Carbon Emissions Policies

We just completed a discussion of how individuals can make a difference in our collective carbon emissions through more responsible choices and decisions in their daily lives. But personal responsibility is hardly enough to effect major changes in carbon emissions. In a market-based economy such as prevails over North America, Europe, and the developed world, and increasingly the developing world as well, only proper market incentives can insure major changes in collective behavior. Ultimately, to solve the climate change problem, we need to fundamentally reshape our incentive structure, which currently provides very little investment for renewable sources of energy, while subsidizing development of fossil fuel sources. Putting a price on the emission of carbon is the only way to do that. And whether it is a carbon tax or emissions permits, only governmental policies coordinated among the nations of the world can implement such a system.

Kyoto Accord

Given the global nature of our carbon emissions, negotiated international treaties are essential if we are to stabilize greenhouse gas concentrations. Awareness of the need for such treaties was recognized by the early 1990s, in the form of the the United Nations Framework Convention on Climate Change (UNFCCC), which was first put forward at the 1992 Earth Summit in Rio de Janeiro. The framework convention was updated at an international summit held in Kyoto, Japan in 1997 to constitute the now-famous Kyoto Protocol, which had as its stated goal, holding greenhouse gas concentrations below a level that would constitute dangerous anthropogenic interference (DAI) with the climate system. This was, indeed, the first reference to the now-familiar concept of DAI. The Kyoto Protocol went into effect 8 years later, in 2005.

While putting a price on carbon emissions is the only way that free market forces will insure stabilization of greenhouse gas concentrations, the Kyoto accord did not mandate a particular approach (i.e., carbon tax, or tradable emissions), nor did it define DAI in terms of a particular CO₂ equivalent stabilization level or amount of warming. However, by 2007, the European Union had taken such initiative, defining DAI as 2°C warming relative to pre-industrial time, and implementing its own pilot program in emissions trading.

By the end of 2008, all industrial nations had ratified the treaty except the U.S. (though Canada withdrew from the treaty in 2012 under a new administration). Many developing nations also ratified the protocol, but were not held to mandated reductions due to the financial hardships the reductions might have imposed upon their fragile economies. While ultimately 192 nations signed on to the Kyoto Accord before it expired in 2012 (and many were willing to sign on to even stricter controls on carbon emissions), the two largest emitters of all ”the United States and China” remained holdouts. This is, perhaps, unsurprising. Both countries, as we have seen, rely upon a fossil fuel energy economy and—in the case of the U.S., politicians are lobbied heavily by fossil fuel industry groups not to pass legislation that might put a price on carbon emissions. Progress in mitigation of global carbon emissions is unlikely to occur without the participation of these two nations, placing much of the global political pressure on the U.S. and China to agree to an emissions reductions treaty.

Some nations, for example low-lying island regions and tropical nations most likely to be impacted in the near-term by climate change, argued that Kyoto did not go nearly far enough, and that for them DAI is already around the corner, and they do not have the resources to implement a program of wide-scale adaptation that richer nations have. Other supporters of Kyoto pointed out that it was just a first step in a process that will hopefully lead to more stringent reductions in the future. Critics on the other side argued that the impacts of climate change are overstated, and that passing the Kyoto accord would cost the economy. However, as we saw earlier in this lesson, sober cost-benefit analyses indicate that the costs of inaction are likely to greatly exceed the cost of action, so the credibility of this particular argument might be called into question.

Other complications arose due to the politics of differing interests of the two major holdouts, China and the U.S. China's net greenhouse emissions are now greater than those of the U.S., but their per capita emissions (due in large part to their extremely large population) are lower. Not surprisingly, the U.S. argued that the required emissions reductions be based on total emissions, while China argued it should be based on per capita emissions. Another complication is that western nations, like the U.S. and Europe, have enjoyed the benefits of more than a century of access to cheap fossil energy, while emerging industrial nations like China and India are only now exploiting fossil fuel energy reserves. These nations argue that the developed world already had its turn, and that they deserve their fair share. There are consequently substantial political tensions that make progress in achieving a negotiated emissions treaty slow and difficult.

Paris Agreement and Future Policy

Little progress was made in achieving a binding international climate treaty in the years following Kyoto. No such agreements were reached during either the 2007 Bali summit, or the 2009 Copenhagen summit. The primary obstacles seemed to be those cited above, namely the differing interests of various major players such as the U.S. and China, and more generally between the developed, developing, and undeveloped world. The reticence of the U.S. in committing to mandatory carbon reductions is, too, in part a product of political pressures. Those favoring U.S. participation have had to fight a coordinated, massively funded publicity campaign by the fossil fuel industry and trade groups representing it, which has successfully prevented passage of energy legislation dealing with climate change by attacking its scientific underpinnings, and by opposing politicians who support such legislation by funding their opponents in political campaigns, among other tactics.

