Environmental Audit Committee - Minutes of EvidenceHC 60-i

House of commons

oral evidence

taken before the

Environmental Audit Committee

Progress on Carbon Budgets

Thursday 16 May 2013

Professor James Hansen and Professor Mark Jaccard

Evidence heard in Public Questions 1 - 18

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Environmental Audit Committee

on Thursday 16 May 2013

Members present:

Martin Caton (Chair)

Peter Aldous

Zac Goldsmith

Mark Lazarowicz

Caroline Lucas

Dr Matthew Offord

Dr Alan Whitehead

Simon Wright

________________

Examination of Witnesses

Witnesses: Professor James Hansen, Columbia University, and Professor Mark Jaccard, Simon Fraser University, Vancouver, gave evidence.

Q1 Chair: Good morning. We are very grateful to you for making time during your visit to come to speak to the Environmental Audit Committee, and you are very welcome. We are aware that you are under considerable time constraints and need to get away by 11.20 am, so we will ensure that that happens.

First, can I apologise on behalf of Joan Walley, our chairperson? Unfortunately she has a commitment that she absolutely has to attend in her constituency, but I know that she is very disappointed not to be here to listen to your evidence.

We are undertaking an inquiry looking at the UK’s carbon budget regime, intermediate targets on the path to the UK’s statutory target to cut emissions by 80% by 2050. That UK carbon budget regime is based on the objective of limiting global temperature rises to 2°C. Is that still the right objective?

Professor Hansen: Well, 2°C is the limit. The community has agreed that 2°C is an upper boundary that we should avoid penetrating. I argue that the limit should be lower than that. We know that the last time the world was 2°C warmer was 120,000 years ago in the Eemian Period, and things were rather different then. The sea level was at least six metres higher. From the earth’s history we know that, as the temperature has changed, the sea level has gone along with it, because ice melts when the planet gets warmer, and so the eventual response to 2°C warming is probably going to be a situation that is rather unacceptable. There is no evidence that would indicate that that target is too ambitious. If anything, it is too weak.

Q2 Chair: Would you agree with that, Professor Jaccard?

Professor Jaccard: My area is in energy policy economic analysis, so I will defer to Professor Hansen. However, thank you for asking me.

Q3 Chair: To what extent is there consensus in the scientific community as to what constitutes dangerous climate change?

Professor Hansen: If you ask an authoritative scientific body-like our National Academy of Sciences or your Royal Society, or any of the geophysical unions or meteorological unions-there is a consensus that warming of 2°C or more would certainly be dangerous. There is not disagreement among the relevant scientific community. You can always find a few people who disagree, but in general there is consensus on that.

Q4 Chair: Thank you. Are there emerging areas of climate change science that could possibly alter our climate change goals?

Professor Hansen: Yes. I would say our understanding of the situation is improving as we get more precise data on the system-for example, beginning 10 years ago, with the satellite called GRACE that measures the gravitational field of the earth with very high precision, so you can measure the changes in the mass of the ice sheets on Greenland and Antarctica. It shows that these ice sheets are shedding mass more and more rapidly, and that this last summer was the most extreme mass loss from Greenland, which was more than 500 cubic kilometres. That is averaged over the winter and summer.

Of course, in the winter we see the ice sheet gets heavier and then it loses mass in the melting season. Integrated over the entire season, it lost mass at more than 500 cubic kilometres per year. Antarctica is also losing mass. It is not as rapid, but it is an indication that our concern about the stability of these ice sheets is well justified. In fact, it is a more rapid loss of mass than would have been predicted by any ice sheet models. It is very difficult to model the disintegration of ice sheets. So that is one piece of evidence.

Another fundamental piece of evidence-which, again, is a recent measurement and a very valuable one-is that we can now measure the earth’s energy imbalance. What we expect is, as you add a gas like carbon dioxide to the atmosphere, it is like putting a blanket on the planet, because it absorbs heat radiation and that reduces the heat radiation to space. Therefore you get an imbalance, with more energy coming in from the sun than going out in heat radiation. That is very clear; from the physical processes we expect that.

