By Oleg Deripaska
Published in "The Australian"
The media trumpets the historic success of the global climate talks in Paris. The politicians and international non-governmental organisation community who invested in the agreement are the undisputed winners of the Paris talks. Absent immediate action, the potential losers from 196 countries agreement to kick the can down the road a few decades are those of us who breathe the air, drink the water, and wish for the safe and healthy environment our children and grandchildren deserve.
In a summit notionally about emission reductions, none were meaningfully agreed to. Indeed, even the applauding atmospheric chemistry scientists at MIT’s Global Change Program calculated that if all the unenforceable, non-binding pledges made in Paris were implemented, the improvement by 2100 would total only 0.2 degrees Celsius. It is now incumbent on global governments, corporations and citizens to bring action to the words of Paris. Here are two practical but vital proposals to meaningfully reduce emissions and steer away from otherwise inevitable ecological calamity.
1. Carbon Emission Levy: Countries and companies alike will never voluntarily impede their own development or wealth creation. The only way to ensure a reduction of emissions is to put a price on those emissions. This may appear politically difficult but there is no other way to even approach the ambitious target of only 1.5C warming without pricing carbon emissions.
Overnight, a one-for-all carbon levy with a secondary purpose of financing international and national climate programs would change the world’s economic calculus and corresponding emissions. It is as simple as that. Fossil fuel energy companies will ferociously oppose it, and they wield disproportionate political power. But it is necessary to introduce a one-for-all carbon emission levy and make payments obligatory for everyone at the same rate.
A carbon emission levy reduces demand for high-carbon emission fuels and discourages businesses from emitting greenhouse gases. The price could be set initially at a modest level of $US15 a tonne and escalated over time. Such a tax would constitute a clear pricing mechanism and signal to the global market, providing a powerful disincentive to carbon producers and consumers. It would also unleash a wave of R&D investment in energy-efficient and lower carbon emissions energy sources.
A third of the revenue generated from the carbon emission levy would be deployed in an international carbon fund to support innovative renewable energy projects. The remainder would help countries meet their own decarbonisation objectives, supporting structural adjustment, efficiency upgrades and compensation to ease the pain for industries.
2. Coal: Today coal provides over 40 per cent of the world’s electricity and 30 per cent of the world’s energy supply (second only to oil at 31 per cent). Coal has been the fastest growing energy source in the 21st Century. Unrealistic predictions of coal’s demise, without concrete action to ameliorate the reality of its continued existence, is a dream that will end badly.
The continuing allure of coal is this simple, especially for developing nations: coal is cheap and easy to access. Coal is also plentiful, ubiquitous, easily transportable, impervious to weather, and often subsidised. India, the world’s third biggest emitter where 300 million people still lack access to electricity, announced plans after Paris to give it to them by doubling coal use in the next 10 years. China issued permits for an additional 155 coal power plants in 2015. The harsh reality is that coal isn’t going anywhere.
As currently burned, coal is an environmental catastrophe. Global CO2 emissions from coal combustion have reached 13.8 billion tonnes per year, and coal also produces smog, soot, ash, acid rain, sludge, mercury and radioactivity. Instead of wishing it away, we could exploit coal chemistry advancements provide technological solutions. We should stop the burning of coal by creating market mechanisms and incentives to invent and deploy technological solutions.
At present, many companies that use coal as fuel are working towards finding ways to comprehensively extract useful organic components from coal. These components could be used to produce various substances and materials, such as plastics and oils, for example. Such complex usage of coal results in significant environmental benefits: dust emissions are significantly reduced and emissions of sulfur dioxide and other pollutants are minimised. There are also synergies in greenhouse gas emission reduction.
We must go further — a new coal chemistry industry should be developed in the same way as in the past we have developed a petrochemical industry, or chemistry based on usage of natural gas. This new industry should seek to provide technological solutions to extract as much material as possible out of coal reserves without actually burning it. But coal isn’t popular today; no one wants to deal with it because of the climate case — that is why the role of states is greatly important. Finding alternative ways to use coal and developing coal chemistry technologies are the challenges we need to address in the near future.
Paris was a necessary gesture, a collective recognition of the magnitude of humanity’s shared problem. But now is not the time for self-congratulation or the illusion that we are taking action. It is time to bring real solutions, and the velocity of emissions means that time is running out. On the carbon tax in particular, we need to develop a workable scheme with a view to introducing an early form of the levy by January 1, 2017. Otherwise, the optimism generated from last week’s meetings in Paris will become part of the problem.Oleg Deripaska is the president of Rusal.
Oleg Deripaska is the President of UC Rusal.