After Copenhagen

This article was published in the October/Fall 2010 issue of World Future Review.  It was written in the spring of 2010 as part of my masters in strategic forecasting, after I attended the COP15 climate change negotiations in Copenhagen in December 2009.  It is somewhat dated at this point.  The Chinese are no longer on such an impressive upwards trajectory, and while the American Congress is still unshakeable in its rejection of climate change, the businesses that bankroll political campaigns are quietly coming to accept that the problem is real and that something needs to be done to deal with it.

If you can, please use this link ( to read World Future Review’s version of the article – they and their publisher, SAGE, have been kind enough not only to allow me to republish it here, but have opened the pdf up to the public.  It’s a more readable version than what I’ve copied below, and WFR gets credit for the pageviews.  Thank you!

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After Copenhagen:  Scenarios for the Future of Climate Change

Climate change is one of the most important issues facing the world today.  So far, the change in global temperatures has been moderate, and natural systems have been able to adapt fairly well.  However, climate models all point to significant increases in temperature over the next fifty years and beyond, warming which will almost certainly be beyond most ecosystems’ ability to adapt, causing major damage to the world economy and requiring behavioral adjustments for centuries to come.

A quick summary of the physical situation, as it now stands:  Human industry, energy production, transportation, and agriculture are adding massive amounts of greenhouse gasses to the atmosphere, much more than natural processes can remove in a reasonable timeframe.  These gasses are already warming the planet, and will most likely alter the climate dramatically (possibly disastrously) during this century and beyond.  Because the lifetime of many of these gasses in the atmosphere is very long (CO2 stays in the atmosphere for hundreds of years, for example), cutting emissions early is better than cutting them later.  Whatever is emitted will stay in the atmosphere and contribute to the greenhouse effect each year for a long time, even if we stop emissions entirely today.

This is the dilemma facing policy makers.  On the one hand, the technology that would allow us to drastically cut emissions is available, but it is still substantially more expensive than the existing technology for energy production, transportation, and agriculture, so passing legislation to reduce emissions now would surely slow down the economy.  There is always a temptation to wait to reduce emissions later, when technology has (we hope) improved and made sustainable alternatives less expensive.  But this approach runs the risk that the amount of greenhouse gasses added to the atmosphere in the meantime will, in the long run, hurt the economy more than the added costs of attempting reduction would do today.

To complicate the dilemma, there are significant uncertainties in the models.  How sensitive is the environment to climate change?  It is almost certain that there are major destabilizing feedback loops that will amplify temperature change beyond a certain point, but there is wide disagreement as to just how much temperature change will trigger these “tipping points.”  If these tipping points are imminent, we may already be running out of time.  On the other hand, there may be self-stabilizing processes in the environment that we do not yet recognize that will mitigate the increase in temperature and give us more of a cushion.  Thus, the risks and costs associated with delay, while clearly high, are both still subject to a considerable margin of error.

People are facing these dilemmas, in one form or another, all over the world.  Some say that the negative impact of emissions regulations on the economy will be minimal and that the pressure to compete in the new, carbon-constrained marketplace will produce a boom in new innovations.  Others think that imposing an energy tax or other equivalent measures, will bankrupt the economy and add unreasonable cost to every energy project required to power the world of the future.  Whatever the case, the possibility of short-term negative economic impacts has made the two leading emitters, the US and China, reluctant to enact legislation to limit emissions or to sign any international treaty that would require them to cut emissions.

The two most recent attempts to create such a treaty, December 2009 in Copenhagen and December 2010 in Cancun, produced no real commitments by any party to reduce greenhouse emissions.  The only progress that has been made was in Cancun, which saw an agreement from developed nations to give more aid to help developing and underdeveloped nations adapt to climate change.

The political dynamic behind this frustrating lack of progress seems to boil down to two countries, now called the G2:  the United States and China, the two leading emitters of CO2 and the two nations that would have to reduce their emissions the most.  America’s actions on this front are restricted by the need for Congress to sign off on any agreement, and the dominant perception in Congress at present is that, even if climate change is real (and enough debate over that issue remains on the Hill to make most climate scientists gnash their teeth in frustration), a majority of senators insist that they will only agree to binding emissions restrictions if China and all the other big developing nations do so as well.  Unfortunately, China and the developing nations insist that they deserve a more lenient deal than the developed nations, due to their still-growing economies and to the fact that they got little benefit from the past 200 years of industrialization (and its carbon emissions).

