The Paris climate agreement needs coordinated carbon prices to be successful

Ottmar Edenhofer, Potsdam Institute for Climate Impact Research

The Paris climate agreement was an important success for climate diplomacy as nation states showed a strong will to cooperate on climate action.

But instead of imposing binding national emission targets, the Paris Agreement is based on voluntary country commitments (known as Intended Nationally Determined Contributions– INDCs). This poses some challenges.

First, the INDCs proposed so far are not enough to limit warming to well below 2℃, aiming for 1.5℃, as agreed in Paris. The INDCs shift a large burden of the effort to reduce greenhouse gas emissions to after 2030.

Second, the INDCs cannot, yet, be verified and compared in a transparent manner to build mutual trust over time.

Third, countries lack incentives to increase their level of ambition without reducing their competitiveness as well as securities that other countries do not free-ride; to counteract this the right institutions are needed.

Lastly, the INDCs do not automatically become national law after a country ratifies the Paris agreement. Only the promise to review and revise INDCs every five years is legally binding. Countries have to make an additional effort to include their proposed climate policy in their other national policies – for example to counteract the expansion of coal power plants.

Raising the bar

To be effective, the Paris agreement, or any international agreement, has to address these challenges. In this respect, sufficiently high national carbon prices that increase over time would be a meaningful climate policy instrument for three main reasons.

First, carbon prices are relatively easy to compare and represent a transparent indicator of the ambition level of national climate policies.

Second, a carbon price drives up the cost of carbon dioxide (CO₂) emissions, rendering high-emission forms of energy (such as coal power) unprofitable over the long term and low-emission technologies (such as wind and solar) competitive.

Third, the additional revenue from carbon pricing could remain in the respective countries and be used to achieve other societal targets, such as the Sustainable Development Goals.

When negotiating international carbon prices, for example in the context of the G20, individual countries would pledge to increase their domestic carbon price levels via emission taxes, fossil energy taxes, or emissions trading schemes featuring a price floor.

However, these price increases would only come into effect if other countries were likewise implementing high prices. This strategy would circumvent the concern that carbon pricing leads to competitive disadvantages. It would also include a sanctioning mechanism if participants were to lower their carbon prices.

Sharing the burden

A truly global coordination and increase of carbon prices can only occur if an effective burden sharing scheme is implemented. To engage developing countries, transfer payments are necessary. A particular country would receive international support if they accept a national carbon price.

Funds would have to increase with the price level, compensating for higher emissions reduction costs. Reducing the level of ambition would lead to a loss of international support.

This mechanism in turn increases the trust that other countries will pursue ambitious climate policies themselves. The climate finance envisaged in the Paris Agreement could be a main pillar of this strategy.

This article was co-authored by Christian Flachsland, head of governance group, and Ulrike Kornek post-doc in the governance group at the Mercator Institute on Global Commons and Climate Change.

Ottmar Edenhofer will be in Australia from 13-17 June and will present public lectures in Brisbane (University of Queensland), Canberra (ANU) and Melbourne (Climate and Energy College).

Ottmar Edenhofer, Deputy Director and Chief Economist, Potsdam Institute for Climate Impact Research

This article was originally published on The Conversation. Read the original article.

Advertisement

Climate change makes a comeback – with the help of social media

David Holmes, Monash University

In what has been shaping up as the election that forgot climate change, there are signs emerging in the Coalition’s election campaign that it is starting to listen to polls, its own focus groups and social media chat on climate.

So far it is the Great Barrier Reef that has drawn out the biggest campaign fight on climate.

Prime Minister Malcolm Turnbull announced that A$1 billion of the Clean Energy Finance Corporation (CEFC) fund would be directed towards a Reef Fund. 10% of the money from the CEFC will be quarantined to make loans available to farmers in North Queensland.

While Turnbull declared the greatest threat to the reef was global warming, he nevertheless specified that the run-off from farming into the reef was what would be tackled. This is seen to be a measure that could prolong the reef in a region where the Coalition is at risk of losing some marginal seats.

So, one pitch is that saving the reef is about retaining 70,000 jobs that it sustains. But a less believable pitch is that the fund will battle climate change, with Turnbull saying that solar panels for farms in the region will reduce reliance on diesel, and that farmers would have loans for more energy-efficient farm equipment.

Labor’s shadow environment minister, Mark Butler, derided the Reef Fund as a “shameless exercise in spin” insofar as such loans have already been available to farmers for years.

Not far from the reef, in the Galilee Basin, is one of the largest coal deposits in the world, which both Labor and the Coalition have approved mining leases for, but which the Greens’ Larissa Waters insisted must be stopped if we are not going to:

… further cook the reef.

But on Monday night on the ABC’s Q&A, Bill Shorten reaffirmed Labor’s commitment to coal. He said:

A Labor government isn’t going to ban coal mining in this country … Coal is going to be part of our energy mix for the foreseeable future.

