Guest essay by Eric Worrall
Even funnier, they also suggest the G20 demand that China match this level of carbon austerity.
Five things the G20 must do to tackle climate change
From demanding America change its carbon tax position to collaborative technologies research, progress must be made
Consider, by way of example, the latest annual statistical review that emerged on Thursday from the energy group BP, an entity that is one of the first to promise to cut its dependency on fossil fuels. (I moderated a discussion with BP on Thursday as well as an event in Venice).
The review starts by outlining some welcome news (for climate change warriors, if not energy investors): carbon emissions fell more than 5 per cent in 2020, primarily due to collapsing oil consumption.
That is startling. But what is more stunning is that Spencer Dale, BP’s chief economist, reckons that “the rate of decline in carbon emissions observed last year is similar to what the world needs to average each and every year for the next 30 years” in order to hit the Paris climate goals of keeping global warming between 1.5C and 2C. This is crucial if we are to prevent irreversible damage to Venice and everywhere else.
Such a demand would require massive behavioural change, particularly given that last year’s decline only happened because of an enforced pandemic-related lockdown and economic slump. Indeed Dale reckons that the scale of drop was comparable to what would have happened if the world had a “scarily high” carbon price (ie tax) equivalent to $1,400 a tonne ($1,543 a tonne) — as opposed to the $2 a tonne price the IMF estimates was the world average before the pandemic.
So what should the G20 do? Ideally, at least five things. First, the finance ministers must collectively embrace a steadily rising carbon price and tax. The EU is doing this. But Joe Biden’s administration is dragging its feet in a shameful way, seemingly because of domestic political concerns. The rest of the G20 should demand that America change its position.
Second, the G20 must also demand China backs away from coal, which provides the majority of its power (the country accounts for more than half of global consumption). The Beijing government has vaguely pledged to do this, and has expanded renewable energy use in an admirable manner. But it must be persuaded to cancel current plans to build yet more domestic coal plants — and stop financing those in its Belt and Road Initiative.
…Read more: https://www.ft.com/content/0e416145-7ce3-4cee-8fe0-2586c18689dc
Resources.org provides a handy carbon tax calculator, but it only goes up to $50. If we take resources.org’s calculation of $0.44 / gallon gasoline price rise for a $50 carbon tax, and scale it up to $1543, we get 0.44 / 50 x 1543 = $13.57 / gallon of gasoline price rise. Given Biden’s policies have already driven gasoline up to around $4 / gallon in some places, with no end to price rises in sight, if the recommended carbon taxes are imposed, you could be looking at $17 / gallon of gasoline and rising.
FT also suggests consumers should be “mobilised” to demand these gasoline price rises (or demand the carbon taxes which trigger the price rises), and other climate policies.
Shame on you Biden, for dragging your feet imposing $17 / gallon gasoline on the American people, because of “domestic political concerns”. And of course, this scale of price rise would also apply to natural gas, electricity, food transport, pretty much everything which depends on fossil fuel.
FT does not provide an explanation for why such draconian taxes are required to drive the adoption of renewables, given that organisations like the Aussie CSIRO claim renewables are the cheapest source of energy.
No doubt China will cave in to G20 pressure, and announce they are now charging $17 / gallon pump price for gasoline. Any day now.