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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
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Climate-Change Policy in the United Kingdom
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- Alex Bowen1, James Rydge1
- Author Affiliations
- 1: Grantham Research Institute on Climate Change and the Environment, United Kingdom
- 10 Aug 2011
- Bibliographic information
The United Kingdom started to pursue policies to reduce greenhouse gas emissions at a relatively early date and now has a comprehensive set of measures in place. It has set clear targets for emission reductions consistent with international goals of limiting global warming and has pioneered statutory underpinning of target-setting. On the international stage, it has been an active protagonist of a global deal to limit human-induced climate change. The new Government has endorsed the direction of previous policies in this area and is introducing further measures, despite heavy fiscal pressures. The United Kingdom is likely to reduce emissions by more than its near-term domestic targets and its target under the Kyoto Protocol, outperforming many OECD countries in the latter respect. But some of the success has been due to ‘one-off’ factors such as the ‘dash for gas’, reductions in non-CO2 greenhouse gases in the 1990s and the recent recession, rather than explicit climate-change policies. The pace of decarbonisation of the power sector has been slow and the spread of renewable energy technologies limited. Implicit carbon prices vary across sectors, and should be harmonized to increase the cost efficiency of policy. The unevenness partly reflects the way in which policies have proliferated and overlap and a simplified structure would be desirable. A step–change in the pace of emission reductions is required to put the UK on the path towards its ambitious 2050 target. Given the central role of the EU emissions trading scheme, a key element of the UK strategy should be to seek tighter quotas within the EU scheme. Preparations to adapt to climate impacts also need to be stepped up, focusing on the provision of more information, better risk-assessment frameworks and more advanced metrics for monitoring and evaluation of adaptation planning. This paper relates to the 2011 Economic Survey of the United Kingdom (www.oecd.org/eco/surveys/uk)
- policy interaction, mitigation, climate change policy, renewable energy policy, adaptation, policy overlap
- JEL Classification:
- Q27: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Renewable Resources and Conservation / Issues in International Trade
- Q54: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Environmental Economics / Climate ; Natural Disasters and Their Management ; Global Warming
- Q58: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Environmental Economics / Government Policy