This dynamic was bound to lead to a face-off between the US and China, but in Copenhagen the American delegation seemed to put more effort into leaving with a deal than did the Chinese.  China sent a low-ranking official who essentially scolded America and Europe for not offering a treaty that would exempt China from any significant binding restrictions.  Given the political realities, the US could not accept such a deal, and so the final proposal was that serious discussion of a binding treaty be postponed.  This lackluster outcome came as a severe disappointment to environmentalists in America and around the world who saw the election of Barack Obama as a sign that things would finally move forward in the fight to prevent disastrous climate change.  The conference in Cancun fared only slightly better due to an agreement at the outset not to discuss the most difficult issues, like binding emissions limits.  While plans were made to deal with the effects of climate change, there was still no progress on stopping it.

The outcome of the the past two UN conferences leaves a great deal of uncertainty about whether talks of this type will ever produce anything worthwhile.  The United States is debating some form of legislation that would put a market price on greenhouse emissions, but when that will pass, if ever, is highly uncertain.  China, too, has stated that it intends to take measures to reduce its carbon intensity (how much it emits per unit of GDP); but like the US, when this will occur, if ever, is an open question.  Most importantly, while these two powerful countries produce 50% of the world’s GHG emissions, the other nations have their own internal debates and agendas.  Isolated actions by one country at a time will not impact global emissions quickly enough to prevent a dangerous level of climate change.

In short, all of the factors impacting climate change are highly variable and very hard to forecast with much accuracy at present.  This is true in the socio-political sphere, which is prone to violent swings from one extreme to another, but also in the natural world.  The natural environment will be affected—and will have an impact itself—far more than in most political debates.  While gradual changes may be ignored by those who don’t want to see them, if the abnormally extreme weather of the past two years continues and intensifies, people are far more likely to put aside their differences—if only to keep things from getting worse.

And so we face the challenge of creating an international climate agreement.  Will it happen?  What form will it take?  What effects will it have?  Will it be impartial, requiring all nations to conform to a single standard?  Or will it be more lenient towards the developing and undeveloped nations, as they insist it should be?  And, most importantly, will it prevent us from altering our world catastrophically?

We simply don’t know. But helping us understand what could be is what futures is all about.

Here are four scenarios of what could happen, depending on how the natural world and the political, economic, and social sectors develop over the next ten to twenty years.

Stalemate is the baseline scenario, what might happen should nothing really change.  Ants and Grasshoppers is what might result from a half-hearted attempt by the West to fix the problem on its own.  Green Dragon Rising is an attempt to show what might happen if China were to become threatened enough by climate change to take matters into its own hands.  Stick and Carrot is a possible (though less than likely) description of a best-case scenario, where everybody is brought on-board to a solution that starts with one nation and grows virally.  The one scenario that I have not suggested (which I personally refer to as Kumbayah) is that the world will come together in the next five years or so and unanimously agree to an effective global accord to reduce emissions.  Given the conflicting national interests involved, that has always been an extremely unlikely scenario, something that was demonstrated clearly by the deadlock in Copenhagen and Cancun.

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date:  11 August 2030



Hey Jon.  I’m sure you’ve been keeping tabs on the negotiations going on here aboard the Oceana, but I just thought you and your friends would appreciate an inside opinion.  Got your antidepressants handy?  🙂  Just kidding, it’s not that bad.  Well… not quite.

Obviously, I can’t talk about the details, but we’re basically in the same place we were eleven years ago.  Which is to say, stuck.  It’s as hard as ever to tell what’s motivating the Chinese.  I knew that the rapid escalation in the prices of oil, minerals, and other natural resources over the last five years had put a lot of pressure on the Chinese economy, but I hadn’t realized how concerned they were about this recession or how paranoid they are getting about other countries cutting off their access to food and raw materials. Whatever the reasons, they seem just as unwilling to fiddle with their industrial output as they were in 2019, so they’re doing their best (again) to put the brakes on the negotiations.

Of course, this is coming from someone working with the US delegation, and we’re not doing much better.  It’s been ten years since I started working on this for the government, and Congress still can’t get its act together.  They’ve been “a few months” from getting a bill passed ever since the Obama administration!  And that delay is still the albatross around our necks at these negotiations, as it has been  since Cancun in ’10 and Wellington in ‘23.  The Chief can’t say “yes” to anything because he knows that the Senate will never ratify it if China’s not fully on board and genuflecting. They still worry more about the economic impacts of emissions cuts than the economic impacts of rising temperatures.  After all, their constituents are loving 3$-a-gallon gas again thanks to the oil wells that have sprung up in the Arctic as the sea ice has retreated.  Never mind that we’re having the negotiations on a cruise ship anchored right on top of the North Pole, and there’s not an iceberg in sight.

