2103. The Economist on Climate Change Policy

By The Economist, November 28, 2015

Climate protestors in Paris where demonstrations are banned offer the shoes instead.

IN SOME ways, the climate talks that begin in Paris on November 30th will show world leaders at their best. Taking a break from pressing issues such as terrorist threats and stuttering economies, they will try to avert a crisis that will pose its gravest risks long after they have left office. It is the opposite of the myopic thinking that is often said to afflict politics. A pity, then, that politicians have set themselves an impossible task, and that they are mostly going about it in the wrong way.

That climate change is happening, that it is very largely man-made and that it is exceedingly dangerous, are all now hard to deny (though America’s leading Republican presidential candidates routinely try). This year will all but certainly be the hottest since 1880, when NASA’s records begin. If so, 2015 will break a record that was set only in 2014. Every single year so far this decade has been hotter than every single year before 1998 (see article).

The wind turbines and solar panels that are spreading across Europe, America and China are barely restraining carbon-dioxide emissions. Since the turn of the century, global energy has become more, not less, carbon intensive. Coal now supplies 41% of the world’s electricity and 29% of the world’s energy—a bigger share than at any time in at least four decades. The atmospheric concentration of carbon dioxide is 40% higher than it was at the beginning of the industrial revolution.

A terrible two

The presidents and prime ministers who gather in Paris will insist that global warming must be halted before the world becomes 2°C (3.6°F) hotter than it was in pre-industrial days. That is what they have said for years but, considering the momentum behind climate change, this target is as unrealistic as it is arbitrary. If annual greenhouse-gas emissions remain at the present level, enough pollution will enter the atmosphere in just 30 years eventually to warm the world by two degrees.

Greens say that the target is a rallying point—that it is useful because it inspires action, and action, once under way, will inspire yet more action in a virtuous circle. If only world leaders would stiffen their spines and promise even more green energy, they argue, disaster could be averted. But this drastically understates the challenge. The parts of the planet that have become rich have done so by tapping a vast store of fossil energy with feckless, if understandable, abandon. For the rest of the world to join them over the century ahead, and then for all concerned—as well as the planet’s non-human inhabitants—to flourish in the centuries that follow, will take a lot more than just a big expansion of existing renewable technologies.

The world and its leaders need more ambition and more realism. The ambition requires increasing the options available. Generous subsidies perpetuate today’s low-carbon technologies; the goal should be to usher in tomorrow’s. Unfortunately, energy companies (unlike, say, drug firms or car companies) see investment in radical new technologies as a poor prospect, and governments have been feeble in taking up the slack. A broad commitment quickly to raise and diversify R&D spending on energy technologies would be more welcome than more or less anything else Paris could offer.

This would be costly. But remember three things. One is that spending money to reduce grave risks is reasonable. The second is that some of today’s climate policies cost a lot more than a greatly expanded research portfolio and yield rather less. The subsidies that have created thousands of wind and solar farms have achieved only a little and at great cost. Other green subsidies, such as some of those for biofuels, have done actual harm. There is plenty of money to be saved.

A third is that one of the best measures against climate change raises money. Well-designed carbon prices can boost green power, encourage energy-saving and suppress fossil-fired power much more efficiently than subsidies for renewables. A few brave places have plumped to set such prices through carbon taxes: the latest is Alberta, in Canada. Most countries that have tried to price carbon have instead issued tradable pollution permits—invariably too many of them, with the result that the price is too low to change behaviour. Ideally such countries would admit their mistake and start taxing. Failing that, they should keep their emissions-trading schemes but add a floor price, and raise it steadily.

The new research agenda needs to tackle the deficiencies of renewables. Though solar, in particular, has become a lot cheaper, new materials, manufacturing and assembly technologies could make it cheaper still. Better ways of storing energy are required—so that wind or solar power can be used, for example, in the cold, still winter evenings when European electricity demand tends to peak. So are better ways of getting it from A to B, either through larger grids or in the form of newly synthesised fuels. Could biotechnology produce photosynthetic bugs that pump out lots of usable fuels? No one knows. It would be worth a few billion to find out.

Nor should the ambitions for research be limited to renewables. There are other forms of fossil-fuel-free energy, such as nuclear. Innovation in nuclear energy is not easy: such power plants are dangerous and need vigilant, independent regulation; they are unpopular and currently vastly expensive. But a civilisation that looks decades or more ahead cannot exclude new forms of nuclear from the research agenda.

Living with it

Radical innovation is the key to reducing emissions over the medium and long term, but it will not stop climate change from getting worse in the meantime. This is where the realism comes in: many people will have to adapt to a hotter Earth, and some of them will need help.

Wealthier countries (including China) have promised $100 billion a year to help poorer ones. The trouble is that it is not clear what counts towards this total or what the money is for. If the Paris climate conference dissolves in rancour, this will probably be the cause. The priority should be research into crops that can survive extreme weather; better sanitation and health care to make the poor more resilient to climate shocks; and cheap energy, whether green or not. The poor need all these things more than they need gifts of green-power technologies that even the West finds too expensive.

The final strand of new thinking ought to be research into cooling the Earth artificially. Climate models suggest that global warming could be slowed by spraying particles into the stratosphere or by using salt crystals to make clouds whiter, and hence better at reflecting sunlight. No one knows whether such “geoengineering” projects can be designed in a way that does not replace existing climate risks with worse new ones. But that is a reason for research and debate, not for looking the other way. Geoengineering is not a substitute for cutting greenhouse-gas emissions (for one thing, it does not stop carbon dioxide from changing the chemistry of the oceans). But putting it off-limits, as many greens desire, is foolish.

In short: thinking caps should replace hair shirts, and pragmatism should replace green theology. The climate is changing because of extraordinary inventions like the steam turbine and the internal combustion engine. The best way to cope is to keep inventing.