Some excerpts from Carey King’s excellent paper titled “Delusion of Grandeur in building a low-carbon future” (2016). By all means worth reading: it identifies the delusionary approach of some policy proposals. Image Credit: K. Cantner, AGI.
…. the outcomes of economic models used to inform policymakers and policies like the Paris Agreement are fundamentally flawed to the point of being completely delusional. It isn’t the specific economic assumptions related to the “low-carbon” transition that are the problem, but structural flaws in the economic models themselves.
There is a very real trade-off between the rate at which we address climate change and the amount of economic growth we can expect during the transition to a low-carbon economy, but most economic models insufficiently address this trade-off, and thus are incapable of assessing the transition. If we ignore this trade-off, or worse, we rely on models that are built on faulty premises, then we risk politicians and citizens revolting against the energy transition midway into it when the substantial growth and prosperity they’ve been told to expect will accompany the low-carbon transition don’t materialize. It is important to note that citizens are also told that doubling-down on fossil energy also only provides growth and prosperity. But this is a major point of this article: mainstream economic models can’t tell the difference. There are foreseeable feedbacks of a fast transition to a low-carbon economy that increase the risk of major recessions.
The AR5 indicates that if the world invests enough to reduce greenhouse gas emissions over time — such that total annual greenhouse gas emissions are practically zero by 2100 — to stay within the 450 ppm and 2-degree-Celsius target, then the modeled decline in the size of the economy relative to business-as-usual scenarios is typically less than 10 percent.
