This May, world media reported a milestone carbon dioxide concentration level in the atmosphere recorded at the U.S. National Oceanic and Atmospheric Administration’s (NOAA) Mauna Loa monitoring station in Hawaii. On May 9: Bloomberg reported it under the ominous title “Greenhouse Gases Hit Threshold Unseen in 3 Million Years. A few days later, on May 13, the media were busy reporting that Hawaiian observatory revised its previous reading and that carbon dioxide in atmosphere did not break 400 ppm (parts per million). It remained fractions of a point below the level of 400 ppm, at 399.89. So, relax – we are still at the safe side – it did not break the magical 400 ppm figure! It seems that our culture have a particular sensibility for figures that mark transition from one level to another – be that an anniversary, a stock market index value or a carbon dioxide concentration in the atmosphere. The media did not report afterwards that official records (always subject to revision) at Mauna Loa monitoring station published at NOAA’s web site did indeed fill-in the average reading of 400.03 ppm but for the week that starts on May 26 instead of two weeks earlier!

Uncomfortable failure

Anyone who bothered to inspect the NOAA web page “Up-to-date weekly average CO2 at Mauna Loa” would have noticed that readings above 400 ppm are the most likely if not the only possible development of a long-term trend that inexorably pushes up. Therefore, news that reported about the revision of the initial readings by fractions of a point below did not make any sense, either in terms of pointing at a major scientific error or in bringing relief from an unfortunate event that luckily did not realise. They may, instead, represent a sign that we are uncomfortable with the fact that after more than twenty years of hard international negotiations and ambitious greenhouse gas reduction goals we failed and we don’t really know how to proceed onwards.

Investments in clean energy are falling

But could we have had it differently, given the fact that substantial changes in the current trend of greenhouse emissions requires consistent policy making and substantial investments in clean energy R&D and infrastructure? Back in 2006, the editorial in Nature pointed that in spite of the fact that “climate treat has become ever more apparent in the past two decades, funding for energy research and development has actually fallen. That was before the global recession hit national budgets and afterwards it only worsened. The commitment of governments was, nevertheless, never large: according to the IEA, energy’s share of IEA countries’ total RD&D investments is generally small: it has varied between 3% and 4% since 2000, after peaking in 1980 when it was more than 10%. Governments have preferred other areas of research, such as defence, health, space program, and general university research[3]. Investments in clean energy (renewables, energy efficiency and energy-smart technologies) at global level followed suit: in the first quarter of 2013 we had the largest decrease over the past few years – a remarkable 22 per cent! The highest reduction of 54 per cent was recorded in the U.S., in China it fell by 15 per cent and in Europe it saw a 25 per cent drop with investments in Spain alone falling 96 per cent compared to last year.

In short, the climate change problem and the issue of gradual transition from fossil fuels, never engaged Western governments strongly enough to support consistently and to a largerextent the necessary investments in clean energy, either through R&D funding, subsidies or directly, by investing in infrastructural projects like smart grids. The needed annual investments are large – think about a benchmark cost of 1% of global GDP proposed by the Stern Review and delaying them may increase the overall costs by trillions of US$.

What funding can do for renewables

What a committed and substantial funding support can do for clean energy technologies can be inferred from what it did for the fossil fuels sector. Continued investments and conspicuous subsidies to oil and gas industry resulted in technological advances like horizontal drilling and hydraulic fracturing that opened up previously untapped reserves. Unlike with clean energy that missed such a support, these technological advances will further contribute to increases in CO₂ emissions.

It is also worthwhile to note that fossil-fuel subsidies amounted to $523 billion in 2011, around six times the level of support to renewable energy. In other words, governments are committing six times more funds to activities that reinforce a trend that they would like to avoid than to activities that should reverse its direction! Perhaps the commitment to fight global warming is only declarative instead of being a genuine one?

Changing course – to the worse

Successful investments in fossil fuels extraction technologies are currently pushing the US energy policy into the opposite direction of what has been proclaimed at the beginning of recession in 2008, when a lot of lip-service and some funds were devoted to the so called “Green New Deal’. Hydraulic fracturing technology, which opened up unexpected reserves of shale gas in the US, reduced natural gas prices in the country by astonishing 72 percent from their record level in 2005. In the absence of a tax policy that would prevent such price volatility in fossil fuel prices and redirect collected revenues to R&D in clean energy, markets are leading economic actors in a societally perverse direction. In the US case we learn that sixteen of the 29 states with renewable portfolio standards are pushing now for a legislation that would reduce the need for wind and solar power in their energy portfolios. This is a rational and expected behavior in a situation where the country is not internationally committed to cut its CO₂ emissions, it grants large subsidies to fossil fuels industry and is not in favor of emissions taxation. Taken altogether this is a clear example of a comprehensive and consistent policy making – only that works in reverse of societally stated long-term goals.

