Al Gore made an important speech today in Washington: In it he challenged the US to become carbon free in its electricity production in ten years time. See this from CNN. Regarding surface transportation, the article quotes him as saying "The way to bring gas prices down is to end our dependence on oil and use the renewable sources that can give us the equivalent of $1 a gallon gasoline." (For much more on Gore's speech, see the blisteringly hard-working Andy Revkin's piece, The (Annotated) Gore Energy Speech, at his Dot Earth blog.)
Is Gore's challenge technologically feasible? Absolutely! I have written about scores of ways of doing this, including reducing the amount of energy we use in the first place. Politically do-able? That's a maybe, but it's looking better every day.
But there's one more driver, folks, and we've been examining it here on a regular basis: economics. The cost of not radically cutting our carbon output down is astronomical, according to the Stern Review on the economics of climate change and the Intergovernmental Panel on Climate Change, among others. The Stern Review likens the economic impact of an unaltered, "business-as-usual" energy and development path to be tantamount to another Great Depression or World War II. Are you on for that? Me neither.
With the maturing of the European Trading System, the coming regional American cap-and-trade regimes (Regional Greenhouse Gas Initiative and the Western Climate Initiative), the federal cap-and-trade scheme we'll see come into being in 2009, and the post-Kyoto regime that will be born in Copenhagen in December of 2009, there's no turning back.
As Kevin Parker, global head of Deutsche Asset Management, says in a really fine op-ed in today's "FT" the Carbon emitters' free ride is about to end. "The effects of a repricing of carbon will be profound. Carbon will take its place alongside oil, coal and gas as one of the most closely followed commodities in the world. This will mark the beginning of externalities at last being priced into the cost of production. [my emphasis] It will signal that carbon emitters have had a free ride for long enough. Governments , the US's in particular , will have to join Europe to create a global market for pricing carbon and businesses around the world will have to accept the price the market sets."
