Climate change mitigation policy: an overview of opportunities and challenges

Science in 2008 to advance public and private action on climate change through innovative, rigorous research. The Centre is funded by the UK Economic and Social Research Council and has five inter-linked research programmes: 1. Developing climate science and economics 2. Climate change governance for a new global deal 3. Adaptation to climate change and human development 4. Governments, markets and climate change mitigation 5. The Munich Re Programme-Evaluating the economics of climate risks and opportunities in the insurance sector This working paper is intended to stimulate discussion within the research community and among users of research, and its content may have been submitted for publication in academic journals. It has been reviewed by at least one internal referee before publication. The views expressed in this paper represent those of the author(s) and do not necessarily represent those of the host institutions or funders. Abstract This paper provides a broad overview of the opportunities and challenges facing global climate change mitigation policy ahead of the UN Climate Change Conference in Copenhagen in December 2009. It begins with a brief review of the technological options for mitigating climate change by reducing, and substituting for, the use of fossil fuels (coal, oil and gas). It then summarises the economic case for climate change mitigation, set out in the 2007 Stern Review. The paper then looks at how the implementation of climate policy measures to meet emissions reduction targets has so far had limited success, with worldwide emissions of greenhouse gases growing by 38% between 1992 and 2007. A critique is then provided of the theoretical framing of current climate policies, arguing that a more integrated, long-term approach may be needed, in order to inform the decisions of economic actors in the face of high levels of risk and uncertainty. New economic ideas are then reviewed which aim to provide a more radical re-framing of the steps needed for a transition to a low carbon economy. These include a 'green fiscal stimulus' or 'green new deal', a focus on reducing emissions upstream at the production end rather than downstream at the consumption end, and challenging the accepted economic growth paradigm. Finally, it is argued that high levels of political will, technological innovation, institutional change, business leadership and citizen engagement will be needed to put the world on a pathway to a sustainable and prosperous low-carbon future.