This makes sense:
Coal-fired power stations, airport expansions and new road schemes could all be put on hold following a decision by Gordon Brown that ministers must in future take account of the true economic cost of climate change damage.
Ministers have been instructed to factor into their calculations a notional "carbon price" when making all policy and investment decisions covering transport, construction, housing, planning and energy.
Unfortunately, this doesn\’t:
The "shadow price for carbon", representing the cost to society of the environmental damage, has already been agreed for every year up to 2050 by government economists. It will be set at £25.50 a carbon tonne for 2007, rising annually to £59.60 a tonne by 2050.
That\’s actually higher than the number the Stern Review came up with and that in itself was an outlier. Others (William Nordhaus) have put the appropriate cost at one tenth of that figure. Adding externalities into the costs used to make decisions is great, using the wrong cost isn\’t: it leads to resource misallocation and thus makes us poorer.
But then that\’s the problem with any form of political action about climate change. It depends upon the politicians being well informed, not subject to lobbying and so on. And as ethanol, biofuels, fleet emissions standards, the CFP, the insane insistence upon recycling everything show us, this simply isn\’t true.