This has always been the big duh of climate and clean energy policy: How ‘bout we start by ending subsidies to fossil fuel development?
Clean energy reform is hard enough, swimming against the killer tides of free carbon dumping, car-centered development, and oil-soaked politics. Can we pleeze stop adding insult to injury by targeting scarce public money toward making it worse?
Steve Kretzmann’s the man on oil subsidies. Steve’s formula is catching on here in Copenhagen: End fossil fuel subsidies in the developed world and use the proceeds to open a pathway to clean development in the global South. It’s a potent two-fer, with big climate benefits at both ends of the deal. Stop hurting, start helping.
This idea has genuine breakthrough potential in Copenhagen: it could seriously scale up the climate finance discussion, which is hovering around the short-term number of $10 billion a year – at least an order of magnitude too low. UNFCCC Chair Yvo de Boer’s working objective for this meeting is $100 billion a year by 2020. (Lord Stern estimates the need is another order higher: more than $1 trillion a year. Sounds like a lot, but it’s 1-2% of global economic output.)
The developed countries are already committed to create the funding source by ending the subsidies – G-20 leaders agreed to do this in the “medium term” at their last meeting in Pittsburgh. They just need to get the show on the road (or, er, rail) and steer it to clean development and adaptation to climate change impacts.
The politics are juicy. The constituency for continuing subsidies to big oil is powerful but small. And while overseas investment is always a hard political sell in the U.S., a global Marshall Plan for clean development beats the hell out of just forking over money to Exxon.
Other big climate finance ideas are on the table: revenues from capping carbon in aviation and shipping fuels; George Soros’ proposal to tap $100 billion in special drawing rights; and a tax on the enormous volume of international financial transactions as France has proposed. U.S. negotiators have pointed to flaws in each idea, but they need to find a way forward, scaled to the pressing need for a clean pathway out of global poverty. The financial crisis demonstrated amply that developed nations can mobilize a lot of money – lots of trillions – in a hurry if they need to.
In the next 4 days, they need to. Developed countries can’t very well pull up the drawbridge on the global South and say “Sorry, the atmosphere is already full of the emissions that created our prosperity, so there’s no room for yours.” But we can and must pioneer a new prosperity, based on efficient use of clean energy. Americans may bridle at the prospect of financing international development, but it’s not a zero-sum game. Unlike fossil fuels, clean energy will generally get cheaper for everyone as global markets grow.
And since we all share the same atmosphere, in the famous words of Argentine climate negotiator Raul Estrada-Oyuela, “We’re all adrift in the same boat, and there’s no way half the boat is going to sink.”
The Copenhagen talks can move a lot closer to success in one big, elegant step: stop funding the problem and start funding the solution. Go to 1Sky to help push this over the top.