Another quick reaction piece, this time on Obama’s climate policy, for The Conversation. My key observation is that, despite its ambitious goals, Obama’s policy is still in the “no regrets” class. That is, the domestic benefits for the US, disregarding climate effects, outweigh the costs. More over the fold
The really striking feature of Obama’s climate change plan is the calculation that the local environmental and health benefits of reducing the use of coal to generate electricity will far outweigh the direct economic costs, even without considering the impact on CO2 emissions. This is consistent with economic research on the subject, most notably this 2011 review, which concluded that the overall damage done by coal is potentially several times larger than the benefits.
A similar assessment is reflected in the Chinese government’s decision to close down all the coal-fired power stations in the vicinity of Beijing and other major cities.
This means we are still in the region of “no regrets” policies on climate change, in which measures to reduce CO2 emissions are beneficial even without taking climate change into account. The fact that so much can be achieved with so little downside is largely due to the availability of so much “low-hanging fruit” in energy efficiency measures, and even more to the startling reductions in the cost of renewable energy, particularly solar photovoltaics. These reductions have rapidly reached the point, where, depending on the vagaries of electricity pricing, renewables are often cheaper than new coal-fired power plants.
On the other hand, it’s sobering that no national government has yet been prepared to incur any substantial economic cost (say, more than 1% of national income) in the effort to stabilize the global climate. If it were not for the fortunate availability of so many “no regrets” policies, the planet would already be facing a quite literally unmitigated disaster.