HOME UK The time has come for finance ministries to get a grip onclimate change policy. I have come to appreciate this after 15 months of talking to companies, investors, academics and policymakers around the world for a study, TheBusiness of Climate Change II, published today. The picture that emerges is of piecemeal, disorganised policy-making, reminiscent more of Soviet central planning than of modern market economics.
In most countries the dominant framework of thought on climate change policy is technical. In part this is understandable: it was technology that enabled mankind to extract and burn hydrocarbons and it will be technology that develops the alternatives. But climate change policy is equally an economic issue. Developing and switching to new technologies come at a cost and there is an important interest in keeping that to a minimum. Yet the preoccupation with technology and regulation, rather than with costs and market mechanisms, is pushing up the bill unnecessarily.
