Climate Change : Need for New Economic Thought

India is the fifth largest emitter of carbon dioxide but lacks a credible policy to address human induced climate change. Reluctance to take action is understandable in a country where per capita emissions are still a fraction of those in the US or Europe. However, in about 30 years, at present growth rates, India’s emissions will reach European per capita levels. At the Ninth Biennial Conference of the International Society for Ecological Economics (New Delhi, December 15-18, 2006) the point was repeatedly and forcefully made that India is neither offering self-restraint nor claiming a “carbon debt” by asking for reductions in other countries’ emissions. Besides activity in the market for “clean development mechanism” projects, which will have little impact on emissions trends, India is practically silent on the international stage. India appears to be in denial over global aspects of human induced climate change, focusing if anything on internal concerns such as changing patterns of the monsoon. This article explores the development of human induced climate change as an international policy concern and the reasons why no country can sit on the sidelines. Natural science has been at the forefront of the debate, with climatologists leading due to their role in the Intergovernmental Panel on Climate Change (IPCC) and its four Assessment Reports (AR).1 However, as regulation of various emissions has moved onto the political agenda so economists and others have entered the debate more prominently. As will be seen, seriously addressing the enhanced greenhouse effect challenges the approach to resource allocation of mainstream economics. A range of subjects arise including: the objectivity of scientific information, asymmetry of costs and benefits over space and time; differentiation between risk and uncertainty; institutional power over information and policy; and the role of ethical judgment in decision processes. Each is a major topic requiring research and posing serious challenges to the current conceptualisation of pollution as a technical problem, which requires an engineered optimal solution. Similar problems have been and continue to be posed by other pollution “externalities”. The difference in the case of the enhanced greenhouse effect is how the issues confront the analyst simultaneously, are nonseparable and arise on a global scale.