Dang.  Now I need some antidepressants…  It isn’t all bad, though.  We’re getting a lot done through side-channels, but we’re pretty limited, even there.  The reforestation and aid initiatives are taking off, but the core of this agreement, the emissions limits, is going to be… underwhelming, shall we say?

Anyway, as usual it’s up to you and your network to start lobbying for next year.  I know you guys are tired and frustrated with this yoyo act that’s been going on, with one of the G2 always having some kind of problem with the agreement and digging in its heels, but without your work motivating people, the US probably wouldn’t even be attending these talks.  I hate to say it, but it really is up to you.  We’ve got to get things moving sometime soon, or those predictions of +5 degrees C by 2100 really will come true, reforestation and aid initiatives or no.

Oh, and it’s not just the natural disasters that we need to worry about.  I’ve heard rumors (I’m sure that they’ve been leaked to the media here already, so you’ll be hearing about it from other sources soon) that China and India are planning some sort of stratospheric albedo-tinkering with sulfide aerosols.  God only knows what that’ll do to the planet, even if it does slow down the warming.  I know that they both face serious economic damage from global warming if the worst projections come true, but this unilateral (or even bilateral) intervention, when we don’t even know the full consequences of injecting that kind of pollutant into the atmosphere, is just crazy!

So, yeah, I’m sorry I can’t give you better news.  Keep up the good work, and the team and I here in the Arctic will try to get the best result we can.  See you around!


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Ants and Grasshoppers

Moderator>  Welcome back to the show.  My guests today are Jim Stockton, noted Princeton economist, and Thomas Black, analyst at American Enterprise Institute.  All right, Jim, you’ve gone on record multiple times about how well the economy has reacted to the carbon legislation that’s been passed in the last fifteen years.  And yet, overall, this has not been what you might call “a good time” for the American economy.  So can you explain your reasoning about this?

James Stockton>  Well, let’s start with the long-term impact of the Greenhouse Emissions Restriction Act of 2016.  It put in place a cap-and-dividend system, effectively taxing power companies and other high-emission industries for their carbon emissions and giving the money back to taxpayers in the form of lower payroll taxes and a yearly rebate.  We saw a spike in unemployment early on, as a number of companies either shut down or moved overseas due to higher energy costs, but the unemployment rate fell back again as the solar and wind industries took off.  The construction business also enjoyed a boom for a few years, as people retrofitted their houses to reduce energy consumption.  Then as the price of gas started to go up, car companies with competitive hybrids and electric cars saw sales go through the roof.

All in all, it was a pretty big bump in the road, but we got through it, and the result has been to substantially reduce carbon emissions compared to what they would have been.  Of course, a lot of people are still angry about that recession….

Moderator>  Especially the coal lobby.

James Stockton >  Well, yeah.  They still haven’t forgiven the politicians who voted for it.  Although they don’t have nearly as much power today as they did fourteen years ago.

Anyway, it’s impossible to say for sure what might have happened if the Emissions Act hadn’t passed, but the 4th-gen nuclear plants are coming online now at a rate of 400 MW a month, and innovations in solar and battery technology have been coming out at a really staggering rate ever since the late 20-teens.  So the theories about market forces creating a boom after placing a price on carbon emissions were mostly right.

Moderator>  Okay.  Tom, your thoughts on the subject?

Thomas Black>  Well, I agree that the higher price for energy and restrictions on emissions have spurred a big upsurge in new inventions. But it hasn’t done as much good as Jim thinks.  When you factor in the number of jobs and entire industries that have been outsourced to the developing nations, this bill did a lot of harm to the American economy, harm that could have been prevented

Moderator>  What do you mean by that?  How could it have been prevented?

Thomas Black >  For one, this kind of regulation should have come at a time when other nations’ emissions were  also being regulated.  Look, we lost a lot of jobs, more than we would have if there weren’t so many places that didn’t put a price on carbon.  How many of our raw materials are processed outside the US nowadays only because it’s cheaper to ship them across the world than it is to pay the extra price of processing them here?  We export ore, then import the metals refined from it, which is crazy!  How does that help the environment?  We should never have agreed to the binding restrictions in the COP20 accords, let alone passed the GERA, without getting China and India, at least, to accept similar emissions limits.

