There are three reasonable policies that can address the climate crisis. It is that simple, yet it will be extremely difficult because of the key players needed to enact these three policies. The players are the 20 biggest nations in the world, otherwise known as the G20.
The G20
According to the OECD, the G20 nations are responsible for emitting close to 80% of global greenhouse gas emissions. This means the G20 countries together are 80% responsible for climate change as we know greenhouse gases are the main drivers of increasing global temperatures.
If the G20 can bring down its emissions and achieve net-zero by 2050, then the rest of the world will follow as a result of the G20’s influence on the global economy, and we can avoid the worst impacts of climate change.
If you follow politics you know it’s very difficult for governments at any level to agree and enact new policies, let alone with other countries. Mixed with the fact that climate change has become such a polarising global issue that it seems like an insurmountable challenge to get the major powers of the world to achieve consensus in order to address it. Yet we must continue to try for the sake of future generations.
International Carbon Price Floor
An International carbon price floor or what I like to call a global minimum carbon tax (GMCT) is the first policy that the G20 needs to agree on and enact across all sectors in order to really address climate change. Back in 2021 over 130 countries came together to work out a global minimum corporate tax rate. For the world essentially to come together to agree on this single policy is really incredible. If the world could come together to agree on a minimum corporate tax, why can’t the world come together to agree on a minimum price for carbon emissions?
A country’s economic standing, fossil fuel dependence, and cultural view on the climate issue all play a role in its government’s level of participation and urgency in tackling the climate problem. Countries that rely on fossil fuels as their biggest export to keep their economies going or have lower GDP per capita usually move slower on climate policies due to the fear of the economic repercussions.
A GMCT can be a means for nations in the G20 who are hesitant on enacting ambitious carbon mitigation policies to ease into being part of the solution in addressing climate change. This however is true only if members of the G20 who are ambitious about addressing climate change make some compromises with their colleague members. The main compromise is the willingness to concede to a lower GMCT that climate hesitant members of the G20 can get on board with.
Until climate ambitious members of the G20 understand that obtaining consensus from every member of the G20 on a GMCT is way more important than fighting for a hypothetical GMCT that will never reach consensus, the world has no hope of actually achieving its climate goals. Truth is one can never fully foresee the real-world impact a new global policy such as a GMCT can have on the world no matter how you try to forecast the potential impact. Therefore no matter what the value of the GMCT may be, as a start, the actual enactment of a GMCT is more important than anything else.
Border Carbon Adjustment
The second policy that would address climate change is the enactment of a border carbon adjustment (BCA) policy by the G20. A BCA policy is only valid if a GMCT is enacted. A BCA is a trade policy that levies charges on imports from countries that have less ambitious or non-existent carbon pricing policies. The charges on imports would be the difference between the importing country’s carbon price and the exporting producers’ country’s carbon price.
A BCA keeps a level playing field in the market by ensuring foreign importers face the same cost in mitigating carbon emissions that domestic producers face. It discourages domestic producers from moving abroad to countries with less ambitious climate policies and protects one’s economy from losing global competitiveness.
The G20 is responsible for roughly 75% of global trade. If the G20 enacts a BCA policy it will pull the rest of the world into adopting carbon pricing policies that are in line with the new global standard. With this, the world is well on its way to achieving its climate goals.
Leveling Energy Subsidies Given To Non-Renewable And Renewable Energy
In combination with the first two policies, the last policy that would put the world on track to achieve Net Zero by 2050 is to level the energy subsidy given between fossil fuels and low carbon energy, 50/50. A subsidy is a financial benefit the government offers a business or industry so that the price of the commodity or service it offers remains low enough to be affordable for consumers. It can take different forms such as a tax break or direct payment.
According to IRENA, in 2020 roughly 70% of energy subsidies went to fossil fuels with the rest going to low carbon energy. This continues to create an unfair energy market benefiting the continued production of fossil fuels. By evenly distributing energy subsidies between fossil fuel and low carbon technology, not only will this create a fair global energy market, but it will also provide low carbon technologies the legitimate means to overtake fossil fuels in the long run as the primary source of energy that powers the society of the future.
The Devastating Impacts Of Climate Change
As the years go by, the impact of fossil fuels and climate change is becoming ever more palpable worldwide.
In China, over 1 million people die every year prematurely as a result of severe air pollution caused by coal-burning in the country. Climate change will increase the death toll yearly, as air pollution exposure in China increases due to more frequent severe weather conditions in the country.
This year in North India, temperatures have crossed a record 49 degrees celsius with prevalent heatwaves and floods making havoc across the northeast.
In 2021, Siberia experienced what may be the biggest forest wildfire in recorded history as over 1.5 million hectares of forest have been burnt.
Conclusion
The earth is like a fishbowl. What any of us does in one area of the fishbowl will affect someone else in another area of the fishbowl. A few countries drastically cutting their own emissions will not address climate change if other countries continue to increase their emissions. That is why global consensus is so important.
Almost all 8 billion people on this planet will be affected and hit hard by climate change in the decades to come if we don’t globally cooperate. Whether we fail or succeed in addressing climate change will not come down to breakthrough technology, but whether the world, starting with the G20, is able to cooperate and achieve consensus on key global climate policies.
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