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The EU wants to spend $7 TRillion on projects that do nothing to fight climate change

The EU proposes spending that much on projects that will barely reduce temperatures or lower sea levels.

Bjorn Lomborg — Project Syndicate — November 29, 2013

Today’s policies to combat climate change cost much more than the benefits they produce. Unfortunately, bad political choices often make these policies even less cost-effective.

Consider the European Union’s 20-20 policy, which targets a 20 percent reduction in CO2 emissions below 1990 levels by 2020. It is important to examine this approach, not only because the EU is pursuing the world’s largest and most ambitious climate policy, but also because other climate policies suffer from similar shortcomings.

The most cost-efficient way to achieve the 20 percent target would be to operate a single, EU-wide carbon-market, which would cost the EU about $96 billion annually by 2020. But the benefits to the entire world would be much lower. Indeed, the only peer-reviewed overview of EU climate policy estimates that it can avoid climate-related damage of about $10 billion per year. So, for every dollar spent, the EU stands to avoid about 10 cents of damage.

This does not mean that climate change is not important; it means only that the EU’s climate policy is not smart. Over the course of this century, the ideal EU policy would cost more than $7 trillion, yet it would reduce the temperature rise by just 0.05Celsius and lower sea levels by a trivial 9 millimeters. After spending all that money, we would not even be able to tell the difference.

Advocates of the EU’s policy often argue that we should pursue such policies nonetheless, because there is a risk that global warming will be much more severe than currently expected. But, though this argument is valid in principle, economic models show that this risk has only a moderate effect on the best policy. Moreover, the absence of any temperature increase over the past 10-17 years has made such worse-than-expected outcomes extremely unlikely.

The real risk concerns the potential for bad political choices to make climate policies worse than necessary. The EU did not just implement a single carbon market in order to meet its target for CO2 emissions. Instead, the EU made a bad deal a lot costlier through a host of partly contradictory policies.

For example, the EU demanded that renewables like wind and solar account for 20 percent of energy supplies by 2020, though this is by no means the cheapest way to cut emissions. In fact, putting up a wind turbine cuts no extra CO2, because total emissions are already capped under the EU-wide carbon-trading scheme. It simply means that when Great Britain installs a wind turbine, it becomes cheaper to burn coal in Portugal or Poland.   Continue reading full article here…..


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