The real problem I have with Jim’s argument is that it’s all based on hypotheticals.  He claims that it would have been worse, but the reality is that we could have gotten the same rate of innovation from normal incentives without shackling the economy and forcing so many jobs overseas.  And what have we really gained?  Have CO2 emissions been reduced?  Even the most optimistic studies show that CO2 levels are still rising fast, and that global warming is getting worse.  All we’ve done is to export our emissions – AND our jobs – overseas.

James Stockton>  Tom is right that CO2 is still going up.  But my point is that it’s going up more slowly than it would have.  When we closed down those old, dirty, uneconomical power plants, about 40% of them were replaced by non-emitting power plants in the West, and the rest by newer, more efficient plants in the developing world.  All told, studies show the increase in CO2 emissions has been cut by 50%.

Thomas Black>  Yeah, but that’s still just hypothetical.  We could have gotten most of those gains from supporting innovation without imposing a huge tax on energy.

James Stockton>  Now, wait a minute, Tom, how exactly were we supposed to sponsor innovation without that tax?  A lot of the benefits we’re seeing now weren’t even looked for before they passed the GERA.  I mean, let’s face it, the government bureaucracy isn’t exactly known for its wisdom in picking winners, and if you couch things in technical jargon, they get even more confused.

Thomas Black>  We would have done it the way we’ve always done science and research in the U.S.  You know, the government gets a bad rap on this whole “picking winners” thing.  Yes, bureaucrats do a terrible job of choosing what new technologies and new industries to support, but the US government has done a terrific job over the years of supporting basic and applied science, and that’s what was really needed all along.  The problem with market incentives like taxes are that they change consumption patterns, but don’t give businesses any incentive to do really long-range basic research.  It’s too much of a gamble, it hurts the bottom line, and the payoff—IF it succeeds—almost always comes well after the CEO who pushed for it is no longer with the company.  So they just don’t do it.  And they haven’t.

The big breakthroughs that companies boast about have all come from commercializing basic research that was done in university or government labs or under contract from DOD or NASA.  We could have just spent more on that research and left the rest of the economy alone.

James Stockton>  But that money would have had to come from somewhere…

Thomas Black>  Of course it would have, but we’re not talking about very much money.  It would have been less than 2% of the amount raised by the carbon tax.  It could have come from a small tax increase, reducing spending on other things, even a small carbon tax dedicated to basic research, and it would have produced at least as many breakthroughs as the big carbon tax we did have.  A tax on energy consumption has a huge negative effect on productivity and only a very diffuse, indirect effect on basic R&D, and that’s what we really needed.

James Stockton>  I guess we’re never going to agree on this.  The tax DID lead to big changes in consumption, which reduced CO2 emissions, and I don’t think it had the big negative effect on the economy you say it did.  After all, people got that money back in the annual rebate, which meant consumers who made changes to their energy consumption had more to spend on other things.

Moderator>  Thank you gentlemen, we’re going to have to leave it there.

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Green Dragon Rising

<all documents are translated from Mandarin>

14 October 2015

From:  Captain Li Ming, People’s Liberation Army

To: General Chen Hao, Deputy Secretary for Strategic Planning, Department of Military and Economic Affairs

Comrade General,

As you ordered, I attended the Party Conference on Climate Issues and Policy.  Attached please find the reports from scientists, engineers, economists, and foreign affairs personnel, detailing the information presented at the Conference.  I will attempt to summarize the conclusions here.

The overall conclusion of climate scientists is that it is too late to prevent substantial amounts of climate change.  Barring a binding world treaty and drastic cuts in greenhouse gas emissions, which no one thinks is likely, the world will get warmer, weather will become more violent and unpredictable, and the PRC must plan ahead to minimize the harm this does.

Due to prolonged droughts in the western provinces and flooding in other regions, the People’s Republic has already experienced a noticeable drop—up to 40% in some regions, and an average of 7% throughout the entire country—in agricultural production over the past five years.  The recommendations of the panel on agriculture include developing and using drought-resistant crops and improving water efficiency and flood prevention.

