Invest in Better Energy Technology to Fight Climate Change
The Post-2015 Consensus' ninth set of papers focuses on climate change, why it is important and what targets should be set.
Climate change has certainly received immense exposure among the most eminent issues of the 21st century so far. The United Nations (UN) Secretary-General, Ban Ki-moon argues that it is “an existential challenge for the whole human race.” On the other hand, when five million people were asked by the UN what they saw as most important, climate change came at the bottom of the list of 17 issues: way below healthcare, education, corruption, nutrition and water – and even below phone and internet access.
The author of the main paper of our series on climate change targets for the post-2015 development agenda, economist Isabel Galiana, comes to a conclusion which is sure to be controversial: that present policies designed to reduce emissions of greenhouse gases are failing and cannot be effective until better technology is available. Despite the Kyoto Protocol and many national initiatives, the fact is that emissions have increased by almost half since 1990 and will continue to increase for many decades to come.
What’s the smartest target to combat Climate Change?
Investing 0.5% of GDP into green energy research and development funded by a low and slowly rising carbon tax will return $11 for every dollar spent.
Why is this important?
Galiana argues that the failure to implement and achieve emissions reductions targets is not simply a matter of lack of political will. Rather, the problem is one of energy technology: current technology is not ready to provide reliable, cheap non-polluting energy for the needs of a modern society.
At the same time, emissions reduction targets, for example keeping temperatures 2°C below pre-industrial levels, are too costly under current technology, returning less than a dollar for every dollar spent.
This is why investing more in energy research, development and demonstration (RD&D) is the best strategy to combat climate change. By innovating more reliable and cheaper green energy, we ensure emissions reduction targets can be effectively met. The author suggests that we can fund the RD&D with a low and slowly rising carbon tax.
The cost of action on climate change rises rapidly as the targets get tougher, points out Robert Mendelsohn, another economist who has contributed a perspective on our climate change series. Keeping average temperature rises below 5°C might cost about $10 trillion, but aiming for a 2°C target would cost ten times as much.
Much better, then, to target a maximum of, say, 3°C rise, which will cost about $40 trillion but avoid most damages. If we insist on 2°C, we will pay an extra $60,000 billion, but only prevent a stream of $100 billion damages that begins in 70-80 years. Moreover, all of these estimates assume cost-effective climate policies, whereas in real life they have often become many times more expensive.
Climate change is a big issue and cannot be ignored. But we need to take the emotion away and look at the facts; otherwise it will be the world’s poorest that will suffer. Money which is not spent on costly, ineffective CO₂ cuts can be used to fund programmes which are guaranteed to improve their lives.
You can read all the reports here. Isabel Galiana, Lecturer in the Department of Economics at McGill University writes the main report, peer-reviewed in perspective papers by Carolyn Fischer, Senior Fellow and Associate Director of the Center for Climate and Electricity Policy at Resources for the Future, and by Robert Mendelsohn, Edwin Weyerhaeuser Davis Professor of Forest Policy and of Economics at Yale University. Additionally, experts from NGOs and stakeholders such as ForumCC and the Overseas Development Institute present viewpoint papers concerning Galiana’s analysis. The papers include the Copenhagen Consensus Center's latest research on Climate Change targets for the Post-2015 development agenda.
