Climate change in the news: Agreement in Lima, the Beijing school ‘dome’ and other solutions

With the climate change agreement in Lima national responsibilities are now linked more flexibly to the rate of change of economic growth, placing more responsibility on fasting growing developing nations to do their bit. The US and China have, much like they did at talks for the Kyoto Protocol, limited their commitment to cut pollution. Pollution affects us all and as such is an example of the tragedy of the commons. Global agreements such as those at Lima are essential to try to reduce the growing problems greenhouse gases are causing.

As cities including Beijing and Kathmandu are described as ‘unliveable’, The Guardian reports a novel approach from the British School of Beijing, who have built an inflatable cover [estimated cost £3m] to protect their staff and students taking PE and games outdoors. The air is so bad on ‘red flag’ days that people are told to stay inside. This is creating labour shortages in the city as ex-pat staff with young children are seeking jobs back home or in other cities with lower levels of pollution.

Much of Beijing’s pollution is caused by manufacturing firms on the city rim, as well as the ever increasing number of cars. Stephen King at HSBC reports that this will only get worse: if half the population of China buys a new car in the next ten years, this will be an equivalent amount to the stock of cars currently in Europe!

This Guardian datablog from 2012 shows how the UK’s carbon emissions are made up and that emissions have fallen on the whole these last few years. The government announced a scheme this week to replace our ageing power stations, funded by higher bills for consumers and taxpayer funded subsidies. The aim is to ensure security of supply as much as to cut pollution.

Learn Liberty have a video here that sets out clearly and simply the difference between private and external costs and looks at the pros and cons of solutions, including taxation [a Pigovian tax], regulation and application of the Coase Theorem. This states that in the absence of transactions costs, assigning property rights can overcome externalities.

This series of videos from the European Commission include one that sets out how the Emissions Trading Scheme works, looking at how two firms could trade carbon allowances.