19 June 2006

Is anybody willing to do something about climate change?

Ramiro Ramirez Al-Hayat - 27/06/06//

After nine long years of negotiations the world is no closer to finding ways in which to tackle a global problem of climate change. The Kyoto Protocol is the instrument by which the international community has sought to deal with the risk of seriously compromising our climate system through ever increasing emissions of greenhouse gases to the atmosphere. But recently someone told me "so what if the US had joined, would we be in any better shape today?" and this question has sparked my imagination.

Let us then imagine for a moment that the US had ratified the Kyoto Protocol back in 2002. The treaty would now be 4 years into force. What would GHG emissions be now? The US would probably not be meeting its target of reducing emissions by 5% from 1990 emissions. The reason? There is no magic formula to de-linking economic growth from rising carbon dioxide emission and certainly more so when we dogmatically believe that the market must be left to its own devices and governments are best kept out. Today we see how the British government struggles to make sense of its environmental policy to reduce greenhouse gas emission. As gas prices have risen, its deregulated power sector flocks back to coal burning plants in order to avoid the higher gas prices. This means emissions that we can expect a huge rise in CO2 emissions from the UK making all the "policy achievements" of the past meaningless.

Markets are driven by prices and prices only know about themselves. So let us imagine what would have happened to this "global market" when new competitors from emerging developing economies started to appear and compete with what would be perceived as a competitive advantage. Surely this would not have gone down well and something would have had to be done. The most likely step would be to block international trading from these countries on environment grounds. But this decision would have recognized that there is something more important than the market and that is not good for globalization (of big business). So, in fact it seems to me to be a very well clear choice between global businesses or the global environment. We all know who would have won anyway.

Where are we now?

The situation is such that in spite of much rhetoric and good intentions on behalf of many players, emissions continue to rise even in the most technologically advanced countries of the world. Furthermore, energy is at the top of the political agenda, but not because we have all agreed that we need to use it more rationally and cleanly but because they are concerned about ensuring secure supplies.

It would seem that the only progress that we have made is a growing public awareness and more scientific evidence that points to a link between man-generated greenhouse gas emissions and changes in our weather system. However, there is also a growing awareness that the problem can not be solved through patchwork. Every country that wishes to develop its economy should participate in this "global" crusade. Nonetheless, priorities are certainly not the same among nations.

Sustainable development as was defined by the World Summit on Sustainable Development in 2002 is a level table that is supported on three pillars, economic and social development as well as environmental protection. Hence, accordingly, one or two of these issues will take precedence over the other one or two. It would seem obvious that for a country whose is still struggling with poverty and hunger among its population will be less interested in attempting to tackle climate change issues over more pressing ones. Hence, it would seem that we need to level the table to ensure that we are all on board to combat this common problem on the basis of common but differentiated responsibilities.

The irony of it all is that in all the environmental fora that I have attended there is a constant call to let business deal with this problem of growing emissions by developing a global market emissions trading market and then let the market deal with it. Nevertheless, it was refreshing to hear Irelands' intervention (an EU country) in the past Fourteenth Session of the United Nation's Commission on Sustainable Development (1-12 May, 2006) speak clearly on this matter. Ireland pointed our that sustainable development is a governments responsibility first and foremost and this could not be shirked off, business was driven by profits and short term returns for their capital, while the sort of action that was demanded today was of a long-term nature and business could hardly deal with those.

The solution that is often presented is to place a price on the right to emit carbon. That by placing a price on carbon emissions on a world scale and thus -arguably-internalizing the cost of the environmental damage done (?) you are letting the market provide an economic incentive for consumers to switch to other fuels. Could they be right? I have my doubts.

  1. What if I have no other source of energy or I can not afford any other form of energy but traditional "cheap and dirty" fossil fuels upon which the industrial powers used to fuel their development?
  2. What if I have no economy to speak of and therefore incentives are irrelevant?
  3. What if my market is so small that no one wishes to invest in my country?
  4. What if the nature of the investments means that big business can not see a quick return for their capital?
  5. What if my people are hungry and illiterate and do not offer an adequate work force to compete in a globalized market?

How can I participate in this crusade to save our planet? It seems that developing countries, at least those that are "least developed" countries have nothing to do in this deal.

Nevertheless, and not without some justification, the argument runs that those emerging economies such as China's should take on commitments to curb their growing GHG emissions.

On the surface, this would seem reasonable were it not for the fact that those countries who are mainly responsible for creating the problem are still unable or unwilling to tackle head on this problem. Perhaps the reason for this is that the problem is inextricably linked to an economic model that is driven by consumption and finding every opportunity to create incentives for it. The dominant patterns of consumption and production of the industrialized world, and hence for much of the industrializing world, is quite unsustainable. This is something that we all know but seldom wish to discuss in any depth.

Where are we going?

The question of tackling climate change is nowhere near finding a solution until we tackle development comprehensively and this should be the aim of the developing world. By comprehensive we mean sustainable development taking into account in a balanced way economic and social development as well as the protection of the environment as a vital resource. But to tackle this we need to tackle many of the injustices that exist today. The world must abandon colonial behavior in its economic relations whereby some countries continue to see their role limited to producers of raw materials for industrialized countries despite much talk of open markets.

In the mean time what can be done? One interesting way to defend our environment is to open up access to cleaner burning fossil fuel technologies as well as de-monopolizing renewable energy development to include participation of developing countries. Furthermore, this would provide excellent ideas for economic development and economic diversification of these countries. But if you think this is too ambitious a target to tackle the problem then perhaps you should embrace the issue as the Chinese suggest, you (the developed countries) take care of climate change, I will take care of my poverty.

*Ramiro Ramirez is an OPEC climate expert


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