How can the world achieve economic growth while at the same time decarbonizing the global economy?

This question is important because there is apt to be little public or political support for mitigation policies that increase the costs of energy in ways that are felt in reduced growth. Consider this description of reactions around the world to the recent increasing costs of fuel:

Concerns were growing last night over a summer of coordinated European fuel protests after tens of thousands of Spanish truckers blocked roads and the French border, sparking similar action in Portugal and France, while unions across Europe prepared fresh action over the rising price of petrol and diesel. . .

Protests at rising fuel prices are not confined to Europe. A succession of developing countries have provoked public outcry by ordering fuel price increases. Yesterday Indian police forcibly dispersed hundreds of protesters in Kashmir who were angry at a 10% rise introduced last week. Protests appeared likely to spread to neighbouring Nepal after its government yesterday announced a 25% rise in fuel prices. Truckers in South Korea have vowed strike action over the high cost of diesel. Taiwan, Sri Lanka and Indonesia have all raised pump prices. Malaysia's decision last week to increase prices generated such public fury that the government moved yesterday to trim ministers' allowances to appease the public.

Advocates for a response to climate change based on increasing the costs of carbon-based energy skate around the fact that people react very negatively to higher prices by promising that action won’t really cost that much. For instance, our frequent debating partner Joe Romm says of a recent IEA report (emphasis added):

. . . cutting global emissions in half by 2050 is not costly. In fact, the total shift in investment needed to stabilize at 450 ppm is only about 1.1% of GDP per year, and that is not a "cost" or hit to GDP, because much of that investment goes towards saving expensive fuel.

And Joe tells us that even these "not costly" costs are "overestimated."

If action on climate change is indeed "not costly" then it would logically follow the only reasons for anyone to question a strategy based on increasing the costs of energy are complete ignorance and/or a crass willingness to destroy the planet for private gain. Indeed, accusations of "denial" and "delay" are now staples of any debate over climate policy.

There is another view. Specifically that the current ranges of actions at the forefront of the climate debate focused on putting a price on carbon in order to motivate action are misguided and cannot succeed. This argument goes as follows: In order for action to occur costs must be significant enough to change incentives and thus behavior. Without the sugarcoating, pricing carbon (whether via cap-and-trade or a direct tax) is designed to be costly. In this basic principle lies the seed of failure. Policy makers will do (and have done) everything they can to avoid imposing higher costs of energy on their constituents via dodgy offsets, overly generous allowances, safety valves, hot air, and whatever other gimmick they can come up with.

Analysts and advocates allow this house of cards to stand when trying to sell higher costs of energy to a skeptical public they provide analyses that support a conclusion that acting to cut future emissions is "not costly."

The argument of "not costly" based on under-estimating the future growth of emissions so that the resulting challenge does not appear so large. We have discussed such scenarios on many occasions here and explored their implications in a commentary in Nature (PDF).

One widely-know example is the stabilization wedge analysis of Stephen Pacala and Robert Socolow (PDF. The stabilization wedge analysis concluded that the challenge of stabilizing emissions was no so challenging.

Humanity already possesses the fundamental scientific, technical, and industrial know-how to solve the carbon and climate problem for the next half-century. A portfolio of technologies now exists to meet the world’s energy needs over the next 50years and limit atmospheric CO2 to a trajectory that avoids a doubling of the preindustrial concentration. . . But it is important not to become beguiled by the possibility of revolutionary technology. Humanity can solve the carbon and climate problem in the first half of this century simply by scaling up what we already know how to do.

In a recent interview the lead author of that paper, Pacala provided a candid and eye-opening explanation of the reason why they wrote the paper (emphases added):

The purpose of the stabilization wedges paper was narrow and simple – we wanted to stop the Bush administration from what we saw as a strategy to stall action on global warming by claiming that we lacked the technology to tackle it. The Secretary of Energy at the time used to give a speech saying that we needed a discovery as fundamental as the discovery of electricity by Faraday in the 19th century.

We also wanted to stop the group of scientists that were writing what I thought were grant proposals masquerading as energy assessments. There was one famous paper published in Science [Hoffert et al. 2002] that went down the list [of available technologies] fighting them one by one but never asked "what if we put them all together?" It was an analysis whose purpose was to show we lacked the technology, with a call at the end for blue sky research.

I saw it as an unhealthy collusion between the scientific community who believed that there was a serious problem and a political movement that didn’t. I wanted that to stop and the paper for me was surprisingly effective at doing that. I’m really happy with how it came out – I wouldn’t change a thing.

That doesn’t mean that there aren’t things wrong with it and that history won’t prove it false. It would be astonishing if it weren’t false in many ways, but what we said was accurate at the time.

So lets take a second to reflect on what you just read. Pacala is claiming that he wrote a paper to serve a political purpose and he admits that history may very well prove its analysis to be “false.” But he judges the paper was successful not because of its analytical soundness, but because it served its political function by severing relationship between a certain group of scientific experts and decision makers whose views he opposed.

Why is this problematic? NYU’s Marty Hoffert has explained that the Pacala and Socolow paper was simply based on flawed assumptions. Repeating different analyses with similar assumptions doesn’t make the resulting conclusions any more correct. Hoffert says (emphases added):

The problem with the formulation of Pacala and Socolow in their Science paper, and the later paper by Socolow in Scientific American issue that you cite, is that they both indicate that seven "wedges" of carbon emission reducing energy technology (or behavior) -- each of which creates a growing decline in carbon emissions relative to a baseline scenario equal to 25 billion tonnes less carbon over fifty years -- is enough to hold emissions constant over that period. . . .

A table is presented in the wedge papers of 15 "existing technology" wedges, leading virtually all readers to conclude the carbon and climate problem is soluble with near-term technology; and so, by implication, a major ramp-up of research and development investments in alternate energy technology like the "Apollo-like" R&D Program that we call for, is unnecessary. . . .

The actual number of wedges to hold carbon dioxide below 450 ppm is about 18, not 7, for Pacala-Socolow scenario assumptions, as Rob well knows; in which case we're much further from having the technology we need. The problem is actually much worse than that, since the number of emission-reducing wedges needed to avoid greater than two degree Celsius warming explodes after the mid-century mark if world GDP continues to grow three percent per year under a business-as-usual scenario.