Carbon pricing: How politics makes implementation difficult
In a curious happenstance last week, two global events put the spotlight on the critical issue of climate change.
 
First, the United Nations' scientific panel on climate change issued a landmark report which painted a far more ominous picture of the consequences of climate change and called for a transformation of the global development scenario at a speed and scale that has "no documented historic precedent". It warned of the catastrophic effects that await the world if net global carbon emissions are not cut in half over the next dozen years and eliminated completely over the next three decades.
 
As if in response, the next day the Royal Swedish Academy of Sciences awarded the Sveriges Riksbak Prize in memory of Alfred Nobel to two American economists; one of whom, William Nordhaus, was accorded the recognition for his path-breaking work on carbon pricing.
 
The UN report focuses attention on the fact that if status quo is maintained and greenhouse gas emissions continue at the present rate, the world will warm up by 1.5 degree Celsius above preindustrial levels by 2040, inundating coastlines and intensifying droughts in the process. All the previous work had estimated the repercussions of climate change based on a higher temperature rise of 2 degree Celsius, which was considered to be the threshold for the most severe effects. Now, there is new evidence that these effects will be realised much sooner.
 
According to the report, despite the international community coming together to strengthen the global response to climate change, in the form of commitment to the Kyoto Protocol or the Paris Agreement, the scale and speed needed to stabilise global temperature at a safe level has not been achieved yet.
 
Nordhaus' work has gained more relevance as it provides an answer to why heavy-handed regulations are unable to correct the market failure. By doing so, his research can guide policymakers on how to tackle climate change. 
 
He has built on the work done in the 1920s by A.C. Pigou. His research points out that individuals, firms and countries have no incentive to reduce carbon consumption as climate is a global public good. This points towards a clear case of market failure where intervention is needed to restore efficiency and enhance public welfare. The interventions can be in the form of taxes or regulations.
 
His research shows that direct government regulations aimed at controlling the quantity of carbon emissions will be far less effective than putting a price on the use of fuels. This happens because, without an incentive, polluters will act as free-riders and not take into account the economic damage inflicted on the society due to their actions. Their failure to internalise these costs leads to emissions greater than the optimal level.
 
He argues that carbon pricing will be an effective policy measure, because when companies are made to pay the price for their fossil fuel consumption they will find cost-effective and innovative solutions for reducing them. The policy will incentivise them to invest and develop energy-saving technologies. 
 
In theory, economists have always been enthusiastic about billing polluters for every tonne of emission they unleash, arguing that the polluters can choose their optimal response given the price. However, in the real world, the road to successful emission reduction has involved heavy-handed government regulations. This happens because of two reasons.
 
First, when governments put a price on carbon, either through a direct tax or through a cap-and-trade programme, they are unable to put a price that is significant enough to drive a reduction in carbon emission. For instance, the World Bank's carbon pricing dashboard shows that there are 51 carbon pricing initiatives that are either implemented or scheduled for implementation across the world whose total value is $81.68 billion. But experts suggest that in most of the programmes the prices are too low to spur emission reductions or to inspire low-carbon investments.
 
Second, government regulations are a safer political bet as high taxes can face a political backlash. For instance, the Australian government's plan of reducing emissions by using a cap-and-trade programme was successful, but it faced a backlash from industrial groups and voters. The party that came to power in the next elections repealed the programme.
 
So, theoretically, a higher price on the use of fuel is the solution, but political factors reduce the possibility of its implementation. If one thinks that public acceptability is a deterrent, then policymakers should focus on bridging the information gap that exists across citizens. They should also address the issue of allocation of revenue from carbon pricing, wherein the collection should be streamlined to cater to environmental concerns of the economy. This will enhance public acceptability and the ability of policymakers to implement carbon pricing.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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Maharashtra Bans Statues of Icons, Leaders in Government Offices
In view of the space crunch and probable disturbances arising out of defiling by miscreants, the Maharashtra government has banned installation of statutes of leaders, national or local icon in government offices and the guest houses run by the state public works department (PWD) with immediate effect.
 
A notification issued by the PWD on 11 October 2018 stated that the need for more space for expansion and public utility projects could occur anytime and if the available space is already occupied by statues, the government would be forced to hire land on rent from private parties for public projects.
 
