Prevention Working Paper. Environmental and climate change policy: a case study in preventative action

Prevention Working Paper Environmental and climate change policy: a case study in preventative action Michael Jacobs Visiting Professor, Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science Introduction In this paper I want to ask first, if environmental policy offers a model for preventative policymaking in general; and second, whether any lessons can be learned about successful preventative policymaking from the experience of climate change policy in recent years not just from the manner of its original adoption, but from the challenge of its subsequent implementation. As a preliminary I d like to propose a very simple model of preventative policy which may help to clarify some of the issues involved in this field. Figure 1. A simple conceptual model of prevention Evidence of relationship Harm to be prevented Preventative action Efficacy of policy Time 1

Figure 1 proposes three main variables: the size of the harms which we want to prevent (understood in terms of human or economic costs, or costs to particular interests in society); the cost of the action we want to take now to prevent these harms occurring; and the time period which elapses between the two. We can also identify two relationships between the variables: the evidence that the harms are indeed causally related to the the preventative action; and the efficacy of the preventative action or policy in preventing or mitigating the harms. This is a very simple way of thinking about prevention, but it strikes me as useful. It suggests that preventative policy will be most widely accepted and introduced when the harms to be prevented are large relative to the cost of the preventative action; when the time between action and harm is short; when the causal link between action and harm is conclusively proven; and when the policy proposed can be shown to be effective in preventing the harm. The time variable is particularly critical not least because it also affects the two evidential relationships. In the most successful and widely accepted examples of preventative action, the time period between action and harm is short. Health and safety policies in the workplace offer an example. Here the preventative action and the harms to be prevented are more or less coincident; in terms of everyday accidents prevented, the cost of many basic health and safety measures will be repaid in the same year. Or take immunisation, another generally accepted form of preventative policy. Here the cost of the preventative action occurs before the cost of the diseases it is designed to prevent, but not much before most such diseases (polio, whooping cough, measles etc) can strike in childhood. The problem faced by advocates of many other kinds of preventative action which are not yet so widely accepted among policymakers is the length of time between the intervention proposed and the harm to be prevented. So for example interventions with young children which aim to reduce crime among teenagers and adults, or to reduce expected welfare spending later on in the children s lives, involve a long time lapse between action and harm. The longer the time period, the more prevention becomes problematic. It is harder to prove that the future harms are sufficiently causally related to present conditions to justify the cost of the claimed preventative action; and it is more difficult to demonstrate the efficacy of present actions in influencing future impacts. This model I think helps explain why some kinds of preventative policies have gained widespread consensus among policymakers and others have not. In his paper in this collection Ian Gough identifies a range of socioeconomic, ideological and institutional factors which need to be understood in these debates. These factors can be incorporated into this model relatively easily for example, in valuations of the harms identified, which might be partly ideological or dependent on the costs to particular interests. And again with reference to Gough s paper, both the Hayekian and neoliberal positions can be applied to the model. They deny the efficacy of preventative actions; they suggest that even if you have all the evidence 2

