Europe Leads the Way on Climate Policy

Robert N. Stavins, an RFF university fellow, Harvard professor, and RFF board member, recently hosted David Victor on an episode of his Environmental Insights podcast. Victor, a professor of international relations at the University of California, San Diego, reflects on how the coronavirus pandemic has illuminated which governments around the world might be most adept at developing policy to address climate change. Victor and Stavins also discuss ambitious plans in the European Union for a Green Deal, the vast uncertainty surrounding US climate policy, and the complicated political calculus that might be hindering the effectiveness of existing carbon pricing programs.

The transcript of their conversation has been edited for length and clarity.

Robert N. Stavins: I thought we could start with where we find ourselves, which is in this global coronavirus pandemic. What have been the impacts, and what will be the impacts in the two realms with which you're very familiar: energy and climate change? And I mean this in terms of energy markets, energy policy, global climate change itself, and global climate change policy.

David Victor: I think the first thing that's worth underscoring is that we don't know. There's a tremendous amount of uncertainty here. That, to me, is very important because from an investor point of view, that uncertainty creates a wariness about putting capital to work—especially capital for long-duration projects. So, I think one of the most important things to watch right now is: Where have governments been able to create credibility around their plan? Where have they been able to outline, "Here's a spending program; here's what we're going to spend the money on; here's why the incentives we're putting into place are credible"? Where that's happening, you're going to see capital flood back in....