Year LVII, 2015, Single Issue, Page 105
The Dangers of Climate Change:
Another Reason to Build Europe Now
The world’s countries have been trying, since 1992, to stipulate binding international agreements designed to limit greenhouse gas emissions. In 1997, a first agreement was reached, although this merely amounted to an undertaking on the part of the world’s most developed countries to reduce their carbon dioxide emissions; moreover, the agreement was never ratified by the United States and the reduction targets it set have never been met. In 2009, as a result of the irreconcilable differences in the field of environmental protection between the developed, the emerging and the developing countries of the world, the Copenhagen summit came to nothing. Most recently, at the 2015 United Nations Climate Change Conference (COP21) in Paris, a total of 195 countries, plus the European Union, approved a new agreement whose aim is to keep global warming to 1.5 degrees Celsius above pre-industrial levels throughout the rest of this century. In actual fact, however, it is the approval of this agreement more than its content that can perhaps be considered the greatest and perhaps the only real achievement of the Paris meeting.
What does the future hold after COP21?
“It’s a fraud… There is no action, only promises. As long as fossil fuel remains the cheapest energy option, it will be used.” This is how American scientist James Hansen, one of the first to raise awareness of man-made climate change and to conduct studies of the phenomenon, tersely summed up the results of COP21. Hansen’s renown derives not only from his studies, but also from his position, until a few years ago, as a government advisor and, in particular, from the famous day in 1988 on which, as director of NASA's Goddard Institute for Space Studies, he presented the US Senate Committee on Energy and Natural Resources with the results of climate change studies conducted by US scientists, who had concluded that it was 99 percent certain that the global warming trend [over the previous 130 years, editor’s note] was due to a buildup of carbon dioxide and other artificial gases in the atmosphere, caused by man.
Today, more than a quarter of a century later and after 21 disappointing international climate change conferences, it is impossible not to share Hansen’s sour appraisal of the Paris conference and his frustration over the lack of political action: “It’s … embarrassing …. [to] realise as a scientist that politicians don’t act rationally”.
However, there is one question that Hansen, in delivering these judgements, overlooks, namely: is it possible in the current global power system for politicians to act rationally for the good of the world? Press coverage of the final stages of the latest conference seems to show that the answer is no. As reported by several newspapers, despite the celebratory tone that accompanied the close of the Paris meeting, the negotiations for the approval of the agreement were actually in danger of breaking down right to the very end: the various national interests and positions were simply too diverse be reconciled; in addition, the currents opposed to a possible challenging of the sovereignty of individual states were too strong, and the various delegations were too concerned with efforts to delete from the final text any reference liable to result in overly restrictive interpretations. One episode in particular is emblematic of the confrontation between the various delegations, namely the negotiation of the wording of one of the paragraphs of Article 4 of the agreement, which in the final version of the text reads as follows: “Developed country Parties should continue taking the lead by undertaking economy-wide absolute emission reduction targets. Developing country Parties should continue enhancing their mitigation efforts, and are encouraged to move over time towards economy-wide emission reduction or limitation targets in the light of different national circumstances”. Ultimately the crucial factor allowing approval of this paragraph was the use of the conditional tense should, rather than the future shall. It was only after the American and Chinese delegations had reached a compromise on this wording that the agreement could be submitted to the delegates for approval.
Decabonisation: yes, but how?
The main topic on the agenda at the Paris conference was that of decarbonisation, i.e. the reduction of energy consumption resulting from the use of fossil fuels. This term has now become a watchword for all countries, the majority of which, ahead of COP21, set out, in detail, voluntary long-term national decarbonisation programmes in which they indicated the period of time (by 2030 in the case of China, for example) within which they expect their greenhouse gas emissions to peak, after which these levels should start to be reduced. The problem is that it is not easy to understand exactly what is meant by decarbonisation, as in practice this term can mean two different things. Indeed, as used by some scientists and governments, the term refers to the change over time in the ratio of emissions to GDP, while for others it refers to the relationship between emissions and total energy consumption. Applying this second definition, which is also the most technically meaningful, it emerges that the trend of global emissions has been moving towards decarbonisation for years. Basically, thanks to evolving technology and the introduction of various national legislative measures, the decarbonisation process is already under way. The problem is that the dynamics of this trend, which can be considered almost spontaneous, are too slow: in short, the reduction targets established by the various climate change conferences will certainly not be met if decarbonisation continues at its current sluggish pace.
