Cautious optimism on route to COP26 climate change summit

At the start of the summer, I noticed how the discourse on climate change had changed in recent years, thanks to huge technological advancements that made green energy more competitive and often less expensive than older technologies. carbon based. This is certainly true for new investments in electricity, although for a while it will be even cheaper to generate electricity from older assets with sunk costs than to build new green power plants. . But in the medium term, I argued, “the new win-win story” implies that “domestic gains and trade benefits can now advance” towards green transformation.

The climate debate is therefore no longer just about the costs of mitigation and how to share them in a fair and politically feasible way. Instead, as Nicholas Stern said in his report to the G7, “the transition to a zero emissions and climate resilient world offers the greatest economic, trade and trade opportunity of our time.”

With less than three weeks to go before the crucial United Nations Climate Change Summit (COP26) in Glasgow, positive developments in green energy certainly give cause for optimism. But an important caveat is in order.

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It would be easy but incorrect to interpret recent advances in green technology as making emission reductions a less important global public good (GPG). This GPG is measured by reductions in atmospheric concentrations of greenhouse gases due to human activity. Less accumulation of these gases through mitigation efforts remains pure GPG: the benefits are non-rival and not excluded. Technological changes do not change that.

The “add-on” to GPGs is the decrease in total greenhouse gas concentrations due to a country’s own mitigation, and a given amount of mitigation anywhere will produce the same global benefit. At the same time, the net benefit of a single mitigation action – the difference between its benefits and costs – will vary from country to country. In the past, technological constraints meant that the net profit in terms of GDP was negative. It is quickly turning positive for many countries, making a green transformation increasingly achievable.

It is necessary to keep this point in mind because the recent report of the Intergovernmental Panel on Climate Change made it clear that the overall performance of countries following their own most profitable development strategies would not provide enough guidance. global mitigation to limit climate change to an acceptable level. The damage and risks associated with global warming have become greater and more imminent, with broader and more volatile effects. In particular, the frequency and severity of extreme weather events directly related to climate change have increased dramatically. Moreover, the imminent threat means that upstream mitigation – including earlier dismantling of old power plants, among many other measures – is crucial.

If each country chose its preferred development strategy, the resulting uncooperative outcome would lead to unacceptable levels of risky emissions. The incentive problem has not gone away. Yes, in many countries technology will increasingly lead to positive economic gains from mitigation. But these countries will still not have the motivation to mitigate with the same intensity and urgency as they would if the overall benefits were part of their cost-benefit calculation.

Thus, while the emergence of net national economic benefits from emission reduction efforts is certainly a welcome development, an optimal global solution will require greater and earlier mitigation than if each country responded only to its own incentives. . In fact, the latest IPCC report suggests that the gap between the sum of national strategies and an optimal global approach may even have widened.

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The IPCC report is expected to temper the optimism fueled by the recognition of the profitability of green energy. It should foster broad acceptance of the need for multilateral efforts to provide sufficient incentives for climate change mitigation and mobilize financial resources to enable all countries to make large green investments that pay off in the long term. As far as incentives are concerned, some form of carbon pricing is a powerful stimulus and, together with regulations, such as banning the production of cars powered by internal combustion engines after a certain date, can set limits. expectations and bring about the necessary change in investments.

Fortunately, an important feature of the new climate discourse – unrelated to the economic cost-benefit analysis of mitigation – should facilitate the cooperative solutions that are still needed. It is the strongest support for ambitious climate policies, rooted in ethical considerations, from civil society around the world.

For many, the preservation of the planet as we know it, including its species and biodiversity, is an almost absolute ethical imperative. Many members of green movements in developed countries not only support upstream mitigation at home, but also seem willing to commit part of their income to finance the green transition in poorer countries.

We don’t know exactly how many would be willing to give up on how much, but climate ethics have become an important political force, especially among young people. This should help make possible the ambitious climate policies required, including the mobilization of resources for developing countries in support of early mitigation actions.

In an age shaped by the re-emergence of populist nationalism, green internationalism can provide an increasingly influential counterweight. The gathering of COP26 will provide a revealing indication of its current strength.

Kemal Derviş, former Minister of Economic Affairs of Turkey and Administrator of the United Nations Development Program, is a senior researcher at the Brookings Institution.

This article was published by Project union.


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