Climate Change and Economic Hegemony

Since the Industrial Revolution in the late 1800s, the world has already warmed by one degree Celsius and human activity continues to raise average global temperatures. Every degree above pre-anthropocene levels has dire consequences that are felt around the world. A report by the United Nations Intergovernmental Panel on Climate Change (IPCC)1 released in October of 2018, which corroborated 6,000 independent studies on the issue, confirmed that climate change demands immediate global attention. The scientific community agrees that left unchecked, the temperature will continue to rise and lead to increasingly frequent climate-related catastrophes. A special coverage article by The New York Times, “Losing Earth: The Decade We Almost Stopped Climate Change”2, outlines the increasing levels of irreparable destruction prescribed with each degree the climate warms. An increase as small as two degrees means the extinction of the world’s tropical reefs, sea-level rise of several meters and the forced abandonment of the Persian Gulf due to uninhabitable temperatures. The consequences of each degree are increasingly severe until ultimately, at five degrees, scientists warn about the end of human civilization.

With so much at stake, it is vital that the international community take action. The Paris Agreement3, a multilateral agreement facilitated by the United Nations that focuses on actions that can be taken to mitigate the effects of climate change, was signed by 175 nations4 on Earth day in 2016. Although it is one of the most comprehensive attempts at combating climate change to date, the Paris Agreement was designed to function primarily through the promotion of voluntary action by individual nations. It is not difficult to imagine then, that some countries have chosen not to take action as their economies are closely tied with some of the practices that are most responsible for pollution. Among them is the United States. President Donald Trump justified abandoning the agreement5 because of the “draconian financial and economic burdens the agreement imposes on our country.” Part of Trump’s campaign platform was rooted in protecting the jobs in the coal industry and a buzzword for him became “clean coal”6 meaning an effort to reduce pollution as a result of coal production. This short-sighted vision overlooks the fact that attempting to limit the environmental effects of coal is largely ineffective and equally as expensive as investing in alternative energy sources which would help the US be a leader in climate activism.  The World Bank emphasizes that when it comes to climate change, “the costs of inaction are far higher”7 than those associated with investing in positive change.

Where the US is stepping down, China is stepping up. One reason China is motivated to take action when the US is not lies in the fact that China, infamous for its unbreathable air, has already paid dearly for its dependency on coal. The International Energy Agency in Paris reports that fossil fuel emissions in China have close to tripled since 2000. This is mainly a reflection of China’s large population as per person emissions are lower than those in the US. In 2009, 16 of the world’s 20 most polluted cities8 were in China. Today only the bottom four cities on the top 20 list are in China because the government has been investing in sustainable technology such as electric cars, wind and solar energy, as well as implementing emission reducing legislation.

In 2013 and 2014, the Chinese government encouraged several pilot cap and trade programs that generated close to $680 million in the 2017 fiscal year. In December of 2017 China announced a new plan9 for an even more comprehensive nationwide market focusing on their power generation sector to trade emissions credits that allow businesses to buy and sell the credits that allow them to emit planet-warming greenhouse gases. Cap and trade programs10 are one of the most talked about ways to combat climate change using the free market. They incentivize business that use clean energy by limiting the total amount of emissions allowed to all companies and then allowing those that have not used all of the emissions they are allotted to sell them to companies that continue to pollute. Hypothetically, this incentivizes companies to go green by ensuring that eco-friendly policies save them money. The challenge with a cap and trade program is closing the loopholes so that heavy polluters cannot skirt around the issue and do, in fact, take initiative to limit emissions. Though there is room for some refinement, the existing measures are indicative of China’s awareness and sense of urgency around the issue of climate change.