With regard to international politics, the Americans have still not enacted any form of regulation that would have an impact on climate change.  Their Congress still squabbles about details, and accomplishes nothing.  None of their diplomats are willing to make hard forecasts—when pushed, one said bluntly that Americans are inherently irrational and unpredictable.  No one believes they will take forceful action to halt greenhouse gas emissions.  Meanwhile, the European cap-and-trade system has proven largely ineffectual, and the EU countries are deadlocked over whether to try to reform the system – yet again! – or scrap it.

Research, education, and manpower trends continue strongly to favor the PRC.  We now graduate over half of the world’s mathematicians, scientists and engineers.  Although we still have fewer of the world’s senior scientists, the average age of our researchers is much lower, and it is well-known that most breakthroughs and critical ideas in science are generated by people in their twenties and thirties.  Partly as a result, we are already experiencing a positive trade balance on patents and sales of technological processes.

In the absence of a favorable agreement with the West to control GHG emissions, the main recommendations for national policy involve increasing and capitalizing on our lead in innovation.  We should continue our policy of reducing the carbon intensity of our economy and reinforce incentives for research and development in wind, solar, and other non-carbon-emitting energy sources, and we should begin aggressively to market these technologies to the West.

The economists, in particular, were confident that mandatory fuel economy standards for all new vehicles would be a net boost to the economy and would help exports.  Although there is less agreement, there was also a strong case made by the Council on Science and Economics that further reducing coal power plants in favor of nuclear power, wind, and other non-fossil energy sources would be a net benefit to the economy.  Research in algae-based biofuels seems especially promising as a way to reduce dependence on foreign oil.

There was also a short discussion of the practicality and possible need for some sort of geoengineering method, using reflective particles in the upper atmosphere to reduce the degree of warming.  However, I am highly doubtful that this would produce more benefit than harm.  Although computer models are becoming more sophisticated, this proposal still needs much more research.  The section of the conference report pertaining to this is 3C – pages 12-49; I would highly suggest reading it, as this could be an important part of keeping the Republic prosperous if we cannot prevent the worst of climate change.

I am at your disposal for a more detailed debrief.

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7 October 2022

From:  Lt. Colonel Li Ming, People’s Liberation Army

To:  General Chen Hao, Secretary for Strategic Planning, Department of Military and Economic Affairs

Comrade General,

As you directed, I attended the most recent Party Conference on Climate Issues and Policy.  I have attached more detailed reports from the experts at the conference, but I wish to stress certain key points that were made clear to me during those discussions in which I took part.

First, the Americans remain stubborn in their refusal to bind themselves to any emissions targets.  Even though they claim to have passed legislation that will lower their emissions, their efforts, and those of the Europeans, seem to be having little effect due to numerous exceptions and loopholes.  Continued resistance to any binding treaty seems to be our best option, since, even if we did promise to cut emissions, the West does not appear to be capable of cutting theirs.  Our carbon intensity reductions have actually had significantly more impact on keeping the growth in global emissions from rising than their relatively puny efforts.

The effects of climate change on our economy, especially in the agricultural sector, are increasing, and a number of reports (attached: 5E, page 89-102) show that over a fifty year period the costs of adapting to a warmer climate would be greater than the costs of reducing emissions.  The West has their own researchers doing similar work, with similar results, for their own economies.  But the vested interests that bog down their governments have so far kept them from taking any action.

With regard to the agricultural impacts of climate change, new drought-resistant crop strains developed over the past four years have lessened the impact of low rainfall in the western provinces, boosting production in the hardest-hit regions.  But output is still low and is not rising much any more.  The agricultural output in other nations that was secured for our use ten years ago has proved beneficial, as the price increases during the past three years have hit us less than other nations.

Our research initiatives are producing promising results, especially in battery and solar technology.  The group working on the fuel cells that the Americans have been developing have made progress in reducing the cost of production.  This could open up new possibilities for replacing our coal power plants.  Combined with the algal strains that the China Agricultural University has developed for oil production, this could mean a significant step away from our severe dependence on foreign nations for our energy supply.  The incentive structures put in place in 2016 have been extremely effective.  Indeed, we are making so much progress in new ways of doing things, that the Americans’ lead in research is shrinking rapidly.

The principle recommendations from experts at the conference were threefold:  (1) continue to emphasize making our cities and agriculture more resistant to weather effects; (2) keep up the incentives for research and implementation of low-emissions power and transportation systems, and perhaps enact some form of price on carbon, so as to further promote growth in those industries; and (3) begin decommissioning our older coal plants as soon as this is economically feasible.

