An Incredibly Expensive Folly: Why Failure in Copenhagen Would Be a Success

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Global energy demand will double by 2050. Alternative sources of energy are far from ready for widespread use. In a paper for the Copenhagen Consensus Center in July 2009, Isabel Galiana and Professor Chris Green of McGill University demonstrated the extent of the technological challenge. They pointed out that reducing carbon emissions by three-quarters by 2100 while maintaining reasonable growth -- a slightly less ambitious goal than the G-8's -- requires non-fossil fuel-based sources of energy to be an astonishing two and a half times greater in 2100 than the level of total, global energy consumption was in 2000. If we continue on our current path, technological development will not be anywhere near significant enough to make non-carbon-based energy sources competitive with fossil fuels in terms of price or effectiveness.

Green and Galiana examined the state of non-carbon based energy today --including nuclear, wind, solar, and geothermal energy -- and found that, taken together, alternative energy sources would get us less than halfway toward a path of stable carbon emissions by 2050, and only a tiny fraction of the way towards stabilization by 2100. The technology will simply not be ready in terms of scalability or stability. In many cases, there is still a need for the most basic research and development. We are not even close to getting the needed technological revolution started. And we should not forget that future generations will not judge us on the scale of our ambitions, but rather on what we actually delivered.

Right now, politicians are increasingly engaging in fanciful promises that have little or no chance of being fulfilled. Consider Japan. In June, it committed to cutting greenhouse gas levels by 8 percent from 1990 levels by 2020. As Professor Roger Pielke Jr. of the Center for Science and Technology Policy Research noted in a peer-reviewed paper, fulfilling this promise would require building nine new nuclear power plants and increasing their use by one-third, constructing more than 1 million new wind-turbines, installing solar panels on nearly 3 million homes, doubling the percentage of new homes that meet rigorous insulation standards, and increasing sales of "green" vehicles from 4 to 50 percent of auto purchases.

This would be a Herculean effort, especially for a nation that has already led the world in energy efficiency. Yet it was roundly criticized when first presented. When Japan's new prime minister recently promised a much stronger reduction, 25 percent, without any obvious way to deliver, it was roundly applauded. Beautiful words are valued over realistic goals.

€53 Billion in Solar Power Will Prevent only an Hour of Climate Change

Our current approach to solving global warming -- focusing primarily on how much carbon to try to cut through taxes, rather than on how to achieve this technologically -- puts the cart before the horse.

The most effective policy response would be to dramatically increase public funds on research and development into non-CO2 based energy. Rather than making fossil fuels more expensive, we need to make alternative energy cheaper.

Research and development investments of around €66 billion a year will be needed. That is fifty-fold more than is spent by governments now, but a fraction of the cost of proposed carbon cuts. Green and Galiana, the academics from McGill University, found that in economic terms, every dollar spent could avoid €11 worth of climate damage.

We cannot rely on private enterprise. As with medical research, many of the required early, innovative breakthroughs will not reap significant financial rewards, so there is no strong incentive for private investment today.

Dramatically increasing public funding would resolve many of the political challenges with the Kyoto approach. Developing nations like India and China would be much more likely to embrace a cheaper, smarter and more beneficial path of innovation.

Carbon taxes could play an important secondary role in supporting research and development. Green and Galiana propose carbon pricing be limited initially to a low tax (say $5 a ton) to finance energy research and development. Over time, they propose, the tax should be allowed to rise to send a price signal to promote the deployment of effective, affordable technology alternatives.

It is important that research and development spending is devoted to developing new, alternative technologies instead of simply propping up today's inefficient technology. We can find a case of the latter in Germany, which pays a huge amount to cut tiny amounts of carbon through supporting solar power. This support costs €0.43 per kWh, which is equivalent to spending €716 to cut every ton of CO2. Yet the expected climate damage of each ton is about €4.

The price-tag is phenomenal -- estimated at €53 billion for the solar panels installed between 2000-2010 -- yet the maximum effect will be to postpone global warming by just one hour, at the end of this century. This incredibly expensive folly is an example of a policy that feels good but does nothing.

Policymakers should abandon fraught carbon reduction negotiations, and instead make agreements to invest in research and development to get alternative technology to the level it needs to be.

Since politicians first promised to cut carbon in Rio de Janeiro in 1992, we have wasted nearly 20 years without making any meaningful progress in our well-meaning but ultimately fanciful quest of cutting carbon emissions. We have no more time to waste on a critically flawed response to global warming.

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• Part 1: Why Failure in Copenhagen Would Be a Success
• Part 2: Fanciful Promises With Little or No Chance of Being Fulfilled