Economic reality is a curious thing. The term has a solid, reassuring sound. To go against it would be very foolish and immature. But what exactly is it? It is certainly unpredictable, even fickle, as we saw during the credit crisis when boom - real enough at the time - turned into the alternative economic reality of bust with bewildering rapidity. Far from being something fixed and immutable (to which we must adapt), it is shaped entirely by our actions and choices. We create it.
Still, costs are not to be ignored. Given the choice of doing something cheap or something expensive to produce a given outcome, the cheapest option is generally preferable. That way there is more money left for other things - such as schools, hospitals and pensions. So our response to climate change should not impose unnecessary costs. It also needs to be effective. That is, it has to work (unlike the current Kyoto system),
or we may as well not bother.
Seen in these terms, there is a strong argument for geo-engineering. We should be researching geo-engineering options to maintain an equable planetary temperature. It may be that we have already passed "tipping points" in the climate system that will cause additional runaway global warming no matter what we do in reducing our emissions. Higher temperatures will make forests burn more easily, releasing extra CO2 into the atmosphere, while warmer oceans will absorb less. Arctic lakes, bogs and seabed sediments threaten to release billions of tonnes of methane - a greenhouse gas 60 times more powerful than CO2 - over the next 20 years. We need a geo-engineering Plan B just in case things do spin out of control.
But we must not put too much faith in geo-engineering. Since we have not yet adequately researched the various proposed solutions, we do not know how effective they would be, or how expensive, or what unexpected results they might produce. Rising CO2 concentrations in the atmosphere are not just warming the planet: they are making oceans more acidic. This makes it harder for marine organisms to build calcium carbonate shells and will cause the disintegration of coral reefs, widespread extinctions and unpredictable changes to ocean ecosystems. Prudence suggests that emission reductions should remain at the core of our strategy to tackle global warming.
Should we make those cuts immediate and drastic? Yes, we should, but not both at once. Worthwhile emission cuts can be made immediately, at a low or even negative cost, simply by reducing the amount of energy we throw away. This will make us richer, not poorer. We need deep reductions in deforestation: burning forests and peatlands imposes high environmental costs for relatively small economic benefits, and could quickly be halted by paying forested countries a reasonable "carbon rent" for conservation. And yes, we need drastic cuts in emissions from fossil fuels in industry, transport and power generation, but these can be realised over coming decades.
A carbon tax is a rational approach to limiting these emissions, since it both creates incentives to move towards low-carbon solutions and raises money to invest in solutions. Even a low carbon tax of £3 per tonne of CO2 would represent an improvement on the present position, and could indeed finance significant investment in renewable technologies. But we need to go further. Significant emission cuts can be delivered most efficiently by 2050 if we avoid sinking investment capital into long-lived infrastructure based on fossil fuels (coal-fired power stations, for example, with a typical lifetime of over 70 years), and redirect it into low-carbon technologies.
We need to bring about disruptive reductions in the cost of clean technologies, especially in renewable power generation and storage. And experience tells us that such price collapses arise from mass production engineering, rather than from scientific research programmes. This is
the message of the VCR, the DVD, the mobile phone and now the compact fluorescent light bulb, and this is the model to apply to bring about our clean technology revolution.
Significant sums are needed to fund poor countries as they seek to adapt to climate change and the floods, droughts, new diseases, natural disasters and sea-level rises that it will bring. We need to finance the "carbon rent" scheme to pay tropical countries to conserve their forests, peatlands and other ecosystems, and restore them where degraded. This all suggests the need for a carbon tax more like £20 per tonne of CO2. This carbon tax should ideally be levied "upstream" in the fossil fuel production process - reducing the cost of collection, limiting opportunities for fraud and creating a level global playing field for international competition.
The geo-engineering plans are not bad; indeed they are far better than anything likely to emerge from the Copenhagen climate conference in December. But they are still an insufficient response that reminds me of an old Hom Sap cartoon in Private Eye of placard-waving demonstrators chanting: "What do we want? Gradual change! When do we want it? In due course!"
Oliver Tickell is the author of "Kyoto2" (Zed Books, 2008), which sets out an alternative framework for global climate governance
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