Finally, a panel on global climate mitigation efforts reported on studies of oceanic blooming through artificial fertilization and alteration of the albedo by means of stratospheric aerosols.  Both technologies appear workable.  Ocean blooming may be affordable, though there are issues of scale in making sure that carbon sequestered in this way remains biologically unavailable for extended periods.  It also appears to be environmentally benign.  It would, however, be easy to block and would thus require at least some degree of international consensus.

Atmospheric aerosols, on the other hand, could be injected into the stratosphere at very low cost by the PRC or any other party, without reliance on other nations. However, their effect on global rainfall patterns remains uncertain.  If that question can be resolved and no other alternatives are available, unilateral action in this regard may be the best way to mitigate the damage that other countries’ emissions are doing to us.  For now the risks appear unacceptable, but more research is required on both possibilities.

I am, of course, at your disposal if you wish for more detail on the conference.

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19 October 2030

From: General Li Ming, People’s Liberation Army

To:  General Zhao Zhuang, Deputy Minister for Strategic Planning, Environmental and Economic Affairs

Comrade Deputy Minister,

Per your request, I attended the 2030 Party Conference on Climate and Policy, and have completed my report on the proceedings.

Many familiar matters were discussed at length  at the conference, such as how far the West has fallen behind us in the past fifteen years, the Americans’ recent passage of emissions cutting legislation (which is far too weak and far too late to make a significant difference), the impacts of the changing climate on the People’s Republic, and the prospects made possible by recent technological advances to improve our energy and industrial sectors.  The attached documents on the background to the climate conference contain a summary of all of these points, but you will find no surprises therein.

My primary concern at the conference was the matter of geoengineering.  I have been examining the research done on the subject since it first came to my attention as a serious possibility fifteen years ago.  My conclusion, given the new reports that I heard at this year’s conference, is that it should be considered very seriously, regardless of whether there is an international consensus on the subject.  Our economy and our people have suffered far too long from the effects of climate change, and despite immense advances in technology over the past decade, which have kept our emissions rate from climbing since 2022, we and the West are still producing too much greenhouse gas to prevent things from getting rapidly worse.

Right now, our best models suggest that aerosol injection into the upper atmosphere would produce a cooler, drier, and less energetic climate.  Moreover, most of the consequent reduction in precipitation within the PRC would be in areas that currently receive too much, meaning fewer blizzards, violent storms, and floods.  Protecting the winter snow pack would also generate a net increase in the water available to our western provinces.  However, as these models show that a reduction in solar forcing will significantly reduce oceanic evaporation, there is also significant potential for increased drying in areas that depend on moisture-laden winds from western oceans, such as the western parts of Europe and North and South America.

The possibility of worldwide impacts started a heated discussion about how other nations might react to unilateral efforts to modify Earth’s albedo.  Given that positive and negative impacts would both be felt fairly soon after the project began, one civilian Party member present went so far as to suggest that the West would consider our initiative an act of aggression.   Although the possibility of a negative reaction certainly exists, the overwhelming consensus was that the West would be unable to agree on any unified action in the face of a fait accompli.

The benefits of geoengineering for the People’s Republic (and for many other nations, which may cause them to support such a proposal, as well) would, in the opinion of our scientists, be strong enough to offset any negative considerations.  It seems very likely that this method of altering the global albedo can effectively halt the rise in global temperature and sea level for half a century or more.  This could buy us the time to widely implement our new technologies, and perhaps compel the US and EU to recognize the error of their ways.  The chance appears to be increasingly worth taking.  I strongly urge the members of the Central Committee to consider the possible costs and benefits.

Ultimately, global warming was primarily caused by the actions and policies of the West, and their refusal to act once the problem became clear to all.  The survival of the People’s Republic cannot ultimately be held hostage by the inability of Western democracies to sacrifice even a small part of their decadent pleasures for the greater good.

See the technical appendices for more information on implementation.  I am of course available to discuss this further with you and other members of the Committee as needed.

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Stick and Carrot

Frontline report, “The Viral Carbon Tax,” April 4, 2030

<A scene from a formal signing; many Chinese officials are smiling at the multitude of flashguns going off>

Narrator>  This past January, officials of the Chinese government signed their application to the World Carbon Tax Agreement, marking an end to their eight-year fight against the international legislation.

This was a breakthrough moment for the United States, as the founding nation of the WCTA, since China was, until this January, the last major emitter of greenhouse gasses that had not joined.  The political and economic tensions that have long plagued relations between China and the rest of the world have since eased, as the tariffs on imports from non-WCTA countries, which have been a thorn in China’s side for the past seven years, have been removed from Chinese goods.

