The world’s leading scientists have given their verdict on the state of the world’s climate and the results are not good.
Global warming is currently 1°C above pre-industrial levels, the point at which humans started burning large amounts of fossil fuels. Nations have agreed to limit warming to “well below” 2°C and try to keep it to 1.5°C. That 0.5°C equates to about a 10cm rise in sea levels.
That may not sound like a lot, but it would save about 10 million people living along the world’s coasts from having to leave their homes. That half degree could also prove the difference between the survival of the Great Barrier Reef and its complete demise. Worryingly, the IPCC report published yesterday warns that we’re currently on track to exceed 3°C.
The good news is that human innovation and technological advancement is already starting to bear fruit. The cost of renewables has plummeted in recent years, outstripping not only the forecasts of the International Energy Agency but even those of Greenpeace. New wind and solar now beats fossil fuels on cost in many places and the trajectory is heading in one direction.
The British Government’s use of market-based auctions for new electricity provision has helped drive innovation and reduce prices. Getting companies to bid for contracts helped get previously expensive off-shore wind down to a bargain basement price of £57.50 per megawatt hour, which compares favourably to Hinkley Point’s £92.50. Onshore wind would be even cheaper. Unfortunately, however, the Government is standing by its self-defeating ban on the technology.
Even in Donald Trump’s White House there has been talk of using an innovation-fuelling carbon tax to drive progress, although sadly it has not yet got through to the President. James Baker, George Schultz and Hank Paulson, stalwarts of the Reagan and George H.W. Bush administrations have argued for a revenue neutral carbon tax that would price carbon emissions at $40 a tonne, with the income paid by fossil fuel companies returned to US citizens in the form of a quarterly dividend to cover higher gas and electricity prices.
One of the first proponents of a carbon tax was the economist William Nordhaus, who was one of the recipients of the Nobel prize this week for his work on the economics of climate change. The Yale Professor has helped form much of the thinking used by today’s carbon tax proponents.
Republican Bob Inglis, a former House Representative, points out that a carbon tax would help to internalise uncosted externalities such as damage to health and the climate into the price of fossil fuels. He said: “This accountability would shatter the illusion that energy from fossil fuels is cheap.”
What is really holding back action on climate change is a lack of belief in our ability to innovate and the insidious power of vested interests. Inglis says: “Climate action is being blocked more by pessimism about innovation than scepticism about causation. Scratch a climate septic, and you’ll find an innovation pessimist. They don’t believe it can be done. Overwhelmed by the scale of the problem, they assume that we can’t change our trajectory.” He adds that if innovation pessimists need hope then innovation opponents need correction. “They’re vested politically or financially in fossil fuels. They don’t want a level playing field. They don’t want transparency.”
Harnessing human innovation and challenging the cosy fossil fuel establishment will be crucial in tackling the impacts of rising temperatures. A carbon tax would help deliver both.
This week’s Nobel prize in Economics was shared. Along with Nordhaus, the other recipient was Paul Romer of the Stern School of Business for his work on achieving sustainable growth through research and development, skills and innovation. Romer said: “Many people think that protecting the environment will be so costly and so hard that they just want to ignore the problem. I hope the prize today could help everyone see that humans are capable of amazing accomplishments.”
He is right. Let’s hope the innovation sceptics are listening.