you need (for example, that poor childhoods affect crime in the future), in the real world it s not actually possible to do anything about them. Environmental policy In contrast to many areas of social science, where much of the evidence on cause and effect is problematic and contested, in the case of environmental policy it might be thought that because the evidence that present actions will cause future problems comes from the natural sciences, this would constitute a field where preventative policies have been more successfully instituted. Indeed, since one of the strongest discourses in the environmental movement has been about environmental policy protecting the future, this might naturally suggest that environmentalism would be a field where preventative policy has worked. However it isn t the case. In fact, very little environmental policy has been done in a preventative form. If you look at all major advances in environmental policy, almost all of them have occurred, not because policymakers have been attempting to prevent some future cost, but because these costs have become large and pressing in the present. So, for example, it was known from at least the 1890s that the growth of coal burning and use of industrial pollutants in urban areas was gradually worsening air quality, and that if it continued the impacts on human health would become more and more severe. But it wasn t until those problems became overwhelming in the present, when the Great Smog of 1952 killed around 20,000 people in London, that the Clean Air Act (1956) was introduced. Similarly, the evidence that lead in petrol damaged children s brain development was conclusive by the early 1970s, and car use was clearly growing. Yet it wasn t until 2000, when the evidence of present harm to children became introvertible, that its use was banned. By 1976 there was scientific consensus on the damage which aerosol CFCs would do to the ozone layer if their use continued to grow; but (despite initial regulation in the US and Europe soon afterwards) it was not until the discovery of the ozone hole over Antarctica in 1985 ie when the damage was visible in the present that the Montreal Protocol phasing out their global use was signed. In the case of fisheries, the near-certainty that the huge growth of commercial fishing would cause the depletion and collapse of of ocean fish stocks was apparent from at least the late 1960s. Yet there is still no effective regulation. Environmental policy (whether pollution control, resource management, or the protection of environmental services ) can always be described as the prevention of future harms, since in conditions of economic growth any economic effect on the environment is likely to be larger in the future. But in practice the historical record is that very few environmental policies have been designed primarily to prevent future harm. Most have not been introduced until the danger has been visible in the present, and their rationale has been to stop this harm occurring now. In this sense, perhaps surprisingly, environmental policy overall is not a very good field to demonstrate preventative policy. There is one major exception, which is the field of climate change. This is rather remarkable. The United Nations Framework Convention on Climate 3

Change was agreed in 1992, and the Kyoto Protocol was signed in 1997, both dates considerably before present climate change started becoming noticeable. The basic theory of climate change dates from the late nineteenth century, and the climatological evidence has been building since the 1960s, but in terms of the present impacts of climate change it is really only in the last ten years that global temperature rises have become evident, and that the frequency and severity of natural disasters has exceeded the patterns of the past. So the idea of climate change as a present problem post-dates the attempts by governments internationally to deal with it. The 1992 and 1997 treaties were genuinely preventative in form. This is particularly so given that the actions we can take now in relation to climate change do not affect the global warming that people are experiencing today. Because of the time lags between greenhouse gas emissions and the climate change they cause, emissions reductions made today will have an impact on global warming in 25-30 years time. In this respect addressing climate change really is not like immunisation, which may stop a child getting whooping cough in the next five years. The emissions reductions we manage to achieve now will reduce the concentration of greenhouse gases in the atmosphere three decades hence, and nothing we do now will affect the temperature over the next ten or 20 years. Explaining climate change policy I d like to try to provide an explanation of why preventative policy has occurred in the climate change field but not in other environmental fields but also why there is now a backlash against it. First of all, we need to recognise that we do have climate change policy. The environmental movement and climate change scientists are right to point out that we are not dealing sufficiently with the problem global emissions are still rising. But that is because current climate policies are inadequate, not because they don t exist. In the UK, in the rest of Europe and in most countries around the world, to a greater or lesser degree, there are now climate change policies which are having some impact on emissions: that is, they are reducing the level of emissions which would have occurred without them. In this sense, for what has been widely described as one of the great failures of international diplomacy, the Copenhagen conference of 2009 was a rather remarkable success. Under the pressure of the UN Summit, governments throughout the world adopted laws, targets and plans to try to control emissions. Most of these policies are failing to halt their rise, and implementation is a major problem, but it is not true to say that there is no policy framework for climate change. The UK has a particularly advanced framework: it was the first country to introduce a Climate Change Act which made national emissions reduction targets statutory. A wide range of policies have subsequently flowed, notably in energy policy. The European Union did something very similar with its major package of directives in 2008, which have led to a series of policies, notably on renewable energy and energy efficiency, which are now being (imperfectly) implemented. 4

