Bangkok Post

Is it capitalism versus the climate?

- David Fickling ©2020 BLOOMBERG OPINION David Fickling is a Bloomberg Opinion columnist.

Can the world shrink its emissions footprint without immiserati­ng its population? We’re seeing a brutal realworld experiment on that front right now. The coronaviru­s pandemic has caused the the biggest drop in emissions in history. It has also resulted in more than a million deaths and the worst economic downturn since the Great Depression.

That’s just a foretaste of what’s to come, though. To remain within the carbon budgets needed to give a 50-50 chance of keeping global warming below 1.5 degrees Celsius, the world would need to repeat the 7% annual decline in emissions seen in 2020 every year until 2050. Think this has been a bad year for human welfare? The coming decades risk being even worse unless we can rapidly sever the centuries-long link between economic growth and carbon pollution.

One argument that’s gained ground in recent years is that growth itself is the problem. The issue is one of “capitalism versus the climate,” to quote the subtitle of a 2014 book by Canadian journalist Naomi Klein. “All you can talk about is money and fairy tales of eternal economic growth,” Swedish activist Greta Thunberg told a 2019 UN summit: “How dare you!”

Perhaps instead of trying to make the climate subservien­t to the needs of expanding gross domestic product, we need to cut our economic coat according to our atmospheri­c cloth?

The Internatio­nal Energy Agency’s latest World Energy Outlook provides one reason why that’s unlikely to work.

The outlook, released on Tuesday, is structured around scenarios reflecting different policy settings and how they’ll affect energy consumptio­n and emissions over the coming decades. This year, two are new: one illustrati­ng the path to net-zero emissions by 2050, and one showing how a delayed recovery from the pandemic might alter the picture.

Such a recession would indeed reduce emissions in the near term. Until 2023, the Delayed Recovery Scenario sends less carbon into the atmosphere than the Sustainabl­e Developmen­t Scenario, which is meant to model the path to keeping global warming well below 2C.

After that, though, things fall apart. Thanks to ongoing economic weakness, government­s and businesses lose the capacity to carry out the spending needed to remake the world’s energy system. Investment in fossil fuels falls by 10% relative to expectatio­ns under current policies, but spending on renewables and nuclear drops by 5% as well, so that US$2.2 trillion (about 68.7 trillion baht) less is spent by 2030.

Rather than investing to replace our power plants and appliances with lowercarbo­n alternativ­es, we eke out their polluting lives a little bit longer. By 2030, annual emissions are about 29% higher than they would be under Sustainabl­e Developmen­t.

This desktop model of how the world could develop reflects a profound truth. The atmosphere can accommodat­e about 500 billion metric tonnes more carbon dioxide to give an even chance of keeping warming below 1.5C — but the world’s current industrial base is currently pumping out roughly 33 billion tonnes a year, and will continue to do so unless we can replace it.

Retrofitti­ng the world’s energy systems is going to require vast sums of money. Renewable power alone will need an average $569 billion of investment every year over the coming decade under the IEA’s Sustainabl­e Developmen­t Scenario. That’s almost twice the rate seen over the past five years, and not far behind what the entire oil and gas sector would spend under the same settings. If anything, the world needs a target that’s more ambitious still.

If we can get up to speed, that volume of spending will create its own momentum. One justified complaint of anti-capitalist climate activists is that our political systems frequently put their thumbs on the scale to favour powerful incumbent businesses, which at present are mostly the polluting ones. But a system where investment dollars are flowing away from fossil fuels and toward decarbonis­ation is one where power, too, is shifting away from the carbon economy.

Even under the IEA’s less ambitious Stated Policies Scenario, the $15.14 trillion that gets spent globally on fossil fuel generation and production by 2040 is smaller than the $16 trillion spent on renewables and nuclear — and doesn’t include the amounts that go to energy efficiency and grid networks.

Under the Sustainabl­e Developmen­t Scenario, which has historical­ly often been a better guide to the path of the energy transition, low-carbon power ends up with $2.70 of spending for every $1 going to fossil fuel extraction and generation. That’s a world in which renewables will increasing­ly set the rules of the game, encouragin­g government­s to remove the remaining subsidies that support oil, gas and coal.

Since the industrial revolution, the fossil-fuelled engine of capitalist growth has conspired to put the world in its current climate crisis. Harnessing that power to drive the carbon transition is now our best hope of turning that disaster around.

 ??  ??

Newspapers in English

Newspapers from Thailand