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Ecological Economics, General, Greenlash

Stern: In Bali the rich must pay

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Nicholas Stern, former chief economist of the World Bank and who led the Stern review on the economics of climate change, writes in the Guardian (Nov 30, 2007), that in Bali the rich must pay to produce a system to tackle climate change that is effective, efficient and equitable. He writes that A fair and global effort to tackle climate change needs wealthy states to take the lead in CO2 cuts:

The Bali summit on climate change, which starts next week, will seek to lay the foundations for a new global agreement on reducing the greenhouse gas emissions that cause rising temperatures and climate change. Ambitious targets for emission reduction must be at the heart of that agreement, together with effective market mechanisms that encourage emission trading between countries, rich and poor. The problem of climate change involves a fundamental failure of markets: those who damage others by emitting greenhouse gases generally do not pay. Climate change is a result of the greatest market failure the world has seen.The evidence on the seriousness of the risks from inaction is now overwhelming. We risk damage on a scale larger than the two world wars of the past century. The problem is global and the response must be collaboration on a global scale. The rich countries must lead the way in taking action. And in thinking about global action to reduce greenhouse gas emissions, we must invoke three basic criteria.

The first is effectiveness: the scale of the response must be commensurate with the challenge. This means setting a target for emission reduction that can keep the risks at acceptable levels.

The overall targets of 50% reductions in emissions by 2050 (relative to 1990) agreed at the G8 summit in Heiligendamm last June are essential if we are to have a reasonable chance of keeping temperature increases below 2C or 3C. While these targets involve strong action, they are not overambitious relative to the risk of failing to achieve them.

The second criterion is efficiency: we must keep down the costs of emission reduction, using prices or taxes wherever possible. Emission trading between countries must be a central part of the story. And helping poor countries cover their costs of emission reduction gives them an incentive to join a global deal.

Third, we should be concerned about equity. Our starting point is deeply inequitable with poor countries certain to be hit earliest and hardest by climate change. But rich countries are responsible for the bulk of past emissions: US emissions are currently more than 20 tonnes of CO2 equivalent per annum, Europe’s are 10-15 tonnes, China’s five or more tonnes, India’s around one tonne, and most of Africa much less than one.

For a 50% reduction in global emissions by 2050, the world average per capita must drop from seven tonnes to two or three. Within these global targets, even a minimal view of equity demands that the rich countries’ reductions should be at least 80% – either made directly or purchased. An 80% target for rich countries would bring equality of only the flow of current emissions – around the two to three tonnes per capita level. In fact, they will have consumed the big majority of the available space in the atmosphere.

Rich countries also need to provide funding for three more key elements of a global deal. First, there should be an international programme to combat deforestation, which contributes 15-20% of emissions. For $10bn-$15bn per year, half the deforestation could be stopped.

Second, there needs to be promotion of rapid technological advance to mitigate the effects of climate change. The development of technologies must be accelerated and methods found to promote their sharing. Carbon capture and storage for coal (CCS) is particularly urgent since coal-fired electric power is currently the dominant technology around the world, and emerging nations will be investing heavily in these technologies. For $5bn a year, it should be possible to create 30 commercial-scale coal-fired CCS stations within seven or eight years.

Finally, rich countries should honour their commitment to 0.7% of GDP in aid by 2015. This would yield increases in flows of $150bn-$200bn per year. The extra costs that developing countries face as a result of climate change are likely to be upwards of $80bn a year, and it is vital that extra resources are available. This proposed programme of action can be built if rich countries take a lead in Bali on their targets, the promotion of trading mechanisms and funding for deforestation and technology. With leadership and the right incentives, developing countries will join.

The building of the deal, and its enforcement, will come from the willing participation of countries driven by the understanding that action is vital. It will not be a wait-and-see game as in World Trade Organisation talks, where nothing is done until everything is settled.

The necessary commitments are increasingly being demonstrated by political action and elections around the world. A clear idea of where we are going as a world will make action at the individual, community and country level much easier and more coherent.

These commitments must, of course, be translated into action. There is a solution in our hands. It will not be easy to build. But the alternative is too destructive to accept. Bali is an opportunity to draw the outline of a common understanding, which will both guide action now and build towards the deal.

via Globalization and Environment

Adaptation, Ecological Economics

Climate change: What to do in Bali? Avoid rearranging the deckchairs

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Soon the international climate policy will meet under the UN’s framework convention on climate change in Bali where representative’s of the world’s nations will attempt to forge an effective international strategy to succeed the Kyoto protocol when it expires in 2012. There has been a lot of thinking in recent years on what form this agreement should take, and strong statements from the world’s scientific community that the world requires immediate reductions in CO2 emissions. The head of the IPCC, Rajendra Pachauri, said “If there’s no action before 2012, that’s too late. What we do in the next two to three years will determine our future. This is the defining moment.”

