[T]he ideal of a biomass plantation that is harvested only at the rate at which it grows back is not always met. Even when it is, such plantations displace other ecosystems that would themselves have sucked down carbon. Processing and transporting the wood to the place where it is burned requires energy that may well come from non-renewable sources. [S]ome biomass programmes could end up emitting more carbon than the fossil fuels they are being subsidised to replace.The underlying problem is the reverence accorded to renewable energy itself. Greens like it for various reasons: independence from fluctuating fuel prices, rural employment, sustainability, as well as low carbon emissions. But as the sorry state of biomass shows, not all renewable-energy technologies are good at achieving all those aims. Nor are all those aims worth spending scarce public money on. Bonfire of the subsidies, the 'Economist', dated 6 AprilThis is what happens when instead of targeting climate change itself we focus instead on trying to limit greenhouse gas emissions; or rather, those gases thought in the 1990s to be the causes of climate change. If we want to achieve environmental outcomes, I think we'd do better to target these outcomes directly, rather than have government - heavily influenced as it is by interest groups - identify the ways of achieving them. A congenial climate, along with many other environmental and social goals, is too complex to be reduced to a set of simple invariant relationships of the sort that government can identify and encourage or discourage.
Social Policy Bonds would instead identify desirable outcomes and reward people for achieving them, however they do so. A bond regime would see investors automatically adapt to changing circumstances and our ever-expanding knowledge about the relevant scientific relationships. If burning biomass were to create more environmental problems than it solves, investors in Climate Stability Bonds would soon focus on better ways of achieving society's climate target. It would see 'renewable' and other high-sounding adjectives as possible means towards society's ends, rather than as ends in themselves.