The Paris agreement approved by 195 countries contained an unexpectedly ambitious goal: to keep global warming within 1.5°C above pre-industrial levels. Scientists have been critical of the text’s failure to articulate how to reach that goal, and some are not optimistic that it is even feasible. So we asked a number of economists what they thought were the most urgent priorities to get the world on track towards that objective. Here are 8 ways to make the economic transition:
1. “Close down the world’s coal industry, close down the world’s coal industry, close down the world’s coal industry,” are the three priorities of Paul Collier, Professor of Economics and Public Policy at Oxford University and Director of the International Growth Centre. Everyone concurs that the most pressing action is to say good bye to fossil fuels. As almost 25% of total CO2 emissions come from coal, “any successful strategy for combating global warming will have the closure of coal as a major consequence,” he explains in a study.
2. “Divest from fossil fuels to invest massively in renewables and soil restoration as an essential carbon sink,” says Jean Gadrey, Professor Emeritus at the University of Lille 1. He warns, however, that investments for the climate can only materialise “reducing social inequalities and regaining public and political control of finance, currencies and credit.”
3. “Scrap fossil fuel subsidies and increase clean energy subsidies where renewables generation is not yet competitive,” argues Marc Stears, Chief Executive of the New Economics Foundation in London. The fossil fuel industry now benefits of some USD550 billion subsidies, more than four times those to renewable energy, according to theInternational Energy Agency.
4. “Put a meaningful price on carbon via energy taxes or emissions caps,” adds Simon Buckle, OECD’s Head of Climate Change. Buckle and Stears also call for more investment in research and development and for support to developing countries, to speed up innovation and the deployment of clean technologies.
5. “Treat oil companies like tobacco companies and withdraw society’s moral support for them with great urgency,” says Rob Hopkins, co-founder of the Transition Network, a charity supporting community projects in response to climate change and economic instability.
6. “Create moral pressure,” argue Collier and Anthony Venables in a recent study. Although there is a recipe for a cleaner energy sector, bringing the ingredients together is not going to be easy. The problem is not only creating policies to pace the transition, but also attributing responsibility for action. This is why Collier and Venables have conceived a ‘theory of moral pressure’, with a sequence of responsibilities that will lead to closing down coal, starting from high-income countries like Germany, the USA and Australia.
7. “Find new ways to value progress, thinking of our economy in the same way we think of our children,” says Hopkins. “Just to aim for something to be larger each year is not enough. We do not wish that for our children. We want them to grow to a reasonable size, but then to grow in other ways, to become wiser, kinder, more skilled, more caring, happier.”
8. “Set up an agency to connect all voluntary, private and public activities undertaken after Paris. Not another complex mechanism, but a facilitator to make sure that things really happen,” suggests Inge Kaul, Adjunct professor at the Hertie School of Governance in Berlin and former Director of UNDP’s Office of Development Studies. “Why do we expect that a complex global public good like the climate can be fixed without anyone bringing the pieces of the puzzle together?” she asks. “During the Ebola outbreak the World Health Organisation appointed a manager so that all actions could fit together to control the epidemics. We should have the same for climate change given its urgency.”