We can now measure that because different nations of the world co-operated in sending out more than 3,000 Argo floats, which are distributed around the world’s ocean. The floats dive down into the ocean to a depth of two kilometres, take measurements and then come back up to the surface and radio the information to a satellite. That enables us to measure how the heat content of the ocean is changing, because that is where most of the excess energy must go. The atmosphere has a very small heat capacity but the ocean has a tremendous thermal inertia, a heat capacity, so that is where the energy goes.

We can now measure that the ocean is gaining energy at a rate of several tenths of a watt per metre squared, averaged over the planet’s surface. What that tells us is that there is almost as much warming that is in the pipeline. Because if you have more energy coming in than going out, then eventually you are going to warm up the planet further and we can now estimate how much more warming there is in the pipeline. It tells us that that additional warming, plus the eight-tenths of a degree that has already occurred, is getting us close to the boundaries of what we should allow if we want to avoid dangerous climate change.

Q5 Caroline Lucas: Thank you. Yesterday there were leaked papers-which I am sure you have probably seen-which appear to show that the UK is rejecting an EU proposal to classify oil from tar sands as highly polluting through the Fuel Quality Directive. That suggests that the UK is happy to see European countries import carbon-intensive tar sands oil from Canada, essentially by creating a market for it here. What are your views on that position, in terms of the extent to which it is compatible with a stated aim and a legal requirement in the UK to keep temperature warming to below 2°C?

Professor Hansen: I would like to make clear why this is extremely important. It is based on very fundamental physics of the climate system, which there is absolutely no dispute about. We understand what we call the carbon cycle very well. When we burn fossil fuels and put the carbon dioxide into the atmosphere, that carbon dioxide will stay in the surface climate system for millennia. That is the problem.

We know, mainly from the history of the earth, how sensitive the climate system is to changes in the amount of carbon dioxide in the surface climate system. We have records over hundreds of millions of years of how the climate has changed over time and in response to changes in the boundary conditions, which include the atmospheric composition and the surface properties of the planet. That is our best measure of how sensitive the climate system is when you give it time to respond. That is where we come up with the limits on how much we can put into the atmosphere without guaranteeing huge impacts.

When we look at how much carbon there is in the conventional fossil fuels-that means oil, gas and coal-we realise that we cannot burn all those fossil fuels without going way beyond what we have agreed is a dangerous limit. In fact, if we burned all fossil fuels, we would head the planet back to the ice-free state, with sea levels 70 metres higher, 250 feet higher. We realised that we cannot do that.

When we dealt only with conventional fossil fuels, the problem was potentially solvable because, if we would leave most of the coal in the ground, or capture the CO2 when we burn the coal and put it back in the ground, then it was solvable because the conventional oil and gas is finite. There was some hope that, with international agreements, if we began to put a price on carbon, which would move the world toward alternative sources of electricity rather than coal, it was a solvable problem.

Here, however, in addition to these conventional fossil fuels, we have these unconventional oils-tar sands, tar shale, fracking for gas-and the potential amount of carbon in these unconventional oils is huge. If we introduce the tar shale and tar sands as a source and exploit those resources to a significant extent, then the problem becomes unsolvable. We know that you can get conventional oil, which is available in places like Saudi Arabia and Russia, out of the ground for several dollars a barrel. There is no way that we can tell Saudi Arabia, "Don’t sell that oil", or tell Russia, "You’re not allowed to sell that oil", so we know we are going to get more out of these conventional sources. If we also introduce the unconventional ones then there is no solution other than geo-engineering, which is a terrible fate to will to our children.

So we cannot pretend that we don’t know the consequences of digging into these unconventional fossil fuels that, frankly, I had always assumed the world would be smart enough to leave in the ground, because they are more carbon-intensive. The amount of energy you get per unit of carbon is less, and you get all these extra pollutants. It is a very dirty process getting those tar sands out of the ground. You are polluting that region tremendously.

