Achieving Net Zero — Solving climate change without carbon taxes and with a little help of the fossil fuel industry

The recent report of the Intergovernmental Panel on Climate Change highlighted the potential role of individual choices and lifestyle changes in meeting the goals of the Paris Climate Agreement, pursuing efforts to keep global warming to 1.5°C. But while choices like adopting a plant-based diet would undoubtedly make achieving ambitious climate goals easier, are they actually necessary? On a more profound level, is our current focus on “demand-side measures” such as carbon pricing actually letting the fossil fuel industry off the hook? The evidence from the latest integrated assessment models is that, if we rely primarily on carbon pricing (whether through taxes or emission trading schemes) to limit warming to 1.5°C or “well below 2°C”, the effective carbon price could rise rapidly to politically unsustainable levels. What is worse, carbon pricing is unlikely to incentivise the development of the critical “backstop” technology for achieving net zero, which is the ability to dispose of carbon dioxide on a large scale, precisely because carbon dioxide disposal is more expensive than most other ways of reducing or avoiding emissions in the short to medium term. I will argue that the only way of ensuring carbon dioxide disposal is available on the scale and at the time it will be needed is to make its deployment a licensing requirement of continued fossil fuel extraction. This would impose cost of neutralising the risk of dangerous climate change on today’s fossil fuel industry and its customers: which, arguably, is the only institution in the world that can afford to meet it.