Energy Policy and Climate Change

Abstract

Is economic growth and development a zero-sum game vis-à-vis the environment: i.e. must economic welfare always come at the cost of environmental damage? This is one of the most fundamental questions facing humanity today – whether there is a way for both the economy and the environment to flourish, or if we must always make trade-offs between what’s best for each. Avoiding knee-jerk reactions wholly in favor of either side is important for society, as evidenced by the disorder experienced in several countries around the world at the hands of self-declared guardians of the environment. The fact is that climate change is not limited to a national boundary but is tied to international actions and reactions. While the price an economy pays for a sustainable future is purely a local price, the social costs resulting from environmental damage is shared globally. Hence, even if a government completely capitulated to the environmental extremists’ demands, there would still be environmental impacts to mitigate. In addition to developing energy policies to reduce carbon emissions, policymakers must act to prepare their economies to deal with climate change. Can energy policies be designed to simultaneously provide social and environmental benefits? The answer is an emphatic yes. This chapter shares examples of a select subset of countries, reviewing their climate change agendas and targets, in conjunction with supporting environmental policies. Specifically, the economic impacts of such measures, and the long-term impacts of such policies on energy supply and demand, are assessed.