Geopolitical dimensions of climate policy

Starting in the 1990s, climate change has become a fixation for rich country politicians and elites. It emerged as the world had just seen the end of the Cold War. There was relative peace and trust across the world, broad economic growth, and swift progress against poverty. In the capitals of Europe in particular, it felt like most of the planet’s big problems were fixed, so climate change was the final frontier.

These proponents of climate action advocated the goal of ending reliance on the very fossil fuels that had powered two centuries of astonishing growth. Sure, this would cost hundreds of trillions of dollars, but there would always be more growth.

What a naïve, narrow-minded worldview. Time has not been kind to the foolish idea that climate change was humanity’s sole remaining problem—or that the planet would unite to solve it. Geopolitics and economics mean a rapid global transition from fossil fuels is impossible.

As has long been clear for many, the majority of the world never shared this myopic focus on climate change. Despite immense progress, in some countries, life remains a battle against poverty, hunger, and disease. In many more countries, the top priority is to create more jobs and life-changing growth and development. Outside the most advanced economies, climate change has understandably always been a relatively low voter priority.

Leaders from Europe and the United States talk up “net zero” as though it has global support. But this unity is quickly revealed as a mirage. For one thing, the destabilizing axis of Russia, Iran, and North Korea is not about to support Western efforts to solve climate change. Indeed, according to McKinsey, achieving the net-zero target would require Russian climate policies costing $273 billion every year—around three times what Russia spent on its military last year. That won’t happen.

The geopolitical challenges run even deeper. China’s growth has relied on burning ever more coal. It is the world’s preeminent greenhouse gas emitter, with the largest increase of any nation last year. Renewable energy made 40 percent of China’s primary energy in 1971, reducing to 7 percent by 2011 as it ramped up coal use. Since then, renewables have inched up to 10 percent. Strong climate action could cost China nearly a trillion dollars annually, hurting its journey toward becoming a rich nation.

The reality is that most of the world—including powerhouse India and emerging economies—will continue to focus on becoming richer, often with fossil fuels. Russia and its ilk will ignore the fixation on climate change altogether. And China will make money from selling the West solar panels and electric cars, while only modestly curbing its own emissions.

As rich countries irresponsibly attempt to export the cost of climate policy to poor countries through carbon adjustment taxes, they will drive a further wedge into an already fractured world.

Meanwhile, despite all the hype, wealthy countries have ever less money left for the climate fight. Annual growth per person among rich countries declined from 4 percent in the 1960s to 2 percent in the 1990s. It now hovers just above one percent. Many of these countries face pressure to spend more on defense, health care, and infrastructure, as geopolitical pressures and changing demographics make their pathway to stability and growth far less certain.

Yet, across Europe and North America, single-minded zealots who were born in a world of relative calm in the 1990s continue to push for deindustrialization and immiseration to tackle climate change—including for the world’s emerging economies.

This attempt is doomed to fail, not least because carbon reductions need to be sustained across decades and through shifting majorities. The economics of strong climate action was always deficient—and today this is blatantly obvious.

More politicians are realizing what former United Kingdom energy and net-zero secretary Claire Coutinho acknowledged: “You cannot heap costs onto struggling families to meet climate targets.”

See Also

Coming of age  

The world needs a better way forward. The best solution is not to push people to be worse off by forcing a premature transition from fossil fuels to inadequate green alternatives. Instead, we should ramp up investments in green innovation, eventually driving down the cost of clean energy to be cheaper than fossil fuels. This is much cheaper and will allow everyone, including India and other emerging economies, to want to make the shift.

Rich countries need to wake up and stop hemorrhaging trillions in self-inflicted climate policies that will be followed by few, laughed at by many, and will mainly make China rich.

Spending a small fraction of the climate trillions on green innovation would fix climate change. This will allow us to focus the rest of our resources on education, defense, health care, and the many other, important challenges in the 21st century.