So why do we have, in this case of climate change, the one significant example of properly preventative environmental policy that is, policy being implemented specifically to address not present but future harms? A crucial part of the answer, of course, is the unique nature of climate change as an issue. The scientific evidence shows that unchecked climate change will have catastrophic impacts on human society. If the emissions trends of the last decade continue, they will lead to a rise in global average temperatures of 4-6 degrees Centigrade above pre-industrial levels equivalent to the warming which has occurred between the last ice age and now. These higher temperatures, which will be reached some time between 2060 and 2100, will cause sea level rises, greater water scarcity, reduced crop yields, ocean acidification, accelerated species extinction and an increase in extreme weather events which will impact in severe ways on every human being on the planet. There are few other issues of this kind. Moreover there is almost complete unanimity among climate scientists about this. Disagreements remain among many aspects of climate modelling and the specifics of predicted impacts, but in terms of the general risk, climate science has achieved an extraordinary degree of consensus. This has indeed taken an organised form, through the Intergovernmental Panel on Climate Change (IPCC). The IPCC has gathered together almost every climate scientist in the world, across a range of disciplines, to produce a series of consensus reports on the latest evidence, both of present climate change and of projected impacts. There is no parallel to the IPCC in other environmental sciences, let alone in the social sciences. In the latter, fundamental disagreements remain among scholars about the core principles of social theory and the causal relationships between different societal variables. For every social scientist proposing present action to prevent future harm, another can almost always be found to disagree. So the nature of climate change as a scientific issue helps to explain why preventative policy became possible. But the period of policy activism on climate change (which in the UK began in 2006, in most other countries some time in 2007-9) was based on more than the scientific evidence alone. It rested on two fundamental political pillars. The first was an economic analysis which showed, not only that the future harm of climate change was very large, but that the present cost of preventing it was not. Most famously put together in the Stern Report, published by the UK Government in 2006, this evidence suggested that the cost-benefit analysis of preventative action was strongly favourable. While unchecked climate change could cause permanent loss of output of between 5 and 20% of GDP, early and efficient policies to cut emissions might cost just 1% of GDP. 1 The analysis was highly contested by economists, not least because it required a discount rate for future benefits much lower than normally used in economic policymaking, 2 but it succeeded in shifting the political discourse, not just in the UK but globally, towards action. At the same time, the increasing public alarm about climate change generated a mass social movement which began to apply serious public pressure on politicians to respond. In the period 2005-9, initially focused in 5

the UK on the adoption of a Climate Change Bill, and then on the Copenhagen UN conference, large numbers of people were mobilised and considerable media attention was generated. This movement did not focus on the narrow cost-benefit analysis: it used moral arguments about the huge damage which climate change would impose on future generations ( our children and grandchildren ) and on the most vulnerable people in developing countries. In doing so it harnessed and gave new expression to the environmental movement s longstanding critique of industrial society the claim that capitalism is fundamentally destructive of nature, and generates material desires which don t actually make us happy. The power of this critique to mobilise the social movement should not be underestimated it provides an ideological underpinning to environmental activism which is not matched in other areas of preventative policy, such as crime or public health. In political terms the combination of the new economic analysis and the pressure exercised by the social movement had a galvanic effect. It caused a whole series of political leaders in the period 2006-9 to adopt climate change as part of their own narrative identity and political purpose. In the UK this included Tony Blair, Gordon Brown and David Cameron, and the two successive climate change ministers David Miliband and Ed Miliband. In the rest of the EU the cause was taken up by European Commission President Barroso, President Sarkozy and Chancellor Merkel, all of whom were instrumental in securing the EU s climate policies in 2007-8. Globally, the issue became a central priority of leaders in countries as disparate as Brazil, Australia, South Korea, Mexico and Indonesia and even for President Obama, though he ultimately failed to pass climate legislation. So climate change offers a good case study of preventative policymaking but it also highlights the unusual characteristics of both the issue and the politics surrounding it which made such policy possible. Sustaining policy implementation And it now offers a case study in how difficult it is to maintain the momentum of implementation. For what is happening at present within the UK Coalition Government is a very considerable political backlash against the policy framework established in that original period of policymaking in 2006-10. On the right of the Conservative Party a strong view has developed that climate change is no longer a priority area for policy; that the UK s climate targets are too stringent and are damaging the economy; and that the drive to renewable energy which is the principal means to achieve them should be reined back in favour of an alternative focus on supplying energy from gas. The Chancellor of the Exchequer has become the most powerful advocate of this position, and his influence has become apparent both in the failure of the Energy Bill published in November 2012 to adopt a medium-range (2030) target for decarbonisation, as demanded by most of the energy industry, and in the subsequent announcement of a gas generation strategy which the independent Committee on Climate Change has warned could lead to a breach in the UK s statutory climate targets. 3 6