All that has been asked for in this fuel standard is to at least label it and say that we are getting more carbon per unit of energy, and yet some countries are afraid to do that. They are putting a burden on their children and future generations for the sake of what, slightly better relations with a particular party in Canada? It is absolutely crazy, the dynamics that are going on here. It is hard to understand how we cannot get countries to understand what the consequences of that are and what they are trading off.

Professor Jaccard: Without dragging the answer to one question out too much, I wonder if I might make a short intervention on this question as well.

Chair: Of course.

Professor Jaccard: Thank you. I am an energy economy modeller and have worked with the intergovernmental panel on climate change, but also with international groups of modellers. What they do with these models is look at the entire energy economy system, so all the different resources in different parts of the world, with some information on their likely costs of production and trade relationship and demand. We take the information that the scientists give us as, say, a carbon budget, "Here is how much carbon pollution can go into the atmosphere for a 1°C target or a 2°C target of temperature change".

The kind of modelling I do is more country-specific to the United States and Canada. I work with these teams especially in a process that is co-ordinated from Stanford University in the United States, called the Energy Modelling Forum; you can look it up as EMF. They bring together the teams of energy economy modellers from around the world, and some of them are from the UK as well.

The models that I have seen are run to meet the constraints of the 2°C: how much carbon we could still burn and put into the atmosphere and how much is unburnable. I have not seen in any of these models-and I can give the references-where we exploited unconventional fuels to a great extent. Of course, it varies. It depends because we are not quite sure with unconventional natural gas where that will go in different regions of the world. However, if you are trying to hit that 2°C limit, you don’t dramatically develop resources like Canada’s oil sands, tar sands, or the heavy oil in Venezuela or in several other jurisdictions.

The question then becomes the very difficult problem of whether we act globally on that. Ideally, we would have a global Government and they would put a global carbon price, and then we would let the market take care of that. However, in this imperfect world, individual jurisdictions are implementing things, like the Fuel Quality Directive-in California, you have the Low-Carbon Fuel Standard-which try to reach beyond your own borders, which try to say, "If we are trying to reduce our emissions in the UK and Europe and California, it does little good if we are not looking upstream at emissions that are caused elsewhere".

I note that your Fuel Quality Directive is not just about tar sands; it is also about oil shale, coal to liquid, gas to liquid and other means of getting the gasoline and diesel that you might burn in your vehicles in Europe. Therefore, I think it is important to hang on to policies like this, and to make sure they have some bite, as a way of signalling to the rest of the world as well what choices you need to make. They will be important. Thank you.

Chair: Thank you. That is very clear.

Q6 Dr Offord: In January this year, the UK’s Meteorological Office published its decadal forecast. They predicted that in the next five years climate change would be slowing, slower than they had predicted in 2011. What does your research show about global climate change slowing down?

Professor Hansen: Five-year forecasts for global temperature are extremely speculative. What we can say about climate change in the five-year timescale would be based mainly on the measurements I have already mentioned, which are the earth’s energy imbalance. We know there is more energy coming in so, on a decadal timescale, we know the planet is going to get warmer. We can say it with a high degree of confidence, not 100% certainty. We are not certain that huge volcanoes will not go off in the next five years. That is unpredictable. If you had huge volcanoes that put aerosols in the stratosphere to reflect sunlight away, then they would change this planetary energy imbalance, and you may have less energy coming in than going out. You cannot be certain, but we do know, from looking at hundreds of years, what the probability is that we get some forcing like that.

We also know how the sun is changing. In addition to human-made factors, there are natural factors that influence global temperature on those timescales. One of them is the sun. The sun goes through these cycles in approximately 11-year periods, which are associated with the solar magnetic cycle, and the most recent cycle is weaker than any of the prior three. We began to make very precise measurements from satellites in the 1970s.

The sun is contributing a bit to slowing down the warming because the sun’s brightness has been about one-tenth of a watt less in the last decade than in the prior decades. Despite that solar, the increase in CO2 over that decadal time period is contributing a forcing of a few tenths of a watt per metre squared, so it exceeds the reduction in solar irradiance. Therefore I can say, with a reasonably high degree of confidence, that over the next several years you will get warming and, therefore, we will see still higher records.

