The global accord to combat climate change is in ill health. This is especially obvious in Paris, the accord’s namesake and the city where it was signed in 2015.
A recent study highlights the steep challenge the Paris Agreement faces. Indeed the Global Carbon Project, which tracks the evolution of CO2 emissions worldwide, finds that emissions picked up by 1.6 percent in 2017 and are estimated to have risen by 2.7 percent in 2018. This after a three-year run where emissions had stayed flat.
The sudden upturn casts doubt on the capacity and willingness of the signatories to tackle global warming with the determination and swiftness it requires.
The report’s timing could not have been worse. It was issued at a moment when protests by the so-called Yellow Vests movement pervaded the roads and roundabouts of France, at times devolving into riots. The movement was born as a protest against new automobile controls and a tax on diesel fuel imposed by President Emmanuel Macron, though it has since evolved. Macron’s aim was to reduce carbon emissions and thereby meet his country’s commitments embodied in the Paris Agreement.
France’s lower-middle-income classes made it clear that they are not ready to sacrifice their already staggered purchasing power for the sake of a remote objective, however grandiose and essential it may be. Emboldened by public support, they moved on to request redistributive reforms to take them out of the precarious conditions in which they live.
The dynamics defining the Yellow Vests phenomenon will not stop at the French border. We are witnessing the emergence of the policy conundrum that will likely shape economic decisionmaking for the years and decades to come, namely: how to reconcile economic growth, social wellbeing, and environmental preservation.
Back to France for a moment: Macron was forced to suspend and finally abandon his policy package to fight global warming. France hosted the conference at which the climate deal was signed three years ago. That Paris still lacks a clear strategy to implement its commitments says a great deal about how difficult meeting the objectives set by that treaty is proving to be.
Macron’s recantation went beyond removing the fuel-tax rise and the stricter technical controls on CO2 emissions. To acquiesce to the expanded yellow-vest demands, the French president introduced social-welfare measures that are estimated to add 10 billion euros to France’s deficit. That was still not enough to bring the protests to a halt.
Macron’s concessions are a radical policy reversal. In the first year and a half of his presidency, he had carried out badly needed pro-market reforms meant to boost economic growth. These included removing a wealth tax that chased private capital away from France, loosening somewhat the rigidities of his country’s labor market, and paving the way for the liberalization of the state-owned rail system. Other structural, supply-side reforms were in the pipeline, but these appear to be seriously compromised.
In a less strident manner, similar backpedaling has taken elsewhere, including in Washington state and in the Canadian province of Ontario, as well as in Australia. Governments seem averse to risk growth or social peace for the sake of decarbonizing the planet.
That understandable reluctance shines light on the inability to prevent the rise of carbon emissions over the past two years. It may equally explain the lackluster results achieved by the so-called COP24, the latest UN conference on climate change, recently held at Katowice, Poland.
Katowice merely agreed to adopt a “rulebook” that sets norms to deal with issues related to financing and reporting. Contrary to expectations, the conference failed to refine the policy means to be employed so as “to hold the increase in global average temperature to well below 2C above pre-industrial levels and pursue efforts to limit the increase to 1.5C” (this is the wording agreed upon in Paris in 2015). Crucial as it is, such a task was put off and dumped into a conference that UN Secretary General Antonio Guterres is expected to organize next September.
The icing on the cake is that, even if implemented, the commitments embodied in the Paris Agreement -- the so-called “nationally determined contributions” (NDCs) -- would not bring down carbon emissions to the levels required to prevent the nightmare scenario depicted by environmentalist experts. The UN Emissions Gap Report 2018 indicates that “current NDCs imply global warming of about 3C (above pre-industrial levels) by 2100, with warming continuing afterwards”.
The growing global policy challenge is taking shape. Reconciling growth with income redistribution (social wellbeing) was a critical challenge that policymakers confronted throughout the past century. Successes were certainly registered. These include the “social market economy” of pre-unification West Germany and the Scandinavian social-welfare model. But there was no dearth of failures, either. Recall how social-welfare policies overseen by the Labour Party devastated economic growth and employment in the United Kingdom in the period prior to Thatcher’s supply-side reforms.
If squaring two objectives was already a colossal endeavor, the task will be still more daunting and hazardous now that a third policy objective is part of the puzzle. Hence the misadventures in the fight against climate change.
Such misadventures should give global players pause for thought and lead them to think afresh the manner in which global warming can be tackled. There are legitimate doubts about the effectiveness of target fixing regulated by governments -- the kind the Paris Accord calls for by requesting countries to fix targets for emission reductions. That kind of exercise has failed to live up to expectations on other occasions.
That was the case, for instance, of the Plan of Action adopted, under the aegis of the United Nations Industrial Development Organization, by governments of the world gathered in Lima in 1975. The Plan of Action stipulated that 25 percent of the world’s industrial production should be generated in developing nations by the year 2000.
The Lima Plan of Action led to nowhere and soon fell into generalized oblivion. What did successfully propel the industrialization of many developing countries were the pro-market privatization and trade-liberalization policies adopted by these countries – and which were conspicuous by their absence in the Lima Plan of Action.
In the same fashion, to reduce carbon emissions and foster investment in cleaner energy technologies, governments would be well-advised to resort not to ineffectual target-fixing, but to supply-side incentives and policies that would enable market forces to play a pivotal role in the rescuing of our battered environment.
The views expressed are the author's own.
