What the patchwork of COVID-19 responses can teach us about climate action
The COVID-19 pandemic is testing modern society, institutions and governments in unprecedented ways, and the lessons learned from this crisis will inform public policy and decision-making for decades to come.
Already, there are several easy comparisons between the lead-up to the pandemic and the current debate over climate change: scientists’ warnings ignored, governments slow to act and skeptics shouting, “Hoax!” But rather than dunking on people who got it wrong, we should really be focused on the takeaways from the COVID-19 policy response so far and how to best apply them toward future climate action.
State and local government responses to the COVID-19 pandemic have been routinely frustrated by a lack of reciprocal measures in neighboring jurisdictions. One city may take drastic measures — closing restaurants, theaters and non-essential businesses — but if neighboring municipalities proceed with business as usual, these shutdown and shelter-in-place efforts are largely undermined. The proactive city takes a disproportionate economic hit while the virus’ spread continues unabated in surrounding areas, further straining badly needed medical resources. A coordinated and congruent effort would be much more effective.
In the lexicon of clean energy circles, this phenomenon is referred to as “leakage.” For instance, one state or country may spend billions of dollars to reduce greenhouse gas emissions — maybe even trillions if something like the Green New Deal were to ever pass — but if neighboring states take no action then the net effect of these actions is effectively zero.
To illustrate the point, suppose the U.S. embarked on a clean energy revolution to eliminate our use of fossil fuels. This would no doubt be an expensive overhaul of the U.S. economy, but our carbon emissions would fall drastically. Global warming would slow and runaway climate change would be avoided.
Or would it?
The ultimate benefit of a U.S. clean energy revolution depends entirely on whether other countries follow suit. And unfortunately there’s no reason to believe that would happen.
If the U.S. switched to 100 percent clean energy, fossil fuel prices would plummet. Developing countries around the world – most notably China and India – would almost certainly exploit this newfound abundance of cheap energy to supercharge their manufacturing sectors. So the U.S could spend trillions of dollars to burn less carbon, but other parts of the world could largely negate our efforts by burning more. Global warming would continue to spiral out of control and Americans would be no better off.
Just as we are seeing the ineffective patchwork of state and local COVID-19 quarantine measures fail absent a more synchronized response, we need a climate plan that brings everyone into the fold.
A well-crafted carbon tax could be the antidote to this leakage problem. By designing a tax that includes import tariffs – applied to goods entering the U.S. from countries without their own domestic carbon tax – America’s trading partners would be obliged to reciprocate our efforts by adopting their own carbon tax. Indeed, the exports of carbon tax regimes would gain a significant competitive advantage over those that face an import penalty.
In this manner, a border-adjustable U.S. carbon tax could create a domino effect around the world and ignite the spark that leads to globally coordinated climate action. Universal carbon taxes would gradually increase the cost of doing business for emissions-heavy industries and sectors, thus providing a firm economic incentive for them to clean up their acts.
Clean energy investment would boom as renewables gained a comparative advantage over fossil fuels. Global carbon emissions would tumble as new innovations and technologies were traded across borders. Government would need only to design and implement the tax, and markets would take care of the rest.
It’s difficult to think about climate change in a time like this. Most of us find it challenging enough to contemplate what the next week might hold, much less the next decade. But if we can view the COVID-19 pandemic as a teaching moment, perhaps we can emerge wiser and better equipped to ensure a healthy future for all of us when this is over. We owe ourselves that much.