TESS talks
Professor Ottmar Edenhofer
Ottmar Edenhofer is Professor for the economics of climate change in Berlin,
director for global commons and climate change and Chief Economist of the
Potsdam Institute for Climate Impact Research
He talks about the implications of new trends in urban planning, the need for a
carbon price and the wider roles grass roots movements can take in influencing
national and global policy change.
Taken from an interview at the TESS Unconference, May 2015. In parts, text is
paraphrased slightly.
“My interest in low carbon transition is a very simple one. Whenever we want to
avoid dangerous climate change, we need to find a way to depart from the
business as usual scenario. This means we need to transform our energy system,
agricultural system and also our economy. From that point of view I am
interested in transformation in pathways.
I started to think about international negotiations, and I thought about
institutional investors and finance ministers.
When I served as a co-chair for the IPCC I made sure we had a chapter on cities.
Its very interesting to see there is a lot of potential to reduce emissions, but on
the other hand a huge challenge as many people are advocating more compact
cities which bring together work places and flats to make city life a bit denser.
But this has a strong implication. At the same time, land in the cities becomes
scarcer. This may create inequalities, so as a result, some people are talking
about property and land taxes, in particular in the broader context as what we
have seen over the last two decades is an increase in land rent in the cities.
This is quite an interesting experience as people can do a lot at the community
level, but at the same time, even at that level, you have to deal with a low carbon
future, and social inequality. This is quite challenging, and I would say living in a
community is a very vibrant place to reconcile both aspects.
I have a lot of sympathy with grass roots movements. In Germany we have seen a
lot of very successful movements – think in particular of the anti-nuclear
movement. Phasing out nuclear power in Germany wouldn’t have happened
without the grass roots movement. So in that sense we have seen the enormous
effectiveness of the grass roots movement.
But my feeling is we are entering a new stage. More and more it becomes clear
that environmental problems are no longer local problems. I would argue that in
the 1980s and the ‘90s we have seen a lot of local environmental problems and
grass roots movements have been enormously effective to addressing this issue.
We realise that climate change is a global problem. To a certain extent avoiding
deforestation, protecting the Amazonian forest at least partially a global
problem. All the other environmental problems around the ocean are global
problems.
We are now at a phase where the grass roots movements need to think about
becoming more effective at addressing these global issues. I have no clear cut
solution for that, but what I can do is formulate the challenge.
From my point of view there was a lot of support, at least in Germany for
supporting renewables, which was in the early days, a good thing. But we have to
realise that at a global scale climate policy hasn’t been effective so far, as we have
seen, despite the global economic crisis, despite mitigation efforts worldwide,
and also in local communities. We can see an emerging renaissance of coal. Coal
becomes competitive in the US, in China and Europe. So from my point of view,
there is a strong need for carbon pricing. This will not become the only solution,
but at least the most important step to implement effective climate policy.
The crucial question is how can grass roots movements support such a thing?
One challenge is the distributional consequences of carbon taxes and carbon
prices. These might damage in particular, low income households. There is also a
distributional issue. We need to think about how to complement carbon pricing
with income tax reform. These are incredibly complicated things, but
nevertheless I hope that the grass roots movements can take on this challenge.
The second challenge is if the grass roots movements are interested in
divestment - this can only take place successfully where you have a carbon price.
So from my point of view there are a lot of interesting ‘entry points’ but it is now
the time to bring this different perspectives together. I would say the grass roots
movement which tries to convince the institutional investors to reallocate
investment budgets, but at the same time convince national finance ministers to
impose a carbon price might be something which is a powerful way to
transformation.
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