It is foolish to think all this can be done in ten years or so, as demanded by many activists and some American presidential hopefuls. But today’s efforts, which are too lax to keep the world from two or even three degrees of warming, can be vastly improved. Forcing firms to reveal their climate vulnerabilities will help increasingly worried investors allocate capital appropriately. A robust price on carbon could stimulate new forms of emission-cutting innovations that planners cannot yet imagine. Powerful as that tool is, though, the decarbonisation it brings will need to be accelerated through well-targeted regulations. Electorates should vote for both.
The problem with such policies is that the climate responds to the overall level of carbon dioxide in the atmosphere, not to a single country’s contribution to it. If one government drastically reduces its own emissions but others do not, the gallant reducer will in general see no reduced harm. This is not always entirely true: Germany’s over-generous renewable-energy subsidies spurred a worldwide boom in solar-panel production that made them cheaper for everyone, thus reducing emissions abroad; Britain’s thriving offshore wind farms may achieve something similar. But it is true enough in most cases to be a huge obstacle.
The obvious fix will be unpalatable to many. The UN’s climate talks treat 193 countries as equals, providing a forum in which all are heard. But three-quarters of emissions come from just 12 economies. In some of those, including the United States, it is possible to imagine younger voters in liberal democracies demanding a political realignment on climate issues—and a new interest in getting others to join in. For a club composed of a dozen great and middling-but-mucky powers to thrash out a “minilateral” deal would leave billions excluded from questions that could shape their destiny; the participants would need new systems of trade preference and other threats and bribes to keep each other in line. But they might break the impasse, pushing enough of the world onto a steeper mitigation trajectory to benefit all—and be widely emulated.
The damage that climate change will end up doing depends on the human response over the next few decades. Many activists on the left cannot imagine today’s liberal democracies responding to the challenge on an adequate scale. They call for new limits to the pursuit of individual prosperity and sweeping government control over investment—strictures some of them would welcome under any circumstances. Meanwhile, on the right, some look away from the incipient disaster in an I’m-alright-Jack way and so ignore their duties to the bulk of humanity.
If the spirit of enterprise that first tapped the power of fossil fuels in the Industrial Revolution is to survive, the states in which it has most prospered must prove those attitudes wrong. They must be willing to transform the machinery of the world economy without giving up on the values out of which that economy was born. Some claim that capitalism’s love of growth inevitably pits it against a stable climate. This newspaper believes them wrong. But climate change could nonetheless be the death knell for economic freedom, along with much else. If capitalism is to hold its place, it must up its game.