How to put the world back on the net zero path within 18 months
2023 has seen several climate records fall. Even if there are legitimate questions over how the figures are calculated and how far back in time any analysis can credibly go, the scientific community is clear on what is behind the spike in global surface and ocean temperatures. A report published by the Grantham Institute at London’s Imperial College found that recent heatwaves in the Northern Hemisphere would have been ‘virtually impossible’ without human-induced climate change.
All of which increases the pressure on governments and businesses to act. The next 18 months are therefore crucial.
1. A carbon tax agreed worldwide that charges carbon polluters at least USD100, and possibly USD150 for each tonne of carbon dioxide (or equivalents) emitted to the atmosphere. This should be applied at the point of production of coal, gas and oil and also be paid by agriculture for its emissions of methane and nitrous oxide and cement for the carbon dioxide generated by its production. This is clearly politically extremely difficult, and incompatible with the modus operandi of the US's Inflation Reduction Act. But it is absolutely vital to secure a market-based transition to a low carbon world.
2. Financial redistribution so that the costs of climate action are not borne by bottom half of the income distribution. We will not be able to achieve a fast enough transition if the costs of carbon reduction are borne by the less well-off. So, for example, all the carbon tax revenues should go in direct payments to lower income households and businesses. It also means providing developing economies with the funds they need to meet the cost of the clean energy transition.
3. Sustained capital spending, led by public bodies, targeting the transmission and distribution electricity grids. In my research for a book on the biggest problems we face in the energy transition, I was surprised by how inadequate most power grid networks are around the world and how weak the incentives are to invest in new infrastructure. If we are to ‘electrify everything’, we need to expand the amount of renewable generation several fold, and then distribute that power to industry, heat pumps and electric vehicles. We cannot do that without trillions of dollars of spending on the grids. That investment needs to start flowing now.