CLIMATE POLICIES: CHALLENGES, OBSTACLES AND TOOLS

A four-pronged approach to climate policy is presented consisting of carbon pricing, subsidies for renewable energies, transformative green investments and climate finance and engendering flywheel effects. Then, a variety of societal and political challenges and obstacles faced by such a climate policy and what can be done to overcome them are discussed. These range from stranded assets, the very long time scales needed to adapt and deal with global warming, intergenerational conflict, international free-rider problems, carbon leakage, green paradoxes, policy failure and capture, adverse income distributional effects and spatial scarcity to the problem of climate deniers and sceptics. The paper also discusses the various tools that are needed for the analysis of both ideal and workable climate policies, and the need to collaborate with complexity scholars, political scientists, sociologists and psychologists.

RETHINKING EVIDENCE-BASED POLICY

Much of public policy-making has in recent decades been driven by the idea of evidence-based policy – policy rooted in the principles of social science and, more specifically, empirical validation based on social and behavioural science. This article argues that evidence-based policy, while helping to improve the design of policies aimed at changing individual behaviour, lacks a recognition that individual and group choices are embedded in social relationships and institutions. There is a risk of over-relying not only on probabilistic models that under-state our condition of ‘radical uncertainty’ but also on data and metrics that are disconnected from the everyday experience of workers and citizens whose needs and interests cannot always be measured or managed. Since uncertainty is a fundamental reality of both the economy and social life, policy-making needs robust conceptual narratives to make sense of numbers and provide a sound basis on which to make decisions allied to ethical judgements.

MONETARY POLICY AND GOVERNMENT DEBT MANAGEMENT DURING THE CORONAVIRUS PANDEMIC

This paper describes how the large budget deficits of 2020 in the United States and the United Kingdom were financed, how central banks are in practice managed not just short-term interest rates but also yields on government bonds, and how their ability to resist a post-coronavirus surge in inflation has been compromised.

ASPIRATIONS FAILURE, DISADVANTAGE TRAPS AND INCLUSIVE REGIONAL POLICY

This paper examines the implications for regional policy of new research on the role played by a failure in the ‘capacity to aspire’ [Appadurai, A. (2004), ‘The capacity to aspire’, in Rao, V. and Walton, M. (eds), Culture and Public Action, Washington, DC: World Bank.] in perpetuating disadvantage traps. After a brief review of the magnitude of the challenge that regional policy needs to confront, it provides a summary of the theoretical and empirical literature on poverty and aspirations failure (and the associated loss of agency, beliefs and self-efficacy). The key implication for the design of an inclusive regional policy is that it needs to address simultaneously the sources of external constraints (such as the availability of resources or adequate infrastructure) and mitigate the aspirations failure inherently linked to persistent disadvantage.