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Interview: Dieter Helm

climate.2009.86-i1.jpgOxford economist Dieter Helm co-edits an upcoming book, The Economics and Politics of Climate Change, that he says takes “a colder and harder look at the challenge”. In a Q&A on Nature Reports Climate Change this week, Helm gives his take on a long-term strategy for reducing emissions. Here’s an excerpt:

Where, in your view, has policy gone wrong?

Let’s remember what lies behind Copenhagen. The Kyoto Protocol measures countries’ production of carbon, not consumption. It’s no accident the Europeans like Kyoto. It’s a set of measures which, as they de-industrialize and production moves to countries like China, makes them look good. But the carbon consumption record of Europe, once you take those imports back, is pretty awful. That’s why Kyoto looks like a success, and yet it hasn’t caused even a blip in the emissions path.

Do we also need to re-think climate economics?

What we have learnt is that politicians tend to choose the most expensive options first. Faced with climate change, what’s our solution? In Europe, it’s to devote most of our energies to a rapid build-out of wind power. This is the sort of thing that makes nuclear power look cheap. Climate change is about the massive increase of coal burning internationally, especially the growth of China and India fuelled by coal-based energy — and America too, where the Obama plans are also small relative to the problem.

What exactly will windmills across Europe do to address that overwhelmingly dominant effect? Of course they’ll play some role, but it’ll probably take a couple of weeks for China to add sufficient new coal power stations to cancel out any renewables effort in Britain. It’s time to grow up. It’s time to realize that coal is where the core of the problem lies, and to think cleverly about solutions towards that.

Read the full interview here.

Anna Barnett


  1. Report this comment

    Brad said:

    From the interview:

    “My view is the level of consumption is far too high in the US and the UK, both for the macroeconomic cycle and for the environment. We’re living beyond our means.”

    So unemplyment in the US is 9.7%. Unemployment in the 16-member euro region is 9.5%. Both of these figures are set to rise over the next 6 months. Lowering GDP per capita is only going to exacerbate the problem. Of course if you are already on top maybe you ’don’t care/mind’ as much.

    I am not suggesting we do not need a radical shift, just that it must be done without hurting the poorest in society. For example: Use the funds from cap and trade to subsidize nuclear, solar and wind energy construction such that the end consumer does not see a rise in electrical costs. That way the disadvantaged are protected.

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    mikep said:

    Dieter Helm is not suggesting anything that would lower GDP. He is suggesting that consumption goes down and investment goes up to compensate. GDP is the sum of consumption, investment government spending on goods and services (not transfer payments) and net exports. Cutting consumption is not equivalent to cutting GDP.

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    Terry Krieg said:

    We should all remember that Denmark, the biggest wind user on the planet has stopped building wind farms. They’ve done nothing for greenhouse abatement and give Denmark the most expensive power in the EU. I’m shaking my head in disbelief that our misguided state government in SA is going the way of Denmark. Aaarrrgghh!!

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