This lack of progress and the apparent lack of will to confront the climate change threat has caused many to become discouraged over prospects for a meaningful carbon emissions policy.  However, there is some cause for cautious optimism as well. While China is the single largest net emitter of carbon on the planet now, this country has shown signs of commitment to developing renewable and clean energy, investing far more money in this area in recent years that other countries, such as the U.S. In November 2014, General Secretary Xi Jinping, along with President Obama, created a plan to limit greenhouse gas emissions.  Meanwhile, the Obama administration pursued executive actions via the EPA to reduce U.S. carbon emissions, including calling for higher automobile fuel-efficiency standards and regulations on coal-fired power plants such as the Clean Power Plan, with a target of reducing U.S. electrical power generation emissions by 32% by 2030.  While the U.S. Congress failed to pass a comprehensive climate bill, many states and localities have implemented their own greenhouse gas reduction schemes.

There are past examples of success we can look to, where nations came to agreement on policies to mitigate other emerging global environmental threats, whether it be the passage of the Clean Air Acts in the 1970s to deal with the threat of acid rain, or passage of the Montreal Protocol in 1984 to ban the production of CFCs, which were known to be damaging the stratospheric ozone layer. These past examples show that nations can join together in binding agreements to confront emerging global environmental threats before these threats reach catastrophic magnitudes. Dealing with climate change is admittedly more difficult, as carbon emissions are at the very heart of our current global energy economy, and simple solutions (such as installing scrubbers in smokestacks in the case of acid rain), or ready substitutes (replacing CFCs with other non-ozone-destroying substitutes as propellants in spray cans) are far more challenging to come by. Clearly, confronting global climate change will require greater will and greater global cooperation than has ever been called for before. Nonetheless, we can look with guarded optimism at these past successes and use them as instructive road maps as we seek to deal with the problem of global climate change.

Figure 12:18: A spray can using CFC Propellant, (left). The United Nations Emblem, (right).

Credit: Wikimedia Commons, United Nations

Finally, at the Paris summit in December 2015, the Paris Agreement was composed by consensus of the nearly 200 attending parties of the UNFCCC (countries plus the EU), and became legally binding in November 2016 after sufficient parties representing enough of the world's greenhouse gas emissions ratified the agreement - including, in particular, the United States and China.  Each participating party has been required to set an emission reduction target - a Nationally Determined Contribution (NDC) - but the chosen amount is voluntary, and no enforcement mechanism is in place. It was agreed that the goal would be to limit global warming to "well below 2 C above pre-industrial levels", but also "to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels".  Course author's Michael Mann's statement on the agreement can be found here.

From a global perspective, there is evidence that mitigation policy is having a noticeable effect.  After steady growth in recent decades, global CO₂ fossil-fuel emissions nearly stabilized 2014 to 2016 (less than 1% growth per year) despite substantial worldwide GDP growth, in large part due to the phasing out of coal power plants in China and the United States.  However, global emissions rose again in 2017 and 2018.  The European Union and 174 world states have ratified the Paris Agreement, and after Syria in 2017 and the United States once again joining the agreement in 20201, every country in the world is now a party to the Paris agreement.  

Sustainable Development

Climate change is but just one of many global environmental threats we now face. Dealing with these threats in a way that allows us to continue to meet the basic needs of the people on this planet including food, water, shelter, and quality of life, while still maintaining the health of our environment, is the challenge of sustainable development. While the goals of economic growth and environmental sustainability may sometimes seem to be in competition in the short-term, we have seen that in the long-term the threat of environmental degradation and collapse potentially trumps all other considerations. Without a healthy and functioning planet, we cannot sustain the increasingly large global population projected by demographic forecasts. If we accept these assumptions, then the object of governmental policies must be to grow our economy while preserving our environment—the challenge, again, of sustainable development. As developed nations are currently on the most consumptive, unsustainable path, any hopes for environmental sustainability will require fundamental societal changes in developing nations, and a transfer of technology and assistance to developing and undeveloped nations to ensure that they grow their own economies in a manner that is more consistent with environmental sustainability than that of the industrial nations in the past.

Within each of the sectors contributing to global carbon emissions and climate change, we can indeed see opportunities for mitigation that more broadly serve the larger goal of sustainable development. Recycling, for example, saves costs, reduces carbon emissions, and preserves raw materials. Switching to a renewable energy economy will create new industries and economic opportunities, and new jobs. And so on.