Ikerbasque researcher: Roger Fouquet
The more likely policies will be introduced that will move us towards a low carbon economy
Could you summarize the objective of your work in a sentence?
My work tries to provide a new perspective for addressing climate change by looking at, first, what people want when they use energy (i.e. heat, power and transportation) rather than focus exclusively on energy and, second, very long run periods (in which we can observe the effects of economic development, technological innovation and major energy transitions). Neither of these two issues has been researched sufficiently, and I have been pulling them together to offer a new framework for understanding and anticipating future greenhouse gas emissions.
How do you foresee the potential impact of the new economic models in climate change?
An important role for economic models today is in advising Government about which policies to introduce. Economic models related to climate change will help Government develop strategies to answer two key questions: how to mitigate (i.e. reduce) greenhouse gas emissions and how to adapt to climate change. As both mitigation and adaptation strategies will probably be needed, both must be understood well and modelled carefully.
A growing number of economists are addressing these problems, including researchers here at BC3, the Basque Centre for Climate Change, and are working on refinements of models for both mitigation and adaptation issues. As an example, I will briefly discuss benefits of including energy services, one of my main interests, into models tackling the mitigation question.
Analysis of energy services seeks to help us understand what encourages and discourages people to want more heating or to use more appliances in their home and to travel further. It tries to estimate their demand for heating, power and transport as energy prices, income or technologies change.
At present, economic models related to climate change focus only on the energy rather than services because of the need for simplification and the lack of data. My research suggests that, for studies of periods longer than about thirty years (that is, time horizons relevant for climate change models), the inclusion of services can greatly improve the model estimates.
Over long periods, major technological change radically reduces service prices that consumers face, but not energy prices. Also, focussing on services provides a more accurate estimate of consumer responses to changes in prices, income and technologies. Trends in prices and consumer responses are key variables in economic models looking at climate change. Now, with new data, service price and consumption can be included, improving the models and, hopefully, the results. This is just one of many potential developments to the models of climate change mitigation.
One impact better models will have is to improve our ability to propose policies that can reduce greenhouse gases at low costs to the economy. This is important because if ways of achieving targets can be proposed with limited burden or even gains to the economy, the more politically acceptable they will be. Thus, the more likely policies will be introduced that will move us towards a low carbon economy. Similarly, models that can offer cheap and effective ways of adapting to climate change are more likely to be introduced.
Taking into consideration the policy outlines that are being discussed, do you think that the Basque Country will be able to satisfy the energy demand in the next decades, on a sustainable way?
When I moved here, my curiosity was drawn to the Basque country´s energy situation. From my limited knowledge of the situation, I noted some positive aspects, but grave doubts about the Basque Country´s ability to meet its energy needs in a sustainable way – and by sustainable, here, I mean with a low impact on climate change.
Key features are how the Basque country will meet its demands for heating, power and transportation. Heating is mainly from gas, which is less polluting than other fossil fuels, but it is still responsible for considerable greenhouse gas emissions. A recent law requiring all new buildings to install solar thermal (for hot water) is a good, modest step.
For power, there has also been a shift away from coal towards gas in the production of electricity – so, a partly positive move. However, It is interesting to note that the largest wind turbine company in the world is Basque, yet there is virtually no wind power generated within the region. Cultural preferences and planning problems mean that wind energy (the renewable energy source that has grown the most worldwide in the first decade of the twenty-first century) is not contributing to the solution in the Basque Country, despite great potential. Given these severe limitations and the potential, I can imagine policies encouraging the development of offshore wind turbines, especially those benefitting from floating platforms (as the waters are relatively deep off the coast), would improve the `sustainability´ of Basque energy demand. There is also room for more push to promote more solar (despite the clouds), small scale hydro and tidal power.
Regarding transport, the overreliance on the car and a good motorway infrastructure is a major concern. The promotion of a faster, more integrated railway system within the Basque Country would be a major step, but will take a long time to see improvements and can be of limited benefit since people are addicted to their cars. Finally, the recent support for the electric car (with the planned introduction of re-powering facilities in the Basque Country) is an important step, as long as the electricity used is generated from sustainable sources.
You have developed your research in very different places, as the UK, Fiji and now, the Basque Country. Which are the strengths of each place in your view?
Now researching at BC3 in the Basque Country, I am in a more forward-thinking environment. All around me, I can feel a desire to be innovative – in the events that are being held in the city, in the architecture, in the way government is spending its funds. This is exciting and stimulating. The opportunities developed through Ikerbasque reflect this, and offer me an excellent platform upon which to pursue creative lines of research that, hopefully, will modify our way of addressing climate change.
My university degrees and early research career was in England, and central to teaching there is the idea of developing a critical mind - to ask questions, especially ones that can change our point-of-view or our understanding. This has been crucial in my ability to generate innovative research ideas.
Also, the UK has been at the leading edge of energy issues in many ways. First, in the eighteenth and nineteenth century, England was the first country to make the dramatic transition from using woodfuels (to meet its energy needs) to consuming fossil fuels, fundamental to the Industrial Revolution. Second, the UK has been at the forefront of thinking on energy markets and policies – in the 1940s, related to the nationalization of energy industries to provide security of energy supply and, then, in the 1980s, the opposite, the liberalization of energy industry to stimulate competition in energy markets. Third, the UK is also taking a leading role in trying to developing a global agreement on climate change. Finally, It has invested a great deal of funds to promote research into energy and climate change issues. This critical and innovative thinking, as well as the historical legacy, have been central to my research capabilities and interests.
Later, I went to lecture at the University of the South Pacific in Fiji. Fiji is a remote island developing economy. A very strong divide exists between urban and rural life. The city capital, where the university is based and I taught, is relatively modern. But, drive a few kilometres in either direction and you will be back to basics – many people lack electricity or only have access for a few hours per day. Families still cook with wood. Roads are made of earth, which are virtually unusable when the tropical rains fall (which is often) even in a 4 by 4 vehicle. Some villages I visited have no roads and are several days walk from the nearest market town. This perspective was valuable for imagining how people might have met their needs for heat, power, transport and light in the past and how their lives changed to benefit from and adapt to a modern energy system. This was the topic of the book I wrote there.
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