British social scientists Gwyn Prins and Steve Rayner recently wrote a commentary in Nature Time to ditch Kyoto (Oct 25 2007)

The Kyoto Protocol is a symbolically important expression of governments’ concern about climate change. But as an instrument for achieving emissions reductions, it has failed. It has produced no demonstrable reductions in emissions or even in anticipated emissions growth. And it pays no more than token attention to the needs of societies to adapt to existing climate change. The impending United Nations Climate Change Conference being held in Bali in December — to decide international policy after 2012 — needs to radically rethink climate policy.

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Influenced by three major policy initiatives of the 1980s, the Kyoto strategy is elegant but misguided. Ozone depletion, acid rain and nuclear arms control are difficult problems, but compared to climate change they are relatively simple. Ozone depletion could be prevented by controlling a small suite of artificial gases, for which technical substitutes could be found. Acid rain was mainly caused by a single activity in a single industrial sector (power generation) and nuclear arms reductions were achieved by governments agreeing to a timetable for mutually verifiable reductions in warheads. None of this applies to global warming.

In practice, Kyoto depends on the top-down creation of a global market in carbon dioxide by allowing countries to buy and sell their agreed allowances of emissions. But there is little sign of a stable global carbon price emerging in the next 5–10 years. Even if such a price were to be established, it is likely to be modest — sufficient only to stimulate efficiency gains. Without a significant increase in publicly funded research and development (R&D) for clean energy technology and changes to innovation policies, there will be considerable delay before innovation catches up with this modest price signal.

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Sometimes the best line of attack is not head-on. Indirect measures can deliver much more: these range from informational instruments, such as labelling of consumer products; market instruments, such as emissions trading; and market stimuli, such as procurement programmes for clean technologies; to a few command-and-control mechanisms, such as technology standards. The benefit of this approach is that it focuses on what governments, firms and households actually do to reduce their emissions, in contrast to the directive target setting that has characterized international discussions since the late 1980s.

Because no one can know beforehand the exact consequences of any portfolio of policy measures, with a bottom-up approach, governments would focus on navigation, on maintaining course and momentum towards the goal of fundamental technological change, rather than on compliance with precise targets for emissions reductions. The flexibility of this inelegant approach would allow early mitigation efforts to serve as policy experiments from which lessons could be learned about what works, when and where. Thus cooperation, competition and control could all be brought to bear on the problem.

Does the Kyoto bandwagon have too much political momentum? We hope not. It will take courage for a policy community that has invested much in boosting Kyoto to radically rethink climate policy and adopt a bottom-up ‘social learning’ approach. But finding a face-saving way to do so is imperative. Not least, this is because today there is strong public support for climate action; but continued policy failure ‘spun’ as a story of success could lead to public withdrawal of trust and consent for action, whatever form it takes.

Nature has a follow-up discussion on this commentary on their climate blog ClimateFeedback.

A recent issue of Nature (15 November 2007) includes a letter from German climate scientist and policy advisor John Schellnhuber in which he responds. In Kyoto: no time to rearrange deckchairs on the Titaniche writes:

Gwyn Prins and Steve Rayner … manage to be perfectly right and utterly wrong at the same time. Their criticism of the bureaucratic Kyoto Protocol is justified on many crucial points (although they don’t mention that the physical impact of the protocol on the climate system would be negligible even if it worked). The novelty of this summary of well-known deficiencies in the treaty is that the list comes from independent European scientists rather than White House mandarins. Is there anything substantially new beyond that provocation?

Yes, in the sense that Prins and Rayner boldly propagate a “bottom-up ‘social learning’ ” approach to climate policy that aspires to “put public investment in energy R&D on a wartime footing”. I agree with the importance of both elements to twenty-first century climate protection, but doubt whether there is a solid causal chain linking them. Fine-scale measures and movements towards sustainability, as well as technological and institutional innovation strategies, are needed to decarbonize our industrial metabolism and to force policy-makers to face the challenges ahead. …

Time is crucial, however. It is unlikely that a bottom-up, multi-option approach alone will be able to mobilize war-level climate-protection efforts by all the major emitters (including Russia, China and India) within the one or two decades left to avert an unmanageable planetary crisis. Without a ‘global deal’ — designed for effectiveness, efficiency and fairness and providing a framework to accommodate every nation — there will be neither sufficient pressure nor appropriate orientation towards the climate solutions we desperately need. The bottom-up and top-down approaches are complementary and must be pursued interactively.

Kyoto is simply a miserable precursor of the global regime intended to deliver genuine climate stablization — and was never expected to be more. “Ditching” it now would render all the agonies involved completely meaningless after the event, denying the entire process of policy evolution the slightest chance to succeed. So, instead of rearranging the deckchairs on the Titanic through social learning, let us ditch pusillanimity.