Besides, the statues are also required to be guarded to prevent their being defiled by the miscreants. Such unpredictable agitations also vitiate the atmosphere and put a burden on the administrative machinery. As such, henceforth no statues will be allowed on the premises, compounds of the government guest houses and other offices. There are nearly 400 guest houses in Maharashtra and a sizable number of government and semi-government offices maintained by the PWD throughout the state.
 
On a fair estimate about one lakh statues are located in 534 towns and 40,000 villages in 35 districts in the state. They include the statues of Chhatrapati Shivaji Maharaj, Dr BR Ambedkar, Mahatama Gandhi, Pandit Nehru, Lokmanya Tilak, Veer Savarkar, Mahatma Jyotiba Phule etc. 
 
In Mumbai alone there are over 40 statues of national and international icons including Dadabhai Naoroji, Pherozeshah Mehta, Swami Vivekanand, Jamsetji Tata and King Edward VII of UK.
 
The state government has already made it mandatory for those planning to erect a statue of national or local icons and leaders, to submit a clearance from the police, stating clearly that any minority community living in the locality or the local residents are not opposed to the move. 
 
This pre-condition, was recently introduced by the general administration department headed by the chief minister Devendra Fadnavis, after an incident involving pulling down of a statue of Marathi poet and playwright Ram Ganesh Gadkari at Pune’s Shambhaji Udyan. 
 
On 3rd January this year, supporters of the Sambhaji Brigade had pulled down the statue, claiming that Gadkari’s books painted Sambhaji Maharaj in poor light.
 
There are 21 guiding principles for installation of statues. As per these principles, the local police are required to ascertain that installation of any statue will not lead to escalation of local or communal tension. 
 
The guidelines also prohibit installation of the statue of a particular icon or a leader within 2 km of an existing statue of the same person. Besides the no-objection certificate (NOC) from police, those erecting the statue would also require a separate NOC from the urban or the rural local body stating that the project will not impact traffic movement and local aesthetics. The powers to approve installation of statues have been decentralised at the collector level.
 
As per the above guidelines, a person cannot install a statue in his/her home or a private organisation cannot install a statue in its premises if some minority community in the locality is opposed to it.
 
The then Cong-NCP government had formulated similar policy in 2005. However, it did not require an explicit ‘no objection’ from minorities, rather it said that the wishes of minorities should be mentioned in the NOC. Which means that as per the old policy, an NOC could be given for a statue even if a minority community was opposed to it. Also, unlike the latest policy, private land was left out of the scope of the 2005 policy.
 
Interestingly Maharashtra government is in the process of installing a 210 meter tall statue of Chhatrapati Shivaji Maharaj in the Arabian Sea at an estimated cost of Rs3,600 crore. This particular project seems to be safe since the latest GR may not be applied retrospectively to it.
 
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COMMENTS

Ashok Senniappan

3 weeks ago

I feel sad to see our leaders statue who fought for the freedom is time and again
defiled.Is this what the value taught to us? What type of Education is being imparted?
and blatantly the Photos Of Corrupt Ministers (TN) in the Assembly.Where are we heading to?

Anand Vaidya

4 weeks ago

"The state government has already made it mandatory for those planning to erect a statue of national or local icons and leaders, to submit a clearance from the police, stating clearly that any minority community living in the locality or the local residents are not opposed to the move. "

Does minorities here, imply Muslims and Christians? Or Hindus in Muslim majority areas are also considered "minorities"?

Air India crew member falls off aircraft in Mumbai
A senior woman crew member fell off an Air India plane at the airport here as it was preparing for a flight to New Delhi, official sources said on Monday.
 
The incident occurred at the Chhatrapati Shivaji Maharaj International Airport (CSMIA) when the Mumbai-Delhi flight AI-864 was preparing for departure shortly before 7 a.m.
 
The 53-year-old air-hostess, identified as Harsha Lobo, who was closing the door for the pushback prior to taxing, suddenly fell from the aircraft onto the hard tarmac several metres below.
 
Some ground crew members immediately rushed Lobo to the Nanavati Hospital.
 
The national carrier later said that she had suffered injuries to her legs and termed the incident as "unfortunate".
 
"In an unfortunate incident, one of our cabin crew (members) Harsha Lobo, fell down on the tarmac from the Boeing 777 aircraft door while closing it," the airline statement said.
 
The flight departed for Delhi after over an hour's delay.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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