Climate change, fairness and level playing fields

http://www.teenissues.co.uk/images/3117.jpgBelow the fold is my column on Bali and greenhouse from today’s Australian.

AS representatives of the world’s peoples wrestled in Bali with the greatest challenge to human co-operation we have ever known, different ideas of what was fair and what wasn’t threatened to tear them apart. They still do.

Environmental lobbyists keep insisting we can’t make progress without goodwill. True enough. Then they join the developing countries to wag their finger at the West saying, “You created the problem. You take the lead in fixing it.”

But though the West hasn’t been perfect, Europe and Japan did take the lead, back in Kyoto. And goodwill from the West won’t solve the global problem on its own.

Here we are a decade after Kyoto. China will shortly overtake the US as the earth’s biggest carbon emitter and the story’s the same. If we could wait a decade at Kyoto we can’t wait that long again. A clearer conception of fairness, to both developed and developing countries, might help our progress.

It’s a cliche that level playing fields between countries and between industries within them improve efficiency. But they also provide a basic kind of fairness.

Paradoxically, the greatest objection to excusing China and India from vigorous climate change effort is not its inefficiency, as unfortunate as that is, but its unfairness.

Right now Australians bear the cost and inconvenience of water restrictions. One might argue for some special help to the poor in this situation, but it’s hard to imagine anyone arguing for simply exempting them from water restrictions. Ditto for higher petrol prices.

Likewise, if developed countries take concerted action to reduce emissions only to watch aluminium smelters decamp to China and India in order to continue emitting as before, political support for our effort will evaporate. Without tolerably level playing fields, action on climate change will become farcical, and thus politically unsustainable.

But if bringing the developing countries properly into an abatement regime is the only way of being fair to the developed world, it can be done in a way that’s more than fair to the developing countries.

Ultimately the only fair way to allocate the world’s rights to emit is the way we allocate votes in a democracy. Each person has equal value. If we divided global emissions entitlements between countries this way, with equal per capita emissions entitlements, China’s population would entitle it to 66 times our own and over four times America’s entitlement.

Of course, once allocated between countries such entitlements should be traded to ensure their most efficient use. It beats me why the developing countries are not playing this card more forcefully now, rather than the delaying game we’re seeing. If citizens of developed countries are too greedy to transition to per capita emissions entitlements quickly, let’s hope we’re not too stupid to do it gradually. Because I can’t see any other way of making the deep engagement of the developing countries politically sustainable.

A gradual transition to such a regime of per capita emissions entitlements would enable developing countries to continue expanding their emissions for some time as they must to continue developing their economies. So we’d have to be prepared to reduce developing countries’ and our own entitlements accordingly.

That’s how the developed countries got engagement from Russia back in Kyoto. Russia was given more emissions entitlements than it needed as a bribe. But rather than the kind of fairness we’re dishing out to the developing countries now, entitling them to delay real action, it was the right kind of bribe. Russia had the same stake in immediately abating carbon as the countries facing tougher targets because it could sell its permits to them.

So as we navigate the new road map that was agreed at Bali we should be both warm-hearted and cool-headed. We can do so by valuing fairness to both developed and developing countries. We should be unapologetic about continuing our own relatively token actions unless and until all major emitters – including as a minimum the US and China – are fully engaged.

And we should focus on the goal and the benefits of carbon abatement, not just its costs. As with tariff cuts there’ll be big winners as well as losers. And some will surprise us. Providing the US and developing countries are engaged, carbon emitters such as gas production and even aluminium will be winners wherever their consumption reduces emissions by more than the emissions used in their production.

Given a tolerably level playing field in our region, the pain of quite deep cuts will be dwarfed by the usual process of economic growth. Indeed adjustment to deep cuts over the next 12 years would be slower than the adjustment we’ve just been through since petrol prices shot up, and that didn’t slow us down much.

And the overriding point of what pain we do experience is to achieve a greater benefit, in this case to reduce the risk of much higher costs from climate change (including the slim but real chance of really catastrophic warming).

If we can focus on securing the basic fairness that is the precondition for political sustainability, we should be unafraid to sign up to the kinds of aggressive carbon reduction target the UN has spruiked. If we can’t, perhaps we should stock up on sunscreen for our kids and grandkids. Things will probably hot up.

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Patrick
Patrick
13 years ago

the greatest challenge to human co-operation we have ever known,

Uh? Kinda like post-WWI but greater? Luckily, then, I guess we have a yardstick for failure…

Peter Gallagher
13 years ago

Hi Nick,

Completely agree that a per-capita allocation of tradable emission entitlements (preferably sold by each government to their emitters) wold be a much better approach than this MAD Kyoto target nonsense.

I’ve long been a supporter of the McKibben-Wilcoxen idea of a two part emission allocation comprising a (possibly per-capita linked) permanent entitlement and a temporary emission coupon to be sold at a multilaterally-agreed dollar value (probably pretty low). It is a lovely device for capturing price expectations.

What’s most important from a negotiating perspective, however, is that it’s target-less and perfectly well-aligned with government incentives (fiscal benefits). I argued in favor of this in my submission to the (former) PM’s Taskforce.

A simple per-capita allocation has the huge advantage of simplicity over the two-part certificate and I’m not sure that (if the certificates are sold by governments) that it’s mechanically less effective than the M+W idea.

Best wishes,

Peter

Peter Gallagher
13 years ago

Oops. Wrong spelling of Warwick McKibbin’s name.

MarkL
MarkL
13 years ago

I must say I applaud PM Rudd’s handling of this. He has ratified the agreement as a purely symbolic gesture to appease the gullible greenie constituency: and then followed former PM Howard’s policy on ignoring the whole sorry farce and not setting meaningless targets that nobody will meet. Rudd appears to know that the major impact of Kyoto is to provide comedians with fresh material. After all, between 1997 and 2004 the following happened:

– man-made GHG emissions globally increased by 18.0%

– the countries which signed Kyoto increased their GHG emissions by 21.1 percent

– countries that did not sign it increased their emissions by 10.0 percent

– but the USA only increased its emissions by 6.6 percent: which

– proves the foolishness of the whole glowball warmening scam.

So by refusing to be party to setting targets which would add to the surreality of the whole Kyoto farce, PM Rudd is indicating that he is shaping up as a halfway decent Conservative PM. He’s acting as Howard-lite, with a younger face.

How his razor gang slashes government spending by $10Bn will be most interesting. He has promised to leave Defence and Education alone (like a good Conservative should), which leaves social spending and welfare programs to slash.

MarkL
Canberra

clarencegirl
13 years ago

Weighted in favour of developing nations or level playing field – won’t matter.
The US is not about to let a truly effective global response to climate change go forward. It just cannot conceive the consequences and still has its head in its nether regions.

GMB
GMB
13 years ago

What you guys still bedwetting about CO2 have to do is some comparative study on massive frauds more generally. That way you can take the lessons learned to help dig your way out of this current fraud that you’ve been taken in by.

No archeological data can be found to support the outrageous idiocy of the Book Of Mormon. Yet many intelligent folks are still Mormon. And at the same time no evidence whatsoever can be found to justify this campaign to restrict industrial-CO2-release and yet here you all are swimming in this fraud. Totally and embarrassingly taken in by it. I’ll not say that intelligent people are still taken in by it the same way as they are taken in by the Book Of Mormon. Because in 2008 I no longer think thats true. To be taken in by this utter racket is proof of failed analytical ability.

But I still think you could look at these other rackets. Like this hoax of Joseph Smith. There are parallels here. Parallels for you nutters to learn by.