The warmest year on record was 2010. There has been a lot of press recently about the fact that some people say, "Oh, the warming has stopped over the last 15 years". They are comparing to 1998, 15 years ago, when we had the El Niño of the century, which caused global temperature to jump two standard deviations above the trend line at that time. It is true that over the last decade temperatures have been only comparable to that 1998 temperature. That is a tricky statement because, if you take the 10-year running average, what you see is that the temperature is still going up, but there is variability on that short a timescale.

To summarise, we can confidently say that the next decade is going to be warmer than this decade. This decade was warmer than the one before. That has been true now since 1970-each decade has been warmer, and, because of the rapid emissions growth in CO2, that is going to continue to be the case until we slow down our emissions of fossil fuels.

Q7 Dr Offord: Thank you. As a result of the report from the Meteorological Office, some of the press have picked up on this and decided that global change isn’t happening and we don’t need to continue in the fashion that I hope some of us are trying to achieve. Some politicians are swayed by that kind of media reporting. How do you feel that we should disseminate some more of the research that you have been talking about-not among just politicians, but among the public as a whole-to try to get across the conditions that you describe?

Professor Hansen: That phenomenon with the media and these overreactions is what Albert Einstein referred to. He stopped communicating with the press because he said they made it sound like every year there is a revolution, like in these little Eastern European countries; in his day, there were revolutions in these small Balkan countries that had global implications. However, the science is not fluctuating crazily from year to year. There are fundamental facts that override.

Of course, there are interesting things that happen on short timescales, and we like to understand those, but it doesn’t change our overall understanding that humans have now become the dominant driving force for climate change on decadal timescales. So there is no reason to alter the goals and the requirement that will bring the human-made forcing under control, or we will leave our children with a situation that is out of their control.

Dr Offord: Thank you very much.

Q8 Chair: Do you have anything that you would like to add to that, Professor Jaccard?

Professor Jaccard: No.

Q9 Zac Goldsmith: Just on the politics of that, which I would be interested to know. There is a report in The Guardian today saying that according to an assessment of all the scientific papers on climate change, where there is a verdict on whether we are responsible or not, more than 99% seem to be of the firm view, which Professor Hansen takes, that we are very much the dominant force for the changes that we are seeing. There is as close to a scientific consensus as science allows. It is hard to hope for or imagine a stronger consensus.

Despite that, politically there seems to be a roll-back. There are very many senior political figures, in this country and elsewhere, who are reluctant to embark on any kind of policy journey that would adequately address this issue. Professor Hansen, I am interested to know how much dialogue you have had with climate-sceptical politicians, either in Europe or in the States, and also climate-sceptic scientists. How much exchange do you have with the people who take that view?

Professor Hansen: That is a good question because I think that that dialogue is really important. I can specifically comment on the situation in the United States, but I think it is very analogous to the one in the United Kingdom. I have taken some initiative to speak with conservatives in the United States. A large fraction of our members of the Republican Party, which is the more conservative party, have taken the position that this whole climate thing is a hoax, and, because of the huge amount of advertisement in the media, have even convinced a fraction of the public-perhaps a quarter or a third-that this is all a hoax dreamed up by scientists who want to get research funding, which is, of course, silly.

Conservatives historically in the United States have been the party that has introduced extremely important legislation for environmental protection and for conservation of public lands, going all the way back to Teddy Roosevelt a century ago. The thoughtful conservatives know that of course this is not a hoax, and eventually it is going to be clear. If a party continues to be anti-science and pretends that it is a hoax, once it becomes clear it was not a hoax, then the consequences are likely to be that the public demands the Government solves the problem and then the Government takes over. That is the worst possible outcome from a conservative’s point of view. They don’t want the Government taking over, so-

Q10 Zac Goldsmith: Could I just interrupt? I agree with you, but, by the time that process happens, the problem will have advanced considerably, so the priority has to be now.

