In an appeal for urgent response to climate change, the International Monetary Fund helpfully measures its own overreach. “Global warming is threatening our planet and living standards around the world, and the window of opportunity for containing climate change to manageable levels is closing rapidly,” opens the executive summary of IMF’s October Fiscal Monitor. “Carbon dioxide emissions are a key driver of this alarming trend…. Policymakers need to act urgently to mitigate climate change and thus reduce its damaging and deadly effects, including rising sea levels and coastal flooding, more frequent extreme weather events, and disruption to our food supply.”
With this extreme portrayal of the problem and its support for aggressive response focused on CO2 reduction, the IMF conforms with much of international officialdom. The approach receives nearly exclusive attention from the popular news media, liberal politicians, and delegates to international climate meetings. Yet it’s not the only way to address climate change. Less-frantic assessments of the problem exist, many from climate scientists who would challenge the IMF’s assertion that “the climate crisis is urgent and existential.” And remedies less drastic than purging energy used by humans of CO2 deserve consideration.
Nonelites unpersuaded
Despite the prevalent messaging, people who don’t write articles for newspapers and magazines, hold positions of authority, or fly about to attend climate summits seem unpersuaded by top-down importunity. Other than the relatively few who enjoy brandishing signs and disrupting vehicle traffic, the world’s nonelites seem little-bothered by climate change. They’ve heard for several decades that they’re ruining the planet by conducting their affairs and have good reason to be tired of it.
The longer imposed fright remains the core strategy of climate politics, the less likely it is to work. And the longer CO2 remains the central lever of policy-making, the less credible the effort becomes as temperature observations challenge model assumptions about the gas’s role in observed warming.
While appropriating shopworn alarm and questionable confidence in the ability of governments to administer climate, the IMF distinguishes itself with a forthright assessment of the cost.
“Limiting global warming to 2ºC. or less requires policy measures on an ambitious scale, such as an immediate global carbon tax that will rise rapidly to $75/ton of CO2 by 2030,” it says, citing the target for Industrial Age warming set at the 2015 Paris Climate Summit. “Under such a scenario, over 10 years electricity prices would rise, on average, by 45% cumulatively and gasoline prices by 15%, for households, compared with the baseline (no policy action).” Those increases might seem tolerable in wealthy countries. But they must happen everywhere.
IMF puts the challenge in stark perspective by pointing out that the average price on global emissions is now $2/ton. So, by the IMF’s calculations, carbon taxation must increase by 3,650% worldwide to keep the temperature rise within the Paris limit. And that’s if standard climate models, which tend strongly to overpredict warming, are right.
Economic jolt
The global imposition of a $75/ton levy on CO2 will not happen. Nothing close to it will happen. Politics will not allow it. The economic jolt of a 37-fold increase in carbon taxation would be staggering. An IMF press release attempts to discount the effect by citing economic growth in Sweden, which has a $127/ton carbon tax. But Sweden has a low carbon base to tax with its distinctively high reliance on hydropower and nuclear energy. It also has no fossil-energy industry to jeopardize by punishing carbon. Global extrapolation from the Swedish experience strains logic.
Advocating the impossible does nothing for the climate. And the rush toward taxation and regulation raises suspicion that climate policy has more to do with money and control than with warming mitigation. The oil and gas industry should urge the IMF and kindred international groups to broaden their views of the problem and responses to it—including responses under way by the industry itself. The climate deserves no less.
