Decarbonization: Think globally, act locally

The U.S. should focus on actions that prompt the world to decarbonize.

Here is perhaps the most frustrating graph in the entire climate debate:

This chart shows a number of things:

  1. Historically, Europe and the U.S. accounted for most of global emissions.

  2. Now, however, China and the rest of Asia account for the bulk of global annual emissions — almost twice as much as the U.S. and Europe combined. (This is true even once you account for the emissions embedded in global trade.)

  3. Since U.S. and European emissions are still trending down, and Asian emissions are still trending up, the U.S. and Europe will account for an even smaller fraction of annual emissions going forward. Special climate envoy John Kerry’s senior advisor, Varun Sivaram, reports that the U.S. is forecast to produce only 5% of global emissions over the next century.

This is incredibly unfair, for two reasons.

  1. The U.S. still has higher per capita emissions than most parts of Asia. But the climate does not care even one tiny bit about per capita emissions! It is the TOTAL amount of emissions that affects the climate. So if we want to save the climate, Asia needs to reduce their emissions drastically, even though they don’t emit as much per person as the U.S.

  2. The U.S. and Europe have, together, historically emitted more than twice as much carbon as all of Asia. In fact, the U.S. and Europe got rich burning dirty fossil fuels and belching carbon into the air without a care. But unless and until we develop a way of cheaply pulling carbon out of the air, it means we don’t have any way to do anything about historical emissions. So again, saving the planet will mean demanding Asia do much of the work of decarbonization, despite historically not being responsible.

In other words, it’s pretty crappy that we have to ask Asia to bear much of the burden of decarbonization. And as long as decarbonization is costly, it means Asian countries are going to balk at doing it. In fact, this has already happened. China insisted on being counted as a developing country under the Paris climate agreement, meaning it had much more lax requirements than developed countries. That was obviously something China thought was fair, given the points above. But the net result is that China’s emissions have soared, and the country has continued to invest heavily in coal. Whether this was a fair outcome, it’s clearly bad for the planet.

Real policy is made at the national level, so let’s think about how America should approach this problem. We have a moral obligation to decarbonize our own economy, but in terms of actually saving the planet, moral obligations mean diddly squat; eliminating 100% of U.S. emissions is the right thing to do, but it would only be a tiny drop in the bucket in terms of actually preventing the planet from roasting.

There’s the argument that U.S. and European decarbonization will exercise “moral leadership” that will cause the rest of the world to follow us, but that seems like an argument better suited to the 1990s than to today; in 2021, it feels like magical thinking. Even if China viewed the U.S. as a moral exemplar (which it does not), it seems vanishingly unlikely that it would decarbonize its own economy just to follow U.S. actions, if doing so slowed its own economic development. It certainly hasn’t so far!

So instead, we need to think about what we, as Americans, can do to help the rest of the world decarbonize. Varun Sivaram expressed this very well in a principle he calls the 95/5 Rule. Here are some excerpts from his Twitter thread about the concept:

Basically, the general principle here is that if we sacrifice much of our economy to decarbonize — as the degrowth movement would have us do — it will provide a negative example to the rest of the world. It will demonstrate that decarbonization = poverty. Asian countries just won’t do it.

BUT, if we find ways to decarbonize while growing our economy, that will do three positive things. First, it will show developing nations that decarbonization is the route to riches, which will make them accelerate their own efforts out of self-interest. Second, it will create technologies that developing countries can use to decarbonize cheaply. And third, it will discover, through policy experiments, which strategies are most effective.

Sivaram mentions research and technology transfer, as well as the beneficial effect of creating detailed decarbonization plans. Those are all important and good things. He also calls for actually investing directly in other countries’ green infrastructure, which I think is a great idea (if they’ll let us do it, which China might not).

Those are all great ideas, but I would like to add one more: Learning curves.

A learning curve describes the relationship between how much of a technology you install and how much it costs. Here, via Ramez Naam, is a learning curve for solar power:

And here, via Max Roser and Nature, is one for various energy storage technologies:

Now, the theory is that as you scale up production, you drive down the price — both via simple economies of scale, and also by learning ways to do things more cheaply.

Of course, the causality can also run in the opposite direction, since if solar and storage get cheaper we tend to install more of them. This reverse causality leads some to question whether we can actually drive down the price of renewable energy technologies faster by installing more. But we have some evidence that scaling adoption really does drive down costs. A 2018 paper by Goksin Kavlak, JamesMcNerney, and Jessika E. Trancik looks at a detailed breakdown of the correlates of cost changes in solar photovoltaic power (scaling vs. R&D, etc.), and then matches these with data on actual improvements in the technology itself. They find:

We find that increased module efficiency was the leading low-level cause of cost reduction in 1980–2012, contributing almost 25% of the decline. Government-funded and private R&D was the most important high-level mechanism over this period. After 2001, however, scale economies became a more significant cause of cost reduction, approaching R&D in importance. Policies that stimulate market growth have played a key role in enabling PV's cost reduction, through privately-funded R&D and scale economies, and to a lesser extent learning-by-doing.

In other words, the more solar you install, the more the cost of solar really does go down. That almost certainly goes for batteries too.

So the more the U.S. pays to adopt these technologies, at huge scale and very quickly, the more the cost goes down. And that means the more other countries will be able to decarbonize cheaply. With solar/storage cheaper than coal/gas/oil, developing nations in Asia and elsewhere will want to use these green technologies simply because doing so will speed up their growth.

In fact, this may already be happening in India. The country is committing itself to very drastic decarbonization targets, and is canceling coal projects at a rapid rate; cheap solar is cited as the reason. The fact that India doesn’t have China-like levels of installed power capacity yet actually makes it easier to do this — instead of being forced to compete with existing coal plants, renewables merely have to be cheaper than new plants. In other words, instead of decarbonizing, India can mostly just avoid carbonizing in the first place, thanks to cheap renewables! That also goes for much of South Asia and Africa, and parts of Southeast Asia.

For China, though, this is much harder. The country has an enormous base of installed coal-fired generating capacity, meaning that renewables have a much harder task — they can’t just be cheaper than new coal plants, they have to be cheaper than existing coal. What’s more, the coal industry in China is politically powerful and will resist change.

But given that U.S. diplomatic pressure and moral leadership are unlikely to produce any change in China’s energy mix, the only thing we can do is just keep driving down the price of renewables. And that means continuing to scale up adoption of solar, storage, and wind.

The best way to scale these technologies up quickly will be to directly speed-up large-scale adoption. That means massive government investment in solar and storage. Carbon taxes will be much less effective, since their effect is diffused through all sectors of the economy rather than focused on the key areas, and since carbon taxes are partially a degrowth policy in addition to an adoption incentive. Similarly, policies to intentionally limit economic growth will be actively counterproductive.

Green growth — intentional rapid mass adoption of renewables — is America’s best shot at saving the planet from catastrophic climate change, because it’s our best shot at actually getting China and other countries to decarbonize. It’s also fair, because it minimizes the sacrifices that developing countries will have to make. And it’s likely to be far more politically acceptable to the American people than high carbon taxes or degrowth policies.

When it comes to climate change, we really do have to think globally and act locally.