The G7 Gears Up to Talk Climate
Image of Friends of the Earth activists protesting Japan’s financial investments in coal in 2019. Japan has promised to phase out overseas funding of coal by the end of 2021, along with the other G-7 countries after an environmental ministerial meeting in London. (Photo: Victor Barro, foe Japan, Flickr AP, CC BY NC-ND 2.0)
The heads of the G7, seven of the wealthiest countries in the world, are scheduled to meet in England starting June 11 to talk about plans to equitably address the climate crisis in the wake of Covid 19. Rachel Kyte, the Dean of the Fletcher School for Law and Diplomacy at Tufts University and former senior World Bank and UN Climate official, joins host Steve Curwood.
BASCOMB: It’s Living on Earth, I’m Bobby Bascomb.
CURWOOD: And I’m Steve Curwood.
Talk about a moment in the human history of Planet Earth: There’s the pandemic, looking better now in the US but still rough in many parts of the world; the economic crush from the pandemic made even worse by inequality, and precious little time left to avert climate change catastrophe. So seven of the richest nations known as the G7 are looking to change vaccination, taxation and finance policies to meet those challenges. Leaders of The UK, the EU, Canada, France, Germany, Italy, Japan and the United States will meet starting June 11th in Cornwall England to address covid, taxes and calls by the International Energy agency and others to move their economies away from fossil fuels. Investors and courts are already pressuring energy companies to get on the path to net zero carbon emissions right now to meet the goals of the Paris Climate Agreement. Rachel Kyte is dean of the Fletcher School of Law and Diplomacy at Tufts University, and a former senior World Bank and UN Climate official. She says the means for success are obvious.
KYTE: Well, there's no real rocket science to the how. You need to put a price on the pollution that you want less of. That means an effective price on carbon. It means using policy and standards and guidelines to make it clear the level of efficiency that you want from cars and trucks, to ships and planes to buildings, to appliances. Increasingly, the emphasis is also using the financial sector and regulation around transparency and disclosure but also making clear where public procurement and public pension funds etc. should be investing for the long run. So you're starting to see a systematic closing down of the space where people want to be holding sort of a heavily carbonized product or a service. And increasingly, you see companies being asked to explain how they are going to continue to be viable companies through the transition.
CURWOOD: What about the equity here. You talk about a price on carbon, I think this last month, the EU price of a tonne of carbon hit what 56 euros, which is I don't know $70, $69. I mean, the price of carbon stood around 20 euros, I think before the the pandemic. So it's really going up. And while some say that this is needed, obviously, to trigger investments in cleaner technology, this can have a regressive effect when it comes to the tax burden on low and middle income communities for them to deal with or even industry in less wealthy places. So what does a rising carbon tax mean for the pockets of low and middle income communities? Do you think?
KYTE: Well, you're quite right, any tax can be more or less regressive depending on how you apply that tax. And I think that there are a number of ways that have been used in different jurisdictions around the world to make sure that a carbon tax does not penalize those on lower incomes. You can levy the tax and then have the revenue from that tax flow back to the consumer in many different ways so it's not experienced regressively by people on low income. And I think that's been effectively done in British Columbia, across the EU and elsewhere. So I think one has to communicate it and what we see around the world as when carbon taxes are introduced, or when fossil fuel subsidies are withdrawn, unless there is an effective communication about you know, this is being changed but this is what it's going to result in for you in your pocket. I mean, you have to explain to people that they won't suffer at the level of their wallet. But I think that pricing pollution is the systemic way to wean ourselves off fossil fuels as the lifeblood of our economy. And it's not the only thing that needs to be done. It has to come with a raft of other policies, but it is the sort of necessary if insufficient policy step if we're really to move at speed and scale.
CURWOOD: There are countries who aren't part of the G-7 to play a major role when it comes to the carbon problem. There's China, India, and Russia, but also the petrostates, Saudi Arabia, Iraq, Iran, what steps do these countries need to take in order for the planet to meet the Paris climate goals? Do you think?
