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Climate Policies After Paris

“Climate Policies After Paris” was hosted by SCEPA’s Economics of Climate Change Project, directed by Willi Semmler, Henry Arnold Professor of Economics and generously sponsored by the Tishman Environmental Design Center (TEDC), the Institute for New Economic Thinking (INET), the Fritz Thyssen Foundation and the German Research Foundation (DFG).

Toward the end of 2015, leaders from around the world convened in Paris for the latest round of international climate talks. This marks the 21st annual Conference of Parties of the United Nations Framework Convention on Climate Change. More than 40,000 people from over 150 countries attended the conference, representing governments, businesses, non-governmental organizations, and supranational institutions.

The Paris talks underscore the importance of addressing climate change before Earth’s ecosystems face irrevocable damage. Simply put, the use of carbon-based fuels that have been central to the economic development of the last couple hundred years creates a significant cost for the environment. Increasing dependence on fossil fuels has precipitated an unprecedented shift in a number of climate indicators. Among other things, global average temperatures are increasing, land ice is shrinking, and sea levels are beginning to rise significantly in several critical locations. While it isn’t possible to attribute any specific weather event to climate change, it is reasonable to say that the increasing occurrence of major climatological events and the increasing occurrence of record breaking temperatures are indicative of a general shift in what can be considered “normal.”

Paris is the most recent in a series of international climate talks tracing back to the Rio Summit of 1992. While previous meetings have ended with little more than basic language and guiding principles regarding the mitigation of and adaptation to climate change, they have proven fairly ineffective at leading any actual policy changes. Generally speaking, the talks are voluntary and subsequent agreements are non-binding. So far, the participating countries have had their intentions in the right place, but they have not been able to make the sacrifices necessary to implement policies that address climate change.

The Paris talks may have been a major turning point for international climate change consensus. The talks resulted in what has been dubbed the Paris Agreement, which is essentially a set of promises and targets for participating economies. While much of the agreement may not be strictly enforceable, it is a significant improvement over prior meetings which ended without any general agreements on burdens and targets.

On Monday May 23, Dr. Ottmar Edenhofer visited the New School’s Starr Foundation Hall to present Climate Policies After Paris, his vision of turning the ideas and ideals of the Paris talks into concrete policy action in countries around the world. Dr. Edenhofer is co-chair of the Intergovernmental Panel on Climate Change and director of the Mercator Research Institute on Global Commons and Climate Change. He is an international expert on climate policy. Climate Policies After Paris was hosted by SCEPA’s Economics of Climate Change Project, directed by Willi Semmler, Henry Arnold Professor of Economics and generously sponsored by the Tishman Environmental Design Center (TEDC), the Institute for New Economic Thinking (INET), the Fritz Thyssen Foundation and the German Research Foundation (DFG).

The Paris Agreement has set a goal of curbing greenhouse gas emissions such that the global mean temperature increases no more than 1.5 – 2 degrees Celsius over the pre-industrial average. In order to keep temperature increases within the desired range, it is estimated that the worldwide consumption of carbon dioxide needs to be capped at 1,000 gigatons. To put that in perspective, we have used 200 GT of CO2 in the past five years alone. The climate scenario that is ultimately realized will depend on both the reductions in emissions and the ability to institute technologies that actually draw carbon from the atmosphere and lower the overall global accumulation. In essence, without significant use of negative emissions technologies, we are beyond the point of no return for the 1.5 degree target.

Recent history of carbon emissions is not exactly promising. While emissions in a number of OECD economies are beginning to slow, the overall level of carbon emissions has spiked in recent years. According to Dr. Edenhofer, we are in the midst of a coal renaissance. Instead of an overall movement toward green technologies, there has been a drive toward carbonization.

This new carbon era is due in large part to the industrialization of a number of large developing economies, such as China and India. Indeed, the intersections of economic growth and climate change are multi-faceted and quite complex. Generally speaking, economic growth has coincided with an increase in emissions. Moving forward and addressing the climate change challenge will require buy-in from the economies that are relatively new to the process of industrialization. This may present both an opportunity and a challenge. Newly developed economies may be less entrenched in carbon-based technologies and infrastructure than those countries that industrialized over the 19th and 20th centuries. However, it is impractical to suggest that the development of new technologies and green infrastructure fall equally on newly developing economies.

As climate change progresses, it is likely to have significant negative effects on the economy, and it is therefore in the best interest of world leaders to implement changes immediately. Beyond a certain point, increasing temperatures are going to have a negative effect on the global economy as (1) labor productivity drops and (2) cities and infrastructure suffer direct damages.

So far, leading economies have said one thing at climate meetings and acted in a completely different manner. In this respect, Paris is not much different. Without pressure on policy makers, it is possible the momentum toward significant climate action will stall. The stated goal of limiting CO2 consumption to 1,000 GT cannot happen with carbon industries being embraced as they are today. Not only are global leaders not transitioning to green resources in a timely manner, they are prolonging the dependence on carbon sources with politically expedient subsidies.

Dr. Edenhofer argues that establishing a minimum carbon price is a necessary step toward seriously addressing the climate problem. An effective carbon price would have several major benefits. It would incentivize green technologies while penalizing the use of carbon-intensive technologies. Simply put, green technologies would be more competitive, price-wise. Additionally, carbon prices maintained through the use of a carbon tax would generate government revenues that could then be used to supplement climate change policies. The use of carbon revenues is strategically quite important – policies that simply raise the price of carbon-based energies will tend to be regressive (i.e., increasing the home heating costs will be felt more heavily as a percentage of income by those households that are relatively less well off). For this reason, it is commonly recommended that at least a portion of carbon tax revenues be used to minimize the impact of increasing costs to the more vulnerable of the population. Additional revenues might be used in the research and development of green technologies and investment in sustainable infrastructure.

Following Dr. Edenhofer’s presentation, NYU Professor Rich Shemaria debuted a movement from his jazz composition “The Warming Earth.” While scientists and policymakers get the majority of the attention related to minimizing climate change, the performance served as a reminder that the arts also have an important role to play, both as distillation and recording of the world around us and as an inspiration to effect positive change in that world.

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Michael Flaherty

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