OPINION, by Mathew Carr
JULY 14-16, 2021 (LONDON): The European Union has chosen July 14 to detail its plan to cut greenhouse gas emissions by at least 55% in the four decades through 2030.
It’s a day that also marks an anniversary of the French revolution, where the people rose up against rulers deemed out of touch and abusive. The heads of the equivalent of Paris’s mayor and the leader of the Bastille fortress, which was famously stormed on the same day in 1789, were soon being displayed on spikes, (thanks Wikipedia).
Politicians around the world have been abusing their power for at least 30 years by allowing unfettered use of fossil fuels when they knew the resulting greenhouse gas was damaging taxpayers’ fragile climate. The United Nations agreed to tackle global warming when 152 countries established and joined a framework convention on climate change way back in 1992.
The damage, the lack of climate action, since then has been astonishing. Let’s not forget, the politicians knew there was a global carbon budget, and they knew they were pushing against it.
The charts above indicate that instead of rich countries most to blame for the climate crisis cutting emissions fast, they even failed to adequately encourage developing nations to limit their emissions. They had plenty of chances. They bottled them all.
Was that some sort of unwritten deal to win a small portion of per-capita climate justice in an extremely perverse way? Certainly, the UN negotiation process has appeared deeply flawed, at least up until now — there’s still a chance envoys will get their stuff together in Glasgow in November, however small. (The big problem is that for the UN Framework Convention on Climate Change to agree anything, everyone has to agree everything, and there are too many special interests).
Voluntary minimum corporation taxes and carbon prices under the G7 or G20 now seem at least within reach (if still unlikely). See IMF I link below. At least they are now talking points.
Yet, instead of regulating fossil-fuel companies properly, governments are still subsidizing them to the tune of $5 trillion a year (see IMF II link below).
Politicians now have run out of places to hide, even though they’re still trying, amid continued poor public debate about the climate crisis.
Take U.S. President Joe Biden. He’s willing to hold flashy online conferences to burnish his green credentials globally, yet approvals for companies to drill for oil and gas on U.S. public lands are on pace this year to reach their highest since George W Bush was president, AP reports. Post pandemic domestic gasoline use has also hit an all-time high earlier this month.
China is delaying its carbon market. Germany is demolishing villages to dig up the dirtiest coal. The U.K., hosting United Nations climate talks later this year, is apparently seeking to spy on climate activists (see XR link).
Impact investor Ronald Cohen cites figures that show Exxon Mobil’s operations alone cause about $38 billion of environmental damage a year (even before taking into account the warming and particulate pollution caused as consumers burn its products). The equivalent figure for Royal Dutch Shell is $22 billion and for BP $13 billion (see Cohen link below — he was born in Egypt, became a refugee in the U.K. and then one of the leading lights of sustainable investing).
Im not forgetting that the economic and technological gains since 1990 — largely by the U.S. — have been surprising and have boosted global wealth. Yet inequality is apparently worsening, and that’s widespread.
For me, it’s the ability of politicians to ignore the build up of heat-trapping gas and their recklessness toward future generations that beats everything else for failure.
The frustrating fact is solutions are readily at hand, but governments seem unwilling still to put them into place.
- Making polluters pay has been adopted by governments for only about a fifth of global emissions.
2. Wood Mackenzie has identified 1,500 oil and gas fields globally as possible candidates for carbon storage, with 62% of them in North America, the region most to blame for the climate crisis. Yet the carbon capture and storage industry remains tiny amid an apparent reluctance by politicians to encourage it.
3. Nations are still being incentivized to cut down forests because the markets have not shifted in favor of protecting them.
4. Agricultural land could mandatorily absorb CO2 using biochar and other tech, but it isn’t being incentivized.
5. Building standard setters around the world could have insisted on cleaner energy solutions, decades ago.
The EU is today providing somewhat of a template to show the world how to cut emissions by more than half. It will expand carbon pricing to include shipping.
The world’s biggest trader of manufactured goods is also prodding others to get more ambitious by planning a carbon border adjustment mechanism (CBAM), where importers of energy-intensive goods from countries with weak climate policy will have to pay carbon prices on arrival.
As that plan becomes a firm future reality today, exporters around the world will be shocked — climate and trade policy is now closely linked and the EU is the top trading partner for 80 countries.
The invisible hand of the free market highlighted by Adam Smith is changing for the better.
“Taxpayers are being made to pay anyway. They are just not seeing a return. I think that’s rotten,” said John Buckoke, business development director at Capstone Green Energy in the U.K., speaking by phone. “Subsidies are the wrong approach. The invisible hand is better.”
If politicians continue to resist, they will not only suffer reputationally, but financially. Taxpayers across the globe struggling with the aftermath of the global pandemic will become angry.
Some of my wise contacts say we are entering a period of dramatic civic unrest. If heatwaves, droughts, wildfires and flooding continue to worsen, the pain on politicians is set to get much worse than a bad legacy. All political readers of the past several years will probably ultimately be hated for their failure to do better on climate protection.
The EU example is far from perfect. A big problem is that overly complicated government is self perpetuating and leads to overly complicated policy. Europe’s bloated layers of government would need fewer employees if all they needed to do was tweak well-constructed free-market policies.
The industries themselves, trade unions, the media and even environmental lobby groups must share their portion of the blame.
But, for me, the bottom line is this, as Cohen highlighted: If the world’s politicians take a leaf out of Europe’s book and regulate emissions properly, if they bring environmental, societal and governance (ESG) impacts into financial accounting standards, “we really do bring the invisible heart of markets to guide the invisible hand and build a better world.”
If it doesn’t happen quickly, will there be bloodshed directed at politicians?
While it still seems slightly distant right now, you can’t rule it out. The French Revolution was stoked in part by poor harvests … and climate change will almost certainly bring those.
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UPDATE JULY 16
U.S. secretary of state Antony Blinken spoke on Bastille day:
https://www.state.gov/secretary-antony-j-blinken-at-bastille-day-celebration/
He included this:
It’s impossible to imagine the success of revolutions and emergence of our democracies without the people of our nations believing – and being willing to give their lives – for similar ideals.
From the Revolutionary War to World War II; from the fight against slavery to the fight against fascism. We see it today, too, in the joint effort to tackle the climate crisis, to beat back this deadly pandemic, to remedy deep inequality.
(Updates with comment, US SEC OF STATE LINK)
NOTES
COHEN: https://youtu.be/JPe7S4F7mqA
IMF I: http://carrzee.org/2021/07/12/g20-carbon-pricing-seen-cutting-need-for-divisive-border-adjustments-imf/
IMF II: http://carrzee.org/2021/07/12/fossil-fuel-subsidies-reach-shocking-5-trillion-per-year-broad-definition-by-imf/