On December 28 ‘The Age’ posted a very strange editorial. It said that judged by much media coverage the world is heading towards a new Cold War and climate change destruction. But the editorial expressed optimism that “providing we can solve a few urgent problems these grim predictions are too bleak”.
The basis for the paper’s optimism comes from “a belief in the power of science and technology to make people’s lives better”. It points to poverty levels in Asia and Africa mostly having fallen and life expectancy in most countries, including Australia, having risen. It goes on: “The speed of technological advance should give us hope that we can find solutions, even for climate change, once the politicians stop bickering. Technologies such as battery storage and electric cars that were at a prototype stage a decade ago are now a practical reality”.
Historian Ronald Wright has identified how, throughout our history, human societies commonly encounter what he refers to as “progress traps”- economic developments that start off with positive consequences for humanity but eventually trap us with negative ones. Fossil fuels and climate change are but the latest example.
Wright says that in modern developed countries, progress traps are exacerbated by excessive faith in technology. He says that technology is addictive because material progress creates problems that seem to be solvable only by further technological progress. ‘The Age’s’ editorial is an example of this excessive faith in technology.
Unfortunately, the problems involved in finding a solution to climate change can not properly be reduced to the issue of a bit of “bickering” amongst politicians. Climate change is a complex policy issue and the policies associated with its solutions are at least as much financial and political as they are technical. With the increased prevalence of economic nationalism, the financial and political obstacles to a solution are growing, even as the technology improves.
Reading the editorial one might think that the recent dismal failure of the 2019 Madrid climate change conference had not happened, or was a mere blip on the radar. The Paris Agreement of 2016 provided a framework for countries to increase their emissions reduction commitments. But it provided no binding requirement to so do. Madrid demonstrated that, whatever framework Paris provided, individual country commitments are determined by their domestic politics, which are now pushing towards economic nationalism. All the most vital issues at Madrid were bumped down the road to Glasgow 2020, which is scheduled to commence one day after the US presidential election.
- Nearly everybody complains that the commitments required are not fair to them.
- The countries that matter most- USA, China and India- have all backtracked- Trump has taken the USA out of the Paris Agreement. China and India are still in but remain strongly wedded to coal.
- Fossil-fuel projects are still being heavily subsidized by governments. In 2018, fossil-fuel subsidies totalled more than $400 billion, according to the International Energy Agency, more than double those received by renewables.
- Developing countries continue to want the benefits of industrialisation enjoyed in the West. At Madrid the developed countries failed to increase commitment to the Green Climate Fund- the financial mechanism established to assist developing countries in adaptation and mitigation practices to counter climate change.
- While European Union leaders have agreed to make the currently 28-member bloc carbon neutral by 2050, they have had to exempt Poland, which remains heavily reliant on coal and does not wish to transition to natural gas from fear of dependence on Russia. Several other eastern European countries also want financial and other guarantees before they agreed to the EU cutting its emissions to zero.
Financing a solution
Groups that track the economics estimate that, all told, more than half a trillion dollars a year is currently going into climate-related activities. Much of this investment does not cross borders. It is spent by private investors in wealthy nations on projects such as solar plants. The amount currently spent is about one fifth of the total amount estimated to be required annually to meet the relevant targets.
The UN’s Intergovernmental Panel on Climate Change (IPCC) says that an annual investment of $2.4 trillion is needed in the energy system alone until 2035 to limit temperature rise to below 1.5 °C from pre-industrial levels. That is a total of $36 trillion over the next 15 years. That is equivalent to around 2.5% of the total value of the world’s economy.
Similarly, Morgan Stanley estimates the world needs to spend $US50 trillion ($73 trillion) on five areas of technology by 2050 to slash emissions and meet the Paris Agreement’s goal of halting global warming.
The International Monetary Fund has tried to calculate the hidden costs associated with continuing to burn oil, coal and gas — such as air pollution and global warming. It has estimated that the unpaid damages caused by fossil fuels could amount to $5.2 trillion in 2017 alone.
There is no agreement, not even anything close to an agreement, about where these amounts of money might be found.
What do these sums of money mean?
A trillion is one $1,000 billion. This clip shows you what a trillion dollars looks like in physical terms.
In today’s dollars, the Marshall Plan to reconstruct post WWII Europe is estimated at a mere US$100 billion.
According to an article in Forbes Magazine the US spent inflation-adjusted $4.1 trillion during the entire Second World War. The Afghanistan war has costs about $975 billion since it’s inception.
Australia had the world’s 14th largest economy. It’s GDP- the total value of goods bought and sold was US $1.17 trillion in 2017.
China’s Road and Belt Initiative (BRI) is the world’s largest infrastructure program. It is difficult to estimate the cost. The American Enterprise Institute (AEI) and Heritage Chinese Global Investment Tracker puts the total at roughly $340 billion during 2014–2017. Current trends suggest it will take six to seven years for the BRI to reach the $1 trillion mark with the $2 trillion mark not being crossed until the 2030’s.
Indeed, the world does not even have a reliable method of counting the current investments in reducing carbon emissions. Those that attempt to estimate these sums readily admit that their reports can give only partial estimates because of numerous data gaps, limited systematic tracking and a lack of agreed accounting definitions.
Just as important as the money itself, is where it is being spent. The Green Climate Fund, for instance, is supposed to fund transformative projects. But critics say that hasn’t always happened.
Optimism might be called for in order to keep hope and activism alive. But a more sober assessment does not provide strong grounds for it.
Faith in technology will not be enough. And if Donald Trump is re-elected as US president in 2020, it may be game over.