Will this COP be different? by Kenneth Rogoff

Limiting global warming to 1.5 ° Celsius remains roughly achievable, but the path to that goal is formidable. The current United Nations climate summit in Glasgow will indicate whether political efforts to achieve this goal are likely to escalate as fast as scientists tell us on the planet.

CAMBRIDGE – As world leaders gather at the United Nations Climate Change Conference (COP26) in Glasgow, there is huge buzz about the potential of green energy sources. But the point is, fossil fuels still make up 80% of the world’s energy, as they did when governments signed the Paris climate accord with great fanfare at COP21 six years ago. And while many economies have yet to return to their pre-pandemic GDP levels, the world is on track in 2021 to post its second annual increase in carbon dioxide emissions on record.

Certainly, the recent flagship report of the International Energy Agency on the world energy outlook, which remains the benchmark for energy analysis, takes an optimistic note by placing more emphasis on what can be done to limit global warming. But at the same time, “keeping the 1.5 ° C door open” seems to involve so many moving parts, innovations, adaptations and, yes, sacrifices, that it’s hard to see how it will work without it. global carbon price most economists consider necessary. In particular, a carbon tax simultaneously encourages and coordinates efforts to reduce emissions and allocates resources accordingly, in ways that state planners simply cannot achieve.

The idea of ​​a carbon tax remains a political anathema in the United States; it briefly came to the fore in recent budget negotiations, but was dropped like a hot potato. Instead, President Joe Biden will promote a mix of measures – such as switching to electric cars and ending the development of fossil fuels – which are mostly good ideas, but which together are much more expensive and less efficient. than a carbon tax.

The European Union, with its emissions trading system (a cap-and-trade alternative to a carbon tax), has made more progress on carbon pricing. Despite this, the scheme currently only covers around 50% of the EU’s greenhouse gas emissions and grants many allowances for free. It’s no wonder, then, that policymakers in emerging and low-income economies react so cynically when asked to risk slowing their country’s economic development in order to tackle climate change. Rather, many ask why global climate agreements do not push all countries to achieve similar levels of per capita emissions.

Even if a global carbon tax magically happened, the world would still need a mechanism to transfer resources and know-how to developing economies to prevent them from becoming the major emitters of the future. I promoted the idea of ​​creating a dedicated World Carbon Bank that would house technical expertise, facilitate the exchange of best practices, and help channel hundreds of billions of dollars in grants and loans to low-income countries. .

The buy-in of developing countries is essential. Coal, which represents 30% of global CO2 emissions, is cheap and plentiful in countries like India and China. Although 21 countries have pledged to phase out coal-fired electricity, almost all of them are in Europe and account for only around 5% of the world’s coal-fired power plants. China’s recent pledge to stop building new coal-fired power plants abroad is a good start. But China itself produces more than half of the world’s electricity from coal, and many other countries, like Vietnam, are now likely to build more coal-fired power plants on their own.

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What’s more, even with a carbon tax, regulators will still have to tackle a myriad of issues, such as deciding where wind turbines can be built, how old coal-fired power plants can be phased out, and to what extent natural gas. can be used as a source of transitional energy. Since wind and solar are intermittent energy sources, there is a strong case for a new push to scale up nuclear power. This would involve the use of much safer modern technologies to build both large-scale power plants and the type of small-scale generators used in nuclear submarines.

Green political parties may cringe at such an idea, but climate literacy must be married to energy literacy. Achieve “net zero” CO2 by 2050, when the world could have two billion more inhabitants than today, requires difficult choices.

It is not easy to convince policy makers and the public to face these choices. The lack of wind last summer contributed to the current energy crisis in Europe, where leaders now hope Russian President Vladimir Putin will supply more natural gas to the region. Likewise, as energy prices are expected to soar this winter, Biden has pleaded with OPEC countries to produce more oil, even as his administration tries to cut domestic production of fossil fuels.

Environmental, social and governance investments, which proponents aim to stifle capital for fossil fuel investments, have been all the rage and, for some time, even seemed to offer nice returns. But with soaring energy prices, that may no longer be the case. In any case, even if advanced economies – including perhaps the United States and recalcitrant Australia – ban fossil fuel exploration, less developed economies will still have powerful incentives to expand the exploitation of fossil fuels. their own CO.2– issuance of resources.

Encouragingly, the IEA still considers limiting global warming to 1.5 ° C as an achievable goal, even though the path is daunting. Sadly, it remains to be seen whether political efforts to achieve this goal will escalate as fast as scientists tell us on the planet. When it comes to climatic summits, we can only hope that the 26th time will be the charm.

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