Biden makes climate policy global

style="float: right; margin-bottom: 10px; font-weight: 600;"Fri 23rd Apr, 2021

After a temporary absence, the United States is again claiming a leadership role in the global fight against climate change. President Joe Biden underscores this claim with the country's return to the Paris climate pact, with major reduction targets for greenhouse gas emissions, and with a video summit at which even the Pope speaks.

Good staging is an expression of political professionalism; at the same time, it obscures the material content of the policy. Biden's promise to halve CO2 emissions by 2030 depends on majorities in Congress that he cannot guarantee, and presumably on court decisions whose outcome is uncertain. His predecessor Barack Obama's attempt to force America's power plants to cut emissions by decree first stalled in court before Obama's successor Donald Trump had the regulation defunded beyond recognition.

The more serious problem does not affect the United States alone, but also the European Union and countries that want to solve a global problem with local contributions. The move away from energy-intensive production over the past 30 years, particularly in Europe, reads well in regional climate balance sheets. It has not been associated with a contribution to mitigating climate change, because consumer demands have instead been met by countries like China, which are fueled by coal.

A tax on energy-intensive imports
For three decades, ambitious policies at the national level have given the impression that progress is being made in the fight against global warming. This suggestion only succeeds if the decisive indicator is neglected. For 30 years, greenhouse gas emissions have been rising linearly, dampened only insignificantly by the most severe crises. The good news that 30 older industrialized nations have succeeded in combining economic growth with falling emissions over the last 15 years loses its charm when one looks at the critical world regions and their industrialization and development paths.

China plays by far the most important role. Half of all coal-fired power plants are located here, and numerous new ones are planned. The country has promised to reach the highest level of emissions in ten years and then to take its economy off carbon. By 2030, however, China's economy could have nearly doubled in size if the country manages to continue its current pace of growth. Even if emissions do not rise by 100 percent over the same period, as is expected, the increases remain daunting. India, where provincial governors are fueling local coal mining, and Africa, with its huge pent-up demand, are the next candidates for huge increases that the global community cannot live with.

One hope lies solely in a climate policy that has a global hinge. In the products of the international value chains that we buy every day, the costs of harmful gases must be priced in. The greenhouse gas tax on energy-intensive imports being discussed by the European Union points in the right direction. Without price signals, neither consumers nor producers act in a desired climate-friendly manner.

America shies away from CO2 pricing
Unfortunately, the U.S. government is shying away from a CO2 price and is trying to talk the EU out of it. It fears opposition from domestic conservatives and parts of industry. Instead, it relies on public subsidies for science, technology and corporations. All of this is embedded in a subsidy policy for favorite domestic companies and industries that barely disguises its protectionist motive. The auto industry can once again count on a windfall, as it does every ten to twenty years. It is irrelevant that the industry is used to compensating for support measures with shrinking productivity and higher prices. There is no doubt that the increase in funding for research makes sense and will inspire the already lively start-up scene in the United States to reduce emissions with innovative technology or to recapture harmful gases from the atmosphere.

But it doesn't help if progress in one country is cancelled out by emissions in another. The best climate policy is therefore a global one that is essentially neutral in terms of the means to achieve its goals. And it must be ambitious in the burden it places on modes of production that involve greenhouse gases. The alternative is expensive and largely ineffective.

Image by Gerd Altmann


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