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Industrial air pollution
In early December, most of the countries of the world wrangled with Saudi Arabia and other petrostates at COP28 – the recent climate change conference in Dubai – over whether there should be an explicit reference to a phaseout of fossil fuels in the conference’s final agreement. The debate went far into overtime, and the pro-phaseout advocates appear to have won the battle.
But don’t believe it! This is a Swiss-cheese, non-binding agreement that “Dirty Energy” will find plenty of ways to subvert.
Despite the many loopholes, there is hope for a genuine phaseout of the vast majority of fossil fuels by 2050. It won't happen by trusting the goodwill of the fossil fuel-producing companies and their allies but, instead, by reducing the demand for these fuels as quickly as possible.
How do we reduce demand?
The short answer is by continuing to reduce the relative cost of clean energy versus dirty energy. We need to accelerate the deployment of clean energy in both the Global North and the Global South, rapidly increase energy efficiency, make trillions of dollars available for the expansion of clean energy resources, provide support to energy-poor and vulnerable countries to cope with the harmful effects of climate change, and end subsidies to the producers and distributers of dirty fuels.
Basic economics tells us that no matter how much fossil fuel companies can produce, they won’t be able to sell their products if they are not competitive in the marketplace. In other words, dirty energy companies can control supply of their products, but they can’t control demand for them. As demand dries up, the market for oil, gas, and coal disappears.
Examples
Let’s dig a little deeper into this demand-side strategy for phasing out dirty energy. The best place to start is with a couple of good examples. In 2023, the European Union enacted “Fit for 55” as a package of programs to accelerate the EU’s reduction of carbon emissions – with the goals of achieving a 55% reduction of emissions in 2030 compared to those in 1990, and net zero carbon emissions by 2050. The main components of Fit for 55 are:
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- An emissions trading system (ETS) that gradually increases the cost of carbon emissions by both domestic “operators” and by companies wanting to export goods to EU member countries.
- The addition of several new target emitters to those already subject to the ETS, including shipping, aviation, road transport, and energy-inefficient buildings.
- Clear, measurable goals and increasingly severe consequences over time for operators failing to meet the goals that are built into the system.
- Periodic updating of the implementation strategy based on changing conditions.
- A carbon border adjustment mechanism that effectively imposes carbon taxes on companies operating outside the EU that market their products to the EU. These carbon taxes protect EU-based companies from unfair competition.
In summary, this strategy is a straightforward, clearly understandable means to reduce fossil fuel use and greenhouse gas emissions in order to achieve the 2030 and 2050 Paris Agreement goals.
Thirteen states in the United States provide a second set of examples of demand-side programs to reduce fossil fuel use. Like the European Union, these states also use carbon-pricing mechanisms to ratchet down fossil fuel use by utilities and other companies. What makes this a big deal is that these states have a significant presence in the world economy. If California were a country, it would have the fifth largest economy in the world.
This demand-side approach could be enlarged dramatically in the next few years, especially if funds were available to developing countries to accelerate their clean energy growth. After all, the large, developed countries in the world caused the current climate crisis through their profligate use of fossil fuels, especially during the last century. And yet, developing countries are suffering the main consequences of this profligacy in the form of droughts, starvation, floods, excessive heat, and other climate-related disasters. Countries in the Global North have a responsibility to provide technical and financial support to these developing countries. Such aid would be part of a broader strategy to reduce worldwide carbon emissions and global warming.
As reported by a UN press release, “The United Nations Climate Change conference, COP28, has concluded with a historic agreement to transition away from fossil fuels, triple renewable energy and increase climate finance for the most vulnerable.”
We have the potential to make this agreement more than just a set of vague promises, especially through concerted efforts to increase the use of clean energy and to rapidly reduce demand for fossil fuels. This demand-side strategy can make a dramatic difference by 2030 despite the disingenuous actions of Dirty Energy to continue the world’s dependency on fossil fuels for as long as possible.
