We must face the true cost of our net zero goals

livemint.com:

At CoP-28, this year’s climate summit, governments are gathering to advance ambitious plans to transform their energy economies. But there are two big problems with this global effort. The measures in place fall short of what’s needed.

And many governments aren’t yet facing up to their true costs. Both failings arise from the need to make climate policies more politically appealing. Policymakers resist taxes to make fossil fuels dearer because it creates losers.

Subsidies to cheapen clean power make everyone feel like a winner, for a while anyway. Yet, this choice leaves many incentives for high carbon emissions undisturbed, which slows the transition. It also ignores the fiscal consequences that’ll likely catch up.

Some countries have explicit or implicit carbon taxes to align the price of fuels with the costs their emissions impose on the planet. But this is going slowly. Even now, around 15% of global emissions are actually subsidized.

Another 65% are neither subsidized nor taxed. Only 20% are taxed, typically at rates far lower than their costs. The cost of renewables has fallen sharply in recent years, but so long as fossil fuels remain underpriced, they’ll be overused.

Globally, the average price of carbon is about $5 per tonne. According to plausible calculations, to get emissions on the path to net zero by 2050, it would have to be about $75 a tonne (and $130 a tonne in rich economies) by 2030, and then rise thereafter. The US leads the world in ignoring the price of carbon.