Green en­ergy a real so­lu­tion to cli­mate change

China Daily (Hong Kong) - - VIEWS -

Thanks to the elec­tion of Don­ald Trump as the next United States pres­i­dent, diplo­mats and gov­ern­ments around the world are won­der­ing what to ex­pect from the next four years. When it comes to cli­mate change, many en­vi­ron­men­tal cam­paign­ers are alarmed, which is un­der­stand­able be­cause Trump has sent mixed sig­nals and the world does not know any­thing about the in­com­ing US ad­min­is­tra­tion’s plans in other ar­eas.

But there could be cause for hope, and even a potential op­por­tu­nity for China.

Cli­mate change is real and mostly man-made. On the pres­i­den­tial cam­paign, Trump said he would dump the Paris Cli­mate Treaty. And al­though af­ter the elec­tion he said, “I have an open mind to it”, it ap­pears un­likely the US will ful­fill the car­bon cut­ting prom­ises that were made by the Barack Obama ad­min­is­tra­tion.

But in­stead of be­ing a worldend­ing event, it of­fers an op­por­tu­nity for other coun­tries in­clud­ing China to step for­ward and lead the way with a smarter ap­proach.

Even if it were to sur­vive, the Paris Treaty by it­self would do very lit­tle to reduce the ef­fects of cli­mate change. The United Na­tions es­ti­mates that if ev­ery coun­try were to make ev­ery sin­gle promised car­bon cut be­tween 2016 and 2030 to the fullest ex­tent, car­bon diox­ide emis­sions would still only be cut by one­hun­dredth of what is needed to keep tem­per­a­ture rises be­low 2 Cel­sius.

The prob­lem is that these fee­ble prom­ises will be costly. To­day’s green tech­nol­ogy is in­ef­fi­cient and re­quires sig­nif­i­cant sub­si­dies. Try­ing to cut CO2 emis­sions, even with ef­fi­cient tax­a­tion, makes cheap en­ergy more ex­pen­sive, which would slow eco­nomic growth.

Cal­cu­la­tions us­ing the best peer-re­viewed eco­nomic mod­els show the global cost of the Paris prom­ises — through slower GDP growth from higher en­ergy costs — would reach $1tril­lion to $2 tril­lion ev­ery year from 2030.

China has promised to cut its CO2 in­ten­sity by 60-65 per­cent by 2030. Stud­ies sug­gest that a 60 per­cent cut could cost about $200 bil­lion an­nu­ally in lost GDP growth. And liv­ing up to the Paris Treaty prom­ise of peak­ing CO2 emis­sions around 2030 could cost China $400 bil­lion or more in lost GDP. So coun­tries, in­clud­ing China, should fo­cus on find­ing smarter so­lu­tions.

Cli­mate econ­o­mists have found that green en­ergy research and de­vel­op­ment are a much more ef­fi­cient ap­proach. And a panel of No­bel lau­re­ates for Copen­hagen Con­sen­sus say we shouldn’t just dou­ble R&D but in­crease it six-fold, to reach at least $100 bil­lion a year. In­vest­ment in in­ge­nu­ity by China and other coun­tries could help reduce the price of green en­ergy be­low fos­sil fu­els. Only then will we truly be able to reduce cli­mate change. The Or­ga­ni­za­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment says that about one-quar­ter of all de­vel­op­ment aid to­day com­prises cli­mate aid. But there are much more im­por­tant is­sues the world’s poor­est are con­cerned about — 2 bil­lion peo­ple suf­fer from mal­nour­ish- ment, 700 mil­lion live in ex­treme poverty and 2.4 bil­lion don’t have ac­cess to clean drink­ing wa­ter and san­i­ta­tion. The UN asked nearly 10 mil­lion peo­ple across the world for their top pol­icy pri­or­i­ties. Ed­u­ca­tion, health and nutri­tion topped the list. Cli­mate change was at the bot­tom.

In gen­eral, most of the world’s most press­ing prob­lems can be tack­led faster and more cheaply by mov­ing away from cli­mate aid to pro­vid­ing funds for elim­i­nat­ing poverty and il­lit­er­acy.

Cost-ben­e­fit anal­y­sis shows that freer trade is the sin­gle most pow­er­ful way to help the world’s poor­est peo­ple. Re­viv­ing the mori­bund Doha De­vel­op­ment Round of global free-trade talks would reduce the num­ber of peo­ple in poverty by an as­ton­ish­ing 145 mil­lion in 15 years, ac­cord­ing to research com­mis­sioned by the Copen­hagen Con­sen­sus Cen­ter. Sadly, Trump’s rhetoric has been con­sis­tently op­posed to trade.

Com­men­ta­tors in the US and else­where re­main un­cer­tain what to ex­pect from the in­com­ing Trump ad­min­is­tra­tion. But on cli­mate change, at least, there could be an op­por­tu­nity for de­ci­sive ac­tion: go­ing be­yond dump­ing the in­ef­fec­tive Paris Treaty, to poli­cies that will har­ness green en­ergy in­no­va­tion to fo­cus on a real so­lu­tion to cli­mate change. If China em­braces a tech­nol­ogy-led pol­icy, it has the potential to be part of the real so­lu­tion to this chal­lenge.

The au­thor is pres­i­dent of the Copen­hagen Con­sen­sus Cen­ter.


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