Climate change: we're not really doing anything

David Roberts asks: 

Are any of the countries that signed the Paris agreement taking the actions necessary to achieve that target? No. The US is not. Nor is the world as a whole. Source: No country on Earth is taking the 2 degree climate target seriously, David Roberts, 'Vox', 29 April 2017

Disappointing, but hardly surprising. The two degree climate target is too abstract, too remote for most of us, who have far more (apparently) urgent, short-term priorities. As individuals, we might be lucky to receive subsidies for driving electric cars. But what good do they really do:

"...China’s 1m-plus electric cars draw their oomph from an electricity grid that draws two-thirds of its power from coal, so they produce more carbon dioxide than some fuel-efficient petrol-driven models. The world is losing the war against climate change, the 'Economist', dated 4 August.)

In essence, the incentives are all wrong. A broad definition of subsidy that includes tax write-offs can generate this headline, which tells us all we really need to know:

America spends over $20bn per year on fossil fuel subsidies, Dana Nuccitelli, the 'Guardian', 30 July

Even ignoring subsidies, if the incentives are there for us to extract and burn fossil fuels, then that is what we shall do. Similarly, if the incentives are there for landowners, car manufacturers, politicians and officials to engage in bickering, lobbying in defence of their own interests, and competing with other interest groups for subsidies - then that is what they will do. Much serious brainpower is being spent on resisting change or extracting privileges from government.

 

We need to target meaningful goals, and we need to motivate people to achieve them. The outcome we should be targeting must be a composite definition of climate stability, which should include indicators of plant, animal and human well-being as well as climatic variables and the rate of change of those variables. This targeted outcome would include reductions in the negative impacts of climate change. Targeting climate like this means that we don’t prejudge the best way of achieving it, which might well be reducing greenhouse gas emissions as the main approach, but would motivate people to look at all other potential approaches, including ones we cannot anticipate. We are learning more and more about the links between greenhouse gas emissions and the climate, and about ways in which we can prevent or mitigate climate change. 

We also need to enlarge and motivate the pool of people prepared to do something to tackle climate change. The fact is that the rewards to a successful pet food campaign manager can be in the millions of dollars, while someone trying to generate new ideas for tackling climate change that don’t fit in with Kyoto will have difficulty getting attention, let alone adequate funding. This points to the need to divert some private sector resources away from trivia and towards solving our most urgent environmental problem.

There’s more. We also need people to buy in to solving the climate change problem. Paris type agreements (or 'agreements') don’t do this. Just the opposite in fact: most people-instinctively resent imposed pseudo-solutions originating in remote bureaucracies.Climate change has become politicised. 

It is for all these reasons that I believe Climate Stability Bonds would be an improvement over current policy. Climate Stability Bonds would be backed by the world’s governments. They would be redeemable once a specified climate stability goal had been achieved and sustained. They would be freely tradeable and their value would rise or fall as the targeted goal become more or less likely to be achieved. The goal could be specified as a combination of climate and other indicators. The bonds would not prejudge the best ways of achieving their goal. They would reward the achievement of climate stability, however it is achieved. Investors in the bonds would have incentives to respond quickly and appropriately to new knowledge about what is causing climate change and to new ways of dealing with it. Governments would be the ultimate source of finance for achieving climate stability, but the private sector would allocate society’s scarce resources.

A Climate Stability Bond regime would express its aims in terms that people can understand. Its explicit goal would be climate stability. If people understand what a policy is all about, they can participate more in its development, refinement and implementation. This matters hugely when, as with climate change, government will probably have to rein in activities to which we have become accustomed. Current policy discourages buy-in to the extent that it is focused on the cutting back of net anthropogenic greenhouse gas emissions, which will impose heavy, and up-front, financial costs in pursuit of nebulous, much-delayed benefits.

Climate Stability Bonds, on the other hand, have a comprehensible, meaningful goal: the achievement of broadly- meaninfully-defined,  climate stability. They would channel the market’s incentives and efficiencies into the solution of our most urgent environmental problem. But with their focus on a set of meaningful goals, rather than a supposed means of achieving them, they would also encourage greater public participation and buy-in to the solutions they generate. We need a widely supported, coherent, and efficient response to climate change. Climate Stability Bonds have all those features. Paris and its predecessor, Kyoto, have none.