Many sceptics continue to argue that no climatologist can yet predict what will happen in each specific region of the world in the coming decades in the wake of the release into the atmosphere, over a period of just two hundred years, of carbon dioxide accumulated in the ground over millions of years. However, the scientific community is largely in agreement on two points: a) that both historical and current climate data show that there is a relationship between greenhouse gases and changes in climate cycles, and b) that unless there is a drastic (but currently unforeseeable) reversal of the current trend of continually increasing levels of emission of these gases into the atmosphere, we can expect to see profound global-scale changes in the climate and ocean currents over the coming decades. In addition, it has been established that if the trend towards global warming is not reversed by the middle of this century, i.e. within the lifetime of many of those who are living today, the global average temperature could, in that time, rise by between 2 and 5 degrees Celsius, which is a significant increase if one considers that the world today is only 5 degrees Celsius warmer than it was at the end of the last ice age. The most likely consequences of this would be: an increase in extreme weather phenomena, resulting in increasingly serious problems of desertification in some regions and flooding in others, as well as damage to crops and agricultural production; a return to glacial climates in some regions and climatic overheating in others; and rising water levels, a phenomenon that would have serious consequences for countries like Bangladesh, but also for coastal megalopolises such as London, Shanghai and New York, to name but a few. The rapidity and relentless succession of climate changes would seriously test the capacity of many countries to deal with the resulting, and inevitable, economic crises, and the migration of populations towards regions that still have a temperate climate.
As regards the fiscal and economic remedies that should be implemented, the scientists are in agreement. These remedies were summarised in a recent study, again led by Hansen, which was published shortly before the start of the Paris conference (and was also at the root of the decision to include, in the resulting agreement, the reference to the restriction of the rise in the world’s temperature to less than two degrees Celsius).
Science has made us well aware of the climate change-related risks faced by mankind. We have also seen the introduction of technological innovations that make it possible to envisage the phasing out of fossil fuels and their replacement with other sources of energy. Moreover, instruments able to speed up this transition have already been identified. But the problem is that the political tools for governing all this at international level are completely inadequate. What is more, while the scientific debate on the nature and possible consequences of global warming can be considered to have been concluded years ago, political debate in this field is still struggling to advance in a rational manner towards the necessary responses in terms of economic and regional planning and the creation of appropriate institutions. Unfortunately, even the involvement of major political figures, such as the former US Vice President Al Gore, and the development of well-financed international campaigns organised by leading environmental NGOs have failed to overcome this discrepancy.
The state, the market, taxation and CO2.
The point is that if we accept that urgent steps must be taken to reduce CO2 emissions into the atmosphere in order to keep global warming under control, then we must also accept that taking them demands the creation and governance, at international level, of a true global carbon market. And it is in relation to the capacity to manage this aspect of the problem that there emerge the main obstacles that are preventing the awareness of the risks faced from being translated into effective political action. These obstacles can be considered both ideological and political in nature.
They are ideological because of the still widespread and deep-rooted conviction that environmental goods should not be subject to the rules of economic incentives and disincentives that are used to govern the production and consumption of all other goods. This is a conviction shared by those who always want to see state intervention in the “free market” kept to an absolute minimum (such as the majority of pro-free market conservatives in the USA) and those who confuse condemnation of market malfunctioning with condemnation of the market itself (such as sections of the far left). And it has the effect of fueling a generic and dangerous lack of trust in political governance of the economy – a lack of trust that, without questioning the good intentions involved, even emerges in Pope Francis’s encyclical letter on environmental issues, in which, in several passages, he appears to be more concerned with denouncing economic behaviours per se than with explaining how and in what framework they might be governed.
