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Pretty
speeches can only take us so far. A month after the
Copenhagen climate conference, it is clear that the world's
leaders were unable to translate rhetoric about global
warming into action.
It was, of
course, nice that world leaders could agree that it would be
bad to risk the devastation that could be wrought by an
increase in global temperatures of more than two degrees
Celsius. At least they paid some attention to the mounting
scientific evidence.
And
certain principles set out in the 1992 Rio Framework
Convention, including "common but differentiated
responsibilities and respective capabilities," were
affirmed. So, too, was the developed countries' agreement to
"provide adequate, predictable and sustainable financial
resources, technology, and capacity-building . . ." to
developing countries.
The
failure of Copenhagen was not the absence of a legally
binding agreement. The real failure was that there was no
agreement about how to achieve the lofty goal of saving the
planet, no agreement about reductions in carbon emissions,
no agreement on how to share the burden, and no agreement on
help for developing countries.
Even the
commitment of the accord to provide amounts approaching 30
billion dollars for the period from 2010to2012 for
adaptation and mitigation appears paltry next to the
hundreds of billions of dollars that have been doled out to
banks in the bailouts of 2008to2009. If we can afford that
much to save banks, we can afford something more to save the
planet.
The
consequences of the failure are already apparent. The price
of emissions rights in the European Union Emission Trading
System has fallen, which means that firms will have less
incentive to reduce emissions now and less incentive to
invest in innovations that will reduce emissions in the
future. Firms that wanted to do the right thing, to spend
the money to reduce their emissions, now worry that doing so
will put them at a competitive disadvantage as others
continue to emit without restraint.
European
firms will continue to be at a competitive disadvantage
relative to American firms, which bear no cost for their
emissions.
Underlying
the failure in Copenhagen are some deep problems. The Kyoto
approach allocated emission rights, which are a valuable
asset. If emissions were appropriately restricted, the value
of emission rights would be a couple trillion dollars a year
- no wonder there is a squabble over who should get them.
Clearly,
the idea that those who emitted more in the past should get
more emission rights for the future is unacceptable. The
"minimally" fair allocation to the developing countries
requires equal emission rights per capita. Most ethical
principles would suggest that, if one is distributing what
amounts to "money" around the world, one should give more
(per capita) to the poor.
So, too,
most ethical principles would suggest that those that have
polluted more in the past - especially after the problem was
recognised in 1992 - should have less right to pollute in
the future. But such an allocation would implicitly transfer
hundreds of billions of dollars from the rich to the poor.
Given the
difficulty of coming up with even 10 billion dollars a year
- let alone the 200 billion dollars a year that is needed
for mitigation and adaptation - it is wishful thinking to
expect an agreement along these lines.
Perhaps it
is time to try another approach: a commitment by each
country to raise the price of emissions (whether through a
carbon tax or emissions caps) to an agreed level, say, 80
dollars per ton. Countries could use the revenues as an
alternative to other taxes - it makes much more sense to tax
bad things than good things.
Developed
countries could use some of the revenues generated to fulfil
their obligations to help developing countries in terms of
adaptation and to compensate them for maintaining forests,
which provide a global public good through carbon
sequestration.
We have
seen that goodwill alone can get us only so far. We must now
conjoin self-interest with good intentions, especially
because leaders in some countries (particularly the United
States) seem afraid of competition from emerging markets
even without any advantage they might receive from not
having to pay for carbon emissions.
A system
of border taxes - imposed on imports from countries where
firms do not have to pay appropriately for carbon emissions
- would level the playing field and provide economic and
political incentives for countries to adopt a carbon tax or
emission caps.
That, in
turn, would provide economic incentives for firms to reduce
their emissions.
Time is of
the essence. While the world dawdles, greenhouse gases are
building up in the atmosphere, and the likelihood that the
world will meet even the agreed-upon target of limiting
global warming to two degrees Celsius is diminishing. We
have given the Kyoto approach, based on emission rights,
more than a fair chance.
Given its
underlying fundamental problems, Copenhagen's failure should
not be a surprise. At the very least, it is worth giving the
alternative a chance.
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