These political developments are instructive, because they show that, however much support preventative policy may have at one political moment, this does not guarantee that the policy will be maintained over time. Prevention is rarely a one-off: it requires sustained implementation. But this offers plenty of opportunity for opponents to regroup and organise against it. In the case of climate change policy, these opponents are both economic and political. On the one hand, business interests facing higher costs and lower growth from climate policy notably those in the fossil fuel industries and energy-intensive sectors have been assiduous in lobbying against it. On the other, there has been a strong move on the right wing of politics to reject the whole idea of climate policy. Starting among Republicans in the US, but increasingly prevalent in the UK Conservative Party, a strong strain of scepticism about climate science has been combined with an ideological opposition to the kinds of regulatory intervention in the economy required to tackle it. The result is an increasingly organised opposition to climate policy. In the UK this is building up to focus on the review in 2014 of the UK s carbon budget for 2023-27. In the early months of the Coalition Government a strong emissions reduction target was chosen for this period, but with the proviso (insisted on by the Chancellor) of a review in 2014. The target is now at evident risk. But equally, the downgrading of climate policy under these pressures is by no means a foregone conclusion. Supporters of climate action are mobilising on the other side, aiming to defend the gains made in 2006-10 and ensure that they continue to be implemented. In this they have several factors in their favour which may offer wider lessons for preventative policy in other fields. The first set of factors derive from the specific nature of the 2008 Climate Change Act. This unusual piece of legislation enshrined the UK s emissions reduction targets and carbon budgets in law; required the government to publish a comprehensive plan to meet those targets; and established an independent Committee on Climate Change to advise it, both on the appropriate level of targets and budgets and on the best means of achieving them. Each of these features creates a strong foundation for subsequent implementation. The statutory basis of climate targets and budgets is a particularly helpful way of embedding objectives in policymaking. It has forced a policy framework on the present government: the objectives adopted by the previous administration cannot simply be abandoned, as often happens in other areas of policy which have no statutory basis. (This is also why, at an international level, agreement on a global climate treaty is widely regarded as essential: it means countries will be bound beyond the lifetime of individual governments.) Clearly, these objectives can be changed by repealing the law or revising the secondary legislation in which the carbon budgets are set; but this is much more difficult and controversial than merely changing the course of non-statutory policy. At the same time the requirement in the Climate Change Act of a comprehensive plan to meet the targets has created a powerful momentum for implementation a kind of path dependence in policymaking. The UK Transition Plan adopted in 2009 set in train a whole series of initiatives and 7

