14.5 — The Transition: What Actually Works

The ozone layer is recovering.

Chapter 2.1 told the story: chlorofluorocarbons destroying stratospheric ozone catalytically, a hole confirmed over Antarctica in 1985, the Montreal Protocol signed in 1987, universal ratification, and the ozone layer projected to return to 1980 levels around the middle of this century.

It is the most successful international environmental agreement ever concluded, and it is the obvious comparison for climate.

So why has the same approach not worked for carbon dioxide? The differences are specific and they explain almost everything about why this problem is harder.

Why Montreal worked and Paris struggles

Substitutes existed. Alternatives to CFCs were available or developable at modest cost. There is no drop-in substitute for fossil fuels across the whole economy.

Few producers. A handful of chemical companies made CFCs; the industry could be regulated by regulating them. Fossil fuels are produced and consumed by essentially everyone.

The economics favoured compliance. DuPont, the largest producer, held patents on the substitutes. Compliance was profitable for the firm best placed to lobby against it.

The threat was vivid and personal. Skin cancer, blindness, an identifiable hole visible in satellite images. Climate change is diffuse, gradual and statistical.

Costs were small and immediate benefits were clear.

And a financial mechanism existed. The Multilateral Fund paid developing countries to comply, which resolved the equity problem directly.

Every one of those is reversed for carbon, and the honest conclusion is that Montreal is not a template so much as a demonstration that agreement is possible when the conditions are favourable.

The climate agreements

The Rio Framework Convention, 1992, established the objective and the principle of common but differentiated responsibilities.

Kyoto, 1997. Binding targets for developed countries only, with no obligations for developing countries. The United States never ratified. Canada withdrew. The targets were partly met by the collapse of eastern European industry after 1991 rather than by policy.

Paris, 2015, changed the architecture completely, and the change is the point.

Its design. Every country sets its own target — a nationally determined contribution — rather than having one assigned. The targets are not legally binding. The mechanism is transparency, five-yearly review, and a ratchet expectation that each round is more ambitious. The goal is to hold warming well below 2 °C and to pursue efforts to limit it to 1.5.

Why voluntary targets. Because binding targets produced Kyoto's outcome: the countries that would not accept them stayed out. Paris achieved near-universal participation by asking for less.

And the result. Current policies point toward something in the region of 2.5 to 3 °C of warming by 2100 — a substantial improvement on the 4 °C trajectory implied before Paris, and well above the stated goal. Pledges, if fully implemented, do better than current policies, and the gap between pledge and policy is the recurring finding of every assessment.

What has actually reduced emissions

The record, rather than the announcements.

Coal to gas switching in the United States and Britain, driven by shale gas economics in the first case and by a carbon price floor in the second. Britain's coal use fell to near zero over about a decade.

Renewable deployment, driven overwhelmingly by cost decline (Chapter 14.4), which was itself driven by deployment subsidies — Germany's feed-in tariff paid above-market prices for renewable electricity and is credited with a substantial share of the early scale-up that produced the global cost decline. It was expensive for German consumers and the benefit accrued to the world.

Efficiency standards for appliances, vehicles and buildings, which are unglamorous and have delivered large cumulative savings.

Deindustrialisation and offshoring, which reduces a country's territorial emissions without reducing global ones — a large caveat on European and American emission declines, and the reason consumption-based accounting gives a different picture from production-based.

And economic contraction, which reduces emissions and is not a policy anyone advocates.

Carbon pricing

The economists' preferred instrument, and its record is instructive.

The principle is Chapter 9.11's externality: the price of a fossil fuel does not include the cost of the emissions, so too much is used. Adding a price equal to the damage makes the market price tell the truth, and every decision throughout the economy adjusts automatically.

Two forms. A carbon tax sets the price and lets the quantity adjust. A cap-and-trade system sets the quantity and lets the price adjust.

Where it has been implemented. The EU Emissions Trading System, covering power and heavy industry. Carbon taxes in Sweden, Canada, Switzerland and elsewhere. China's national ETS. Around a quarter of global emissions are now covered by some pricing scheme.

What the evidence shows. It works, in the sense that emissions in covered sectors fall relative to the counterfactual. Sweden's carbon tax, in place since 1991 and now at a high level, coincided with substantial emission reductions alongside continued economic growth.

And the prices are mostly too low. Estimates of the social cost of carbon vary widely — from tens to hundreds of dollars per tonne — and most implemented prices are at the low end or below it.

The political problem is the one that decides it. A carbon price is visible, immediate and regressive unless the revenue is returned. France's fuel tax increase in 2018 produced the gilets jaunes protests and was withdrawn. Australia introduced a carbon price in 2012 and repealed it in 2014.

The design that addresses this is fee and dividend — collect the revenue and return it equally per capita, which makes most households better off in cash terms while preserving the price signal. Canada's federal scheme uses a version of it, and Switzerland does.

