The World Economic Forum (WEF) issued a position paper on Monday that intrinsically linked two of the world’s biggest crises – “climate change” and “democratic decline.”
It claims that fighting the former can save the latter if consumers stop burning coal, oil, and gas in favour of green renewables.
According to the WEF paper, democracy has already been declining globally for the past 15 years. The organisation noted that “leading democracies must strengthen their economies and safeguard liberty to protect and promote freedom.”
It goes on to say that ignoring progress toward a “low-carbon economy could put democracies in greater economic peril, not less,” while repeating environmental activists’ broader demand that companies stop investing in fossil fuels.
According to the WEF, Russia’s invasion of Ukraine has renewed focus on this economic weakness.
What is the answer for the U.S. and Europe? Pricing the alternatives to green energy out of the market. It says:
First, leading democracies should agree to end the underpricing of fossil fuels, which is the principal factor preventing a clean energy transition. The underpricing associated with producing and burning coal, oil and gas amounted to $5.9 trillion in economic costs in 2020. Nearly a quarter of these losses – $1.45 trillion – occurred in 48 major and smaller democracies.
The leading democracies of the G20 should collectively commit to phasing out cost and tax breaks for the production and consumption of fossil fuels. They should also phase in more efficient pricing of fossil fuels through taxes or tradable permits to cover the costs of local air pollution, global warming, and other economic damages.
The paper then contends that compliance can and should be enforced.
Carbon-intensive imports can be taxed to reduce the risk of unfair competition for their domestic industries, as well as to deter companies from relocating overseas to avoid compliance at home.
According to the WEF, forcing other economies to reform their under-pricing of fossil fuels in order to avoid the policy’s penalties should also be actively pursued, with U.S. President Joe Biden has already stated his intention to punish the fossil fuel industry into extinction.
They reinstated: delaying a clean energy transition “makes leading democracies’ economies more vulnerable through continued reliance on fossil fuels.”
Collectively acting to foster a green transition “is not only good for the climate but also critical for protecting democracy,” the WEF paper concludes.