Dr. Pete Lunn:

Deputy Bruton mentioned I had not answered the second question, so I will have a pop at it. I will be careful because what I am about to say is not as strongly evidence-based as what I have said so far. The Deputy asks me what makes a good regulation. That is an open-ended question to which there is not really an evidence-based answer. If, however, one takes some information from evidence, I think one can have a stab at it.

In the climate space there is a point to be made here. One of the real problems with climate policy is how fair it is perceived to be. It is clearly the case that we have to move towards a world where the polluter pays, but moving towards such a world tends to hit poorer households worse and tends to hit particular industries harder than others. That is perceived as very unfair by the sectors that and the people who feel they are picked on by the policy. When it comes to regulation, it might be good if we were to give advance notice of technologies that are polluting and that we intend to phase out and that we give dates for that. For example, some countries have said that after a certain date no diesel or petrol cars, will be for sale. There are some places where people have said no gas boilers will be fitted after a certain time. Why do I favour that? I do so because it totally changes the economic incentives. For a period, instead of trying to lobby against a regulation, the companies have a competitive incentive to try to adapt to the regulation and to put out the best alternative products. In that way one aligns the market and the economic forces towards abiding by the regulation and improving the green technology, rather than lobbying to stop the old technology being put to one side. That is important. I also think that has behavioural effects because it focuses people on something that appears to be fairer and more reasonable. We can say that we know that this is hitting some sectors harder than others but that we have given people four or five years to put their house in order. People will be able to see that that is a fairer thing to do than to impose something suddenly or for something to go one way or the other after a fight, for many people to go out of business and so on.

That is not a purely evidence-based view. It is a matter of better aligning the economic and behavioural forces and putting in place strong regulation that is credible, whereby it will be introduced by a certain date but people will be given time to adjust.