Professor Hansen: Right, so we need the thoughtful conservatives to understand that now. We cannot wait for Mother Nature to make it obvious. There is some progress in that. For example, George Shultz, who was the Secretary of State under Ronald Reagan, has agreed to be a public spokesman for an approach of dealing with this problem that would be acceptable to conservatives-and, frankly, would be more effective than what the liberals are offering-and that is a revenue-neutral carbon tax. That means it is not really a tax. It is a carbon fee that you collect from fossil fuel companies at the source, at the domestic mine or the port of entry, and then you give the money to the public. In particular, he agrees with what I have been recommending, which is to give an equal amount to every legal resident of the country so that the person who does better than average in limiting his carbon footprint will actually make money. With the present distribution of energy uses, 60% of the people would get more in their dividend than they pay in increased prices.

That is the kind of approach that conservatives can go along with because it doesn’t allow the Government to get bigger. It is not using the money to make a bigger Government; rather, it is having a programme that is designed in the long run to phase out the source of the problem. That is, if that carbon price continues to rise over time, it will allow other alternatives to replace fossil fuels. We have to do that in the long run.

Q11 Zac Goldsmith: If you do not mind me asking how-

Chair: Last one, though, Zac.

Zac Goldsmith: Oh, I have to choose now. This is a supplementary question, but I am interested in how much traction that has achieved within the conservative element of the States.

Professor Hansen: It is kind of new, but even the most extreme, like Grover Norquist-I don’t know if you know him from American politics, but he has been very successful in getting all Republicans to agree not to have any tax increase. They signed a pledge, and those who then vote for any tax increase he then opposes and has been successful in getting them defeated-even he, in discussions, is thinking this makes sense. So I think there is a good chance. It is going to take more convincing. I wouldn’t say it is in any way a majority of conservatives yet, but I think it is the way we have to go if we are going to get bipartisan agreement.

Q12 Peter Aldous: Do you feel that climate feedbacks are adequately understood and factored into climate models?

Professor Hansen: No. For example, one of the feedbacks is that as the planet gets warmer you melt ice. The Arctic sea ice is melting faster than the climate models indicated. The climate models often get criticised-and it is a valid criticism-that there is a lot of physics that we may not even have in the models, and that which we do have in may be inaccurate. Our understanding of climate sensitivity is based, first of all, on the history of the earth: how the earth responded in the past. That is really an empirical way of assessing it. Despite those model deficiencies, they don’t prevent us from having a pretty good understanding of how sensitive climate is.

Q13 Peter Aldous: Are there any feedbacks you feel that we should be particularly concerned about or which we need to know more about?

Professor Hansen: Yes, there are a number, but I would say it is especially the ice sheets because we don’t know how rapidly they can change. The IPCC had prior estimates. The last report was that sea level this century would only go up a fraction of a metre. The new report is probably going to estimate more like a metre, but these are educated guesses. We don’t have the ability to simulate that process, because the important processes occur on a scale that is much smaller than the grid resolution of the models.

There is another one that might bear, and that is the methane hydrates. We don’t know how rapidly the methane, which is locked in this frozen methane in the tundra and on the continental shelf, can be released as the planet gets warmer. We need to understand that.

Q14 Peter Aldous: That is helpful and it leads on to a couple of other questions I have. This Committee recently looked at climate change in the Arctic, where I think recent modelling from satellite measurements shows that there has been a significant loss of volume and ice extent. How do you see the interaction between Arctic climate change and global climate change?

Professor Hansen: Of course the Arctic is responding to global warming, but, in turn, that Arctic change feeds back on regional climate and the conditions on the land in the northern parts on the continents. One of the interesting issues is the impact of that ice loss on the weather, especially the winter weather. The long-wave patterns, the Rossby waves, are the things that influence that.

The mass of atmosphere in the Arctic is of course more or less fixed, so when the wind blows from the north at one longitude, it has to blow from the south at another longitude, and, as those long-wave patterns shift, that changes where it is going to be unusually cold and where it is going to be warm. It so happens that in the last couple of years they have shifted, such that Greenland was nice and warm and Europe tended in some months to be quite cold. The relationship of that with the sea ice is not very well understood, but there are some papers in which they are trying to understand how that works. Those weather oscillations are very noisy, dynamical things, so it is going to take a while, and to get empirical evidence you are going to have to look at a number of years.

