Climate change has raised tricky questions over policy responses

Relevance: Mitigation of climate change and its effect is an important topic in the Environment.

Synopsis:

The G20 environment ministers can speak of ambitious goals. But to succeed in mitigation measures towards Climate change, the world has to take some drastic steps.

About the G20 environment ministers meet:

In the recent G20 environment ministers meet, they said that all 20 countries would try to limit global warming to 1.5° Celsius above temperatures before the Industrial Revolution.

This is a more aggressive target than that of the Paris Agreement in 2015 when almost all countries in the world agreed to keep it below 2° Celsius.

The new G20 agreement comes just before the United Nations Climate Change Conference in Glasgow this November. The sharp drop in economic activity in 2020 caused by the pandemic led to a parallel decrease in carbon dioxide emissions and a big increase in poverty, globally.

Challenges in mitigating climate change:

1. Large financial costs: At the very least, it will involve large financial costs. Most of the carbon pumped into the atmosphere has come from rich countries. Countries like India still have low carbon emissions per capita, as well as low carbon intensity for every unit of GDP.
   • It is unfair to expect the global poor to share the burden of mitigation equally with the global rich, especially if it means sacrificing income growth.
2. Another aspect of climate justice is also important. I.e. between current and future generations. Some argue that today’s generation should only minimally pass on costs to future generations for emissions that the latter were not responsible for.
   • On the other hand, there are also others who say that generations to come will be richer than the current one and better able to afford the bill for a green shift.
3. Challenges with subsidies for green technology promotion: The use of subsidies leads us to an old question about whether governments are good at picking technologies. For example,
   • Big subsidies for solar power or one variant of electric vehicles might make it harder for other green options to attract investment.
   • A carbon tax is simpler because it punishes polluters, but makes no distinction between green alternatives available right now and ones that can potentially emerge later.

Suggestions to mitigate climate change:

• Meeting the ambitions of generations: A lot depends on what economists call the discount rate, on how costs are shared between generations. A low rate will place a higher burden on the current generation. The governments have to decide on discount rates also.
• There are two contrasting ways in which incentives can be used to make the shift to a green economy as smooth as possible.
  1. Impose hard pollution quotas decided by a public agency. The government needs to avoid going back to license raj during executing quotas.
  2. Use policy levers to change relative prices, either by imposing high carbon taxes or by subsidizing alternatives, or some combination of the two.
• Investment by private: National action plans should be complemented with private sector commitments. That could well be an emerging issue in corporate governance. Individual cities or companies can also draw up their own strategies to reach net carbon neutrality by 2050, or even earlier.
  • For instance, when the former US President pulled the US out of the Paris Agreement, individual states, companies, and universities responded with voluntary pledges to cut their carbon footprints.