Can the wealth of nations prevent climate catastrophe?
Even before the recent IPCC report, leaders and commentators have been clamouring for more aggressive targets and commitments at COP 26, the upcoming UN climate conference in Glasgow. What we needed then and now is action, not further diplomacy, nor increasingly difficult target-setting and the loose commitments, as if we are not playing for real stakes!
The target-setting process started with the Kyoto protocol 25 years ago and did well to get the ball rolling. Since then, targets have become progressively more difficult to set. With so many prior targets still not hit, creating further objectives is likely to have a net-zero effect.
With time clearly running out, those who want us to deal effectively with the dynamics of a worsening climate should rather promote a market-driven process (of which carbon pricing is only one part). We must link incentives to the impacts and effects of a changing climate that we can all clearly see, rather than continuing to rely on a quasi-planned economy process that is leading us toward climate catastrophe.
For now, the most pressing concern is that of disconnect: between global and national climate politics; between the holistic, bigger picture and the on-the-ground, national politics required to turn commitments into action. The challenge in translating targets into climate crisis action is that the current narrative is framed around a purely collaborative and egalitarian notion of “fairness”. This is unfortunately and evidently, supporting a delay in action due to the differing interests of countries, and as such very little is getting done. This is because, although many in society are willing to make contributions and sacrifices to change course, others (free riders) think only of how to take advantage of a system in transition. This is the situation we find ourselves in now, this is what is truly unfair: the exploitation of those who are trying to make a difference.
Therefore, climate politics cannot only be about collaboration and fairness. It must also be about competition, about who puts in the most effort and makes the most difference in the marathon to prevent a disastrous future. It must be about our carbon impact, what technologies are invested in and deployed, how many forests are saved and rehabilitated, who adapts their lifestyles the best and what portion of our oceans are protected.
These competitive incentives will enable us to act in a coordinated way, with each nation motivated to bring their best capacities and capabilities; and innovate those that do not yet exist. It is only economics at a global level that can create the conditions for this essential and complex task. It is capitalism’s turn to step up and play its headline role: those who contribute more to the solution should get rewarded more!
Embedding this principle would upgrade what many refer to as a “fair” transition into what is really needed: a fairer playing field — one on which all countries are able to play an active role, including developing nations who have contributed least to the problem and yet will suffer the worst consequences. A more level playing field would reduce our reliance on polarising value systems to determine rewards and levels of support, for example: do oil and coal workers get rewarded more than sustainable farmers or energy innovators? True fairness is about giving everyone an equal chance, not an equal reward — this is where individual actions matter.
We should be aiming for a world where countries are competing against each other on outcomes (such as emissions) and also collaborating to enable these outcomes (trading goods, services and technology) in a race to avert catastrophe. This environment would simultaneously create the mandate for governments to take the actions they need to transform their economies and uplift their people. We know this approach will work, and that it can be designed to build-back-better. We know this because it was capitalism, with a focus on externalising environmental impacts, that got us into this mess. It can only be capitalism — ready today and erupting with firepower — that gets us out of it. The rewards for winning this race are great and can be shared fairly. Like with any sport or game, nobody wants to watch an unstructured free for all — like a kindergarten playground! To make the game engaging we need the rules of the game at a global level to be clear, and a common way to measure performance — which I am suggesting must be based on economics and trade. Only then can each country select their best teams’ in this Olympic effort, competing for their nation’s interest and in so doing protect our collective humanity.