IPCC’s latest report on Climate Change – summary part 7

In this final part, I’ll look at the role of government intervention and at sustainable development.

The case for government intervention

Government support through financial contributions, tax credits, standard setting and market creation is important for effective technology development, innovation and deployment.
- Public benefits of R&D investments are bigger than the benefits captured by the private sector, justifying government support of R&D.
- Government funding in real absolute terms for most energy research programmes has been flat or declining for nearly two decades and is now about half of the 1980 level.
- Governments have a crucial supportive role in providing an appropriate enabling environment to sustain investment flows and for effective technology transfer - without which it may be difficult to achieve emission reductions at a significant scale.


Even for an economic liberal like myself, there is a clear role for the state in setting the stage for tackling carbon emissions. I think it is clear that a carbon price needs to be set that reflects the damage caused by CO2 emissions. That way, it can be established what alternate energy sources, such as renewables and nuclear are viable. Also, it will cut out marginal economic activity that is only profitable when carbon emissions are ‘free’ to the polluter. Although I’m generally against tax breaks, in this case I think they are necessary to push the market to investing in speculative, energy efficient technologies, so that they can be brought to market quicker and make an impact on CO2 emissions sooner. As mentioned in the previous blog, the sooner the peak in emissions is reached and the decline starts, the sooner we will reach CO2 stabilisation and lower the rise in global temperatures will be.

Sustainable development

Making development more sustainable can make a major contribution to climate change mitigation whilst also providing other beneficial effects. For example:
- Climate change policies related to energy efficiency and renewable energy are often economically beneficial, improve energy security and reduce local pollutant emissions.
- Other energy supply mitigation options can be designed to also achieve sustainable development benefits such as avoided displacement of local populations, job creation, and health benefits.
- Reducing both loss of natural habitat and deforestation can have significant biodiversity, soil and water conservation benefits, and can be implemented in a socially and economically sustainable manner.
- Forestation and bioenergy plantations can lead to restoration of degraded land, manage water runoff, retain soil carbon and benefit rural economies.

One final point is the importance of the transfer of energy efficient technologies to developing countries. This will require the help of developed countries’ governments to overcome barriers to implementation, such as lack of skills and financing. A simple example of this would be transferring and implementing carbon sequestration technologies in developing countries that use a lot of coal fired power stations, such as China. The benefit in mitigation terms would be huge.