American voters, who represent about 4 per cent of the world’s population, had the onerous task of electing a president whose climate policies would not only affect everyone on Earth today, but also future generations. In that respect, former vice-president Joe Biden’s victory is good for the planet —but that alone will not be enough.
Most climate scientists believe that humanity will self-destruct if we continue adding greenhouse gases (GHGs) to the atmosphere at the rate we have been doing over the last few decades. In 2015, the international community reached a landmark accord in Paris that committed almost all countries to major reductions in GHG emissions compared to a business-as-usual scenario. The United States played a leadership role in getting other countries on board — especially China, which pledged to reach peak carbon dioxide emissions around 2030. Without the commitments from large developing countries, the Paris agreement would not be as significant.
Scientists knew that the Paris agreement was by itself insufficient to bring humanity into a comfort zone, because it only delayed rather than averted the time when the world’s climate would reach a dangerous tipping point. The hope then was that governments would build on the accord in a series of progressively more ambitious future agreements.
But US President Donald Trump, elected in 2016, openly opposed America’s participation in the Paris agreement and started the process of withdrawing from it. (The withdrawal took effect on November 4, one day after the election.) Mr Trump’s decision set back the global climate effort in two ways. First, it tacitly allowed other countries that wanted to water down their climate actions to do so without much resistance. Second, it stopped any serious multilateral negotiations to upgrade the commitments made in Paris, because such efforts are neither meaningful nor possible without US participation and leadership.
Mr Trump opposes the Paris agreement not because he or his supporters do not understand the need for it, but for narrow reasons. Over the next few decades, the brunt of the climate disaster will be felt by countries in or near the tropics that are not rich enough to undertake sufficient adaptation measures. Over 70 per cent of the country of the Maldives, for example, could be under water before the end of the century. But such victims are too abstract or foreign for many US voters.
Because reducing GHG emissions involves costly investments in renewable energy and reduced dependence on shale gas and coal, which America possesses in abundance, a narrow calculation might make US participation in the Paris agreement seem less appealing to some voters. In addition, while reducing GHG emissions will mainly benefit future generations, the costs of doing so start now.
Finally, although a sea-level rise caused by climate change can create havoc for New York, San Francisco, Miami, Shanghai, Hong Kong, and Tokyo, these cities are rich enough to find ways to adapt and cope. And some other regions in the US and Japan could actually benefit. So, richer countries may not feel the same urgency to tackle the climate threat that many poorer ones do.
Mr Biden, by contrast, has pledged to return the US to the Paris agreement. But a US leader who regards climate change as a national-security threat still will be insufficient for global mitigation. China’s recent declaration that it will go beyond its Paris commitment and achieve carbon neutrality by 2060 is an encouraging step. But we need all countries to do more collectively.
Illustration: Ajay Mohanty
Given the difficulty of the negotiations that produced the Paris accord, how do we encourage countries to step up their mitigation efforts? Three new tools could help.
First, whereas Mr Trump’s tariffs were both inequitable and inefficient (and his tariffs on Chinese goods are illegal, according to a recent WTO ruling), it may be productive for climate-conscious governments to impose tariffs on imports from countries with high GHG emissions on either a per capita or per-unit-of-GDP basis. Such levies would narrow the gap between the true global cost of GHG emissions and the immediate (and much smaller) cost currently incurred by emitters.
Second, international financial institutions — including the International Monetary Fund, World Bank, European Bank for Reconstruction and Development, European Investment Bank, Asian Development Bank, and Asian Infrastructure Investment Bank — should consider conditioning loans and assistance to member countries on ambitious GHG emission reductions. These lenders can also organise more technical assistance to help member states devise and implement cost-effective ways to reduce GHG emissions, including a tradable emission-permit system. In addition, special grants to least-developed countries could offset part of the cost of switching to more renewable energy sources.
Third, parallel to a shift to renewable energy, more innovation is needed to reduce the cost of carbon capture. This will allow for some fossil-fuel-based electricity generation while eliminating the resulting GHG emissions. Because many countries do not want to give up fossil fuels completely, CO2 capture needs to be scaled up. Integrated gasification combined cycle technology plus carbon capture is a promising but currently expensive option. Innovations that reduce costs have an important positive spillover for the world, implying a need to reward technical progress more generously. At a minimum, we need to encourage green industrial policies that subsidise innovations that will help all countries to reduce GHG emissions.
The climate-change crisis is the greatest threat to humanity’s long-term viability. With more sensible US leadership, new policy tools that increase the cost of GHG emissions, and stronger incentives to make carbon capture cheaper and more effective, the world will have a fighting chance of survival.
The writer is professor of finance and economics at Columbia Business School and Columbia University’s School of International and Public Affairs. ©Project Syndicate