14 12 2015

Climate change – many villains and few heroes

The Paris summit ended with an agreement, fortunately. Not good enough to save our grandchildren from climate disaster, but at least a beginning, which we hopefully will be able to build upon. Apart from the climate change deniers, who live in their own claustrophobic world, much of the disagreement is about justice: which are the countries to blame, and which should clean up their acts first? The Paris summit tried to avoid the question of justice and convince us that we all have to contribute, including the developing countries. And the developing countries seem to have gruntingly accepted that.

Let us for the moment ignore the climate change deniers. They are many and they are powerful, but luckily they are not a majority, not even in the US, according to a survey by IPSOS-MORI from last year. In dirty China, the deniers are a miniscule minority. They are strong in the dirty US, UK and Russia, but still, they are a clear minority.

 

So to the blame game: who are the sinners? What follows does not pretend to present anything new. The aim is simply to recall well-known facts that tend to be forgotten.

When we look at total CO2 emissions as calculated by the OECD, in 2011 the big sinners were China, US, India, Japan, Russia and Germany.

It should be mentioned that the calculation is consumption based which means that correction has been made for the fact that e.g. China is the factory of the world, while the rich countries as consumers are importing more CO2 than they are exporting.

But is this comparison fair? Is it fair to compare a middle-sized country as France with the US, and the US with China, which has more than four times the population? Most – but far from all – agree that it is fairer to correct for the size, i.e. look at the CO2 emission per capita. That changes completely the picture:

Now the big sinners are the developed countries, with very few exceptions (as e.g. Saudi Arabia). The dirty trio is Australia, US and Canada. China has per capita emissions that are less than a fourth of the US, and dirty India has emissions that are less than 8% of the US. Denmark, who is often referred to as “supergreen”, is dirtier than Sweden and Russia (which we all know is dirty). It should perhaps be mentioned that e.g. Brazil (and Indonesia) would be higher on this chart if emissions from deforestation were included.

Many developing countries argue that not even this figure with per capita emissions is fair, as the CO2 is cumulative and the developed countries have accumulated enormous amounts of CO2 into the atmosphere during their process of industrialisation, a process that the poor countries are only about to embark upon. And then there is the – to my opinion strange – opinion that what matters is the CO2 intensity of the GDP, where the developed countries score much better than the emerging economies. So we are rich, and yes, we pollute as hell, but we would pollute much more if we were not so energy efficient.....?!

However much can be made of the question of justice, the good thing that has happened is that the biggest polluter in absolute terms, China, has reached the conclusion that it is in its own best interest not to follow our path for fossil energy consumption (which they earlier have insisted that they are entitled to), as the country is so heavily affected by pollution that is has to find cleaner alternatives. According to the World Health Organisation, WHO, New Delhi is the most polluted mega-city in the world, so perhaps there is hope that India, on course to become the world's most populated country in 2020, will reach the same conclusion too. I must admit that here I am not too optimistic.

But as I have argued earlier, the cost of renewable energy is tumbling, so the market forces could now be a force for the good. However, if this is not coupled with government interventions, the process will be too slow. A global carbon tax would be the most simple and transparent mechanism (and much simpler than the complicated carbon trading systems introduced by the Kyoto summit). Of course big oil and coal is dead against it, as are the oil producing countries. But it would be in accordance with the policy of “polluters pay”, and will no doubt be backed by the quickly growing renewable energy industry. So perhaps the balance of power over this issue will shift in the not too distant future.

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Thorbjorn Waagstein

Thorbjørn Waagstein, Economist, PhD, since 1999 working as international Development Consultant in Latin America, Africa and Asia.

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