An analysis published a few days ago by the campaigning group Sandbag estimates the amount of carbon that will have been saved by the end of the second phase of the EU's emissions trading system, in 2012; after the hopeless failure of the scheme's first phase we were promised that the real carbon cuts would start to bite between 2008 and 2012. So how much carbon will it save by then? Less than one third of 1%. SourceClimate change might be our most urgent environmental challenge. Or it might not. It might lead to catastrophic changes in weather patterns around the world, threatening millions of those people who are least able to adapt. Or it might not.
Our policymaking system doesn't deal well with such uncertainty. It's in most policymakers' interests to delay significant action until it becomes impossible to ignore the consequences of doing so. In similar policy areas, perhaps in most, that isn't too disastrous a policy. But there are occasions when the scale of the consequent disaster is immense.
In all these years of discussion about climate change, I haven't been persuaded that there's anything more likely to meet the climate challenge effectively than Climate Stability Bonds. Under a bond regime, the private sector would bear the consequences of over- or under-estimating the severity of the problem. And they would do so adaptively. That contrasts with the current approach, whereby policymakers employ a limited number of experts using today's science in an attempt to grapple with tomorrow's events - at a time when our knowledge of the causes and consequences of climate change is small, but expanding at a prodigious rate.
It's no wonder then that, perhaps at the unconscious level, our policymakers have decided to do nothing, other than engage in bureaucratic displacement activity. There's an unknowable, but non-zero, probability that we shall get lucky, and that this approach will prove to have been wise; but we can know that only in retrospect. And even if that were to be the case, Climate Stability Bonds, because of the way they work, would still have functioned as an insurance policy. One that could have a massive positive payoff, and one that in any event would be no more costly than the pointless rituals that signify the current way of pretending to deal with the problem.