An example of such coordination is the similarity in policies used by governments around the world to stop the spread of COVID-19. The best practices, when a virus like COVID-19 is already globally prevalent, require governments to act uniformly so that they can curtail the virus everywhere it festers. Commitment to flattening the epidemiological curve through physical distancing, self-isolation and mass testing is imperative within individual countries, while travel restrictions should be used to limit cross-border transmission.
COVID-19 is a quintessential collective action problem where inaction on the part of one nation can create adverse consequences across the world. Acting in concert will minimise societal costs.
Global coordination can also ensure that scarce resources — like ventilators, testing kits and face masks — are allocated efficiently. Examples include the recent donations of medical supplies by Chinese institutions and companies to countries facing mass outbreaks. Such actions are mutually beneficial — only through the widespread eradication of COVID-19 can we limit its potential re-emergence.
Similarly, the widespread curtailment of greenhouse gases (GHGs) also creates mutual benefits. It is another collective action problem where inaction on the part of one nation can create adverse consequences around the world — even if these consequences are unevenly distributed.
We should seek to build a more cohesive, multilateral world beyond COVID-19 and let the lessons of this crisis inform our need to begin building a global consensus to solve the granddaddy of all existential threats — climate change.
The Paris Agreement achieved much in terms of diplomacy, symbolism and capacity building. But agreement on carbon pricing commitments — as well as mechanisms through which national climate commitments may be better enforced — were conspicuously absent. These are two avenues through which we can build a global consensus to alleviate climate change.
The carbon taxes or emissions trading schemes now in place in over 70 national and subnational jurisdictions are the beginning of the long process of addressing the core market failure contributing to climate change. It is imperative that this process is continued at the now-postponed COP26 in Glasgow in 2021. The endgame of a single global carbon price is one long-promoted by economists as the most efficient way to internalise the externality costs of GHG emissions globally.
Coming to any agreement on a single pricing mechanism will be fraught with challenges. The most significant involves persuading less-developed nations with less cumulative responsibility for today’s atmospheric concentration of GHGs to adopt carbon prices equivalent to those of richer countries, who have until today benefitted from the unfettered use of fossil fuels. This need not present a stumbling block.
Agreeing on a comprehensive and generous system of compensatory cash and technology transfers from rich to poor nations would go a long way in supporting the transition to low-carbon economic growth across the developing world. Such transfers can be made conditional on the adoption of carbon pricing, which will also create domestic environmental, health and fiscal benefits from reduced air pollution and increased revenue generation.
Carbon revenues can be used to fund compensation for the economically disadvantaged and allow governments to reduce distortionary taxes on individual and corporate income, among many other revenue-recycling options. All these benefits in turn support the domestic political palatability of carbon pricing.
In the same way that uniform policies can contribute to the efficient curtailment of COVID-19 in our globalised world, steps in this direction can slow carbon emissions growth on a global level. This will consume tremendous amounts of political capital and time, so it is important to get moving as soon as possible.
In the short-run, we should place emphasis on a regional carbon pricing framework. In Asia, measures are already in place in China, Japan, Singapore and South Korea, and are under consideration in Thailand and Vietnam. As a first step, efforts should be made to convince other major regional emitters — including India, Indonesia and Malaysia — to join in. A twin strategy of encouraging domestic adoption of carbon pricing alongside diplomatic efforts to produce a regional (and eventually global) policy will ensure that over time, the costs of the greenhouse gas externality are internalised to a greater degree.
The creation of an authority with the ability to enforce climate commitments across countries should also be on the agenda. At present, this lack of enforcement is a key reason many nations are struggling to meet their Paris pledges.
The solution may be to establish a climate equivalent of the World Trade Organization. For a so-called International Climate Authority (ICA) to function effectively there must be a deferment of authority to the ICA on matters pertaining to the climate. The ICA could take either a carrot or stick approach to its duties — or a combination of both.
It could extend aid to less-developed countries requiring assistance to meet their targets or who seek to utilise carbon pricing to reach these targets. It could also deny it to those whose policies go against the ideal of collective climate action. In acting as the guardian of the global commons, the ICA could help overcome the international free-rider problem and eventually oversee and support a future global carbon pricing mechanism.
Failure to make progress towards an international carbon pricing scheme will leave the global community ill-prepared to cope with rising temperatures and the sea of disproportionate consequences it will create. We cannot let myopia cloud possibly the most universal of lessons of COVID-19 — that to solve global issues we need pre-emptive global action.
Darshan Joshi is a lead researcher at Research for Social Advancement (REFSA), Kuala Lumpur.
An interesting and thoughtful article.
“COVID-19 is a quintessential collective action problem where inaction on the part of one nation can create adverse consequences across the world. Acting in concert will minimise societal costs.”
“We should seek to build a more cohesive, multilateral world beyond COVID-19 and let the lessons of this crisis inform our need to begin building a global consensus to solve the granddaddy of all existential threats — climate change.”
I am worried, though, that the article entirely ignores the other great ‘existential’ threat that is upon us: population size and population growth: the grandmummy of existential threats!
Unsurprisingly, this forum rarely comes to grips with this issue. Moreover, when it does, there is no acknowledgement that the enormous population problems facing the region (for it is very much a regional issue, although its consequences are global) are a product of failed policies and/or inaction.
Even in the 2020, East Asia/South East Asia is not earnest enough in reducing the rates of population growth and appear content to follow policies that rely on trends that indicate growing affluence leads to reduced family size. We need to be much more earnest than that!
We often see written that, because the west has secured the greatest advantage from industry that has produced enormous volumes of climate-changing carbon emission, it should be primarily responsible for fixing the problem. Although I do not disagree, it has been problematic for reasons to be discussed. Darshan’s article seems to step away from this attitude and invite a co-operative and multi-lateral approach from developed and developing nations, but he/she ignores the population aspect of it.
Those unpersuaded by his basic premise ought to consider the enormous global challenges that have been produced by the unfettered population of East Asia (and now Africa). It is not reasonable, and it has not been reasonable, for the developing world to rail against carbon emissions while it has failed so terribly to reduce the number of life-long consumers it brings into the world and who now feel entitled to aspire to western-style affluence at some point in the future!
It is important to bear in mind, also, that it is primarily the technology of the west (rapidly adopted and adapted in the East) that will, if we are wise, permit East Asia (and Africa) to drag millions of its citizens from the dark depths of poverty without the complete destruction of the planet. Without the technological advances achieved via western development, East Asia would be required to take the same dirty path to development as was taken by the west. We know the harm done by the development of a fraction of the Easts population; it is frightening to contemplate what would occur if the East was unable now to avail itself of the technology of the west.
So, Darshan’s conception is a good one, although insufficient as it stands. The west must step up to the mark with regard to carbon emissions. The East must step up to the mark with regard to population reduction. There are benign solutions to the latter that have, for decades, been ignored or under-utilised for a variety of reasons: a lack of political will, a lack conviction that a problem existed, religious and social influences and so on.
If the West is to take responsibility for carbon, the East must address population; in combination we would achieve much.
So, Darshan, lets think in terms of Granddaddy and Grandmummy … let’s get her out of the back-seat where she has been required to sit for too long!