A Win-Win Strategy for Fossil-Fuel Producers and Environmentalists

Abstract

Humanity now faces a dangerous dilemma: on one hand leading scientists predict that if we continue to burn coal, gas and oil the environmental consequences are likely to be catastrophic (e.g. Hansen et al., 2013); on the other hand many economists argue that if we stop using fossil fuels our industrial civilization will run out of energy and collapse (e.g. Canes, 2015). Although renewable technologies are beginning to compete with fossil fuels in the production of electricity, electricity is only 20% of energy use (IEA, 2014). In other areas—e.g. most heating, industrial production and transport—renewable alternatives are either non-existent or not yet cost-competitive. Because the global economy still requires fossil fuels, any efforts to quickly cut carbon pollution will reduce output. This is an enormous problem as most people—especially those struggling to get by in developing countries— are not prepared to accept lower standards of living. In addition fossil fuel producing countries and companies are not prepared to forgo coal, gas and oil revenues. This dilemma underlies the failure of international negotiations to agree to sharp reductions in greenhouse gas emissions. While most decision-makers accept that climate change poses growing threats, they are unwilling to enact policies likely to cripple their businesses and national economies. As a result it is hard to imagine any scenario in which action will be taken in time to prevent dangerous climate change. Yet time is of the essence: already glaciers are melting, coral reefs are bleaching, rainforests are burning, and many critical agricultural areas are becoming hotter and drier (e.g. Ricke et al., 2013). We must find solutions, or doom our children to living on a dying planet.