There is a new essay in Nature from Galiana and Green of The Breakthrough Institute. They propose dropping the emission-target circus in favor of a Kaya Direct Approach focused on energy R&D financed by a carbon tax (starting at $5/ton CO2 doubling every 10 years). They don’t discuss the 100% rebate of the carbon tax, so I can’t tell if they are proposing a full-on fee-and-dividend policy — which a portion of the dividend diverted to a global $100billion/annum energy R&D fund. Here is an excerpt that outlines the essence of the policy proposal:
To describe the required trade-offs of any climate policy, analysts use the Kaya identity C = P (GDP/P) (E/GDP) (C/E), which relates carbon emissions, C, to its four driving factors: population (P); per capita gross domestic product (GDP/P); energy intensity of the economy (E/GDP); and emissions per unit of energy (C/E). Conventional climate policy considers only the emissions, C, and the political will needed to achieve reductions, but ignores the driving factors. Policy-makers are understandably reluctant to use population or economic growth to reduce greenhouse-gas emissions; hence policy should focus on the technological drivers. A useful way of looking at these is by combining E/GDP and C/E to yield the economy’s carbon intensity (C/GDP).
In recent decades, although global GDP has grown at about 3% per year and global carbon intensity has declined by about 1.4% per year, emissions have grown well in excess of 1% per year. In view of this, the proposal by the Group of 8 rich nations (G8) to cut global emissions in half by 2050, consistent with limiting global long-term temperature increase to 2 °C — and to do this without slowing economic development — would require a tripling of the average annual rate of decline in carbon intensity for the next 40 years. This accelerated decline in carbon intensity requires a revolution in energy technology that has not yet started.
Can a technology-led approach avoid dangerous climate change? We proposed such a policy6 as part of the 2009 Copenhagen Consensus on Climate, in which a panel of leading economists ranked 15 policy responses to global warming. Our analyses show that cumulative emissions consistent with minimizing the rise in global temperature (climate stabilization) can be achieved by investing US$100 billion a year for the rest of the century in global energy R&D, testing, demonstration and infrastructure.
For two of the three technology paths we investigated, cumulative carbon emissions would be kept at levels that could limit long-term warming to 2 °C (ref. 7), despite the greatest emissions reductions occurring after 2050. Moreover, all of the paths we considered passed cost–benefit tests, usually by very large margins. A technology-led approach can stabilize the climate with higher probability and much lower cost than the emissions-target approach.
How would the technology-led approach work? First, governments would replace emissions targets with credible long-term global commitments to invest in energy R&D. To finance this, we propose a low carbon price of $5 per tonne of emitted carbon dioxide, which would raise almost $150 billion per year globally and $30 billion in the United States alone.
Second, the low carbon fee should be allowed to rise gradually over time, doubling, say, every 10 years. This would send a ‘forward price signal’ to deploy new or improved low-carbon technologies as they become scalable and cost-effective. Third, R&D funds should be isolated as far as possible from political interference by placing them in dedicated trust funds that are administered by independent committees drawn from the public and private sectors. Allocation of funds would be left to experts, akin to The Bill & Melinda Gates Foundation. Energy-technology competitions could be open to individual enterprises, nations or international coalitions. Countries that decide not to participate in R&D could use the funds raised to purchase successfully developed technologies from those that do participate.
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