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January 2017, Volume 23, Number 1

Climate Change

The Paris Agreement reached in December 2015 between 195 countries to combat climate change went into effect November 11, 2016, after 94 countries representing two thirds of global emissions signed it. The goal of the Paris Agreement is to limit the increase in global temperatures over pre-industrial levels to two degrees Celsius by having countries develop plans to reduce carbon emissions.

Achieving this two-degree goal requires leaving two-thirds of the global coal, oil and natural gas reserves underground. The world uses 95 million barrels of oil a day, including 20 million barrels a day in the US.

Experts disagree over whether oil use is likely to continue rising with economic growth or fall as more countries implement policies to reduce carbon emissions. Some oil firms are emphasizing cleaner natural gas, and some NGOs urge a return to nuclear because it does not emit carbon.

Under the Paris Agreement, each country develops its own carbon-reduction plans, and these nationally determined contributions (NDCs) to reduce carbon emissions are reviewed by all countries. The NDC mechanism is meant to provide benchmarks for internal and peer pressure to help governments to set ever more ambitious goals.

Most economists favor a carbon tax that raises money from emitters but allows them to decide how best to reduce their emissions. Carbon taxes have not worked as expected, with the price per ton of emissions falling from $9 in December 2015 to $6 in November 2016. The expectation was that a rising price of permits to emit carbon would spur firms to reduce their emissions.

NGOs concerned about global warming acknowledge that the review language of the Paris Agreement is weak: country plans to reduce carbon emissions "shall be implemented in a facilitative, nonintrusive, non-punitive manner, respectful of national sovereignty, and avoid placing undue burden on parties."

Donald Trump has cast doubt on the impacts of human activities on climate change, and threatened to withdraw the US from the Paris Agreement. During the campaign, Trump said that the science behind global warming was a Chinese plot to undermine the US economy.

California enacted a law in 2015 to reduce carbon emissions 40 percent below 1990 levels by 2030, and Governor Brown says the state will implement SB 350 regardless of what the Trump administration does. However, the state's businesses could be at a competitive disadvantage if energy and other costs rise in California and fall in other states.

Many NGOs favor electrification, which means producing power in plants and transmitting it over wires to batteries for transportation, heating and other uses. They assume it is easier to control emissions from a relatively few power plants than from many autos and homes. Better and cheaper batteries to store electricity, more efficient ways to make biofuels, and higher prices for the most emitting fuels such as coal could speed the transition to a low-carbon economy.

Many NGOs urge governments to both reduce carbon emissions and adapt to global warming with new crops that can thrive with droughts or more rainfall, new safeguards from coastal flooding, and strategies to deal with new disease risks as insects spread their range.

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