Hooked on carbon – how can we break the habit?
UN DESA’s latest World Economic Situation and Prospects (WESP) report could not be any clearer: the global transition to cleaner energy is not happening fast enough.
After three years of remaining flat, energy-related carbon emissions picked up again in 2017, reaching a new historic high, and preliminary evidence suggests that this worrisome record will be crushed again for 2018. This increase in emissions coincides with robust growth in global GDP – a sure sign that, despite progress on renewable energy sources, the world economy is still very much carbon-dependent.
This spells trouble not only for the climate and the environment, but for every aspect of our lives, including the global economy. The 2019 WESP report warns that climate change, which used to be a long-term economic risk, has now become a very real and direct threat to economic activity and to the livelihoods of millions of people.
According to Munich Re’s NatCatSERVICE, the number of weather-related loss events has more than tripled since the 1980s, and 2017 ranked among the top five years with most natural catastrophes. That same year, natural events caused losses estimated at a whopping $335 billion and, according to the Internal Displacement Monitoring Centre, displaced 18 million people in 135 countries. Extreme weather continued in 2018, leaving more than 10,000 deaths in its wake.
Things are likely to get worse, warns the recent Intergovernmental Panel on Climate Change (IPCC) report, unless we reduce our carbon pollution by 45 per cent by 2030 and bring it down to ‘net zero’ by 2050. We can only achieve such dramatic reductions if we decouple our economic growth from carbon emissions or, in other words, if we end our economy’s addiction to fossil fuels.
One way to facilitate the required technological and economic transformation is to put a price on carbon pollution. This can be achieved through measures such as emissions taxes or emissions rights trading mechanisms. Fair and equitable carbon pricing would create an incentive for developing innovative low-carbon technologies and generate an additional source of revenue. Governments could redistribute that revenue as social transfers to ease the transition to the low-carbon economy.
Carbon pricing could also help to pay for low-emissions technology and infrastructure and incentivize natural climate solutions, such as reforestation, land-use change and other ecosystem-based approaches. These measures could accelerate efforts towards economic diversification in countries that remain highly reliant on fossil-fuel production.
To learn more about the effects of climate change and its policy challenges, read the February issue of UN DESA’s World Economic Situation and Prospects Monthly Briefing. Every month, the WESP Monthly Briefing brings you the latest and most relevant information on global economy. Stay tuned!