Global climate awareness may never have been higher, but two recent studies show just how much work the world has to do to turn its carbon-cutting dreams into reality.
The first study, released last week by the World Bank, found 5% of carbon prices employed around the world today are stringent enough to keep global temperatures from rising by more than 2 degrees Celsius.
BP PLC released the second yesterday in the form of its annual statistical review of global energy markets. The bottom line: Energy emissions worldwide were up 2% in 2018, the largest year-over-year increase since 2011.
“My guess is that when our successors look back at Statistical Reviews from around this period, they will observe a world in which there was growing societal awareness and demands for urgent action on climate change, but where the actual energy data continued to move stubbornly in the wrong direction,” Spencer Dale, BP’s chief economist, observed in a post outlining the oil company’s findings.
He framed it “a growing mismatch between hopes and reality.”
The BP report shows why. Renewables grew by 14.5% worldwide in 2018, a robust if slightly lower rate than previous years. But much of those gains were erased by global energy demand, which surged by 2.9%. That pushed up demand for coal by 1.4% and natural gas by 5.3%.
The trend was especially prevalent in the United States, where energy consumption rose by 3.5% in 2018, reversing a decade of declines. The figure is the highest spike in American energy demand in three decades.
More countries and states than ever are employing carbon-pricing policies like cap and trade or carbon taxes, the World Bank found. It reported that 46 countries and 28 subnational entities employ carbon pricing, covering about 20% of global emissions.
Yet those prices were often too low to spur the sort of emissions cuts needed to avoid the worst impacts of global warming, the report found. Only Sweden, Switzerland, Liechtenstein, Finland and France employ carbon taxes within or above the $40-$80-per-ton range recommended by the U.N. Intergovernmental Panel on Climate Change.
Carbon pricing is not the only area where the world is falling short, but it is indicative of the wider challenges facing climate policy, said Robert Stavins, an economics professor who studies carbon pricing at Harvard University.
“You’re asking voters in a representative democracy to incur costs now, when a lot of benefits are going to go to people in other countries and to future voters,” he said. “This is a huge challenge. It won’t be addressed this year or next year. An important step in my view is the Paris climate agreement, in that the first rung on the ladder is the initial set of NDCs [nationally determined contributions].”
The dynamic has led to a push and pull in carbon pricing efforts. Canadian Prime Minister Justin Trudeau helped put in place a national carbon tax last year in his country but is facing a difficult path to reelection this fall. A win by Canada’s Conservative Party would almost certainly spell doom to Trudeau’s carbon pricing plan. Voters in Australia and France have also bucked at the prospect of forcing polluters to pay for their emissions.
Not all the news is grim. Carbon prices are on the rise in California and the European Union’s emissions trading program thanks to strong economic growth and reforms meant to limit the number of excess carbon credits. But they still remain far below the level recommended by the IPCC.
Then there is China. The world’s largest emitter is set to introduce an emissions trading program for its power sector next year. The program is expected to eventually grow to encompass half the country’s emissions, greatly expanding the amount of carbon subject to a carbon price worldwide.
Like many economists, Christopher Knittel of the Massachusetts Institute of Technology reckons the solution is to employ a more stringent carbon price. But he is not holding his breath.
The World Bank report, he said, “tells us carbon policies are a tough sell even when the vast majority of people admit climate change is real, it’s man-made and we need to do something about it.”
And so the gap between the world’s emissions and carbon-cutting goals continues to grow.
Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news atwww.eenews.net.