Academic

Klemperer on Climate Change Priorities

By Lawrence Solum

Paul Klemperer (University of Oxford - Department of Economics) has posted What is the Top Priority on Climate Change? on SSRN.  Here is an excerpt:

The critical issue is that no strategy will work unless it is consistent with developing countries' continued economic growth.3  So we are unlikely to be able to reduce the use of 'dirty' energy enough ? either through carbon taxes or through a 'cap and trade? permit system ? unless we can find a cheap, clean, substitute. And that requires innovation.

Developing countries are not going to give up the immediate aspirations of their (often growing) populations for climate-change benefits that are largely in the future. Worrying about preserving the environment for our great-grandchildren is a luxury developing nations do not have.

And:

Businesses know that when an innovation is sufficiently important, the innovator gets little of the benefit: the developers of drugs for AIDS, and of vaccines for Anthrax and bird flu were threatened with compulsory licenses in many countries (including in the United States) until they 'voluntarily' licensed their innovations cheaply. The difficulties of getting effective patent protection in the first place (so any innovator would fear being copied, and forced to compete with imitators), the riskiness of much energy R&D, and the large scale of some of the necessary investments (for example, research into fusion) are further reasons why business is reluctant to undertake the needed R&D without subsidies.22 So it is catastrophic that ? as the Stern Report emphasized23 ? public expenditure on energy R&D has been falling in most countries over the last 30 years, and it is shameful that most of Europe spends a much smaller fraction of its GDP on public energy R&D even than the USA and Japan. The UK is one of the worst offenders.

Trenchant, to the point, and recommended.

Full post as published by Legal Theory Blog on January 26, 2009 (boomark / email).