Top-down vs bottom-up: Part one

A difference in opinion exists as to whether the best strategies for tackling climate change are large-scale, top-down initiatives or smaller, bottom-up schemes.

To most people, the phrase “climate change mitigation” tends to instinctively induce images of grand projects that are usually centred around geoengineering, whether it be by sending giant mirrors into space or injecting aerosols into the stratosphere. The idea of community-led strategies is often overlooked despite being essential to resolving progress. Over the next two posts, I’m going to focus on whether there should be a preference for either top-down or bottom-up mitigation.

Top-down schemes

Top-down initiatives usually spawn out of governmental policy. Following the introduction of the Kyoto Protocol, and the subsequent Copenhagen Accord and Paris Agreement, pressure has mounted on individual states to bring climate mitigation into force. The majority of effort has understandably focussed on emission reduction, with the IPCC estimating that global GHG emissions need to be reduced by 40-70% by 2050 in order to limit warming to 2C.

Cap-and-trade

One of the more revered top-down strategies is that of cap-and-trade programmes (Dirix et al., 2013). These involve placing a maximum level on the emissions of a particular pollutant. Allowances are then calculated based on the cap in the form of a “units” of the emitted pollutant, and these are allocated to each polluting body, for example countries or companies. Units can be traded between bodies, so if an entity is unable to reduce their emissions of a pollutant, they can make up for it with reductions in other areas. An example of a cap-and-trade scheme is the EU ETS, which can be read about here or in Figure 1 below.

Figure 1. How the EU ETS works.
Source

Cap-and-trade leads to emission reductions by gradually lowering the total amount of permitted pollutant. At the beginning of the EU ETS, in 2005, each corporation was given units equal to their current levels of emissions. The scheme has been introduced in three phases over 15 years, with Phase II (2008-2012) reducing emissions by 6.5% compared to the those at the start of Phase I (2005-2008) (Dirix et al., 2013). By the end of Phase III in 2020, emissions will be 21% lower than in 2005.

Dirix et al. state that these schemes are generally seen as successful due to them being able to directly work toward the aim of environmental policy. However, they are not without their critics and are judged by some NGOs to be biased in favour of high-polluting entities.

Carbon tax

Another popular top-down method that seems to be gaining increasing traction is a carbon tax, involving the introduction of a financial cost for carbon released into the atmosphere (Ekins and Baker, 2001). I think this is a really interesting policy idea and so will be focussing on this specifically in a future post rather than in this one.

Geoengineering

Geoengineering is another huge topic that I will focus on in a future blog post. It’s an area that is met with much contention, and is essentially “large-scale efforts to diminish climate change resulting from greenhouse gases that have already been released to the atmosphere” (Caldeira et al., 2013).

Has top-down mitigation worked so far?

As expected, this is not a question with a simple yes/no answer. Dirix et al. argue that climate policy can be judged on two key factors:

1.       Does the policy lower emissions?

2.       Does the policy place the burden equally between parties?

Looking specifically at the EU ETS, the authors consider the policy to fulfil both of the above criteria, due to its ability to not just lower emissions, but also the improvements in market efficiency and price volatility reductions that it offers. The scheme is not perfect, however, and some argue that it favours large corporations, specifically through an over-reliance on offsetting emissions. This is seen by some to be an easy escape route from emission reductions.

Various studies believe that top-down initiatives have not been as successful as hoped. Prins and Raynor (2007) state that though the Kyoto Protocol represented a considerable step by showing a governmental concern for climate change, it ultimately failed in its goals, most notably with no significant emission reductions. The core reason for this is placed with a simple misjudgement of the problem; borrowing a strategy used to tackle issues such as acid rain and ozone depletion, when they are only partly analogous, is considered by some to be an oversight. The complexity of the climate change issue transcends that of the problems for which a global control technique has previously worked.

Prins and Raynor state that the theory that the Kyoto Protocol is based upon, which is effectively cap-and-trade, has failed to take-off. Governmental investment into clean energy is lacking but is nonetheless essential to avoid an energy gap from reductions in fossil fuel usage.