<Montage of information slides and images>

After ten years of abnormal blizzards in the eastern US and severe droughts in the western part of the country, in addition to similarly devastating weather throughout the rest of the world, by 2020 all but the most passionate climate deniers were ready to acknowledge that climate change was real and harmful.  As we have learned, a warmer climate is also a much more energetic and extreme climate, and this became economically painful much sooner than most people expected.  From its low point in 2011, US public opinion swung strongly in favor of regulating carbon dioxide and other greenhouse gasses, but remained strongly opposed to any unilateral commitment that would hurt the US economy and benefit those who kept polluting.

The decision by the US Environmental Protection Agency in 2018, backed strongly by the White House, to cap greenhouse gas emissions and block all new fossil fuel power plants forced the issue to a decision.  The EPA argued that under the law it had to act on the overwhelming evidence that pollution was harmful.  That left it squarely up to Congress to either override the EPA or else take action to reduce greenhouse gasses. Pro-business forces lacked the votes to simply overturn the EPA decision in the face of a promised veto, so intense negotiations ensued over a possible compromise measure.

Narrator> Political economist Arnold Phelps has been keeping track of the progress of the WCTA since before its inception.

<Cut to Dr. Phelps, at a Brookings Institute briefing room in Washington>

Dr. Phelps>  The result of all the wrangling in 2018 was a bizarre three-way alliance between big business, protectionist unions, and environmentalists.

The source of the convergence that resulted in the WCTA has been endlessly discussed and debated.  Energy companies depend heavily on their geologists and chemical engineers and many executives of those companies come from those ranks.  These companies were in a better position than most to see the reality of global warming, even if they didn’t always acknowledge it publicly.  Furthermore, many of these companies had by then invested heavily in alternative technologies, and these were beginning to pay off.

Faced with a choice between replacing aging plants with more of the same or of investing somewhat more capital for new technologies, most decided to bet on more long-term growth from innovation.  They could also see that carbon-based energy would still be necessary for a long time and that restricting its growth would create shortages and higher profits for some time to come. So restricting carbon emissions looked like a double win for them.  Many other American businesses also feared climate-caused economic disruptions and the loss of their technological competitive edge to aggressive innovators in developing countries more than they feared gradually higher energy prices at home.

Workers and labor unions, of course, had complained for years about environmental protection measures that forced US businesses to move overseas, exported jobs and pollution and accomplished nothing.  Unions had consistently opposed any measure that would do more of the same.  When faced with the EPA ruling, labor lobbied hard in Congress to overturn the decision.  Environmentalists, on the other hand, fought equally hard against this, and the battle threatened to tear the Democratic Party apart.  Ultimately, the proposal put forth by business groups proved acceptable to both sides.

Narrator>  Energy companies had already been in the peculiar position of lobbying for a tax on carbon that would at least let them continue doing business with some idea of the cost.  ExxonMobil and several other major producers began advocating such a carbon tax in 2007 as an alternative to cap-and-trade, and their arguments slowly made headway throughout the business community.  This time, instead of fighting any climate legislation at all, big business devoted its lobbying efforts to protecting the US economy against cheap imports from countries without such limitations.

<Cut to a well-appointed office with Pennsylvania Avenue visible in the window; the narrator is seated facing a woman.  The label on the screen reads “Catherine Hendersen, Chief Analyst, Economic Policy Research Associates”>

Narrator>  Catherine Hendersen was the top White House negotiator responsible for getting the opposing parties together to work out a deal.  We’ve asked her to describe what happened.  Ms. Hendersen?

Catherine Henderson>  After a lot of maneuvering, they reached a compromise to gradually introduce a tax on greenhouse gasses generated within the US (which satisfied the environmentalists) and at the same time to impose a tariff on imports from countries that had no such tax, which made labor happy.  The proceeds from both were to go to fund the Social Security system and eventually reduce the Social Security tax, removing an existing disincentive for creating jobs.  The idea was that this would prevent the export of “dirty” jobs, make American labor cheaper and more competitive, and also create incentives for other countries to clean up their own houses.  Partly as a result of lobbying from Canada and Mexico, the legislation also created, almost as an afterthought, a vehicle for incorporating other nations into a carbon tax trade zone.