Q15 Peter Aldous: Thank you. Carbon dioxide has been the main focus in climate change science. How important are other types of emissions, such as black carbon, aerosols, and methane, which you have just mentioned, to global warming? Do you feel that reducing these offers better prospects for action to actually tackle climate change?

Professor Hansen: CO2 is by far the most important because the carbon stays in the surface system for millennia, and that is going to dominate in the long run. These others are shorter-lived, so they are not going to be dominant in the long run. Methane is very important because, as the amount of methane increases, so does the tropospheric ozone, and so does the stratospheric water vapour, for fairly simple chemical reasons.

Therefore, if you can reduce methane, you will reduce tropospheric ozone, which is damaging health-wise and it is also a greenhouse gas, and you would also reduce stratospheric water vapour. Its effect has been at least 40% as much as the CO2, so it does provide a sort of safety valve, but I would almost rather it be used that way rather than start with it. We really have to start with the carbon problem or we will have an unsolvable problem for our children.

The effect of black carbon is a little exaggerated in some of the papers in the literature and in the public discussion. It is true that black carbon also causes warming. It is soot, which is the dark soot from burning the fossil fuels. It causes warming because it absorbs more sunlight. When you produce black soot, along with it you also produce aerosols that scatter sunlight. They have a cooling effect that has partially masked the warming due to CO2. It is very hard to reduce the black soot without also reducing the other things and you should reduce the aerosols because they are very damaging from a health standpoint. However, it is not going to save us from warming to reduce the black soot because we will also reduce the cooling aerosols.

Q16 Dr Whitehead: Just briefly, on the feedback mechanisms, one of the important questions for the UK is the effect of ocean currents on our climate, particularly the Gulf Stream, without which I think we would have a climate similar to that of Newfoundland. What evidence is there, in terms of the overall ocean warming that is going on, that this is seriously affecting the direction and intensity of ocean currents, particularly those in the Atlantic?

Professor Hansen: I would say that as yet the effect of human-made changes, to the atmosphere in the Gulf Stream and the transport of heat by the ocean, is not clear. We can see that the North Atlantic now and for the past few years has been unusually warm. The water off the United States’ east coast was about 2°C or 3°C warmer this past year. When the category 1 hurricane Sandy came up, it should have petered out before it got to New York, but, because the water was so warm, it stayed a category 1 hurricane and then combined with a frontal storm and moved inland. Whether that warming was a consequence of a human effect is unclear.

It is also unclear what the effect is going to be over the next several decades. It is a very interesting topic. I don’t know if we have time to get into this, but let me just briefly say that I am working on a paper that concludes that, if we stay on the path we are on, the ice mass loss from Greenland is going to reach a level such that it cools the North Atlantic.

This is a concept that Wally Broecker talked about a lot 10 or 20 years ago, but then he was beaten into submission by other scientists who said, "Actually, the CO2 is going to overwhelm that and you are going to get warming in the North Atlantic regardless". However, they were not including rapid ice loss from Greenland, which I think is going to happen because we can see it starting. If it continues to accelerate the way it has been, then that mass loss will become fast enough that the cold fresh water and icebergs coming out from Greenland will likely cause this cooling of the North Atlantic, and then that is what I called "The storms of my grandchildren" because you get cooling in the North Atlantic, warming in the tropics from the continued CO2 increase, so the temperature gradient gets much stronger and it drives much stronger storms. I have some evidence from the paleoclimate that such phenomena have happened in the earth’s history a long time ago. Anyway, this is a research area so it is somewhat speculative.

Q17 Mark Lazarowicz: Because of the failure to get comprehensive international agreements, there has been quite a lot of focus on individual countries doing their own thing as being the next best solution to the fact there has not been a comprehensive agreement. Do you-perhaps Professor Jaccard, rather than yourself-still think that international agreement is necessary and, if so, is it possible? It is possibly the other way round: is it is possible or necessary? Do you think the country by country approach is any type of substitute for international agreement?