And carbon border adjustment — charging imports from countries without a carbon price — is being implemented by the EU, and it is both a genuine solution to the leakage problem and, from the perspective of developing countries including India, a trade barrier imposed by the countries responsible for most historical emissions. Both readings are defensible and both are being argued at the WTO.

The equity problem

Chapter 14.3 laid out the distribution and it is the central obstacle to agreement.

The developing country position, stated as it is actually made. The rich world emitted its way to prosperity over two centuries; the atmospheric space is largely used; and asking countries at a fraction of the income to forgo the same path, without finance, is asking them to bear the cost of a problem they did not create.

India's specific position has been consistent: it will not accept binding absolute caps at its income level; it has committed to an emissions intensity target and to large renewable capacity targets; it has pledged net zero by 2070; and it links faster action to finance and technology transfer.

The finance commitment — 100 billion dollars a year from developed to developing countries, promised for 2020 — was met late and its accounting is disputed, with much of it counted as loans rather than grants and much of it reallocated existing aid.

And the loss and damage fund agreed in 2022 is capitalised at a small fraction of estimated needs.

The honest position: the equity argument is correct on the historical facts, and the atmosphere does not adjudicate fairness. Emissions from anywhere have the same effect, and the largest projected emissions growth is in countries that have contributed least. Which means the only arrangements that work are ones that make low-carbon development cheaper than the alternative, rather than ones that ask for restraint.

Which is why the cost decline in solar and batteries matters more than any treaty.

What individuals can and cannot do

Stated honestly, because both the guilt-based and the dismissive positions are wrong.

The biggest personal levers, in rough order of effect in a high-income context: flying less, driving less or electrifying, home heating and cooling, and diet — particularly reducing beef and dairy, which are far more emissions-intensive per calorie than other foods.

The scale. Individual consumption choices in aggregate matter and they cannot substitute for systemic change. A person who does everything available to them reduces their own footprint substantially and changes the global total imperceptibly.

And the framing of personal responsibility has a documented history. The concept of the personal carbon footprint was popularised by a marketing campaign funded by BP in the early 2000s — which does not make the concept wrong and does indicate why it was promoted.

Where individual action actually has leverage. Adoption drives cost decline — early buyers of solar panels and electric vehicles paid a premium that funded the learning curve everyone now benefits from. Voting and political pressure. And professional choice: what you build, design, finance or teach has more effect than what you consume.

Geoengineering

It has to be covered because it is increasingly discussed.

Solar radiation management — injecting sulphate aerosols into the stratosphere to reflect sunlight, mimicking a volcanic eruption (Chapter 1.7).

It would work, in the narrow sense. The physics is understood and Pinatubo demonstrated it. It is cheap enough that a single country or a wealthy individual could attempt it.

And the objections are severe. It does nothing about ocean acidification. It would alter regional precipitation, with modelling suggesting monsoon disruption — which is a direct threat to South Asia. Termination shock: stopping abruptly would produce very rapid warming. And there is no governance mechanism for who decides.

Carbon dioxide removal — direct air capture, enhanced weathering, reforestation, soil carbon — is the other category, and it is necessary rather than optional in most pathways. Nearly every scenario consistent with 1.5 or 2 °C assumes substantial removal later in the century.

And that assumption deserves scrutiny. Direct air capture is currently expensive and operates at a tiny scale. Assuming large future removal is, in effect, borrowing against a technology that does not yet exist at scale, which is a real criticism of the scenario literature.

Where things actually stand

The honest assessment, avoiding both alarm and complacency.

Emissions have not peaked globally, though the growth rate has slowed and several major economies have peaked.

Solar, wind and battery costs have fallen faster than almost anyone projected, which is the single most encouraging development and which was not the result of a treaty.

Current policy trajectories point to roughly 2.5 to 3 °C, which is much better than the pre-Paris path and much worse than the stated goal.

1.5 °C is, on any realistic assessment, very unlikely to be met without overshoot and subsequent removal.

And the framing that follows. This is not a pass-fail examination. Every tenth of a degree matters, the difference between 2 °C and 3 °C is very large in consequences, and action taken after a target is missed still reduces damage. The two failure modes are denial and fatalism, and fatalism is now the more common and the more useful to those who prefer nothing to change.

Where this shows up in your life

Electricity from renewables is now cheaper than from new coal in most of the world, which means the transition in the power sector is increasingly an economic rather than a moral argument — and that is the strongest position it has ever been in.

And the practical point for an Indian reader. India is simultaneously among the most exposed countries to the impacts and among the smallest per-capita contributors, with the fastest-growing energy demand and the world's cheapest solar auctions. Its choices over the next two decades will matter more to the global outcome than almost any other country's, and the leverage lies in whether new demand is met by coal or by something else, rather than in reducing what already exists.

What the next page covers

Chapter 14.6 closes this Part with the other limits — freshwater, soil, biodiversity, nitrogen and waste. Several of them are more immediate than climate, less discussed, and in some cases already past the point where the damage is reversible on human timescales.