KYTE: So you're quite right, that there are a number of major economies that are not in the G-7. Most of these economies are indicating that they are aiming to achieve a net zero economy, so an economy with net zero emissions by mid century. So China has said that it will get there by 2060, Japan, South Korea have come in at 2050. We've got other major economies like Brazil and Indonesia saying that they can get there too but they need help. We're expecting that India would come out with a revised ambition around net zero by mid century, sometime this year. I think they they've been distracted by the severity of the pandemic. Yeah. And then we've got the Irans and the Iraqs and the the gulf states, and also Russia and others, and every country now really needs to indicate how it's raising its ambition. The importance of the G-7 is that this in large part is the grouping of advanced economies that historically have been the perpetrators of most of the problem. It has been the industrial history of the G-7. that got us to this point in large part. And so when we think about the politics of climate change, it is a moment when there is leadership needed. And it's, it's about the G-7 saying, this is what we're going to do, we're going to lead by example. And we are going to stand in solidarity with countries who by no fault of their own, find themselves grappling with the extraordinary impacts of climate change already today and will do in the future. And that's the importance of the G-7’s leadership. This year in particular, we have the race to zero now. People are ratcheting up their ambition. But a lot of countries will need a lot of help to get there.
CURWOOD: You're giving me lots of hope here Rachel Kyte in, in a world where hope can sometimes be in short supply. What gives you so much optimism?
KYTE: Well, because we're, we're arguing about the right things. For the last few years, we're arguing about, you know, is it real? Is it manmade? Does it matter? Is it our fault? You know, there's lots of finger pointing. And really since September of last year, when both the EU and and China confirmed that they understand that their economies have to be at net zero by mid century and then with the advent of a Biden administration in the US coming back into the fold, you know, that's between the EU, China and the US that's 60% of global domestic products in the in the world, right. So now the question is, do we dare enough to imagine what the world would look like without carbon and the emissions that come from it as a sort of lifeblood, and if we are prepared to sort of elect those leaders keep those leaders in power and demand that kind of leadership from our leaders, then this isn't something that we can't do. Now, I'm a hopeful pessimist. There are lots of reasons why we should be very afraid. And there are lots of reasons why citizens have to hold their leaders to account and we have to demand leadership from them. But we've got enough money in the global economy to do it. It's it's badly distributed and it's not efficiently used. We've got a lot of technology already today that we could deploy, that would make an enormous difference in people's lives. We've just got to be good enough to do all of that.
CURWOOD: Let me ask you about this. Right now, it seems that there's pressure from almost every angle on the fossil fuel industry. We've seen a shareholder revolt involving Exxon, and they'll be more about that, in this this broadcast. There are legal cases involving youth and climate organizations. And then there's this recent court decision in the Netherlands that ordered Shell to reduce its planet warming carbon emissions by nearly half by the year 2030 from 2019. I believe the numbers 45% reduction in levels. I'm not sure but it sounds to me like this is the first time a court has decided that a major polluter has to cut emissions. So what do you think this court decision means when it comes to establishing legal precedents in climate related cases? And what does you think it mean in the UN and for that matter around the world?
KYTE: So previously, the Dutch courts that had agreed that the Dutch national plan wasn't ambitious enough and didn't protect its citizens. So we already had that case. And now we have the specific case demanding that Shell really cuts emissions, not sort of talk about the efficiency of the emissions that it produces. And that's fully in line with demanding that we move our economies towards net zero, we're now talking about actually keeping fossil fuel resources in the ground, not exploiting them. So the Dutch court is consistent with the direction of travel that everybody's agreed to based on the international science. So one could expect that this will have a ripple effect as others try similar court actions against other fossil fuel companies. That happened in the same week as shareholders at Chevron pushed for greater ambition. And then obviously, the attempt and the successful attempt in the end to to put different directors on the board of Exxon. All of this is actually related to the performance of these companies now and in the future. They've now formed less and less and less of a part of the S&P 500. Their profit levels have taken hammering over the last few years. And many of them are now making it more ambitious commitments but they are relying on offsets. The idea that some natured forest, somewhere else in the world will absorb the emissions that this company is going to release due to its activities. And I think that there is some deep skepticism that that's going to be a sufficiently ambitious way for the fossil fuel exploitative companies of the developed world and of the West and to move forward. There is also a deep inequity, I think, in the approach to offsets from some companies. Of course, nature is a solution and trading voluntarily the carbon sequestration capacity of a forest against a company or a country somewhere else in the world is going to form part of the way in which we move forward. But I think the question that is asked by many people in those countries is why does the sequestration capacity of our forests have to be used to mitigate the business development strategy of an oil and gas company in the North Sea. And so there's some really profound economic and moral questions that are being posed to these fossil fuel companies and I would expect to see more court cases not less in the future.
CURWOOD: Rachel Kyte is Dean of the Fletcher School at Tufts University. Thanks so much for taking the time with us today.
KYTE: It's my pleasure. Take care.
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