Professor Jaccard: If I can just start. We obviously have to get to an international effort. It is a global problem. We need the major emitters acting. Whether or not that comes about through a process of voluntary discussions and negotiating a fairness arrangement between parties, which is more what we have been trying to do internationally with the Framework Convention on Climate Change, or it happens because of key players, groups of countries reaching bilateral or multilateral agreements to move forward, and then bringing the rest of the world with them, is a big debating point right now. There are scholars-David Victor’s book, Global Warming Gridlock-who are talking about how successful international agreements have been achieved in the past by clubs of countries. For example, that would be Europe and the United States and perhaps China working together to try to do something, or just the United States and China.

The point of that is we shouldn’t just be relying on an international negotiating process that happens every few years, or even we try to make it happen every year through the annual climate conferences. Instead, as individual entities, the United States, Europe, we should be trying to do things that extend the reach of our policies. Bringing it back to the Fuel Quality Directive, the point I made earlier, that is why I see that Europe saying, "We will reduce our emissions, without thinking about upstream what is going on in the rest of world" would be a mistake. That is why I believe you do need to take an initiative to act in your own jurisdiction, your own country, your own group of countries in Europe, if that is the case, but also always be looking to policies that have a further reach. Europe has been trying that with the Fuel Quality Directive, and California has been doing that with similar policies as well.

Q18 Mark Lazarowicz: How serious do you see the international implications for the current difficulties facing the EU ETS and the collapse of the carbon price?

Professor Jaccard: We may have different views on that. As an economist, when you put in an emissions trading system, if you don’t have a floor price or even a ceiling price for that system, you do understand that you may get price fluctuation, and some economists would argue that is a good thing. If your economy is not growing rapidly so your emissions are going down, then the price would quite naturally fall for a time. That creates a problem, though, for long-term investment and price security, which is why economists would tend to prefer a carbon tax. If that is not possible politically, over time I would encourage people to revise your trading system and, if you stay with that, to get some kind of floor price on it. I know jurisdictions have done that before. There are trading systems that have worked for acid emissions, local air quality and so on, so there are design possibilities. Paul Joskow at MIT has written a fair bit on that, about how to get a price floor in.

I tend to argue that you can do this with a lot of different kinds of policies. It is going to be that design that really counts. Even with Mr Goldsmith’s point earlier, there are fluctuations in public interest, but, from what the scientists are telling us, we know this issue will keep coming back. In my own career, I remember a peak in 1988 to 1989 in interest, in 1995 to 1997 leading up to the Kyoto Protocol, and then again in 2002 to 2008 until our recession. The important thing is to get policies in place and then to try to sustain them in those periods when we are weathering the economic storms, as we are right now.

Professor Hansen: If I could just add a comment. Given the urgency of getting global reductions in carbon emissions, I think that the Kyoto type of approach, the IPCC or the United Nations type of approach, doesn’t have a chance of being effective. We can see that emissions have accelerated globally. We are going to have to have more limited and bilateral agreements. We particularly need one between the United States and China, and I think that is a real possibility-as you probably know, a few weeks ago Secretary of State Kerry went to China and they agreed to have a working dialogue on this-and also if Europe would join an agreement.

What they need to discuss is a carbon price, not a cap-and-trade system. A flat carbon price would need to apply in China and in the United States, not necessarily at the same rate because the United States is responsible for 26% of the excess CO2 in the atmosphere now and China for 10%, even though China has many more people. Incidentally, on a per-capita basis, the United Kingdom is number one in responsibility because the industrial revolution began here. If you integrate over time, the United States is number two, Germany is number three and China is way down.

In any case, in order to solve this problem, we need to put an honest price on carbon-based fuels, which begins to pay their cost to society. If both countries agree to have rising carbon fees, then we can begin to address the problem. Frankly, without that, I don’t think the measures are anywhere near what is needed.

Chair: Thank you, Professor Hansen. It is now 11.21 am, so we will have to conclude. Can I thank you both very much for your enormously helpful evidence to start the inquiry off?