It’s demography stupid!

The protestors on the streets of London, New York, Madrid and Tel Aviv do not understand the economic and political problems they face.  The developed world is suffering from a demographic crisis.  Railing against financiers and the richest 1% misses the underlying cause of the crisis: the costs of paying for their own parents' and grandparents' retirements.

One of the concerns frequently expressed about climate change policies, is that if we reduce and restrict carbon emissions in the UK, then energy intensive manufacturing will simply shut down and move to other countries.

Some fascinating research, via Ryan Avent, suggests that this may not be the case.

Ralf Martin, Laure de Preux, and Ulrich Wagner published a really interesting paper investigating the effects of the UK’s climate change levy (CCL) and climate change agreements (CCA) on manufacturing firms production of goods, energy use and carbon emissions.

They used data on individual firms from the Office of National Statistics, and found: