The recent Queen's speech notably had a climate bill which will set forth legislation for the next round of Parliament. The legislation will be centred on "four pillars":

1. placing the target to cut CO2 emissions by 60% from 1990 levels by 2050 on to the statute books

2. establishing an independent "Carbon Committee" to work with ministers to deliver reductions "over time and across the economy"

3. creating new powers to ensure the 2050 target is achieved

4. improving the way CO2 reductions are monitored and reported, including to Parliament

Within this bill, no yearly targets were given for CO2. There is talk of five-yearly running targets but nothing shorter. As we are well aware of time inconsistency of monetary policy (e.g. Kydland and Prescott), we should also be aware of the time inconsistency of climate policy. The appropriate institutions have to be in place so as to monitor (pillar 2) carbon emissions so as to make sure governments do not renege on previous promises to cut emissions.

Whether this could be done in one or five years is important to establish – especially with business cycles etc. The 2050 target is so long-term that this government can never be punished for increasing emissions too much. As with all climate policies, it involves risk and uncertainty that cannot be mitigated against. For a discussion on these issues, see Helm, Hepburn and Mash. To see what type of Queens’ speech environmentalists would like, see here:

My government will herald this new age by bringing forward legislation to introduce carbon rationing in the UK within five years, based around the principle of contraction and convergence. Every individual and organisation will be issued with an annual carbon budget, the punishment for exceeding which shall be a custodial sentence.

Hmm, not too sure about that - try selling that one to the public.