Climate Change Mitigation Policy: An Overview of Opportunities and Challenges

Abstract

This chapter provides an overview of the opportunities and challenges associated with climate change mitigation policy, in order to achieve the target of limiting global average temperature rise to 2°C above pre-industrial levels. Scenarios from the International Energy Agency and others show that a large number of mitigation ‘wedges’ from the large-scale deployment of a range of low-carbon technologies, including a range of renewable energy technologies, nuclear power and carbon capture and storage from coal- and gas-fired electricity generation, are likely to be needed. The Stern Review set out the economic case for climate change mitigation, arguing that the costs of mitigation are likely to be much smaller than the costs and risks of the impacts of climate change. Governments are now attempting to implement policies to deliver effective and efficient mitigation in three complementary areas: carbon pricing, through taxes or tradable permit schemes; increasing support for R&D, demonstration and early commercialisation of low-carbon technologies; and measures to overcome non-market barriers to the deployment of energy efficiency and low-carbon technologies. However, the rationales for these different types of mitigation policy come from different areas of economic theory, and it is argued that a more holistic framework may be needed to stimulate a transition to a low-carbon economy, drawing on new economic thinking, such as a ‘green fiscal stimulus’ or a global ‘green new deal’.