UCL-Energy seminar: 'Planetary Economics and the Three Pillars of Climate Policy', Michael Grubb, University of Cambridge Centre for Mitigation Research

This presentation from Michael Grubb, Chair of Energy and Climate Policy, University of Cambridge Centre for Mitigation Research and Senior Advisor, UK Office of Gas and Electricity Markets,  outlines the underlying economics of energy sector decision making and implications for the design of climate policies. It illustrates three different domains of decisions, and corresponding pillars of policy which flow from these.

Evidence is presented to suggest that all three domains are equally important in the task of transforming energy systems, and shows that the corresponding pillars of policy – on efficiency, pricing, and innovation - are mutually interdependent. Any pillar on its own will fail. A fundamental problem of policy in Europe has been failing to set carbon pricing within the wider context of the other policy pillars, on efficiency and innovation. This has both undermined the effectiveness of the EU ETS, and made it unnecessarily unpopular.

The presentation outlines some implications for ETS design in two areas - strengthening synergies with other policy pillars, and the need for stabilisation mechanisms.   Finally, it sets the underlying issues in a wider context of economic theory and the European economic crisis, and outlines ways in which energy and climate can and should become more closely linked to mainstream debates about European economic recovery.

This presentation is based on the authors book Planetary Economics: Energy, Climate Change and the Three Domains of Sustainable Development, published by Routledge 2014.

About the speaker:

Professor Michael Grubb is Chair of Energy and Climate Policy at the Cambridge University Centre for Climate Change Mitigation Research, and Senior Advisor on Sustainable Energy Policy to the UK Energy Regulator Ofgem.  He is editor-in-chief of the journal Climate Policy and is on the editorial board of Energy Policy. and was recently the Specialist Advisor to a House of Lords European Committee enquiry. ‘No Country is an Energy Island: securing investment for the EU's Future' (2013).  His former positions include Chair of the international research organization Climate Strategies; Chief Economist at the Carbon Trust; Professor of Climate Change and Energy Policy at Imperial College London; and head of Energy and Environment at Chatham House, and he continues to be associated with these institutions. In 2008 he was appointed to the UK Climate Change Committee, established under the UK Climate Change Bill to advise the government on future carbon budgets and to report to Parliament on their implementation.

 Michael Grubb is author of seven books, fifty journal research articles and numerous other publications. He has held numerous advisory positions with governments, companies and international studies on climate change and energy policy, and has been a Lead Author for several reports of the IPCC on mitigation, including the IPCC Fourth Assessment Report.  He has recently completed a new book Planetary Economics, which brings together the lessons from 25 years of research and implementation of energy and climate policies, and is published in January 2014.

Slides