Limiting global warming to 1.5º Celsius remains just about attainable, but the path to this target is formidable. The United Nations climate summit now underway in Glasgow will indicate whether political efforts to achieve this goal are likely to heat up as fast as scientists tell us the planet is.
CAMBRIDGE – As world leaders gather at the United Nations Climate Change Conference (COP26) in Glasgow, there is tremendous ebullience about the potential of green energy sources. But the hard fact is that fossil fuels still account for 80% of global energy, as they did when governments signed the Paris climate agreement to much fanfare at COP21 six years ago. And even though many economies have not yet returned to their pre-pandemic GDP level, the world is on track in 2021 to post its second-largest annual increase in carbon dioxide emissions on record.
True, the International Energy Agency’s recent flagship World Energy Outlook report, which remains the gold standard of energy analysis, strikes an optimistic note by placing greater emphasis on what can be done to limit global warming. But at the same time, “keeping the door to 1.5°C open” seems to involve so many moving parts, innovations, adaptations, and, yes, sacrifices, that it is hard to see how it will work without the global carbon price most economists regard as necessary. In particular, a carbon tax simultaneously incentivizes and coordinates emissions-reduction efforts, and allocates resources accordingly, in ways that state planners simply cannot achieve.