Environment

Rethinking African solar power for Europe

Emanuele Massetti, Elena Ricci, 23 July 2014

Concentrated solar power generation in Northern African and Middle Eastern deserts could potentially supply up to 20% of European power demand. This column evaluates the technological, economic, and political feasibility of this idea. Although concentrated solar power is a proven technology that can work at scale, it is currently four or five times more expensive than fossil fuels. Concentrated solar power could play an important role in Europe’s energy mix after 2050, but only if geo-political challenges can be overcome.

Discounting the very distant future

Stefano Giglio, Matteo Maggiori, Johannes Stroebel, 21 June 2014

Long-run discount rates have big implications for fiscal and climate-change policies. This column estimates a discount rate for very long-run housing cash flows of 2.6%. This suggests that people are more willing than previously thought to invest today for the benefit of future generations, particularly if the benefits occur with certainty.

Inferred fossil-fuel subsidies: A new database

Radek Stefanski, 30 May 2014

No comprehensive database of directly measured fossil-fuel subsidies exists at the international or the sub-national level, yet subsidies may be crucial drivers of global carbon emissions. This column describes a novel method for inferring carbon subsidies by examining country-specific patterns in carbon emission-to-output ratios, known as emission intensities. Calculations for 155 nations from 1980-2005 reveal that fossil-fuel price distortions are enormous, increasing, and often hidden. These subsidies contributed importantly to increasing emissions and lower growth.

Greening Economics: It is time

Carlo Carraro, Marianne Fay, Marzio Galeotti, 26 April 2014

The concept of environmental capital is throughly entrenched in policy dicussions but largely missing from mainstream economic curriculums. This column argues environmental externalities, climate change, and constraints on natural resources will constantly and deeply affect humankind’s future. The teaching of economics, especially growth economics, should stop ignoring them.

Climate policy targets revisited

Richard S J Tol, 25 April 2014

The IPCC’s Fifth Assessment Report estimates lower costs of climate change and higher costs of abatement than the Stern Review. However, current UN negotiations focus on stabilising atmospheric concentrations of greenhouse gases at even lower levels than recommended by Stern. This column argues that, given realistic estimates of the rate at which people discount the future, the UN’s target is probably too stringent. Moreover, since real-world climate policy is far from the ideal of a uniform carbon price, the costs of emission reduction are likely to be much higher than the IPCC’s estimates.

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