Economics and politics - comment and analysis

Climate change: a global challenge in search of a global policy

Cross-posted from Brussels Morning (


The latest Intergovernmental Panel on Climate Change (IPCC) report presents the scientific state of the art on our changing climate. Everyone in our latitudes agrees that something has to be done. But without a global executive, the question is “how”. People do not want to admit that the “world” has a problem, but not a global problem solver.

Unsurprisingly, the new IPCC report attracts considerable media attention; after all, it is a policy-guiding report prepared by experts for politicians, every five to six years. Of course, politicians are involved in writing the report, hence intergovernmental. But it’s astonishing that, while the report tells humanity what’s happening, it offers so little in terms of prescriptive guidance on policy. The IPPC says that humanity should do something, but doesn’t say what.

“The assessments are policy-relevant but not policy-prescriptive: they may present projections of future climate change based on different scenarios and the risks that climate change poses and discuss the implications of response options, but they do not tell policymakers what actions to take.” 

It would be helpful if there was an intergovernmental working group focusing on policy prescription. The reluctance to form such a group either shows cowardice before the enemy, or is the fruit of the old belief that a consensus on perceiving the problem will lead to a common approach to its resolution, instinctively. That latter conviction is wrong. The only way to end fossil fuel dependency is concerted global action on the basis of a common strategy. Everything else is window dressing.

The United Nations ducks away

The present rift in the discussion over climate change has come to the attention of the Secretary-General of the United Nations (UN), Antonio Guterres, who in his press statement on the report summons the courage to admit the following:

“This report must sound a death knell for coal and fossil fuels, before they destroy our planet… Countries should also end all new fossil fuel exploration and production, and shift fossil fuel subsidies into renewable energy.  By 2030, solar and wind capacity should quadruple and renewable energy investments should triple to maintain a net zero trajectory by mid-century.”

According to Guterres, the report should sound the death knell for fossil fuels. But who is ringing the bell? Not the report. That death knell can only be delivered by those who have the power to decisively end the oil and coal industry. The report does not propose anything as decisive as that, nor does the Secretary General. Most media outlets and political leaders too are rhetorically in favour of ending the use of fossil fuels but are habitually thin on detail. To the question of “how,” the usual answer is silence.

Neither the UN Secretary General nor the acting politicians of the big states have understood, or want to understand, that “ending” the fossil fuel sector presupposes producers stopping new exploration projects and gradually limiting production. This must of course be accompanied by a worldwide ban on the use of new extraction techniques such as fracking. The cumulative result will be an inevitable rise for fossil fuels prices that will make its use impractical. As long as fossil energy remains as dirt cheap as it is at present, it will be extracted come hell or high water, because there is always a demand for it somewhere in the world. It is completely naïve to believe that a global turnaround can be achieved with small steps and low-level initiatives when the price of fossil energy is extremely low.

There is not a single UN initiative for a global strategy that systematically engages with all producers. Here, the UN Secretary-General should take the lead. As long as he fails to engage leading producers and major powers, there will be a sustained denial of the link between low pricing and high global consumption. That link needs to be explained to voters rather than expending energy in symbolic gestures that do little towards a substantial resolution of the challenge at hand.

High – and continually rising – prices for fossil fuels must be enforced by the community of nation states. But such a project is politically manageable in democracies only if it entails a massive redistribution of income and/or wealth. And that is exactly the kind of discussion political leaders and parties avoid. Nevertheless, high prices with redistribution are clearly the solution that is most likely to be reconciled within the current mixed system of market and state capitalism. Focusing on rationing, the quantitative reduction of fossil fuel consumption without relying on prices would be tantamount to a systemic change, which is completely illusory.

Rationing as a solution?

Without high prices combined with redistribution, one would have to resort to some form of state rationing of fossil energy sources. But rationing only works if what is rationed is scarce. The attempt by individual national governments to ration, limit or ban certain uses of a substance that is readily available and still abundant worldwide is undoubtedly doomed to failure if no binding international agreement is reached.

But even if there were a general shortage of fossil fuels, rationing would be much more difficult to achieve than price increases and redistribution. Rationing raises first and foremost the “simple” question of the legitimacy of individual consumption. One can then no longer avoid the question of how much CO2 should be emitted per capita in the world and who is allowed to deviate from this and for what reasons. Are billionaires like Mr Bezos and Mr Branson allowed, to use a current example, to fly into space on a whim?

