After a summer of climate-related disasters, the latest report from the U.N. Framework Convention on Climate Change is a dire warning for the world. The planet faces a “rapidly narrowing window” to avert catastrophic levels of warming. Even if countries fulfill existing pledges, the Earth is projected to warm by 2.4 degrees Celsius by the turn of the century — a smaller increase than was projected a few years ago but still well past the 1.5-degree threshold scientists say the globe shouldn’t cross.
In the lead-up to the annual U.N. climate conference (COP28) starting next month, this forecast should put policymakers and business leaders on notice. On top of that, early analyses show the month of September breaking a global heat record by a wide margin. Yet the news is not all dread and despair. The U.N. report also touts the progress made since the Paris agreement was negotiated in 2015, including “early signs of transformation and urgency” that could remake the climate fight. To be sure, these green shoots of innovation are not enough — but they can provide evidence-based building blocks for the crucial next decade of climate action.
For decades, carbon prices were found primarily in wealthy nations. With the exception of the United States, every Group of Seven country prices carbon through either an emissions-trading scheme or a tax. But now, more middle- and low-income nations are joining the trend. China’s national trading scheme launched in 2021 after a long pilot period. Though concerns remain about data accuracy, on which these programs’ effectiveness rests, their existence still signals a step forward in intent and infrastructure.
India, too, is starting to experiment with market-based regulations. In the state of Gujarat, researchers from the University of Chicago, Yale University, the University of Warwick and the Abdul Latif Jameel Poverty Action Lab investigated the impact of a market for particulate matter emissions. Economist Michael Greenstone and co-authors found that industrial plants that participated in the market reduced emissions by 20 to 30 percent; the market mechanism also lowered the costs of achieving this decline, compared with other emissions-cutting approaches. While the program targeted local air pollutants, these emissions are closely linked with greenhouse gases. Based on the results, other Indian states and cities are launching similar programs, and the central government has started working toward a national carbon market.