The United Nations climate change agenda is coming to an end with the recent announcement of a new agreement between China and the US. It’s been a long time coming for this global environmental movement, but does it do enough to actually help the planet?
The wsj commentary is a political and social commentary. It discusses the climate-change agenda going out with a bang, in which it means that it will be gone for good.
On July 12, a Nissan Leaf gets refueled at an electric car filling station in Paris.
Photo courtesy of Bloomberg News/Nathan Laine
This week is meant to be a watershed moment in the history of climate change. The European Union announced a massive new plan to reduce carbon emissions, while China launched an emissions-trading system and the United Kingdom unveiled a plan to green transportation.
Except that this is all occurring at a time when climate politics seem to be shifting rapidly and significantly in many areas, and not in the way that environmentalists had anticipated. To put it another way, voters have begun to notice how much they will individually have to pay to decrease carbon emissions, and they do not like it.
It’s an astonishingly widespread occurrence. A vote to put a gasoline tax and a charge on airline tickets was rejected by the Swiss last month. The British cabinet, which proposed significant new carbon limits for the transport sector on Wednesday, is also divided over previously announced proposals to prohibit gas-fired home heating and compel landlords to improve energy efficiency in rental properties.
The EU hadn’t even announced its major new climate package this week when fierce lobbying from virtually everyone erupted in opposition. It’s no surprise that French authorities are especially concerned about the threat. Grassroots demonstrations over a fuel tax increase that began in 2018 have thrown President Emmanuel Macron’s agenda off for the better part of three years.
Meanwhile, climate-conscious shareholders in Japan have recently finished a disappointing (for them) season of annual shareholder meetings. At all three firms where activists suggested them, Mitsubishi UFJ, Sumitomo, and Kansai Electric Power, resolutions codifying strong corporate carbon goals were rejected.
This comes after the news in April that Japan’s Government Pension Investment Fund, the world’s biggest with $1.6 trillion in assets under control, will quit fashionable ESG investment. (The acronym ESG stands for “environmental, social, and governance.”) In an interview with Bloomberg, Kenji Shiomura, senior director of the fund’s investment strategy department, stated that the approach was a financial loss and that “we can’t compromise profits for the purpose of purchasing environmental companies or ESG firms.” Given Japan’s looming retirement crisis and labor scarcity, Bloomberg’s correspondents had no choice but to admit that “pensions are a more delicate topic than climate change.”
Greta Thunberg’s star shone brightly two years ago, and campaigners believed the public had reached a tipping point in favor of climate action. What went wrong?
Climate activists are mostly victims of their own success. Carbon intensity in industrialized economies has decreased significantly in recent decades for a number of reasons, some of which are market-based and benign, and others which are regulatory and costly. According to one estimate, the United States currently emits 0.28 kilogram of carbon dioxide for every dollar of GDP, down from more than 0.8 kilogram in the 1970s (using constant 2010 dollars). In the same time period, Britain’s emissions per dollar of GDP fell to about 0.13 kilogram from over 0.6 kilogram, while Japan’s fell to 0.18 kilogram from 0.36 kilogram.
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This implies that future reductions in emissions in these economies will be considerably more difficult and expensive to achieve. Note how, despite fanciful claims about the economic advantages of electric vehicles or green employment, getting from here to there always appears to require untold billions of dollars in taxpayer-funded Green New Deals and a few hundred dollars more on your home heating bill.
This simply serves to remind Western voters of all the other areas of the globe where carbon intensity has not decreased as much, such as China, India, and Russia, where carbon emissions per dollar of GDP are nine to ten times higher than the lowest-emitting market economies.
These nations simply need to import carbon-reduction technology that already exist. Beijing’s new emissions-trading scheme is very definitely an effort to compel obstinate businesses to do so, if for no other reason than to improve overall economic efficiency. Such a shift will be expensive, and will have to be paid for either via increased consumer prices on Chinese goods or through direct government subsidies. However, it is almost likely less expensive than rich nations’ present plans to spend a few trillion dollars inventing a completely new economy in order to accomplish very minor carbon reductions.
Such realities are unlikely to intrude on the COP26 conference in Scotland later this year. The slew of major new green projects announced this week indicates that the climate agenda will go out with a boom rather than a whimper.
However, when prices rise into the stratosphere, one may guess once again on how long it will be until gravity returns. When that happens, expect the climate-change industrial complex to invent an excuse to declare success based on advances already made—before any other foolish politician has to ask people to spend money they don’t want to give up.
Emmanuel Macron welcomed Joe Biden to “the club” in Wonderland. He was referring to the European social welfare state. Image credit: Reuters/Kevin Lamarque
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The herd immunity wall street journal is a publication from the Wall Street Journal. It covers news on climate change.
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