Ed Barbier doesn’t mince words. In a recent Nature opinion piece, the University Distinguished Professor of Economics and School of Global and Environmental Sustainability affiliate faculty member urged world leaders to take “swift and decisive” climate action.
The Group of Seven world economies — Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, along with the European Union — met in Hiroshima, Japan, May 19-21 for the 49th annual G7 Summit. Addressing global climate change was at the top of their agenda. Barbier, who is one of the world’s most respected environmental economists, delivered a special presentation on “Greening the G7 Economies” at Think7 Japan, a pre-summit think tank event held on April 27. In that session, he outlined three “clearly doable” strategies for the G7 to pursue.
These strategies, which Barbier lays out cogently in the May 16 Nature piece include:
- Removing the current world market distortions that favor fossil fuels.
- Making the G7’s existing “Climate Club” globally inclusive.
- Assisting developing economies to decarbonize.
By “market distortions,” Barbier refers to the G7’s current consistent underpricing of fossil fuels in the international market, which does little to motivate countries, corporations and individuals to stop using them. The practice also disincentivizes innovation in green technology and fails to account for “the environmental and health costs of fossil-fuel use, including climate impacts, pollution, traffic congestion and road accidents.” Based on estimates from the International Monetary Fund, Barbier’s research shows that “underpricing fossil fuels is costing the G7 nations almost $1.2 trillion each year.”
Barbier calls the “Climate Club,” which the G7 initially formed in 2022 and expects to formally launch this year, a “step in the right direction.” However, to be effective, the club must incentivize member countries to reduce emissions by setting a minimum carbon price and imposing penalties on countries that don’t participate, a plan that makes sense for the G7 and other advanced economies. But the climate club needs also to be globally inclusive, and to do so it should — Barbier says — the club must incorporate the kinds of incentives and penalty standards that will allow “emerging-market and developing economies” to become members, from setting different minimum carbon prices for lower-income countries to allowing for participant nations to meet the standards gradually, beginning with one or two industry sectors.
The more inclusive standards that Barbier proposes for the G7 “Climate Club” are part of the larger strategy that he believes the member nations must adopt, of not just expecting but of assisting developing economies to decarbonize. This assistance starts, he says, with G7 countries making good on current commitments to “support clean energy (and) more-sustainable urban development” in developing economies. But high-impact global change demands that countries around the world implement and uphold new policies that integrate “poverty alleviation, development and climate-mitigation goals simultaneously.”
To this end, Barbier says that the G7 also needs to help “with finance and the design and implementation of climate policies” in partner nations, leveraging both their own resources and those of international entities like the World Bank.
Barbier defined the field of environmental economics with his 1989 co-authored Blueprint for a Green Economy, one of the top sustainability references of all time. In 2009, he authored the United Nations’ Global Green New Deal, which was revived and popularized in 2018 and for which he has outlined an affordable implementation strategy. During COVID, the UN and other international organizations asked him to identify lessons of the 2009 green stimulus on which to model the greening of the world’s post-pandemic recovery.
In the Nature piece, Barbier distills the forceful argument of his 2022 book Economics for a Fragile Planet: Rethinking Markets, Institutions and Governance, which Steven Stone of the United Nations Environment Programme says challenges “us to reinvent and realign economics for a fragile planet. And not a moment too soon.”
Barbier’s own sense that any change we make will come “not a moment too soon,” also clearly informs his call for the G7 Summit to lead immediate worldwide action on climate change. As he puts it in the article’s title, what he proposes are “Three climate policies that the G7 must adopt — for itself and the wider world.”
