Harvard, Yale experts analyze net-zero trends at ESG Sustainable Taiwan Summit

哈佛、耶魯專家在 ESG 永續台灣高峰會上分析碳中和趨勢

Robert Stavins shares about post-COP26 climate policies, Todd Cort discusses carbon trading


TAIPEI (Taiwan News) — Harvard University economist Robert N. Stavins and Yale University scholar Todd Cort presented analyses on trends in the global Net Zero by 2050 movement during the second Environment, Social, and Governance (ESG) Sustainable Taiwan International Summit held by Business Today on Monday (March 21).

Stavins, the A.J. Meyer Professor of Energy and Economic Development at the Harvard Kennedy School, focused on climate change policies since the 2022 United Nations Climate Change Conference (COP26). As greenhouse gases mix in the atmosphere, the issues of emissions and climate change are “global commons problems,” he pointed out.

Because the world is dealing with global warming as a consequence of accumulated greenhouse gases, “the greatest benefits of climate policies will be in the long term, but climate change policies and the attendant costs of mitigation will be up front,” according to Stavins. This goes against traditional political incentives, which usually seek immediate benefits and place costs in the future, he noted.

Thus, despite a push for more ambitious Nationally Determined Contributions (NDCs) and for nations to eliminate fossil fuel subsidies, by the end of COP26 delegations had only agreed to “phase down” coal and “reduce” inefficient fossil fuel subsidies in the Glasgow Climate Pact.

Cort, faculty co-director of the Yale Center for Business and the Environment, added that the world’s largest coal users — China, the U.S., Russia, and India — did not sign the pledge to phase out coal. He emphasized that the “international carbon trading framework” initially proposed in the Paris Agreement had finally been officially adopted during COP26, making it the most important outcome of the Glasgow Pact.

The international carbon trading framework will ensure that there will be no double counting of carbon credits, no taxes on bilateral trade, and no limit on the number of carbon credits a nation can use to meet its NDC. It sets 2013 as a cutoff date for old credits in order to prevent the carbon trading market from being flooded with credits.

According to Cort, these mechanisms “should stabilize voluntary carbon credit prices” due to standardization and increased transparency, though he admitted standardization of markets between different jurisdictions will still be difficult.

The framework will also reduce and stabilize the cost of capital for investments and bridge loans for carbon sequestration projects, making carbon reduction projects more attractive to investors. Cort said that standardization, price stabilization, increased transparency, and lowered costs will benefit the lowest-cost carbon reduction initiatives, such as those related to forests, agriculture, and renewable energy.

Cort concluded that the long-term benefit of the Glasgow Climate Pact would ideally be “reduced reliance on carbon credits in favor of emissions reduction.” An “implicit” agreement during the COP26, Cort said, was that “countries should try to reduce their direct emissions first and then buy carbon credits.”

“So, we expect that most countries will be investing in their own countries, around emission reduction technologies, and that will be a significant step in the next five years,” said Cort.