The outcomes of the Paris talks have been greeted with great enthusiasm by the global community. Spiegel Online, Germany’s largest news website titled “the miracle of Paris”, Huffington Post, an American blog, even called them “one huge step for mankind”. The World Bank celebrated the talks as a “game changer”. Meanwhile, François Hollande, France’s president, declared that “history is here“, and Greenpeace, an environmental NGO, acknowledged that “the wheel of climate action turns slowly, but in Paris it has turned”.
196 countries agreed in December to limit global warming to no more than 1.5°C compared to pre-industrial times, an extremely ambitious target. Reaching the 2°C target, the “magic number” suggested by many climate scientist, would have already required drastic emission cuts.
To accomplish the 1.5 °C target, global carbon dioxide (CO2) emissions must peak before 2030, according to Hans Schellnhuber from Potsdam Institute for Climate Impact Research. The Earth has already warmed by 1°C since pre-industrial times. If current trends continue, the world may see a rise of 5°C.
The Paris Climate Agreement signals unprecedented momentum to defy current trends. Indeed, many around the world now name climate change as a top threat. Nevertheless, various questions remain. Prior to the Paris talks, the key global polluters committed to various emission targets – so called Intended Nationally Determined Contributions (INDCs).
These read ambitious at first sight. For instance, the European Union (EU) announced to cut emissions by 40 percent below 1990 levels by 2030. Meanwhile, China vowed that its total emissions will peak by 2030.
Sadly, the history of United Nations climate talks suggests that many countries will not implement these commitments. After all, none of the INDCs are legally binding – a prerequisite, the negotiators found, in order to forge a deal which consolidates the diverse interests of the global community.
Defecting from these INDCs is tempting because cutting emissions remains a costly endeavor initially. Investments equivalent to 2% of global GDP are needed to keep the concentration of greenhouse gases below 500 parts per million (ppm), according to climate economist Nicholas Stern.
Current actions to combat climate change fall short of the ambitions outlined in Paris. The initially great costs of cutting emissions are likely a key reason. Since 2000, global energy has become more, not less carbon intensive. For instance, coal now supplies 41% of the world’s electricity – a greater share than at any time in at least four decades. Even Germany, an alleged climate change role model, increased its electricity production from coal sources from 45% in 2011 to 48% in 2013 – ironically, a consequence of its Energiewende (energy transition) to renewables.
Germany’s Energiewende mandates that greenhouse gas emissions are supposed to fall by 80-95% by 2050, compared to 1990. To reach this goal, the share of Germany’s renewable energy from sun, wind and biomass ought to rise to 80% of its electricity production by 2050. Furthermore, Germany plans to switch off its last nuclear plant in 2022, a decision taken after the Fukushima Daiichi nuclear disaster.
Undoubtedly, Germany’s attempt to radically transform its energy mix is a step in the right direction. After all, energy-related CO2 emissions make up the majority of global greenhouse gas (GHG) emissions.
However, the case of Germany also illustrates many of the weaknesses of global climate policy. All too often, hasty decisions are undertaken to appease the populace. Meanwhile, a frank and constructive discussion backed by scientific evidence which gauges the pros and cons of various options is lacking.
Three pathways must be embraced in order to address climate change. First, global energy supply must be fundamentally transformed. The eventual aim is a world entirely fueled by renewable energies. Second, measures curbing energy demand must be undertaken. And finally, adaptation measures must be implemented which help people adjusting to the adverse effects of climate change that occur despite various mitigation efforts. Pragmatism must underpin these three pathways.
Many economists believe that emission trading schemes would be the silver bullet for a sustainable global energy supply. If a global trading scheme were implemented, emitters would need to pay for the environmental damage caused. An incentive would be created to adopt cleaner technologies.
But the world is nowhere near a global emission trading scheme. The prospect of a prohibitive price for emissions is all too daunting for policy-makers who fear their economies may be hurt. Hence, a trading scheme is mostly a textbook solution to global warming.
Workable solutions must yield immediate benefits to consumers, while decarbonizing the economy. These may include various interim solutions. Shale gas is a case in point. The United States’ shale gas revolution has led to record-low natural gas prices boosting its public acceptance in the country. Meanwhile, it has helped reduce emissions. Fossil fuel CO2 emissions in the United States decreased by 11% between 2007 and 2013, a change not only caused by the global recession, but also by a shift from the use of coal to natural gas in the country’s electricity production.
1 ton of coal produces up to 2.86 tons of CO2, shale gas emits about 45% less per unit of energy. Yet, shale gas’ ecological footprint (including seismic risks) is highly problematic. Hence, shale gas is likely to be only the lesser of two evils.
However, its potential as a bridge technology to a low carbon future must be discussed. Phasing out coal plants via fracking can be a pragmatic policy choice. Governmental revenues generated via shale gas then need to be invested in developing cost-competitive renewable energies and storage technologies.
Measures curbing demand are a second pathway to combat climate change. Awareness campaigns can be powerful policy tools. Companies are able to save up to 20% of energy costs via this low cost measure. The United Kingdom’s Department of Energy & Climate Change has even published a guide for small and medium-sized enterprises on how to best leverage this potential. However, preaching energy austerity is unlikely to be enough. Pragmatic climate policy must not only rely on benevolence.
Rather, policy tools that yield immediate benefits to consumers, while curbing overall demand, also need to be implemented. A particularly promising tool is the top runner approach. First implemented in Japan in 1998, this environmental policy tool declares the best available product on the market (from an energy efficiency perspective), e. g. an air conditioner, to be the industry standard. If competing products do not meet this standard within a certain time frame, e. g. five years, they are banned from the market.
By 2009, the program had achieved mandatory energy efficiency standards for 21 products in Japan. These amount to more than 70% of residential electricity consumption in Japan. Consumers are largely supportive of the tool because of its instant benefits. After all, a particularly energy-efficient air conditioner saves costs immediately for the purchaser.
Meanwhile, overall demand is curbed. Evaluations suggest that the policy tool induced energy efficiency improvements of up to 80%. For instance, the energy efficiency of air conditioners improved by 68%, while the policy was in place.
Lastly, measures must be undertaken which help people to adapt to the adverse effects of climate change. Most likely, the poorest countries will suffer the earliest and most from global warming. These countries require a contingency plan, backed with plenty of funding by the developed world, as a response to climate change whose implementation must start immediately.
Europe must be at the forefront of funding. After all, it has contributed significantly to emissions from a historical perspective. Germany alone accounts for approximately 7% of total historical emissions since 1850.
If the world’s governments truly ratchet up climate financing to USD 100 billion by 2020, a key announcement in Paris, this could be a major contribution to help the poorest counties adapt. However, many fear that existing aid may only be relabeled as climate finance. This would be irresponsible. Many usages of additional funding can be thought of.
For instance, investments are needed in order to improve the availability of weather forecasts and early warning systems. Additional research is also needed on crops that can survive extreme weather conditions.
The Paris Climate Agreement is a triumph of diplomacy. The negotiators now set an extremely ambitious goal on curbing global warming which will require drastic actions. A pragmatic roadmap which radically transforms the world’s energy production and consumption is now needed to reach it.
Mitigation measures implemented (including interim measures) must yield both short-term and long-term benefits to societies in order to be implementable. Furthermore, adaptation roadmaps must be designed to address those adversely impacted by climate change.