“It is govern­ments of oil-im­port­ing de­vel­op­ing coun­tries that are likely to have the most ur­gent need for en­ergy – and also the widest array of pos­si­bil­i­ties to meet that need”

Financial Mirror (Cyprus) - - FRONT PAGE -

There is never likely to be a per­fect mo­ment for in­tro­duc­ing new cli­mate poli­cies. Long-run prob­lems re­quire poli­cies that send long-run sig­nals. And these poli­cies can­not be con­stantly fine-tuned to the volatil­ity of the mo­ment. At­tempt­ing to do so only fuels fur­ther volatil­ity (which is what re­ally hurts growth). Now is al­ways as good a time as any to take action.

And we should do so un­der no il­lu­sion that the trans­for­ma­tive out­come we need will be a smooth, in­cre­men­tal process. Tech­no­log­i­cal changes whip up gales of cre­ative de­struc­tion. There will be – must be – many losers. But there will also be win­ners, as new tech­nolo­gies cre­ate new busi­ness op­por­tu­ni­ties. Govern­ments that try to protect the sta­tus quo will not only fail on cli­mate change; they will ul­ti­mately im­pose higher so­cial costs, even as they fail to cap­i­talise on the eco­nomic op­por­tu­ni­ties cre­ated by re­form.

Cli­mate-change poli­cies must be steady and con­sis­tent. Action must lu­bri­cate change, not re­peat­edly stop it in its tracks. Once in­vestors see that the fos­sil-fuel game is over, govern­ments must let the ef­fects of the re­sult­ing cap­i­tal re­al­lo­ca­tion play out. It will be bumpy. But there is no other choice. Try­ing to fine-tune an eco­nomic and tech­ni­cal adjustment path would be as fu­tile as try­ing to con­trol the price of crude oil.

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