Those who opt for a rationing strategy must always ask themselves where one draws the legitimacy to consume more than someone else, irrespective of where the two individuals are situated. Now, after the publication of the IPCC report, all the media are repeating the same mantra: “we” have to pull ourselves together, “we” have to change, “we” have to do without this or that. But who is “we”? Is it the diesel driver who leads an ecologically sensible life but takes the liberty of driving to work and driving on holiday? Is it the air passenger who takes a domestic flight once a year but otherwise completely forgoes major travel? Or is it the billionaires who don’t give a damn about the world’s ecological balance?

Anyone who wants to ration consumption cannot avoid the calculation of individual ecological footprints and cannot circumvent the question of why one person pollutes the planet more than another, or has done so in the past. The answer, in my opinion, is clear. Every human being must have exactly the same right, and those who have “sinned less” in the past are entitled to be compensated by those who have sinned more. Those who want to consume more than they are entitled today must buy the right from those who are willing and able to burden the planet with less than their fair share.

This rationing model points towards a brave new world in which every person (and every company) meticulously reports all their activities to a central statistical office, which will keep an individualised tab on our ecological footprint, billing us daily. Those who do not meet the norm are denied access to fossil energy by the central office until they reach their benchmark. The big haggling begins when the rich buy pollution rights from the poor to avoid changing.  The whole thing is so absurd that there is no need to comment further.

How “we” will muddle through forever

Anyone who does not believes this simplistic logic does not understand how politics work. But anyone who does not believe in this fairy tale has the responsibility to discuss a realistic political strategy that phases out fossil fuels. Since no one dares to tackle the big question of a real increase in the price and scarcity of fossil fuels at the global level, not to mention the redistribution of income that this would entail, we are making do with frantic activity on the sidelines.

Without anyone having the global picture in mind, national politics always does something where it seems politically opportune because it costs few votes. One day we abolish the combustion engine, another day we ban domestic flights or promote domestic holidays and regional products. Since no one asks what the contribution of this symbolic policy is at a global level, we can politically muddle through until the next IPCC report, which will no doubt produce even harsher warnings, followed by an even greater flurry of symbolic policy.

The IPCC, like so many others, appeals to the “we” to be able to tackle the big problem of decoupling from fossil energy. This “we” does not exist. There is no leader of the global community of states who could get the global company board to fall in line. A few globally- acting institutions have the possibility to formulate a global strategy, but they do not have the right to enforce it. The next summit in Glasgow will change this as little as the Paris summit did in 2015. The world has a problem, but the world has no problem solver. It is understandable that the IPCC avoids making concrete policy recommendations. But it is hard to comprehend that the recipients of its messages manage to avoid responsibility so cheaply, resorting to national action alone.

Only a price mechanism addresses the root of the problem in the long run

Political muddling through and muddling out in industrialised nations comes at the cost of enormous economic and social dislocations. Because nothing is certain and predictable, investments that could secure jobs are not taking place. This further reduces the chances of politicians being able to politically implement the structural change that must go hand in hand with a long-term ecological transformation necessary. High unemployment, as everyone should have understood by now, is the biggest obstacle to any kind of economic restructuring that needs to be initiated by the state.

Only with a consistent strategy that aims to induce global scarcity of fossil energy sources can we avoid pointless climate muddling and achieve a socially-equitable transition. Otherwise, we could be stuck in wrangling over the climate challenge completely, with new daily accusations and moralising. This dulls the receptivity of the public to the need for changes and prepares the ground for parties that promise to simply do nothing. What is needed right now, therefore, is a major political initiative by the EU with the aim of giving global politics a push to focus on the appropriate strategy of fossil fuel scarcity. If this does not succeed, we can also dispense with the nitty-gritty and concentrate on tackling adaptation to much higher temperatures in the most affected regions of the world.

P.S.: As if to confirm my scepticism about a global action, the Financial Times reports that the US National Security Advisor appealed to oil-producing countries to ramp up their oil production in order to lower the price of oil. The price of petrol in the US is currently about 50% higher than last year. So, this is the President who has put climate change high on his agenda and is giving the impression in international negotiations that he wants to break out of the American tradition of fossil fuel dependency on transport infrastructure.