November 23, 2009
by Irwin Stelzer
It sounds harmless enough, the news that the 15th Conference of the Parties to the United Nations Framework Convention on Climate Change will meet in Copenhagen early next month. Another U.N. talking shop, surely, designed mainly to provide a nice expenses-paid junket for the U.N. bureaucrats, representatives of nongovernmental organizations, and world leaders who find these things an attractive diversion from coping with economic problems at home. A total of 20,000 delegates, give or take a few, will be there from 192 nations--so many that Copenhagen can't cope, and many will have to commute for a dozen days from as far away as Sweden, leaving their carbon footprints embedded in the atmosphere.
The goal is to devise a method of reducing greenhouse gas emissions to prevent global warming. At least, that's the stated goal, and the real one of those convinced that warming is an existential threat to the world as we know it--"human survival itself is at risk," according to scientist/activist James Lovelock. So profound is such a belief that the British courts this month accorded believers in climate change all of the rights the law extends to practitioners of any religion. Ruling in a case in which a man claims he was dismissed as "head of sustainability" for a real estate firm because of his ecological beliefs, the court held, "A belief in man-made climate change and the alleged moral imperatives is capable, if genuinely held, of being a -philosophical belief for the purpose of the 2003 Religion and Beliefs Regulations."
But the drive for a replacement for the Kyoto Protocol, which expires in 2012, comes not only from the passion of true believers. Others behind the Copenhagen get-together see climate change as a crisis that they cannot let go to waste, a chance to achieve their long-standing goal of transferring trillions in wealth from the rich to the poorer nations. This drive started long before global climate change became the hot issue it now is, and will continue long after the earth starts to cool.
Here is the state of play. The delegates are to consider a 181-page draft that calls for developed countries to pay an "adaptation debt" to developing countries to the tune of somewhere between $70 billion and $150 billion per year, funded perhaps by a 2 percent tax on international financial transactions in the developed countries. Prime Minister Gordon Brown, seemingly unaware that Britain is, er, broke, has generously offered to throw $1.5 billion into the pot, topping Barack Obama's offer of $1.2 billion.The European Union has endorsed the $150 billion figure--but refuses to say how much the 27-nation EU grouping is willing to put up, or how its contribution would be divided among its members. Eastern European members of the EU have rejected a call for an EU contribution of $10 billion. -Germany's Angela Merkel guesses that the EU should contribute 30 percent of needed funds, or close to $50 billion, leaving about $100 billion for other developed nations to cough up. In short, even within this one grouping, there is little agreement on how to pay the bill for meeting emission reduction targets.
There is agreement, however, that the stumbling block to a final treaty--"treaty" is a word not used, perhaps to avoid the need for Senate approval of any deal that President Obama might sign--is the United States. Barack Obama might be popular in Europe as the non-Bush, but on this issue America remains Europe's favorite piñata, as the Guardian's summary of world reaction to the American position makes clear. "We expect American leadership. President Obama has created great expectations around the world. Now we expect [the United States] to contribute," says Andreas Carlgren, Sweden's environment minister, speaking on behalf of the EU presidency. The reluctance of Congress to pass expensive environmental legislation is no excuse adds Connie Hedegaard, the Danish environment minister, "I remind the U.S. that it is not the only country in the world that has to have discussions with its domestic parliament. The expectation out there worldwide and among populations and the young [is for] the U.S. to deliver."
In short, Hedegaard would have Todd Stern, U.S. special envoy for climate change, renege on his promise not to sign any deal that would be "dead on arrival" in Congress. John Bruton, EU ambassador to the United States, enraged Stern by telling the press, "Sometimes the greatest deliberative body in the world [the Senate] acts as though it is the only deliberative body in the world." Proving that his stay in Washington has taught him nothing about how the U.S. system works, Bruton adds, "The world cannot wait on the Senate's timetable." Wanna bet?
The meeting's chairman, Yvo de Boer of the Netherlands, piles on, "We need to see clear targets from the U.S. at Copenhagen." The U.S. position of "pledge and review"--pledge to reduce emissions and then review the effectiveness of measures taken--has little appeal to those who prefer targets, which the left-leaning politicians who dominate discussions of global climate change have historically found as attractive as they are ineffective.
China, the world's largest emitter of carbon dioxide, a principal greenhouse gas, has made an unquantified promise to cut its "carbon intensity." That means it will reduce its emissions per unit of increased GDP--and since its GDP is growing, its emissions will continue to increase. (When George W. Bush made a similar proposal, it was greeted with disdain.) Obama hopes to use his visit to Beijing this week to get the Chinese to sign on to several specific actions in lieu of specific commitments: more renewable energy, for example.
India, another developing country, is even more reluctant to accept constraints on its growth and rising output of greenhouse gases and is offering only to substitute "actions" of the sort Obama has in mind for any commitments to reduce emissions. No objections heard from most of the delegates headed for Copenhagen, who agree that developing countries should be allowed to go down the "actions" path. But America's offer actually to reduce emissions by 17 percent below 2005 levels just isn't good enough. "Far short of what science demands," says Greenpeace, which characterizes the cap and trade legislation now before Congress as "a perpetuation of business as usual." (Senators know better, which is why the president is having such a hard time persuading his Democratic allies that the recession is just the time to raise taxes on energy production and use.)
