Mainstream economic thinkers back carbon pricing. We should too

Science Matters | by David Suzuki

Angel Gurria sounds more like the leader of an environmental or social justice group.

In his recent University of Toronto lecture Climate Action: Time for Implementation, Gurria stressed that climate change is a public health issue “disproportionately affecting the most vulnerable as well as those least responsible for anthropogenic warming.”

Gurria is Secretary-General of the Organization for Economic Co-operation and Development, a group representing some of the richest, most industrialized nations on Earth.

He said the Toronto lecture was his third climate talk in recent years. In the first, he argued that fossil fuel emissions to the atmosphere must be “completely eliminated in the second half of this century.” I disagree with his support of carbon capture — allowing carbon dioxide pollution to be created but storing it below ground. But his vision of worldwide net-zero emissions is breathtaking. We associate the words “completely eliminated” with Greenpeace, not the OECD.

And he’s certainly no friend of coal-fired power. “[It’s] no longer cheap given rapid advances in renewables and the heavy costs of air pollution,” he argues. In its report Investing in Climate, Investing in Growth, the OECD laments continued investment in coal-based power generation. Given that many member states are economically vested in coal, Gurria’s stance is admirable. He doesn’t ignore the fuel’s harmful effects nor is he afraid to critique his own constituents.

And he understands the situation’s urgency. “Countries can no longer credibly argue that better evidence is needed before we take action,” he says.

Gurria has no patience for those who claim the science is unsettled or that climate remedies can be postponed. It’s encouraging that someone of his stature believes the question is no longer “whether” but “how fast?”

Gurria is a great supporter of the Paris climate agreement but believes it doesn’t go far enough. Rather than adopt a cautious approach — perhaps waiting for nations to meet their current targets before embarking on more stringent ones — he urges greater ambition, arguing there is presently a “serious shortfall in the aggregate level of pledged emissions reductions.”

He notes that even if Paris commitments keep temperature rise below two degrees Celsius, there will be more extreme weather events — including flooding and drought — and food insecurity.

Perhaps most encouraging, Gurria calls for higher carbon prices and a phase-out of fossil fuel subsidies. Carbon prices, he says, are non-existent or too low.

In recent years, the debate in Canada has been over whether or not to implement carbon pricing. For Gurria, that question is settled. The issue now is raising the price to levels that will achieve emission-reduction goals.

By taking this position, the OECD  has put carbon pricing opponents on notice that they are out of step with mainstream economic thought.

Fossil fuel subsidies, Gurria writes, function as “negative carbon price signals” furthering the uptake of oil and gas at the very moment when their use needs to be curtailed. He could have urged the subsidies’ reduction; instead, he calls for their removal. He reminds us of their staggering global scale — about half a trillion dollars annually. He says they “disproportionately benefit” the well off.

Criticizing these subsidies takes guts. It means targeting some of the world’s largest resource companies.

The only serious flaw is his unquestioning support for economic growth. He believes that can be “inclusive and climate-compatible,” but his argument is not wholly convincing. In a recent open letter, some 15,000 scientists raised concerns about “the role of an economy rooted in growth.” At a minimum, Gurria should recognize the work of thinkers such as Canadian economist (and former David Suzuki Foundation board member) Peter Victor, who argue vital societal goals, such as full employment, can be achieved without growth.

But the lesson is not that the OECD still embraces some tenets of traditional economics. That’s a given. The interesting thing is how far elite actors have come in acknowledging key drivers of the climate crisis, and the means to its solution. Sceptics take note: one of the world’s most influential economists urges dramatic climate action — including a higher, and rising, price on carbon.

With contributions from Gideon Forman. Learn more at