But, as we have said, efforts to understand and tackle the problem are impeded, above all, by obstacles of a political nature. Indeed, contrary to what people too often tend to think, or are encouraged to think, the climate change problem, like other environmental emergencies, is not born of immoral or consumeristic behaviours on the part of individuals, or of the desire for excessive profits – in other words, behaviours that, beyond certain thresholds, should normally already be regulated and sanctioned by law. Instead, environmental degradation, both local and global, is primarily the result of malfunctioning of the market at various levels in a setting characterised by a lack of proper regulation, by the institutions, of the prices of natural resources. As recently pointed out by William D. Nordhaus, in a debate started in the New York Review of Books on the significance of the Pope’s encyclical, principles and maxims may educate and encourage people to behave better, but in themselves they can do little to reduce the tens of billions of tons of carbon dioxide emissions released into the atmosphere each year by seven billion people through their many modes of energy consumption: “To solve environmental problems, we need to move to the practical arts of economics and politics. When scientists and economists began studying climate change four decades ago, neither the scope of the problem nor the solutions were evident. After years of experiments with different approaches, it has become clear that the most reliable approach to bending the curve of emissions and slowing climate change is market-based instruments like near-universal carbon taxes or cap-and-trade policies that raise the price of carbon emissions. Voluntary measures, actions of people of goodwill, and even regulatory actions on cars and power plants will not come close to meeting the targets of governments and Pope Francis.”
Europe at the crossroads between paradoxes and possible solutions.
Cap-and-trade policies, in other words policies designed to limit emissions by allowing the buying and selling, by carefully monitored companies, of CO2 emission permits on the carbon market, have in fact already been launched in some parts of the world. For example, such policies have been adopted in California, Australia, Canada and, above all, the European Union, whose Emissions Trading System (ETS) was the first international system for controlling greenhouse gases and remains the most advanced. China, too, has announced its intention to start a CO2 emissions trading system, whereas in the United States, cap-and-trade markets have been created for different emissions caused by acid rain and considered harmful to heath, but not for carbon dioxide. India, in 2014, created an energy efficiency market embracing eight industries that consume more than fifty percent of the energy produced in the country. There thus exists a wide range of policies that are already implemented and, among these, those of the EU have proved to be quite effective. Europe’s ETS has helped several companies involved in the scheme to cut their emissions by as much as 10%, without this impacting on their competitiveness. Furthermore, the experience accumulated over the decade since the European control system was launched, together with data on trends in carbon emission permit prices over that time, provides a useful benchmark for establishing the limits of a system that is still based on cooperation between states, rather than regulated by an actual government.
As pointed out by an article in The Economist,“The benefit of allowing trade in carbon permits is that market participants can determine who emits what, and when. If the price signal is distorted because of uncertainty over the future of the policy, firms will consume too many permits today. What’s more, there is insufficient incentive to make crucial investments in energy-saving equipment and low-carbon R&D. This could not only considerably raise future costs of meeting the cap, but also become a self-fulfilling prophecy: if meeting the cap becomes too expensive, policymakers may dismantle or weaken the ETS. …Directfinancing by the EU Commission or member states is probably the most straightforward fix, especially for ramping up clean energy R&D which is growing but still far below early 1980s levels as a share of GDP. This extra money could be provided by the ETS itself. Many permits are still allocated for free to ensure international competitiveness. But the EU is unnecessarily generous. Ralf Martin and co-authors find that up to €3 billion could be raised annually by better targeting free permit allocation, without having much impact on competitiveness. With this money, the EU could double its spending on renewable energy technology R&D.”
Certainly, thanks to the experience accumulated over recent years, the European system of emission control has registered some successes; indeed, the European Union is responsible for only about 10% of total global emissions of greenhouse gases. That said, it is very hard to imagine that the European countries, to help achieve the targets set by the Paris conference, will be willing, or even able, to reduce this percentage to zero in the space of a couple of decades, perhaps in order to compensate for the delays on the part of other continents. Therefore, to meet these targets, systems similar to the European one, based on political control of the market and of carbon prices, should therefore be implemented immediately in the other continents. But at the same time, and in conjunction with this, Europe should and could do more. For example, to be more effective and, in turn, generate revenue over time, the ETS must, as soon as possible, a) provide for the establishment of an adequate basic minimum price for pollution permits; b) be able to count on the availability and use, in Europe and in other continents, of adequate resources to be invested in energy transition and in R&D, an activity that, in Europe, would be supervised by the European Commission, which should be assigned a proper role of government in these areas.
