A Beautiful Picture!
While researching for the Ending Subsidies piece in our new Policy Playbook I came across this stunning graph. It took me a while to realise how remarkable it is. Now I’m so impressed I think it is beautiful!
It could be seen as just another graph showing global carbon emissions and the various rates of reduction needed to get to zero or net zero by a particular year. There have been thousands such graphs drawn since the Paris Agreement began to set targets for 2030 and 2050.
Then I noticed the steep blue dotted line. It suggests that ‘Efficient fuel pricing’ can get us well on track to stay under 1.5C before 2050! It also suggests that it can do that on its own. Think how powerful it would be in conjunction with other complementary policies!
I re-read the article that contains the graph: “Climate Change: Fossil Fuel Subsidies” from the IMF. It says:
Raising fuel prices to their fully efficient levels reduces projected global fossil fuel CO2 emissions 36 percent below baseline levels in 2025—or 32 percent below 2018 emissions. This reduction is in line with the 25-50 percent reduction in global GHGs below 2018 levels needed by 2030 to be on track with containing global warming to the Paris goal of 1.5-2C.
“Raising fuel prices to their fully efficient levels” is exactly what CCL’s climate dividend policy aims to do.
So what does efficient pricing mean? It simply means that all the costs of a product are included in its selling price. And as we explain in Ending Fossil Fuel Subsidies … the only way to incorporate the costs of the damage that fuels cause to climate, environment and health is to price their carbon content before they enter the market. That enables us to pay the true cost of the fuel, the cost to the producer and the cost to society.
So lets consider the implications of this claim - that efficient fuel pricing can reduce global emissions by 36% in only 4 years.
This one policy could enable Australia to reach its 2030 target for 43% emissions reduction several years early, all on its own. It would do most of the heavy lifting and enable the safeguard mechanism and other policies to mop up non-fuel derived industrial emissions. It would end the competing demands of energy and climate policies thus making the process of decarbonisation so much easier than the conflicted and burdensome process it is today. And it would enable Australia to join the race to zero emissions with relative ease.
After decades of climate wars that is a beautiful picture indeed!
And here is another beautiful picture!
It shows the major effect the application of a carbon price has on global temperatures - the blue line in the graph. It drops the expected global temperature at 2100 from 3.6C to 2.6C. All the other levers have very little effect on their own and many need to be applied together to have anything near the same effect. You can try for yourself at EN-ROADS.
It is developed by Climate Interactive and MIT.
