How to rethink climate change

You would think it would be getting much easier to tackle climate change by now. Renewable energy has never been more affordable. Everyone has a net zero target. Billions of dollars are pouring into efforts to cut or capture carbon emissions, and outright denial of climate science is widely recognised as the bogus rot it always was.

Yet global carbon dioxide emissions remain at record levels and, as a result, widening evidence of a warming planet stalks nations across the world.

So who, or what, is the villain here? Why is it taking so long to deal with a problem that threatens to reshape so much of life as we know it? Resistance from oil companies, coal miners and other big, conspicuous industries is part of the answer. But there are powerful, less visible forces at play too. Much of the intellectual machinery we are using to tackle climate change was forged in the middle of the fossil fuel era and is no longer fit for purpose.

It has become apparent that, just as renewables must replace coal power stations, we need entirely new ways of thinking about the climate dilemma. Three books published this year attempt to do just this for fields that run from science and economics to politics. Given the scale of rethinking needed, it is no surprise that one of them is a novel.

The most provocative is the non-fiction Five Times Faster, an insider’s account of government efforts to cut emissions by former British civil servant Simon Sharpe. The book’s title comes from the fact that, to keep global warming to the internationally agreed level of 1.5C, we must decarbonise the global economy about five times faster this decade than what was managed in the past two decades.

This task came to preoccupy Sharpe, whose work in the energy department and foreign office convinced him it was too simplistic to blame oil companies or short-termist politicians alone for slow progress. He concluded that we are also being held back by three fields that should be central to solving the climate dilemma, starting with science.

Scientists, he discovered, have an understandable desire to prioritise findings that can be made with the greatest confidence. Some were also subjected to years of intimidation from fossil-fuel-funded campaigns.

The upshot has been a lot of studies showing what might happen if global temperatures rise by 2C or so, but fewer on warming of 4C or more. And fewer still on worst-case risks such as tipping points being crossed that unleash dramatic changes in ice sheets, forests and other critical influences on the climate system. In fact, as Sharpe writes, the study of tipping points was long regarded as a “somewhat disreputable niche pursuit” in the climate science establishment.

Thankfully, this has begun to change. Sharpe admits that governments’ deepening understanding of the full scale of the climate threat may not guarantee five-times-faster decarbonisation. But, “without it, what hope can we have?”

He makes an equally convincing case that the intellectual plumbing of the economics profession is overdue for reform in a world where heat records are being smashed by 4C and more, not the few tenths of a degree that used to be more normal.

Exhibit one: the assumption that the more we cut carbon emissions, the greater the costs will be. As Sharpe points out, experience shows that wind turbine and solar panel technologies cost a lot to develop initially. But today they can generate electricity more cheaply than either gas or coal — permanently.

McCulloch advocates an approach known as TWP — ‘thinking and working politically’ — which involves tactics such as secrecy and a willingness to be opportunistic

Experience has also undermined the widely held view that regulation is inefficient, subsidies wasteful and carbon pricing invariably the best climate policy. Sharpe says he held these assumptions himself when he first arrived at the UK energy department, “having read The Economist magazine for many years and absorbed the narrative of equilibrium economics that permeates so much of public debate”.

So as ministers worried about rising bills for renewable subsidies, he naturally asked his analyst colleagues: why don’t we raise the carbon price instead of giving out wasteful renewable power subsidies? Yet, after the analysts explained how prices were set in the UK electricity market, Sharpe was persuaded that a subsidy for renewables could achieve the same effect as a carbon price — at a much lower overall cost. He later saw how market-shaping policies such as subsidies could drive innovation, economies of scale and cost reductions in a way that dramatically speeded up the advance of green energy — often much faster and more efficiently than carbon pricing.

An understanding of these dynamics helped to create a world-leading UK offshore wind industry, where costs fell sharply and electricity was due to be sold at below market prices. “This means that instead of the industry receiving a subsidy from the government, the government will be receiving a subsidy from the industry,” writes Sharpe.

Carefully targeted carbon pricing still has a place. A carbon tax helped to make Britain the world’s fastest decarbonising power sector for a period. Likewise, a mix of taxes and subsidies made electric vehicles so cheap to buy in Norway that a world-beating 80 per cent of new cars sold there last year were electric. But it is clear that a rigid focus on market efficiency will hold back the policy innovation needed to address a problem as vast as climate change.

Diplomacy is another field where calls for a switch in gears have gathered pace, and this time Sharpe has played a part in the shift. International climate negotiations have long focused on spurring countries to set economy-wide emissions targets, but more recently there has been an effort to pull together smaller “coalitions of the willing” to accelerate progress in critical areas such as energy.

