Game theory meets emissions targets
BBC News reports disagreement between different UK Government departments over the emissions target for the UK to 2010. This is partly to be expected, since where someone stands on an issue usually depends on where they sit! DEFRA, concerned about the environment, wants to cut UK carbon emissions by 8 million tonnes by 2010, while the DTI, concerned about UK competitiveness, wants a cut of just 3 million tonnes. The BBC says the Government has reached a compromise by giving a range of possible cuts (between these upper and lower values), which has the advantage of allowing the UK to see what other EC countries declare as their targets before finally committing the UK. After all, if every country has similarly-large cuts to achieve, then UK companies will not be at a disadvantage with targets at the higher end.
Of course, one could take the view that targets which are difficult-to-achieve will encourage more energy-saving creativity and innovation, greater adoption of green technologies, and more trading of emissions rights, all to the benefit of UK industry compared to its European competitors. In other words, larger emission targets can also be good news for UK industry, since they will force adaptation faster than elsewhere in Europe.