The demand for environmental quality in driving transitions to low-polluting energy sources

Abstract

The purpose of this paper is to understand the long run demand for energy-related environmental quality, its influence on legislation and on transitions to low polluting energy sources. It presents a series of episodes in British history where a demand for improvements in energy-related environmental quality existed. These episodes helped to identify a few cases where markets partially drove transitions to low polluting energy sources, in specific economic conditions. More generally, they showed that, when pushed, governments will introduce environmental legislation, although it tends to be weak and poorly enforced. In the case of air pollution, strong and binding legislation occurred roughly one hundred years later than was socially optimal. Based on this evidence, for a transition to a low carbon economy, governments will probably need to introduce focussed and binding legislation, and this cannot be expected without strong and sustained demand for climate stability. This demand will need to be spearheaded by pressure groups to introduce legislation, to enforce it and to avoid it being over-turned by future governments.