On its current course, global energy consumption would be 40 percent higher in 2030 than it is today. Following this path for even another decade would doom efforts to keep future warming below 2°C. Government policy holds the key to steering a different course. The International Energy Agency has called for “strong action now” by all the world’s top 20 emitters.
The biggest single policy change that is needed is to put a price on carbon, making it no longer free to dump heat- trapping gases into the atmosphere. Whether established by placing a tax on the carbon content of fossil fuels, or placing a cap on emissions and creating a market-based system for trading emissions permits, pricing carbon will end the era of free pollution and enable the world to save the cheapest tons first. To be most effective, carbon prices should cover the entire economy and all greenhouse gases, not only carbon dioxide from fossil fuels. In addition to pricing carbon, aggressive policies are needed in three key areas: energy efficiency, low carbon energy, and land- use, which includes forest conservation and agriculture.
Energy efficiency – wringing more useful work out of coal, oil, and natural gas – is the fastest and cheapest way to reduce greenhouse gas emissions. The efficiency resource is vast, and most efficiency investments in homes, offices, and factories are profitable, saving money and carbon. The key policy targets are:
- Stronger building codes to eliminate wasteful energy use, while improving comfort.
- Appliance efficiency standards to enhance the energy productivity of everything from lighting to refrigerators to office equipment.
- Vehicle fuel economy standards to ensure that cars of the future go much farther on every tank.
- Incentives to accelerate the adoption of more efficient technologies, such as tax breaks for hybrid cars and lower mortgage rates for energy efficient homes.