By Kerry Adler, President and CEO of SkyPower
The fundamental inequality that exists between emitters of carbon and the victims of its devastating byproduct requires global cooperation and intervention beyond our willingness to act thus far. Today, we have the necessary technology, ingenuity and global monetary tools to incentivize a shift to cleaner energy.
Placing a price on carbon enhances the competitive position of renewable energy technologies, such as utility-scale solar, relative to fossil energy, thus encouraging migration away from high-carbon fuels. It is an important step, and it can be supported with other initiatives to ensure accountability.
In the private sector, transparency regarding carbon emissions is essential. With the advent of the Internet and the plethora of information available today, it is not only possible, but imperative that emitters of carbon are held accountable in a public forum.
Carbon governance—the institutional arrangements in place for mitigating greenhouse gas emissions—can vary considerably across countries. In Brazil, the financial community is actively interested in carbon trading, but Chinese banks have hardly any interest in it. In India, the Clean Development Mechanism (CDM) market is developed almost uniquely by domestic companies, while China relies extensively on foreign firms. And while the Chinese government takes an active interest in providing capacity to project developers, the Brazilian authorities see their role uniquely as guarantors of environmental integrity of emissions reductions projects. So, if carbon is the same everywhere, why is carbon governance so incredibly varied?
Since it is the poorest continent, produces less than 4 percent of global greenhouse gas emissions, and was not responsible for the build-up of CO2 in the atmosphere, there is a strong case that Africa should not have to constrain its growth by mitigating greenhouse gas emissions in the future. The one exception may be South Africa, which produces 65 percent of Africa’s (and 1.5 percent of the world’s) emissions and, as a middle-income country, may have the capacity to curb emissions in the future. In a recent paper, Delfin Go, Sherman Robinson, Karen Thierfelder and I explore the costs to the South African economy of a tax on carbon emissions.
The two great challenges of the 21st century are the battle against poverty and the management of climate change. On both we must act strongly now and expect to continue that action over the coming decades. Our response to climate change and poverty reduction will define our generation. If we fail on either one of them, we will fail on the other. The current crisis in the financial markets and the economic downturn is new and immediate, although some years in the making. All three challenges require urgent and decisive action, and all three can be overcome together through determined and concerted efforts across the world. But whilst recognising that we must respond, and respond strongly, to all three challenges, we should also recognise the opportunities: a well-constructed response to one can provide great direct advantages and opportunities for the other.