The Answer to the Climate Problem Is Innovation—Not Empty Promises

On Tuesday, China and the U.S. made a joint statement on their intentions to limit their CO₂ emissions. This took part of the media by storm. CNN told us that “U.S. and China reach historic climate change deal.” The Los Angeles Times wrote it was a “landmark climate deal” and Huffington Post saw “Ambitious Climate Change Goals.”

But this is mostly wishful thinking, and worse, it is starting to look an awful lot like the original “solution” to global warming, the Kyoto Protocol, which consisted of mostly broken promises.

The actual U.S.-China statement hedges itself to make no new obligations: “The United States intends to achieve an economy-wide target of reducing its emissions by 26% to 28% below its 2005 level in 2025 and to make best efforts to reduce its emissions by 28%. China intends to achieve the peaking of CO₂ emissions around 2030 and to make best efforts to peak early and intends to increase the share of nonfossil fuels in primary energy consumption to around 20% by 2030. Both sides intend to continue to work to increase ambition over time.”

China is essentially just promising what it was already going to do. In the International Energy Agency’s baseline scenario, China would see its CO₂ emissions peak in 2030. Even if China were not going to add a single new climate policy from today to 2030, the energy agency expects China would almost peak its emissions in 2030. And it will peak at about 10 to 12 gigatons, or 25% to 50% higher than today, where China’s emissions make up more than a quarter of the whole world’s CO₂ emissions.

Many, including CNN, also said that China will get “20% of its energy from renewable resources by 2030.” But they promised only nonfossil fuels — and promised little they wouldn’t already be doing. In the baseline scenario of the IEA, China would get 18% of its energy from nonfossil fuels. However, solar and wind will make up only a bit more than 3%, whereas the rest comes from 5.5% nuclear and 3% hydro. The biggest part will come from 6% wood, which by 2030 will still power the cook stoves of more than 240 million Chinese, contributing to devastating indoor air pollution, likely killing more than half a million people each year.

In many ways, these promises resemble the one the Chinese made leading up to the Copenhagen negotiations in 2009. Here they promised they would emit 40% to 45% less CO₂ per dollar of GDP by 2020, and back then it was similarly hailed as a big breakthrough. However, China was also then promising to do essentially business as usual as projected by the IEA.

The target that Obama is offering is, on the other hand, a real and significant reduction. Without any new climate policies, the shale-gas revolution will see U.S. emissions reduced by 11% in 2025, so getting an extra 16 percentage points would require a lot of new, stringent climate policies. But clearly Obama lacks any legislative basis for making such a promise.

In fact, this is reminiscent of Al Gore going to Kyoto in 1998. Back then, a Senate resolution with 95 votes to zero had already established that the U.S. would not ratify the Kyoto Protocol. Consequently, the Clinton Administration never submitted Kyoto for ratification, but it still promised a 7% cut by 2008–12. In fact, the U.S. saw a 9% increase in its CO₂ emissions over the period — ironically 16 percentage points more, just like Obama is now promising.

For the past 20 years the main solution to global warming seems to have been grandiose promises of reductions that rarely materialize. Remember Canada promising a 6% reduction at Kyoto but delivering a 24% increase?

There is a real climate problem, and climate economics shows that there is a smart way to fix it. If we invest dramatically more in green innovation we can eventually solve the problem. If we can innovate the price of green energy down below fossil fuels, everyone will buy it, including the Chinese and the Indians. The Americans have spent $10 billion on research into shale gas, which has now spurred a great switch from coal to cheaper and less polluting gas. This has reduced U.S. emissions by about 300 million tons of CO₂ per year, while making the U.S. about $200 billion more in GDP. Compare this with the European approach, which has cut just 91 million tons of CO₂ with solar and wind, but costs $40 billion in subsidies each year.

If we spent $100 billion per year on green research, it would likely cut long-term emissions dramatically, and every dollar spent would do about $11 worth of good.

Yet, the China-U.S. agreement seems to suggest that the world is rather going to replay the Kyoto strategy of making empty promises. Kyoto lost us 20 years, and if we’re not careful, we may again in 2030 be standing with little progress. It is time the world took climate change seriously and focused on green R&D instead.