The right direction on climate change

SOCRATIC QUESTIONING IN WORLD POLITICS

Richard is a second-year student studying Finance and International Relations. He is an international student with a very broad experience with NGOs and academics. His articles will analyse global affairs from a political and economic point of view. He uses the Socratic way of questioning to provide a philosophical perspective in perceiving contemporary global affairs.

Many countries are trying to transition from fossil fuel and gas power. Following the G20 summit, numerous countries have made a bid to tackle climate change in this aspect. China is one of the biggest fossil fuel consumers and produced 11.2 trillion USD (GDP) by 2016. China recently claimed that they would end the sales of combustion-engine vehicles to push electric cars. The successful implementation of this policy might alleviate domestic air pollution, and perhaps have a positive impact on climate change.

Despite the allegedly good intentions by the Chinese, a specific deadline on the sale of fossil fuel-based cars has yet to set. Cynics perceive that the successful implementation in such massive market will take until the 2040s to accomplish, and therefore cannot fulfil the 2-Celsius goal set by Paris Agreement. Some even say that to implement this policy, China will have to face severe market failure and market inefficiency in the short-run. Thus, it is significant to cautiously consider whether ending combustion-engine vehicles will combat climate change and ultimately fulfil the Paris Agreement.

It is important to assess what the main contributor to climate change is. Despite the lack of a unanimous agreement on this issue, it is widely believed that the excessive emission of carbon dioxide causes climate change. Interestingly, according to US Environmental Protection Agency, the world major CO2 emission industries are Electricity & Heat Production (around 25%) and Industry (21%). In contrast, the Transportation Industry (which contains air, rail, road as well as fossil fuel-based vehicles) only contributed 15% of the global greenhouse gas emission in 2010. With this in mind, perhaps the goal of transitioning motor vehicles from fossil fuel to electricity might not be as efficient as changing and targeting other significant industries, such as Electricity & Heat Production.

Additionally, as mentioned above, electricity production contributes around 25% of CO2.In other words, if we replace combustion engines with electricity, this will reduce the CO2 from transportation but increase the amount in the electricity industry. Ultimately, this measure of replacing combustion engines cannot necessarily reduce the emission of CO2, which is still the key contributor to global warming.  

Another consequence of this policy in both China and other same-vision countries might be the potential economic loss. Per the Australian Bureau of Statistics, 51% of households in Australia have access to two or more motor vehicles, and the majority are combustion engine based (these engines use fossil fuels). This number will arguably increase as countries develop more. Thus, if we introduce electric cars, this indicates that more than half of the household might need to either shift their transportation or spend more money to pay the electricity bill. Indeed, CO2 emissions can potentially drop because consumers use less fossil fuel. Notwithstanding, markets might be less efficient because ultimately consumers are getting the same thing but having to pay more money.  

On the bright side, such gesture might stimulate the innovation on alternative energies. Norway, the most ambitious country, set the deadline by 2025, which means all the sales of the conventional cars will be banned in the next eight years. This indicates that motor companies in Norway must produce a solution on alternative energy cars if they want to survive in the market. A rational choice for those companies would be increasing investment in research and development in the electricity sector or other alternative energies.  

As a result, it is uncertain whether ending combustion engine vehicles will alleviate climate change. However, it is important to recognise the pitfalls in this policy or mindset. Firstly, we need to recognise that transportation is not the major mean for climate change. Secondly, the potential economic loss and market failure that needs to be considered is the decision-making process. Therefore, the policy itself is controversial to various extents. If the policy is going to shift our focus on research and development on alternative energies, it is most definitely not the worst start to combat climate change.