However, all this, to come about, will require a decisive intervention of politics in a historical phase in which, with fossil fuel prices falling all the time, it has become difficult to fix prices of pollution permits; and in which an increase in European budgetary resources and a greater role for the European Commission (particularly in the current institutional framework) seem inconceivable. The slump in the price of fossil energy in particular could have devastating implications, both for the cap-and-trade markets and for the future of our planet's climate.To meet the objective of limiting global warming to under 2 degrees Celsius in the present century it will be necessary to pursue that of reducing consumption of fossil fuels by 80%. But with the price of a barrel of oil, having been 115 dollars in June 2014, now standing at between 30 and 40 dollars, and according to some (including Goldman Sachs) looking set to drop to 20 dollars, what country is going to be willing to take on the costs of this energy transition? It had been hoped that oil shortages would help to speed up the energy transition process, but for the moment this possibility looks to have vanished. Similarly, the idea that the use of renewable energy could be boosted simply through policies of incentives at national level has also turned out to be illusory. In fact, the governments and national parliaments, anxious not to excessively penalise their own economies, have shown little interest in reducing direct and indirect incentives for the consumption of fossil fuels. As argued by Nicholas Stern, as long as governments (as well as political parties and public opinion) do nothing to dismantle national aid policies that continue to favour the use of fossil fuels (and leave scant resources for promoting R&D and the use of renewable energy), then all efforts to prevent the risks of climate change will be in vain.
As things stand, what did not happen in 2015 cannot reasonably be expected to happen in 2016 either. The blame for this lies partly with Europe, which has proved unable, and unwilling, to propose an adequate system of governance and bolder European-wide policies in response to the climate change problem. And in so doing, it has failed to assume, in the international arena, the task of balancing and influencing the other major world areas.
To make the world safer from the climate point of view, it is not enough to develop the policies, admittedly good and necessary, that already exist; what is needed is the establishment of a framework of governance that overcomes the current impasse and allows proper management of the problems facing the world. The world’s future is trapped in a paradox: global prosperity depends on the success of globalisation, but at national level this phenomenon is producing economic and political reactions that prevent the possibility of pursuing globalisation strategies, while at global level it is producing unchecked environmental changes.
With Europe’s help, a decisive step to overcome this situation could be taken. Europe is the area that, for decades, has been the setting of the world’s most advanced process of integration between states; it is also the area where the most successful policies of coordination and cooperation at international level have been implemented. For this reason, it is also the continent that has seen the greatest evolution of the struggle between political and social forces in favour of extending the sphere of government to supranational level and those that, clinging to the now illusory idea of national sovereignty, oppose this advance. It is a struggle that, in practice, is reflected in the attempt, by the former, to complete the monetary union with economic and political union and to reorganise, on this basis, power relations between the EU states and European institutions.
The possibility of building a more cooperative system of governance between the great continental regions – a system that is fairer and safer and more rational – depends, among other things, on the outcome of this struggle.
 James Hansen, father of climate change awareness, calls Paris talks 'a fraud', The Guardian, 12 December, 2015. http://www.theguardian.com/environment/2015/dec/12/james-hansen-climate-change-paris-talks-fraud. Equally cutting was the comment, entitled COP21: The Toothless Paris Agreement, published on 18 December 2015 by the Institute for Defence Studies and Analyses (IDSA) in India. http://www.idsa.in/idsacomments/cop21-paris-agreement_dadwal-malaviya_181215.
 Global Warming Has Begun, Expert Tells Senate, The New York Times, 24 June, 1988.http://www.nytimes.com/1988/06/24/us/global-warming-has-begun-expert-tells-senate.html?pagewanted=all.
 Marzio Galeotti and Alessandro Lanza, Si fa presto a dire “meno carbonio”, lavoce.info, 4 December, 2015. http://www.lavoce.info/archives/38784/meno-carbonio-nella-nostra-energia-cosa-non-ha-funzionato
 J. Hansen et al., Ice melt, sea level rise and superstorms: evidence from paleoclimate data, climate modeling, and modern observations that 2 °C global warming is highly dangerous, Atmospheric Chemistry and Physics (ACP), 2015. See, for example, the following passages: “The first order requirement to stabilize climate is to remove Earth’s energy imbalance … If other forcings are unchanged, removing this imbalance requires reducing atmospheric CO2 from ~400 to ~350 ppm … The message that the climate science delivers to policymakers, instead of defining a safe “guardrail”, is that fossil fuel CO2 emissions must be reduced as rapidly as practical [which] implies a need for a rising carbon fee or tax, an approach that has the potential to be near-global, as opposed to national caps or goals for emission reductions. Although a carbon fee is the sine qua non for phasing out emissions, the urgency of slowing emissions also implies other needs including widespread technical cooperation in clean energy technologies”. http://www.atmos-chem-phys-discuss.net/15/20059/2015/acpd-15-20059-2015.pdf.
