A modest proposal on climate change

At the end of November,  close to 40,000 people, including world leaders and sundry scientists and activists, will gather outside Paris for the 21st Conference of the Parties (COP) aimed at addressing climate change. A great deal of the discussion will be around targets for national emissions cuts (and who has to make them), transfers to developing countries, and different enforcement mechanisms. As the number 21 in the name suggests, all this has happened before.

 And the truth is that it hasn’t worked before. At Kyoto in 1997, there were emissions targets that had to be met by 2012. Many countries that signed up missed them, and global emissions continued to rise. In 2010 in Cancun, world leaders agreed to take actions to limit temperature change to 2 degrees above the pre-industrial level. Even so, by 2013, for the first time, carbon dioxide levels had risen to more than 400 parts per million (ppm), according to the National Oceanic and Atmospheric Administration, compared to 280 ppm in the pre-industrial era. The 400 ppm figure was also substantially higher than when the Kyoto Protocol targets were negotiated (365.05 ppm).

To put it another way, global GHG emissions have gone up every year since 1990, the year that the Kyoto cuts were pegged to, and BP estimates that carbon emissions will rise another 25 percent by 2035. Those trends support a pessimistic view.

But there are also reasons for optimism both around COP21 and beyond. One is that, compared to previous COPs, there is real enthusiasm and commitment going into this one. As of November 17, 164 countries had submitted climate plans.  Another is that businesses have been active leading up to the event and are at the table in an unprecedented way. This signals a change in the way companies are approaching climate change and sustainability. Regardless of what happens at COP-21, companies are stepping up with new business models, innovation and entrepreneurship.

Another reason for optimism is that “energy intensity”-- how much economic output is created per unit of energy--is improving all over the world. A few countries have gone even further, breaking the link between economic growth and energy use entirely. Carbon intensity is also improving, as is efficiency.

So, is there a way to connect these positive trends to the goals of COP-21? I think there is: technology. Consider the United States. It was the subject of a great deal of scorn for never ratifying Kyoto (or even trying to). But in 2012, its emissions were lower than at any time since 1994 (they have since inched up a bit).  The major reason: the wide-scale substitution of lower-carbon natural gas for much-dirtier coal (and an economic recession that depressed industrial activity and travel). The reason the United States was in position to make that change was the use of innovative new techniques to recover natural gas such as fracking. Yes, I know a lot of people hate fracking. But it’s done more to reduce US emissions than all non-hydro renewables combined.

Targets like the ones that are likely to be discussed in Paris can be useful because they give countries and companies something to aim at; there is certainly a need for good policies to send the right signals to the market.  But reaching a target—in this case, radically cutting emissions--requires finding new and better ways to do the things we need to do.

 That is one of the points made in a thoughtful report released earlier this year: A Global Apollo Programme to Combat Climate Change. The authors, all of them British, are an impressive group, including John Browne (former CEO of BP); the astronomer royal, Martin Rees; the former chief science adviser, David King; and Adair Turner, former chairman of the Financial Services Authority and of the Committee on Climate Change (and a McKinsey alumnus). They argue it is time to launch an international program akin to America’s Apollo space program. Of course, coping with climate change is actually much more difficult, because it affects every company, every household, every person, every minute. Putting a man on the moon was simple by comparison—a straightforward and singular goal.

 So, even if the analogy is flawed, the authors are right when they note that the most promising way to deal with climate change is to find and deploy the technologies that can actually bend the curve in terms of clean and efficient energy use.  They note that most incentives in this regard have been directed toward the private sector (feed-in tariffs, tax breaks) and also consumers (subsidies).  Their big idea is to boost publicly-funded research and development; they estimate that publicly-funded R&D on energy accounts for only 4 percent of research budgets, and renewables are only half of that. In 1981, the figure for energy research was 11 percent. Interestingly, private investment isn’t great, either, a ratio of just 2 percent to sales for energy, less than half that of consumer electronics. They suggest three main areas of focus—non-hydro renewables (including storage and transmission), nuclear, and carbon capture and storage. 

The advantage of such an approach is that it allows options to be considered and, if necessary, discarded; failing fast is a virtue when exploring new technology. The authors would like to emphasize renewables, storage, and transmission, which makes some sense. Most renewables cannot reach their potential unless and until they can be stored, and the state of many of the world’s power grids is shocking, so to speak.

 They propose that countries sign up to devote two-hundredths of a percent of GDP on energy research a year over the next 10 years, to spend as each country sees fit. There would be a modest organization to coordinate the Apollo program, to disseminate the most promising approaches, to create a “road map” of what avenues to pursue and to help eliminate the bottlenecks that will inevitably emerge. The ultimate goal is to make clean and green sources of electricity cheaper than fossil fuels, and just as easy and reliable to use.

 When that happens, climate change and the problems associated with it will not be at an end. But it would represent a bright, low-emissions light at the end of the tunnel.