Does the government need to be involved?

Certainly individuals and corporations can act independently. Indeed, we have recently seen corporate leaders like Bezos and Nadella (neither raving socialists last time I checked) pledge action both individually and through the corporations that they run.

So why can’t this just be left to corporations and individuals? For the well understood reason that free markets don’t work well when there are costs that are not reflected in the price. So if I buy a gas guzzling SUV, the price I pay for it, and for the gas it uses, doesn’t factor in the increased environmental damage it is doing, and the cost of repairing that damage (or the social cost of everyone living with the consequences). These are called externalities in economics.

One way to solve the problem is to ensure that the external consequences are factored fairly into the price paid - add a tax to the price of the car, or to gas, and use the revenue to, say, invest in carbon neutral power plants to offset the negative impact. Then individuals are still free to purchase the gas guzzler, but have to accept paying the ‘real’, not artificially low, price. And the same applies to corporations, who are not generally going to do the “right” thing. They are, quite understandably, going to do the thing that is best for the business. So to avoid companies buying their power from cheaper fossil fuel sources, where that cheap price doesn’t include the large future cost of the damage done, we should be ensuring there is a premium paid to reflect that damage. How one prices the misery caused by floods and fires that climate change is giving us I don’t know, but it’s certainly larger than the current $0. Once fossil fuels are priced correctly, we will likely find alternative sources become much more attractive financially. Then we might avoid the crazy situation of more carbon friendly biomass plants in the US closing down, or running at reduced capacity, due to price pressure from artificially cheap natural gas. [1]

Rather than taxes, the government could of course flat out regulate, and/or subsidize other energy sources - not to unfairly put their finger on the scale in favor of renewable sources, but to make the scales fair, to then allow normal market incentives to operate.

Until the government takes such a role, we can hardly expect the oil and gas companies themselves to change. The EID paper mentioned above spoke of the environmental benefits of the shift from coal to natural gas. It seemed to ignore the fact that extraction of natural gas releases methane, which is a much more potent greenhouse gas. Fortunately, independent studies by Berkeley Earth showed that even when that effect is factored in, natural gas is better than coal. So is that why the large switch to gas occurred? Of course not - it has simply been that, as the paper points out, “[gas] has been made abundant and affordable by advances in horizontal drilling and hydraulic fracturing technology.” The fact that it is less bad than coal in regard to CO2 emissions is a lucky coincidence - I’m sure if it happened to be worse it would have made no difference, as, in the absence of regulations or carbon taxes, the same market forces would have led to its increased usage.

This page on ExxonMobils website is indicative of how they are not addressing the problem with anything like the required urgency. This articles talks about the carbon capture technology being deployed by ExxonMobil, and includes the following boast: 6.6M metric tons of CO2 were captured by ExxonMobile for storage in 2017

The accompanying “feel good” video is about making power plants absorb CO like real plants. 6.6M tons captured in 2017? As with all big numbers, it’s meaningless without being put in context. As we saw above, the total emissions of the US in 2017 were 5128 M tons. So 6.6 M tons, whilst sounding a lot, is just 0.13% of the US total. So let’s update their page:

In summary, the government (federal and state) must lead the way, and drive the changes needed. To leave to individual choices feels akin to having organized D-Day around the principle that anyone who wanted to participate should feel free to turn up on Omaha beach on the morning of June 6th, and hope for the best.