At the same time, he acknowledged:

… when we talk about the reef and when we talk about climate change, they are inextricably linked.

But Shorten’s message was identical to Turnbull’s in referring to jobs, saying that:

… good environments generate good jobs. 70,000 people make a living from the reef. It generates $6 billion in turnover for the Australian economy.

Weather and climate

In another climate change publicity opportunity, in the wash-up of the east coast storm last week, Shorten and Turnbull spent a day surveying the flood damage in Tasmania – but only Turnbull ventured so far as to link the floods to climate change.

While Shorten was happy to link climate change to the reef, he did not want to go near linking climate and weather:

In terms of climate and weather, today for me is not a day where I will join the dots about extreme weather events.

But Turnbull had no such hesitation. In a rare moment, the Turnbull of old came out in a moment that harked back to his days as environment minister, when he had no problem talking up the dangers of climate change:

Certainly, larger and more frequent storms are one of the consequences that the climate models and climate scientists predict from global warming but you cannot attribute any particular storm to global warming, so let’s be quite clear about that.

Turnbull is incorrect about subtropical lows becoming more frequent, but he is right about climate scientists’ forecasts that storms will get bigger.

If national policies in Australia and around the world are not calibrated to the 2℃ guardrail, the energy we saw released by last week’s storms will pale compared to what might be in store for future generations.

Referring to the Eemian period of 120,000 years ago, which was the last time the global average temperature was as high as the threshold that the Paris agreement is trying to avoid, scientists are uncovering evidence of storms that were of an order not compatible with the built environments of today’s human settlements.

In recent research, James Hansen, the author of the book Storms Of My Grandchildren, points to the puzzle of giant rocks in the Bahamas, up to one thousand tonnes, that are in a place they just shouldn’t be. Scientists warn these geological freaks harbour a terrifying secret – epic superstorms capable of tossing around boulders like bored Olympians.

But so as to reassure voters, both leaders did talk up the importance of mitigating damage (through the likes of building levies) – but not mitigating climate change itself.

While it was remarkable for Turnbull to discuss climate change at all in this election campaign, he failed to join the dots between the adequacy of the Coalition’s emissions reduction targets for Australia realising a responsible contribution to avoiding a 2℃ threshold.

Social media as a barometer of climate concern

A likely explanation as to why Turnbull in particular is reasserting climate change and the reef as an issue – but not asserting any kind of policy that will fix it – may be his reverence for the power of social media, and what it is telling his media team about neglecting climate change.

An analysis of 150,000 conversations on social media in Australia for the first three weeks of the election campaign reveals climate change is among the top five political topics Australians are talking about on Facebook, Twitter, YouTube and blogs.

More than half of the discourse is negative towards each leader, with only 22% positive about Turnbull and 35% positive on Shorten. But of these posts, grouped around leaders, the only issue (other than negative gearing) that is common to discussion of both leaders is climate change. Climate change also stands out as the only issue in the top five that was not being aired by the leaders.

The analysis, by Meltwater, is significant in that it is so different from a poll. Those who answer a poll know that it will be aggregated and is likely to have a political impact. Their answers may not actually reflect their concerns as much as it does the desire to have an impact.

Analysis of social media, however, is more likely to capture the “backstage” of what people are actually concerned about in their daily conversations.

Could it be that, buried in these backstage conversations, are clues as to why voters are turning away from the major parties? And that neglect of climate change is a big part of this? Could it also be why the major parties have made panicked preference decisions to block the Greens and independents, who combined may capture 25% of the national vote?

There is evidence also that the Coalition’s announcements on the Great Barrier Reef are calculated to neutralise social media concern about it as an issue.

Perhaps it is its focus groups or it could be simply the impact of talk show mega-star Ellen DeGeneres’ “Remember the Reef” video-message campaign.

The campaign, which is also part of a promotion for a new film, Finding Dory, has seen Disney, the Great Barrier Reef Foundation and the Great Barrier Reef Marine Park Authority collaborate on raising awareness about the threats to the reef.

But more remarkable than this campaign was the barrage of tweets from Environment Minister Greg Hunt, strenuously defending the government’s management of the reef.

//platform.twitter.com/widgets.js

//platform.twitter.com/widgets.js

//platform.twitter.com/widgets.js

//platform.twitter.com/widgets.js

A further tweet personally invited DeGeneres out to visit the reef to allay her fears. But the fear is mostly coming from Hunt it seems, that the Disney campaign really could get out of control, based on an animated movie that is to be screened just two weeks out from election day.

//platform.twitter.com/widgets.js

David Holmes, Senior Lecturer, Communications and Media Studies, Monash University

This article was originally published on The Conversation. Read the original article.