Energy, climate change and the three domains of sustainable development
Lead Contributor: Jean-Charles Hourcade, Karsten Neuhoff
Routledge – 2013 – 520 pages
Why do we – and in particular, governments – seem to be so incapable of acting to protect our future, and what we should be doing instead? How well do the theories which guide our thinking about the global challenges of energy and environment actually fit the facts?
In this ground-breaking book, Michael Grubb and his co-authors argue that three distinct domains of human decision-making need to be recognised and connected in order to address these crucial questions. Each domain corresponds to different theoretical foundations, draws on different areas of evidence, and implies different pillars of policy. One of these domains is neoclassical economics, which has tended to dominate economic thought and policymaking, yet the authors demonstrate that this approach has significant shortcomings. Global energy and environmental issues take us beyond the reasonable boundaries of neoclassical assumptions, so other frameworks need to play a supporting role.
The book presents evidence that in relation to the grand challenges of energy and environment, each of the three interdependent domains is of roughly equal importance. It is shown that from these three domains flow three pillars of policy – three quite distinct kinds of actions that need to be taken, which rest on fundamentally different principles. Any pillar on its own will fail. Only by understanding all three, and fitting them together, do we have any hope of changing course and solving some of the biggest challenges of our time.
'This book combines extraordinary breadth with depth, all written with exceptional clarity. In explaining why energy and climate change take us beyond the traditional boundaries of economics, it is a landmark study which should expand the horizons of economics itself – as well as mapping out how, in doing so, we can solve some of the most pressing problems of our time.' — Professor Catherine Mitchell, University of Exeter, UK
Preface 1. Trapped? 2. The Three Domains Pillar I: Standards and Engagement for Smarter Choices 3. Energy and Emissions: Technologies and systems 4. Why So Wasteful? 5. Tried and Tested: Four decades of energy efficiency policy Pillar II: Markets and Pricing for Cleaner Production and Products 6. Pricing Pollution 7. Cap-and-trade and offsets: From idea to practice 8. Who’s hit? The distributional impacts of carbon pricing and how to handle them Pillar III: Strategic Investment for Innovation and Infrastructure 9. Pushing Further, Pulling Deeper: Bridging the technology valley of death 10. Transforming Systems 11. The Dark Matter of Economic Growth 12. Conclusions: Changing course
Michael Grubb is Senior Researcher and Chair of Energy and Climate Policy at Cambridge University, UK and Senior Advisor on Sustainable Energy Policy to the UK Energy Regulator Ofgem. His former positions include Chair of the international research organization Climate Strategies; Chief Economist at the Carbon Trust; Professor of Climate Change and Energy Policy at Imperial College London, UK; and Head of Energy and Environment at Chatham House.
Jean-Charles Hourcade is Research Director at the Centre National de la Recherche Scientifique and at the École des Hautes Études en Sciences Sociales, France. He is Professor at the École Nationale des Ponts et Chaussées and was formerly Director of the Centre International de Recherche sur l'Environnement et le Développement. He has advised the UNDP, UNEP, OECD, IEA and World Bank several times.
Karsten Neuhoff is Head of Climate Policy at the German economics research institute Deutsches Institut fürWirtschaftsforschung (DIW), and is Professor at the School of Economics and Management at the Technical University of Berlin, Germany.