China’s shift away from coal is not only environmentally responsible, it is also economically shrewd as they are setting themselves up for financial success for decades to come and effectively leaving the United States to wallow in what remains of their 20th century glory. The World Health Organization has acknowledged China’s efforts in curbing pollution and hopes that other nations will take a cue from their actions. In order to stay economically relevant, nations need to invest in sustainable energy sources. The Visual Capitalist cites the “the Green Revolution” as one of the 8 major forces shaping the future11 of the global economy as well as the fact that by 2040, a total of $10.2 trillion will be invested in new power generation capacity worldwide. Nations that chose to live in denial of their impact on climate change are also in denial of the fact that they are simultaneously becoming relics from a pre-climate change era.

It’s time for nations around the world to follow China’s lead and start thinking about negative externalities regardless of the scale of the project; inaction only exacerbates the issue. Each day is an opportunity for nations to redefine themselves and prepare for the future. As there are no binding international climate treaties already in existence, we don’t have the privilege of taking the time to reach a global agreement on what actions should be taken. Individual nation states must act rapidly and prudently to lead the charge by investing in sustainable practices by being practical and responsible inhabitants of Earth in order to both prevent further environmental damage and stay economically relevant.

 

  1. Watts, Jonathan. “We Have 12 Years to Limit Climate Change Catastrophe, Warns UN.” The Guardian. October 08, 2018. Accessed December 30, 2018. https://www.theguardian.com/environment/2018/oct/08/global-warming-must-not-exceed-15c-warns-landmark-un-report.
  1. Rich, Nathaniel. “Losing Earth: The Decade We Almost Stopped Climate Change.” The New York Times. August 01, 2018. Accessed December 30, 2018. https://www.nytimes.com/interactive/2018/08/01/magazine/climate-change-losing-earth.html.
  1. “What Is the Paris Agreement?” UNFCCC. Accessed December 30, 2018. https://unfccc.int/process-and-meetings/the-paris-agreement/what-is-the-paris-agreement.
  1. “List of Parties That Signed the Paris Agreement on 22 April.” United Nations. Accessed December 30, 2018. https://www.un.org/sustainabledevelopment/blog/2016/04/parisagreementsingatures/.
  1. Roberts, Timmons, and Angelica Arellano. “Is the Paris Climate Deal Legally Binding or Not?” Climate Home News. November 02, 2017. Accessed December 30, 2018. http://www.climatechangenews.com/2017/11/02/paris-climate-deal-legally-binding-not/.
  1. Grossman, David. “How Does Clean Coal Work?” Popular Mechanics. April 02, 2018. Accessed December 30, 2018. https://www.popularmechanics.com/technology/infrastructure/news/a27886/how-does-clean-coal-work/.
  1. World Bank. 2016. “High and Dry: Climate Change, Water, and the Economy.” Executive Summary. World Bank, Washington, DC. License: Creative Commons Attribution CC BY 3.0 IGO
  1. “Worldwatch Institute: 16 of World’s 20 Most-Polluted Cities in China.” VOA. October 31, 2009. Accessed December 30, 2018. https://www.voanews.com/a/a-13-2006-06-28-voa36/397920.html.
  1. Bradsher, Keith, and Lisa Friedman. “China Unveils an Ambitious Plan to Curb Climate Change Emissions.” The New York Times. December 19, 2017. Accessed December 30, 2018. https://www.nytimes.com/2017/12/19/climate/china-carbon-market-climate-change-emissions.html.
  1. “Carbon Pricing 101.” Union of Concerned Scientists. Accessed December 30, 2018. https://www.ucsusa.org/global-warming/reduce-emissions/cap-trade-carbon-tax#.XClKaM9KgWp.
  1. Desjardins, Jeff. “The 8 Major Forces Shaping the Future of the Global Economy.” Visual Capitalist. October 04, 2018. Accessed December 30, 2018. https://www.visualcapitalist.com/the-8-major-forces-shaping-the-future-of-the-global-economy/.

COMMENT

  • Global economy is ruined. V-shaped recovery is a myth. Same for U-shaped one… I think that this economic collapsed will affect climate goals and governments will turn back to fosil fuels, ruining the world faster than ever.

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