Department of Agricultural Economics: Undergraduate Research


Date of this Version

Fall 12-18-2018

Document Type



Op-Ed from ENSC 230. Energy and the Environment: Economics and Policy, University of Nebraska-Lincoln, Department of Agricultural Economics, Fall 2018


Recently, the United Nations' International Panel on Climate Change (IPCC) released a new report[1], warning us that storms are becoming more volatile, sea surface temperatures are getting higher, global environment as a whole growing less predictable: in other words, things are about to get a whole lot worse than we predicted.

Unless, of course, we do something about it. The IPCC recommends cutting CO2 emissions by 45% in order to curb just the worst of climate change's many effects.

There are a plethora of articles on the topic of just what, exactly, we as individuals can do: take shorter showers, recycle more, make sure to turn off the lights when you leave the room. All of these are valid options, and to a small degree these actions can mitigate some of the effects of climate change.

Unfortunately for all of us, though, we as individuals aren't the biggest source of the changing climate. According to a 2017 report by the Carbon Disclosure Project (CDP)[2], just one hundred companies are responsible for 72% of global CO2 emissions.

Admittedly, 90% of that 72% comes from downstream emissions, meaning products sold—since those one hundred companies include names such as ExxonMobil, Shell, and BP, as well as coal giants, this does mean gasoline and electricity. So there is a grain of truth to the individual action: you should still drive your car less, and remember to turn off your lights.

But as long as these companies have reason to keep feeding our fossil fuel addiction, these numbers are unlikely to change. And unless those one hundred companies change what're they're doing, we still won't be able to prevent catastrophic levels of warming.

It's clear that, if we want to have a livable planet in the coming years, we need to cut ourselves off from fossil fuels. So what do we do?

One option that has had success elsewhere is to subsidize what we want to see—in this case, less carbon. We can follow in the footsteps of other countries such as Germany[3] and Denmark[4]. Government subsidies have made solar and wind energy production incredibly cheap and efficient—and yes, solar panels[5] and wind power[6] aren't completely without their carbon footprints, but they tend to be about a fourth of traditional means of energy production.

Combine renewable electricity with more fuel efficient and electric vehicles (electrically-powered mass transit, anyone?), and the grasp of oil magnates will start to slip.

Currently in the US there are subsidies for wind and solar—just not enough to unseat coal and gas and oil, and also in decline[7]. Part of this paucity is due to the way the US budget is divided (it's a well-known fact that the US devotes more to military spending than the next seven countries combined), and part is due to the resistance of the US public towards any sort of tax.

Both Germany and Denmark have income tax rates that outstrip even the highest US bracket[8]. And yet, people pay this willingly. Why? Because they know that individual responsibility can only take things so far. Only by working can together can we hope to keeps climate change to survivable levels.

If this means we need to raise taxes to subsidize renewables so that we can prevent one hundred companies from destroying the planet for the other seven and a half billion of us, then so be it.

The US might like to believe that individualism can solve anything, but the fact is, climate change is a global problem, and everyone needs to do their part.

It's high time we start doing ours.

[1] IPCC Report

[2] CDP Report

[3] Data about German energy surcharges

[4] Denmark's wind subsidies

[5] Solar panel life cycle analysis (from Europe)

[6] Wind turbine lifecycle analysis (from Saskatchewan)

[7] Declining US renewable subsidies

[8] Taxes across countries