That’s because carbon dioxide emissions accumulate and are long-lived. Without zero net CO2 emissions, temperatures will just keep rising. When I said that two years ago, it was deemed controversial. Today, I’m pleased to see that it has become conventional wisdom and a commonly shared goal–including just last month by the G7 Leaders.
Not much has changed since then…except prices.
So let me start by reflecting on what has and what hasn’t changed since that day (9 October 2013). First of all, the science has not changed. The IPCC’s recent Fifth Assessment Report has confirmed the seriousness and urgency of the issue. The second key element that has NOT changed is the predominance of fossil fuels. Two years ago, we were awash in fossil fuels. Unfortunately, they still dominate global energy supply, accounting for an aggregate share of 81%. In fact, the carbon intensity of the fuel mix has hardly changed since 1990.
What has changed significantly is the price of fossil fuels. On the day I delivered my first LSE lecture, Brent crude stood at US$109 per barrel. By mid-January 2015, the price had plunged to less than US$50 per barrel. It has since followed an upward and volatile trend, but remains well below last year’s peak, fluctuating at around US$60 per barrel. Of course, coal prices have fallen too, though less dramatically.
©OECD Observer July 2015