The eagerly awaited Stern Review conveys a clear message – climate change is fundamentally altering the planet; the risks of inaction are high; and time is running out. The Guardian reports that shortly after the launch of the report, David Miliband announced in the Commons that the Government will legislate in the next session to reduce carbon emissions. Reducing emissions is necessary, but it cannot be done by increasing complex Government regulation and incentives.
It is already emerging that the Government has set its mind on several initiatives on how to prevent the increase of CO2 emissions. There is a talk about green taxes, advancing low-carbon and energy efficient technology and setting up a new independent carbon committee to achieve government’s goals. However, putting in place various measures to tackle the problem is likely to lead to more bureaucracy and confusion.
It is beyond doubt, that climate change is a serious problem that needs to be addressed now. But the Government should not create a complex solution to the even more complex problem. What is needed is a straightforward solution that will make people change their behaviour. It is likely that green taxes will change our behaviour and will make us think through our actions. For example, London congestion charge has reduced the number of cars on the roads and people will find alternatives to move around London.
The idea of supporting the development of low-carbon technologies is all well but companies should take up the initiative themselves. Government should not increase incentives and grants but should leave it to market forces to take care of. Implementing a simple carbon tax and an emission-trading scheme would do the work. Once people were faced with the full social cost of their actions, they would switch from high-carbon goods and services and invest in low-carbon alternatives.