China and India say they will do no more to risk their economic growth, at least until offered a satisfactory dollop of cash and access to Western technology. In the case of wind power, China is already using U.S. technology and--get this--stimulus cash designed to create jobs for American workers, to build machines for developers of a 600-megawatt wind farm in West Texas, to the consternation of the neo-protectionist senator from New York, Chuck Schumer. As the developing world sees it, the industrialized world created the warming problem with its high standard of living and is poorly placed to ask emerging economies, many of which can supply electricity only to a minority of their populations, to stop the growth that is bringing rising living standards to their relatively impoverished masses.
Which brings the delegates right back to the United States. They contend that only American leadership-by-example--acceptance of tight curbs on its own emissions and willingness to fund the wealth and technology transfers demanded by poorer countries to cooperate--can produce a meaningful treaty, or at least a large step towards such a treaty. Which is why the 20,000 delegates are so pleased with Obama's decision to stroll across the Skagerrak Strait to Copenhagen to lay hands on the delegates and push the talks to a successful conclusion immediately after accepting his Nobel Peace Prize in Oslo on December 10. John Kerry, among others, believes the presidential presence will be an adequate substitute for legislation as a demonstration of American commitment to fighting climate change. Surely, the man who promised that his election would be seen as "the moment when the rise of the oceans began to slow and our planet began to heal" can bring agreement out of discord.
No summary of the positions being taken would be complete without mention of the African nations--which have boycotted preliminary meetings because they deem the emission-reduction targets inadequate--and the bunch with the most chutzpah (although that is a word they would reject for many reasons): OPEC. The oil cartel contends that since the goal of the Copenhagen summit is to reduce use of carbon fuels, including oil, its members should be reimbursed for any reduction in their revenues resulting from cutbacks in oil consumption. Transfer wealth from consumers who have the temerity to use less oil to the producers who have bled these consumers dry for decades--not a program likely to garner significant support. But, hey, it's worth a try, even if the use of oil is projected to rise, not fall, as the world economy recovers, and the prospect of $100 oil again rears its pricey head.
The size of the Copenhagen gathering reflects the consensus among world leaders that global warming is a threat. Their faith in the efficacy of complex climate-change models has not been reduced by the failure of the complex financial-risk models in which they put their faith until the almost-collapse of the world financial system. They may be right to worry about rising sea levels, especially the 80 percent of Australians who find life along their nation's beaches preferable to residence in its bleak outback, and the small island-states such as the Maldives, Kiribati, and the Bahamas. After all, it is not bad policy to assume that prudential, cost-sensible steps should be taken on the assumption that the globe is warming, that human activity is the cause, and that prudence dictates taking steps to reduce CO2 emissions. Low-probability risks with high-magnitude consequences should not be ignored.
But is the U.N. effort the right step? It is if you believe with meeting chairman Yvo de Boer, now presiding over a staff of 200 and an annual budget of $30 million, that only a supranational agency can manage the galaxy of measures needed to produce a major cut in emissions. As the London Times put it, "Copenhagen is perhaps viewed best as .??.??. an agreement that, if successful, could define the global industrial and commercial landscape of the 21st century."
The U.N. is eager to provide that definition, acquire the power to tax to fund its vision, and to take such steps as are necessary to enforce the agreed emission-reduction limits. This goes far beyond anything envisioned in the Kyoto Protocol, so unpopular that President Bill Clinton and his vice president, Al Gore, did not dare send it to the Senate for ratification after that body unanimously adopted a resolution stating that the United States would not sign on unless developing countries agreed to binding targets, or if the agreement would "result in serious harm to the economy of the United States."
Which the Copenhagen deal just might. Oil industry officials have called the U.N. goal of a huge reduction in emissions "completely illusory." Before trotting out the "they would say that wouldn't they?" line, remember that the EU, an enthusiast for emission reductions, has failed to meet its targets, that the emissions trading scheme it set up has failed, that the only effective emissions reducer has been the current recession, which has closed factories around the world, and that heavily subsidized renewable sources have failed to provide more than -trivial portions of most nations' energy.
Too bad the Copenhagen delegates won't consider an alternative to centralized U.N. control: private sector investment, backed by carbon taxes or an effective trading scheme that puts a price on carbon and thereby levels the playing field between carbon-free technologies and carbon-intensive ones. Some $3 trillion would be needed by 2020 to even approach the Copenhagen targets, says Deutsche Asset Management in a report prepared with Columbia University's Climate Center.
The bureaucrats, regulators, and NGOs in Copenhagen might usefully spend the time before they gather next year to convert any political deal they strike in Copenhagen into a draft treaty figuring out what incentives are necessary to get investors to put up that much cash to fund the research and development of technologies that can reduce emissions without stifling growth or inviting massive government control of the daily habits of ordinary citizens and industries.
Irwin Stelzer is a Senior Fellow and Director of Economic Policy Studies for the Hudson Institute. He is also the U.S. economist and political columnist for The Sunday Times (London) and The Courier Mail (Australia), a columnist for The New York Post, and an honorary fellow of the Centre for Socio-Legal Studies for Wolfson College at Oxford University. He is the founder and former president of National Economic Research Associates and a consultant to several U.S. and United Kingdom industries on a variety of commercial and policy issues. He has a doctorate in economics from Cornell University and has taught at institutions such as Cornell, the University of Connecticut, New York University, and Nuffield College, Oxford.
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