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The political economy of climate change

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C. Stagnaro
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In Europe, climate control through the Kyoto Protocol has been accepted at face value as the appropriate solution to global warming. According to this sceptical author, vested interests in Europe have an incentive to greatly exaggerate the risks deriving from climate change and the policies needed to address it.The paper suggests that, as a result of these vested interests, Europe has a poorly formulated climate policy which will drastically reduce the GDP of European countries. The author predicts that the Kyoto Protocol might have several negative consequences during the first commitment period (2008-2012) for average European citizens:consumers would see rapid increases in living costs – food, durable goods, heating and cooling, transportation – because all energy, not just oil and gas, would be more expensiveif emissions limits were established, the cost would be passed on by businesses to consumers. Combined with the increased cost of energy, consumers would see the buying power of their salaries greatly weakened. because economic production would greatly slow, many people might lose their jobsThe suggestion is that European countries and the European Union ought to pursue policies which encourage flexibility and innovation, so that Europeans can adapt to change – whatever those changes may be rather than “wasting and diverting resources from more urgent and substantial needs” . To that end, we should:invest in climate research, both scientific and economic. A better understanding of the process and its effects is indispensable to creating public policyencourage innovation in energy sources and utilisationstimulate adaptation to changeremove obstacles to the scientific process and to economic growth, including subsidies and trade barriersTo achieve these results, it is necessary to:guarantee freedom of research for scientistsstrengthen the institutions of free societies, to enable human innovation and creativitysupport free market reforms which are unbiased towards specific energy sourcesPublished in: Adapt or Die: The science, politics and economics of climate change; edited by Kendra Okonski