September 24th, 2014

Politicians and business must opt to save the Earth

Climate Change & Environment

The world faces an unprecedented challenge: to change the high-carbon energy DNA of the global economy in the next three decades to low carbon. This requires directed technological change on a historic scale.

It could well fail, and with failure will come a planet wrecked by climate change. At Tuesday’s UN climate summit, nations began the negotiations that will continue through 2015, and that are our last chance to change course.

The reasons we need to change course on the economy, energy and environment are diverse and interconnected. They include persistence of extreme poverty and rising inequality; human-induced climate change; the destruction of biodiversity; and, most generally, the many challenges of a large and growing world economy and population that press far too hard on the earth’s fragile ecosystems and resources.

The question is not the need for change but how to achieve it. The challenges of global-scale social and economic change are profound, not least high levels of inertia visible in the world’s economic and technological systems – industry, energy, transport, production, trade and investment.

The inertia of the global economy results from several powerful factors: long-term infrastructure, vested interests (perhaps no lobby is more powerful than Big Oil), geopolitical competition, short-termism and massive technological uncertainties and challenges. The world needs to chart a new low-carbon energy trajectory, but what will it be? Of course, different countries will make different choices and should be supported to do so.

For the politicians, the issue of climate change is deeply unpleasant. It is filled with uncertainty and technical complexity; it involves time horizons far beyond election cycles; it requires patient long-term investments; and it requires new public-private institutions that are no joy to design and implement over the din of lobbyists. And these issues involve counterintuitive choices, such as stranding fossil fuel reserves that have been discovered but cannot safely be burned because of the need to limit carbon emissions.

These considerations have so far caused 22 years of inaction since the signing of the UN Framework Convention on Climate Change. So how to move forward? Here’s my take. First, we should hold on for dear life to the globally agreed commitment to keep the rise in mean temperature below 2C. This is not meant to be a target, mind you; it is meant to be an upper limit. By all accounts, right now we are on a 4C-6C trajectory instead.

Second, each of the countries that is a big emitter (and many other high-income and smaller middle-income countries) should agree to design – and present to the world – a country-specific pathway to deep decarbonisation by 2050 that is consistent with the 2C limit. Such deep decarbonisation pathways would provide country-level scenarios of how each of the world’s leading economies proposes to cut emissions to 1-1.5 tons a head by 2050, implying a reduction of about 90 per cent in the US, and about 80 per cent in China and Europe.

Third, the world’s governments and leading businesses (especially in energy, transport, industry and construction) need to undertake a massive and co-operative programme of research, development, demonstration and diffusion of low-carbon technologies. A clear, predictable carbon tax would help those technologies by giving a market-based incentive to shift from carbon; but carbon pricing is not enough to generate the rapid development and uptake of new technologies, or the network infrastructure to deploy them.

Such public-private partnerships in low-carbon technologies are not a new type of co-operation. They are familiar from the military sector, informatics, computing, space science, genomics and physics (as in the government-backed hunt for the Higgs boson). Several leading economies are indeed very good at directed technological change. But when it comes to low-carbon energy, we just haven’t really tried.

There is a narrow path up to climate safety. It involves holding on to a clear goal, in this case the 2C limit. It involves finding practical pathways to success for each of the big emitting countries. And it requires a well-funded, generation-long effort to develop the low-carbon technologies that we will need.

As the politicians met at the UN this week, they had not yet decided on such a bold, co-operative, generation-long effort. Yet our survival depends on it. Tuesday’s gathering will have mattered if its pushes political and business leaders in the direction of survival. We can save our planet and ourselves if we decide to do it. With crucial negotiations ahead in 2015, next year will be the year of decision.

Read the full article at the Financial Times or download PDF here


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