FORTUNE 04/30/16
By Michael Shank and Carolyn Kissane
There’s no more time for stalled sustainability measures.
After 170-plus nations signed the Paris climate agreement last week and now with trans-Atlantic trade talks back on President Obama’s agenda, it’s clear that the international community’s trade rules will need to be rethought, revamped, and rewritten if we’re going to be successful in curbing climate change. When the top emitting countries – United States, China and India, for example – are busying taking each other to court for supporting renewable energy investments, and effectively preventing them from going forward, this significantly hampers our ability to tackle global warming and ramp up the necessary renewable energy to transition the grid.
While India appeals to the World Trade Organization – which ruled in the U.S. government’s favor and demanded a level playing field for foreign solar companies – dangerous precedents are being set, post-Paris climate agreement, that bode ill for countries keen to curb their emissions. The idea that the U.S. – or any of these big three emitters – is serious about a level playing field when it comes to their energy industries holds little merit.
Worldwide, based on the latest figures from the International Energy Agency, the fossil fuel industry – specifically coal, oil, and gas industries – were subsidized to the tune of $550 billion annually. This is four times what the renewable energy industry received. In the United States, the government is subsidizing coal, oil and gas industries at $20 billion a year. And it’s worth noting that President Obama increased these subsidies by 35% since taking office in 2009.
If the United States – or any other country – genuinely wants a WTO-brokered level playing field then it must stop subsidizing the energy industry and that includes oil, coal, and gas. It’s likely Washington D.C. legislators are keeping quiet because oil and gas firms are among the top three biggest lobbying industries contributing to Congress, ranked beside the pharmaceutical and insurance industries, paying hundreds of millions of dollars annually to ensure taxpayer subsidies continue.
This has got to stop if we care at all about our national carbon footprint. There is nothing sustainable about this agenda, especially if you consider all the costs countries have to cover when considering fossil fuel’s negative externalities. According to the International Monetary Fund, $5.5 trillion is being paid by governments globally in order to “fully reflect the environmental damage associated with energy consumption”. What a devastating sum that could be spent in substantially more constructive ways. For Washington and Beijing and Delhi to show serious commitment to their climate targets, a new agenda is necessary.
First, stop the finger pointing. It’s unhelpful and disingenuous of the United States government – and, frankly, the myriad environmental nongovernmental organizations that backup the administration – to use any kind of stick when instigating a conversation about China’s and India’s climate commitment when the U.S. is equally guilty of undermining an energy transition.
Second, stop fortifying fossil fuels. Mindful of the White House’s own report this month connecting health impacts to climate change, something similarly identified in a Lancet report last year, any subsidies to oil, coal, and gas are a direct hit to public health, a bill which taxpayers should refuse to support. It’s illogical, bordering on the absurd, to financially support a practice that simultaneously undermines one’s health. And as long as we continue to prop up methane-heavy natural gas, carbon dioxide-heavy oil, and toxic-laden coal, that is exactly what we’re doing.
Third, start enforcing change. Big promises came out of Paris on the climate front. Big pledges to cut greenhouse gas emissions. Big targets to tackle. And just in time. This month’s study that sea levels are rising much faster than previously thought, and will hit six feet by the end of this century if we don’t act fast, shows that we don’t have much time. We need to move now. Not in 2050.
Fourth, start rapidly ramping up investments in the energy infrastructure of the future. It’s poor planning to build more oil and gas pipelines when we clearly can’t be relying on them in 10, 20, or 30 years. Renewable energy infrastructure should be the sole focus for U.S., China, and India going forward and nations should support each other’s efforts, rather than undermining them within the WTO. The price point is behind us on this. There’s no good argument anymore for weak investments or laissez-faire strategies. This is where the economic growth opportunity is and it comes with an immediate health and climate co-benefit.
The planet does not have time to witness more stalled sustainability measures, scuttled by trade texts and WTO tribunals. Revise the trade language now to be more climate-friendly – including investor-state dispute settlement mechanisms which rarely come down on the side of the environment – before more hottest year and highest carbon records are broken. Globalization at the price of global warming and its increasingly raucous extreme weather helps no one. The time to tweak our trade texts, so they’re 100% more climate-friendly, is now.
Michael Shank, is an adjunct assistant professor of sustainable development at NYU’s Center for Global Affairs graduate program. Carolyn Kissane is the academic director of the NYU’s Center for Global Affairs.