policy changes which the present Government has been required to follow through or explicitly abandon, not least the wholesale reform of the electricity market which is now embodied in the Government s Energy Bill. Abandonment is of course possible, but the Government would then have to find an alternative means of implementing the targets, or face the very public assessment of the Committee on Climate Change that it was off course to meet them. The Committee s independence and authority have provided a robust means of holding both the last and present governments to account for the delivery of the Act s objectives. The second factor which strengthens the chances of sustained implementation is the development over the last few years of a strong business lobby in favour of climate action, and an accompanying new discourse about the economic benefits of preventative policy. This is a striking phenomenon. For a long period environmental policy could be crudely but not inaccurately cast as a battle between environmental NGOs on one side and the business community it sought to regulate on the other. This is no longer true in the field of climate change policy. As policy has come to be put in place, a major industry has arisen which benefits from it the investors and developers in renewable and nuclear energy and energy efficiency; the manufacturers of the technologies and equipment they use; and the finance, engineering, construction and service companies which constitute their supply chains. Globally the environmental sector (including its climate-related subset) is now a $4 trillion industry, larger than aerospace; and in the UK (where it is valued at 120bn, and is one of the few sectors showing robust growth over recent years 4 ) it is now organised in powerful business lobbies. In the run-up to the publication of the Energy Bill, over 50 of the UK s largest companies wrote to the Government in support of a 2030 decarbonisation target. When the Chancellor s suggestion of a dash for gas was immediately criticised by the CBI, which represents British business as a whole, it was clear that the politics of climate had changed. 5 And as this has happened, a new discourse has emerged which focuses on the present economic gains from tackling climate change rather than its future benefits. The concept of green growth, which argues that environmental policy stimulates greater investment in jobs, profits and exports than the brown growth of high carbon dependence, has now become a mainstream discourse in the UK, and is gaining traction globally. 6 In doing so it has turned climate policy aimed at preventing future harms into an economic policy designed to achieve present gains. Given the importance of economic arguments in politics, not least in today s economic conditions, this is likely to prove an important bulwark against the climate backlash. But there may be still another factor which is required to ensure the sustained implementation of climate policy. That is the revival of the social movement in favour of action on climate change. There is little doubt that in the wake of Copenhagen the movement became disillusioned and tired, and the public became preoccupied by more immediate economic anxieties. And as an issue of public concern climate change suffers from an acute problem, which is that even when action is successfully taken, it is not visible. Because of the time lag between emissions reduction and its 8

effects, climate change impacts will continue to occur even after mitigation policies are put in place. So it is hard to maintain public confidence and pressure. Yet at the same time, the facts about climate change remain the same as they were when climate rose to the top of the political agenda in 2006-10. There is therefore every reason to think that when the IPCC publishes its next comprehensive assessment of the scientific evidence, in 2013-14, public alarm can again be catalysed. The UN has set a deadline of 2015 for agreement to be reached on a new international treaty on climate change to replace the Kyoto Protocol; a leaders summit has been called for the year before. So there will be ample reasons for the revival of a social movement to apply pressure on governments. Perhaps more to the point, for the successful implementation of preventative environmental policy, such a revival may prove to be the necessary condition. This essay was submitted as a working paper to a new economics foundation (nef) seminar on Prevention held in November 2012. The views expressed do not necessarily represent the views of nef. Endnotes 1 The Stern Review of the Economics of Climate Change, HM Government 2006 (published as Stern, Nicholas, The Economics of Climate Change: The Stern Review. Cambridge, UK: Cambridge University Press, 2007). 2 See for example Nordhaus, William. A Review of the Stern Review on the Economics of Climate Change. Journal of Economic Literature, Vol 45 (3): 686-702, 2007. 3 CCC says early decarbonisation of the power sector should be plan A and the dash for gas Plan Z, Committee on Climate Change press release, 5 December 2012 4 Low carbon and environmental goods and services: 2010/11 report, Department of Business, Innovation and Skills, 2012. 5 2030 Power Sector Carbon Target Essential for Growth, Aldersgate Group press release, 8 October 2012; CBI comments on gas energy debate, Confederation of British Industry press release, 6 October 2012. 6 Going for growth means going for green, DECC press release 2012/007, 6 February 2012; World Bank, Inclusive Green Growth: The Pathway to Sustainable Development. Washington D.C.: The World Bank, 2012; OECD, Towards Green Growth. Paris: Organisation for Economic Co-operation and Development, 2011. 9