However, the US is not alone in changing its course from proclaimed clean energy support policies. In April this year the European Parliament rejected a proposal to delay the issuance of new carbon permits, triggering a record 35 percent drop in its market price and marking a worrisome end point of its value trajectory – from €30  five years ago to the present €3.38/ton – a trajectory that can be best described from worth to worthless. On July 3, fortunately, the European Parliament reached a tight consensus and approved a plan to reduce a glut of permits, starting not before mid-2014. The markets reacted and pushed the price to €4.69 ton. However, analysts estimate that industry won’t eliminate carbon for less than €100 per ton¹ – a goal that at present seams out of reaches anytime in the near future. Additional  signs of wobbling in the EU climate policy comes from Germany who championed in the past the European commitment to clean energy orientation and itself is a world number one in renewable electricity generation – a remarkable 22 percent in 2012.  In April 2013, Germany has unveiled plans to freeze renewable subsidies for two years and announced that its future rises would be limited to 2.5 percent a year after that.

Commenting on the collapse of the carbon trade market, Financial Times wrapped up well the concerns on the overall policy changes in pointing at a “loss of interest in the issue of climate change among top policy makers” and a “vulnerability of the whole structure of European climate agenda”.

How to move onwards?

The fact that 23 years after the 1990 base targets set out in the Kyoto Protocol, the global carbon dioxide output from fossil fuels has increased by 49% does not present a case for urgency to the major world polluting economies. After two decades of endless meetings the last one in Doha succeeded in agreeing on a new global climate treaty in 2015 (hopefully) that would come into force from 2020 (hopefully). There is no time pressure. In the meantime austerity programs will continue killing R&D and subsidies in clean energy while volatility in carbon permits and fossil fuels prices will continue confusing private investors. In 2021 there may be another recession and so on, until the next rounded figure of carbon dioxide concentration in the atmosphere – the one-way road to 450ppm or perhaps, to 550ppm – far beyond any conceivably safe levels!

Yet the solutions may be “only a keystroke away” as Tim Jackson, the author of ” Prosperity Without Growth: Economics for a Finite Planet” pointed out in his recent speech at the 2013 Conference of European Society of Ecological Economics held in Lille. Just being consistent would already contribute much: for example, increase funding for clean energy R&D at the level of military spending (isn’t a stable climate worth that much?), increase subsidies to renewable energy generation at the level that is six times higher than the present support to fossil fuels (just to compensate for the long-lasting bias in government policy), cancel subsidies to fossil fuels so that market price may reflect more closely its real extraction costs, put caps and CO₂ emissions, withdraw surplus carbon permits from the market to help its price rise above €100/ton. Give the industry clear long-term operating conditions and let the markets work out details and spur innovations. If 20 percent of world economies who account for nearly 80 percent of total CO₂ emission would commit to this simple and mutually self-reinforcing requirements now, by 2020 no country would have serious troubles in meeting its climate treaty obligations. This would not have solved yet the problem, but the world would be on a different track.

Two barriers to change

So what stands in the way of taking action now? I can think about two main reasons. On the one hand it may be our biological inheritance – we evolved in stable environments and did not have the reason to develop a capacity to perceive significant long-term, large scale changes in environment like the climate change[5]. The remedy to that shortcoming is to be aware of it and not let ourselves yield blindly to our natural propensity to postpone actions to slow acting treats – we are, after all, supposed to do better than frogs in slowly heated water! In that context a perceived “overreaction” to climate treats may just be an “appropriate” action.

The second barrier is a cultural one and refers to our worldview – a dominant set of values and beliefs by which we ordinate our institutions and ultimately our way of life[6]. It is a slow changing variable and it acts as a drag on implementing institutional changes like those mentioned above. One of the remedies to that obstacle is “informed persuasion” that appears in many different guises, like texts published in GEJ and in similar journals, public lectures, university curriculums, green political programs, and other forms of civic activity. The more of it the more likely it is that we will succeed in adapting our values and beliefs to worrisome environmental realities that our civilization has been facing for the past fifty years! And not the least, EU must take bolder steps in “walking its talk” and sustaining its global credibility and political leadership in climate change issues that the world much needs now.