countries to reduce their reliance on oil, the oil exporting countries reduce the price of oil. Solving climate change becomes even harder to solve due to the uncertainty of the damage being caused, the difficulty monetising the environment, historical inequity between countries and the huge time dimension involved.
Given that climate change is such a challenging problem to solve, how can we move forward? Michael recommended that we increase awareness of the benefits of early action, that we recognise the lessons that can be learned from economists about what makes successful policies and that we are creative in our pursuit of new and better solutions. He discussed policies that were typically favoured by economists, including carbon taxes, emissions trading schemes and subsidies for green technologies, as well as introducing two radical policies that he personally favoured, including a 'deposit refund system' and 'border tax adjustments'.
Michael's lecture inspired us to see that although climate change is an incredibly complex problem to analyse, it is well worth the effort. It affects the economy in a whole host of different ways and is fundamentally important in our lives. The world needs bright young people to solve the major problems facing us and an insight into Economics empowers students with the skills to tackle such issues with confidence.
Mr Mark Cleaver, Head of Economics