Although the initial values for both the tax and the tariff were quite low, the legislation set out a strict schedule for annual increases that would impose small but significant rises in the cost of carbon emissions every year.  When Congress passed the Climate Mitigation Act of 2021, the American energy sector had been expecting the move for years, and had already started to adopt more alternative energy sources in order to reduce the impact of increased costs of fossil-fuel burning power plants.  And the stock market, which had stalled after the EPA announcement, celebrated the greater predictability with its first major bull market since 2015.

<Cut to a slideshow of reports and headlines (in English, Mandarin, and many other languages) from the past twenty-five years>

Narrator>  On the international front, even though the US had adopted significant emissions restrictions, a group of developing nations, including China and India, refused to accept binding emissions restrictions on themselves at the 2020 UN Climate Conference in Buenos Aires.  The Europeans had attempted to create a cap-and-trade system, but this failed badly to reduce their carbon emissions, amid repeated revelations of fraud, phony offsets, and third-world nations selling the same offsets to multiple buyers.  Faced with deadlocked negotiations and a growing barrier to its exports to the US, the EU abandoned its failed cap-and-trade system and joined what became the World Climate Trade Association, also known as the World Carbon Tax Association.  Although based on the seed in the US legislation, the WCTA actually came into existence through the EU-North American treaty negotiations of 2022.

<Cut to a list of items appearing on the screen>

Put simply, members of the WCTA must all charge a uniform tax on carbon emissions internally, must all eliminate subsidies for carbon-based energy, and must all place a uniform tariff on goods imported from outside the union.  Both the internal tax rate and the tariff began at low levels and have been gradually increased according to the original timetable, intended to ease the initial impact and provide businesses and consumers with a predictable future.  We asked Dr Phelps to describe what happened next.

<Cut to Dr. Phelps in Washington>

Dr. Phelps>  China, Russia, and India all pushed hard to make the US back off from its trade restrictions and to block the negotiations with Europe.  Unfortunately for them, the citizens of Western nations had become more than a little fed up with their aggressively obstructionist tactics in the past decade, and were firmly behind their governments.  Although the treaty, like the CMA before it, was initially opposed by free traders and initially supported by many politicians because of the protectionist effect of the tariff, the World Trade Organization rejected several challenges to the measure and the Senate ratified the treaty, officially creating the WCTA.

Canada and Mexico had effectively joined the union before its official birth by passing a carbon tax and tariff to match the American measures and qualify for continued free trade status.  As more and more nations joined the WCTA—Japan and most of the South American block in 2024, Australia in 2025—all seeking to benefit from lower export restrictions and to gain money from imports of goods, China and the other holdouts became more and more isolated, and their economic growth rates showed it.  India and Russia, after much internal argument and political posturing, applied for membership in 2027, leaving China as the only major holdout.

<Cut to a press conference, with Chinese officials giving a speech to assembled reporters in Beijing>

Narrator>  With China’s application to the WCTA, scientists, environmentalists, and government leaders around the world hope to see improvements in the outlook for the climate over the coming decades.  In just ten years, there has already been a significant “bending of the curve” downward in terms of greenhouse gas emissions.  Currently, climate models are predicting a rise in temperatures by 2100 of around 3.3 degrees Celsius, and officials at the IPCC are waiting to see the new forecasts that will follow China’s announcement of its emissions reduction plans.

 – – – – –

In Closing

There is no such thing as being perfectly accurate when you make forecasts.  When you build a scenario based on a forecast, this is doubly true.  The four scenarios that I’ve presented here are, simply, works of fiction that describe what might happen.  They are not the only things that could happen, and they certainly won’t happen exactly as I’ve described.  Their purpose is to help you think about what could happen in the next two decades, and what we can do to influence that.  That is, in my mind, the primary purpose of futures as a field:  to broaden our minds about what could happen, and help us think of ways to turn the future to our advantage.

Those who deal with the science and politics of climate change are familiar with the trends that these scenarios are based on.  If you are interested in learning more about the subject, I recommend The Rough Guide to Climate Change, by Bob Henson, which is an excellent primer on the science, history, and to some extent the politics of climate change.  Climate Change Science and Policy, edited by Stephen Schneider, et al., is a more detailed, but also a more academic, summary of the political and economic issues and the science behind them.  For a more continually updated look at what’s going on, The Economist also has a wealth of information on the subject, particularly on international politics and economics as they relate to climate change, and is an excellent source for current scientific news on climate change presented in language accessible to the lay reader.

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