The UK put such collaboration centre stage at the COP26 climate summit in Glasgow in 2021. As a member of the UK’s COP26 unit, Sharpe ran campaigns to stop burning coal for electricity, boost electric cars and stem forest loss. The effort received mixed reviews but the broader strategy of collaboration is undoubtedly here to stay.

Another dose of policy pragmatism comes in Ending Fossil Fuel Subsidies by development economist Neil McCulloch. This short, sprightly book sheds a different kind of light on the slow pace of decarbonisation, this time by addressing what McCulloch rightly calls the “extraordinary fact” that governments around the world still subsidise fossil fuels.

Those subsidies added up to $468bn worldwide in 2019, more than double all aid to poor countries, with predictable consequences. Making fossil fuels cheaper means more get used, which means more pollution, more climate change and often more debt in countries that can least afford it.

Like Sharpe, McCulloch says fossil fuel forces are not the only culprits. Governments subsidise fossil fuels because they want to keep down prices of energy, a lifeblood of their economies. They like to promise a bright green energy future without suggesting it might depend on fuel prices rising.

McCulloch shows reform is possible. India abolished diesel subsidies. El Salvador got rid of subsidies for the liquefied petroleum gas commonly used as a cooking fuel. But reforms can come at a political cost and subsidies have a habit of coming back.

McCulloch says the solution lies in recognising the often overlooked political realities that keep fossil fuel subsidies alive. He advocates a new approach to reform known as TWP — “thinking and working politically” — flexible, locally driven efforts in which the political imperatives of subsidies are well understood and acknowledged upfront.

This involves tactics that do not always come naturally to reform-minded campaigners, such as secrecy and a willingness to be opportunistic and unafraid of making negative attacks. 

The TWP strategy has had some small-scale successes in countries such as Nigeria, where a UK-funded project to improve management of the country’s historically corrupt oil sector saved hundreds of millions of pounds for the government. It is heartening to think such thinking could spread.

Politics forms the backbone of a third climate book this year, this time a sprawling novel called The Deluge by American author Stephen Markley. It is set in a troubled US of the near future. Weather extremes are raging. Lachlan Murdoch and LeBron James have lost their homes in a Los Angeles megafire. Septic tanks burst from the ground in flooded Florida. Dust storms blanket cities across the country and, finally, climate change is centre stage in Washington DC.

In a display of opportunism that might please Neil McCulloch, a contentious activist swings her powerful climate movement behind a Republican presidential candidate promising serious climate legislation. The candidate wins. The House of Representatives approves measures to accelerate decarbonisation that would be just the ticket for Simon Sharpe’s five-times-faster goal.

Then the political backlash starts. The carbon lobby shifts into gear, deploying more than 3,000 lobbyists and rolling out a crafty PR campaign to gut the climate bill. Meanwhile, eco-terrorists park truck bombs outside coal-fired power stations. Senators stuff the climate bill with tough national security measures. Politics grows more toxic. Homeowners default on mortgages for uninsurable houses in flood zones. The economy tanks. Goldman Sachs files for bankruptcy. And so on.

The point about this imagined future is that the political pressures and trade-offs it is based on are all too real. Markley captures them well, albeit at a length requiring serious reader stamina.

And he avoids the worst clichés of brutish oil executives versus saintly green campaigners that plague so much climate fiction — and gloss over the far more complicated reality of decarbonisation. Shifting the global economy away from the fossil fuels that underpin our daily lives at the pace and scale required to keep temperatures at safer levels has never been done before. It was never going to be easy and it was always going to pose the unwieldy choices that Markley’s novel portrays.

Likewise, Sharpe and McCulloch are a welcome departure from non-fiction writers who have supplied endless advice on what to do about climate change but far less on why their counsel goes unheeded. Each book represents a more realistic way of looking at the great problem of our age, and ultimately a hopeful one. As Sharpe says: “Changing our ways of thinking may be difficult, but it is not impossible. We have done it before and can do it again.” 

Five Times Faster: Rethinking the Science, Economics, and Diplomacy of Climate Change by Simon Sharpe Cambridge University Press, £20, 350 pages

Ending Fossil Fuel Subsidies: The Politics of Saving the Planet by Neil McCulloch Practical Action Publishing, £32.95, 104 pages

The Deluge by Stephen Markley Simon & Schuster £26.33/$32.50, 96 pages

Pilita Clark is a business columnist at the FT