Is Climate Change Already Solved?

"The market is clearly headed towards clean energy, and that trend will only become more pronounced."


Ronald Bailey

Marrakech—The global clean energy transition has already taken off. That is the mantra repeated in countless speeches, presentations, panel discussions, activist manifestoes, open letters and official pronouncements here at the COP22 U.N. climate change conference. If true, then the problem of man-made global warming is well on the way to being solved.

For example, in his swan song on Wednesday at COP22, Secretary of State John Kerry declared, "The market is clearly headed towards clean energy, and that trend will only become more pronounced." He continued, "The United States is right now, today, on our way to meeting all of the international targets that we've set, and because of the market decisions that are being made, I do not believe that that can or will be reversed." At the High-Level Meeting on Climate Change involving CEOs and government officials on Wednesday in Marrakech, Lise Kingo, Executive Director of the U.N. Global Compact asserted: "The climate movement is unstoppable. More and more companies are taking action, and seeing new opportunities for growth and innovation."

On Wednesday, the leaders of some 300 businesses signed an open letter urging President-elect Trump to support the Paris Agreement. In conjunction with the letter Matt Patsky, CEO of the socially responsible Trillium Asset Management firm stated, "The enormous momentum generated by the business and investment community to address climate change cannot be reversed and cannot be ignored by the Trump administration. That train has left the station and to stand in its way is folly."

These business leaders evidently agree with Kerry's assertion that "ultimately, clean energy is expected to be a multitrillion dollar market – the largest market the world has ever known. And no nation will do well if it sits on the sidelines, handicapping its new businesses from reaping the benefits of the clean-tech explosion." In a press briefing on Thursday Grenada-based climate negotiator Leon Charles concurred, "The U.S. will have to decide if it wants to be stuck with old technologies or new more efficient clean energy technologies. The best way to respond to the Trump phenomenon is to continue and accelerate the momentum toward a clean energy economy."

Of course, if renewable energy turns out to be cheaper, American companies will not let themselves be stuck with old fossil fuel technologies, but will race to invest in, create and install those sources of power. If markets are already generating the clean energy transition, then the Paris Agreement is largely irrelevant, right?

Not so fast. The government officials, businesspeople, and activists gathered at COP22 don't actually appear to quite believe what they are saying about the profitability and inevitability of the clean energy transition they are championing. Instead, they insist that governments have got to send "signals" to the energy markets in order to assure shareholders and corporations that their investments are sound. "The private sector welcomed the signals that we sent in Paris, but they are demanding even stronger signals now – the private sector – so that they can invest clean energy solutions with even greater confidence," explained Kerry. What sort of signals are they supposedly demanding? Subsidies, tax breaks, mandates and regulations that favor renewable energy technologies, of course. Let's just say that such interventions in commerce do not "signal" a lot of trust in the operation of markets to produce the clean energy results that the folks at COP22 insist are already on the way.

The Marrakech Action Proclamation

On Thursday evening, the Marrakech Action Proclamation for Our Climate and Sustainable Development was agreed to by all 197 countries at COP22. "Our climate is warming at an alarming and unprecedented rate and we have the urgent duty to respond," asserts the Proclamation. It cites the "extraordinary momentum on climate change worldwide" made during this past year and declares that "this momentum is irreversible." And it calls for "the highest political commitment to combat climate change, as a matter of urgent priority." The Proclamation seems to be aimed directly at President-elect Trump. According to Christian Aid's international climate lead Mohamed Adow, the Proclamation "underlines the determination of world leaders that they will not let the election of Donald Trump hijack the important work being done to secure the safe future of our planet."

A Trump Green Infrastructure Fantasy

Donald Trump wants to be the "infrastructure president," observed U.N. advisor and Columbia University development economist Jeffrey Sachs during a Thursday session at the COP22 U.N. climate change conference. Sachs spun out a scenario in which the day after he takes office Trump reads the Obama administration's Mid-Century Strategy for Deep Decarbonization which was just released as part of the Paris Agreement on Climate Change commitment process. In Sachs' fantasy Trump immediately realizes that the Mid-Century Strategy is essentially a massive decades-long series of infrastructure projects. His competitive spirit aroused, Trump purportedly vows that the United States will build the "cleanest and greenest infrastructure in the world." The folks over at the Niskanen Center have floated the idea that Trump might even consider a carbon tax as a way to pay for his trillion dollar infrastructure plan.

A Short Kind Word for the Paris Agreement?

Unlike the misbegotten Kyoto Protocol, the Paris Agreement is not structured as a top-down centralized plan for the climate. I correctly predicted back in 2004 that "there will be no further global treaties that set binding limits on the emissions of greenhouse gases (GHG) after Kyoto runs out in 2012." Instead, the Paris Agreement's design is more like a bottom-up decentralized federal system for governing the atmospheric global commons. Similar to the U.S. Constitution, the Paris Agreement is largely a procedural document. It sets no binding limits on what a country must do with regard to man-made climate change. Each country decides on its own climate change commitments based on its own domestic concerns and priorities. Since each country picks its policies for its own reasons, there is possibly a greater likelihood that they will be fulfilled than when they were imposed from outside as they were under the Kyoto Protocol. In addition, the bottom-up structure means that the incentives of countries to reset their climate policies are less affected when a country, say, the United States, withdraws from the Agreement.

The Surprisingly Happy Conclusion of COP22

Unlike most of the previous COPs on which I have reported there was very little drama here in Marrakech. The participants maintained a sense of calm even despite the fact that the Trump election was somewhat disconcerting to many of them.

So, according to participants, what are the main achievements of COP22? "First and foremost it is a celebration of the entering into force of the Paris Agreement and the start of the CMA1," declared Elina Bardram, the head of the European Union's delegation. The CMA1 is the first official meeting of the parties of the Paris Agreement. Bardram added, "I think we have the makings of a beautiful process." Bardram is not alone in thinking that the negotiations at COP22 have gone splendidly. U.S. special climate envoy Jonathan Pershing certainly concurred, "We have had quite a successful week here at COP22." Grenada-based negotiator Leon Charles declared, "We believe that the most important achievement of this COP is the operationalizing of the Paris Agreement."

Why all of the comity and good feelings? First, because Paris Agreement on Climate Change has come into force in record time – in less than year—for a multilateral international pact. So far 111 countries responsible for more than 75 percent of the global emissions of greenhouse gases have ratified or accepted it. Second, the delegates convened the first Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA1) in Marrakech. This is significant because the parties could agree on and launch various processes for creating the "Paris rulebook" by 2020.

Among other things, the Paris rulebook will set out standards for reporting, monitoring, and verifying the nationally determined contributions to addressing man-made global warming promised by signatories. In addition, the CMA1 inaugurated negotiations concerning assorted financial issues, including how much and from what sources rich countries are supposed to be obligated to pay to poor countries to help them cope with a warmer world and make the transition to low carbon energy. Thus each country's negotiators can depart Marrakech happily imagining that the future decisions at the next COPs will go their way. For climate bureaucrats, a beautiful process indeed!

Note: This is my last daily dispatch from the COP22 U.N. climate change conference in Marrakech.