 James F. Tracy, CO2 and the Ideology of Climate Change: The Forces Behind “Carbon-Centric Environmentalism”, Global Research, Centre for Research on Globalization, 12 November 2013. http://www.globalresearch.ca/co2-and-the-ideology-of-climate-change-the-forces-behind-carbon-centric-environmentalism/5342471.
 Cf., in this regard, the following paragraphs of Pope Francis’s encyclical letter Laudato Sì – On Care for Our Common Home (http://w2.vatican.va/content/francesco/en/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si.html):
- “Even as the quality of available water is constantly diminishing, in some places there is a growing tendency, despite its scarcity, to privatize this resource, turning it into a commodity subject to the laws of the market.” (para. 30);
- “…economic powers continue to justify the current global system where priority tends to be given to speculation and the pursuit of financial gain, which fail to take the context into account, let alone the effects on human dignity and the natural environment. Here we see how environmental deterioration and human and ethical degradation are closely linked. Many people will deny doing anything wrong because distractions constantly dull our consciousness of just how limited and finite our world really is. As a result, “whatever is fragile, like the environment, is defenceless before the interests of a deified market, which become the only rule.” (para. 56);
- “There are no uniform recipes, because each country or region has its own problems and limitations. It is also true that political realism may call for transitional measures and technologies, so long as these are accompanied by the gradual framing and acceptance of binding commitments. At the same time, on the national and local levels, much still needs to be done, such as promoting ways of conserving energy. These would include favouring forms of industrial production with maximum energy efficiency and diminished use of raw materials, removing from the market products which are less energy efficient or more polluting, improving transport systems, and encouraging the construction and repair of buildings aimed at reducing their energy consumption and levels of pollution. Political activity on the local level could also be directed to modifying consumption, developing an economy of waste disposal and recycling, protecting certain species and planning a diversified agriculture and the rotation of crops. Agriculture in poorer regions can be improved through investment in rural infrastructures, a better organization of local or national markets, systems of irrigation, and the development of techniques of sustainable agriculture. New forms of cooperation and community organization can be encouraged in order to defend the interests of small producers and preserve local ecosystems from destruction. Truly, much can be done!”(para. 180).
 William D. Nordhaus, The Pope & the Market, New York Review of Books, 8 October, 2015. http://www.nybooks.com/articles/2015/10/08/pope-and-market, and The Pope & the Market: An Exchange, New York Review of Books, 19 November, 2015. http://www.nybooks.com/articles/2015/11/19/pope-and-market-exchange.
 Arthur Van Benthem, Ralf Martin, Europe’s carbon-trading system is better than thought, and could be better still, The Economist, 11 December, 2015. http://www.economist.com/blogs/freeexchange/2015/12/schr-dinger-s-emissions-trading-system.
 The price of natural gas, which in many countries had been chosen as an alternative energy source to oil, is also plummeting (liquefied gas costs 70% less than in 2013), putting it in competition with renewable energy sources, the use of which would help to further reduce CO2 emissions. To make matters worse, the increased production of shale gas in the US – which has started exporting oil again –, together with the abundance of coal, is helping to keep prices of fossil energy down.
 The authors of the 2015 IMF working paper cited by Stern (David Coady, Ian Parry, Louis Sears, and Baoping Shang, How Large Are Global Energy Subsidies, https://www.imf.org/external/pubs/ft/wp/2015/wp15105.pdf) quantified the subsidies paid by states for the extraction and use of fossil fuels, taking into account both direct ones, i.e. incentives (such as those serving to encourage the use of diesel fuel in Europe), and indirect ones, i.e. non-taxation (as in the case of coal, which currently costs about $ 50 per ton, but should cost four times that amount if one considers the damage it does). They found that the value of these subsidies was a staggering five thousand billion dollars, or 6% of world GDP, and that the G20 nations contribute about 80% of this total. The study concluded that “Eliminating post-tax subsidies in 2015 could raise government revenue by $2.9 trillion (3.6 percent of global GDP), cut global CO2 emissions by more than 20 percent, and cut pre-mature air pollution deaths by more than half.” See also Nicholas Stern, Action on fossil fuel subsidies must be accelerated, Financial Times, 13 November, 2015, http://blogs.ft.com/the-exchange/2015/11/13/action-on-fossil-fuel-subsidies-must-be-accelerated.