Melting Iceberg Melting Iceberg

The Paris Agreement of Climate change, or the Paris Accord, comes into force today (November 4th)– assuming force isn’t too strong a word. There is just a chance that this agreement could not only save the world from itself, but create an economic boom too.

The Paris Accord was signed by 200 countries, and on 5th October, was ratified by 55 of those countries, allowing it to come into force 30 days later – so that’s today.

There are lots of problems with the agreement – the plan is to limit the rise in global temperatures above the average pre-industrial revolution levels by less than two degrees. This target may not be achievable. A major question mark hovers over how countries can be truly forced to implement their promises and a certain Presidential candidate in a certain rather powerful country has said that if he wins the vote, and becomes the leader of the Free World, he will reverse US ratification of the treaty.

There are two reasons to think that the agreement will go ahead – after the odd false-start, and in full.

Reason number one, it has to. If you have not yet watched the new Leonardo DiCaprio movie, Before the Flood – it’s free to view on YouTube, do.

The case for climate change is as proven as something can be in a world where nothing is certain. The price we pay for not moving ahead with the agreement is too awful to contemplate.

Reason number two: the global economy would boom if it did go ahead.

We all know wars are nasty things – but they can also be good for the economy. Take World War II as an example. A good case can be made to say that the spending that came with this war led to the end of the Great Depression in the US, and provided the catalyst for the greatest period of economic growth the world has ever seen, from 1948 to 1973.

World War 2 was, in effect, a massive Keynesian stimulus, and after the agony of war, it created boom.

But the war against climate change is possibly the greatest imperative of this age, but it’s a war that, providing it is declared soon and with sufficient will-power, does not have to claim lives.

In one respect the climate change lobby is wrong – it is way too pessimistic on the wealth that could be created if only the will-power was there to fund the investment into technology that could save us.

The narrative that the fight against climate change means less economic growth is false.

Consider this. A recent press release from the UNFCCC (United Nations Framework on Convention on Climate Change) stated that a key issue is to ensure “$100 billion, pledged by developed countries to developing ones, is truly building in the run up to 2020 and that even larger sums are being leveraged from investors, banks and the private sector that can build towards the $5 to $7 trillion needed to support a world-wide transformation.”

So, that’s $5 to $7 trillion – now that kind of money really would create economic growth.

Furthermore, there is reason to be optimistic that, with technology as our ally, we can win this fight. Technology cynics are full of linear thinking. Take this argument, stated recently in the New York Times, ‘despite seeing their sales rise eleven-fold, electric cars still only make-up 1% of total car sales’. Well, if car sales continue to rise at the same arithmetical rate seen in the last five years, it will be a long time before they make-up a high proportion of total car sales. But if the trend continues, and sales continue to increase eleven-fold every five years, then by the middle of the next decade electric cars would make up 100% of total cars sales. Okay, the trend rate will slow, but consider how the cost of lithium ion batteries is falling. By 2020 the cost of an electric car including the cost of running it is likely to be similar to the cost of a car with an internal combustion engine and by 2025, electric cars may be much more cost effective.

Renewable energies are already approaching grid parity – and are set to carry on falling in cost once they pass that point. Then there is the technology for carbon capture – which may reverse the volume of carbon dioxide in the atmosphere.

It is not too late to save the planet, and in doing so, the global economy can climb out of the malaise that has infected it for the last eight years.

Why would anyone not want to do that?