First thing: don’t kick the obdurate mule

The Durban Conference on Climate Change has yielded minimal results. If outright collapse has been avoided, governments have not submitted to stricter emission standards for greenhouse gases. The Kyoto Protocol has been extended for three years – in Micawberian hope that “something will turn up”. I’m no fan of the UNFCCC Treaty. Not because I don’t believe climate change is a problem – it certainly is, along with other serious problems that beset humanity and the world. To me the Treaty has inherent flaws. We should rethink the whole underlying assumptions and objectives, rather than leave the conceptual framework in place, and tinker with it in the hope this hopeful monster will ever function. Canada has now withdrawn from the Treaty – ostensibly because US and China have not signed on. It is not so much a sign of Canada’s “selfishness” – as maybe the consequence of the unthinking application of the “polluter pays principle”. The Treaty targets a country’s CO₂ emissions: countries that produce emissions are responsible for abatement measures. In a globalized world with a high degree of division of labor, some countries produce goods (e.g. manufacturing countries like China and India, and raw-materials-rich Canada and Australia), while others concentrate on “CO₂-clean” services. Rich countries may have the largest CO₂ footprint nowadays, yet not be big emitters. When we tax the producer hoping for the consumer to behave, we have the well-known “tax incidence problem”. The transfer of the abatement costs from producers to consumers is not automatic or in full: it is a function of market power, and the producer may be stuck with part of the abatement bill, and in any case he has to make the investment up front. The sanctimonious finger-wagging of those who no longer produce CO₂ emissions yet sport large CO₂ footprints does not help. CO₂ lasts in the atmosphere a very long time. The “West” emitted to its heart content while industrializing. In doing so it developed technologies and created wealth. Had the “West” been “CO₂-wise” then, industrialization would have taken much longer. Now the “West” wants “late” developers not to pollute on their way to catching up with it – given the technologies they currently employ, this means in fact slowing down their development. How fast CO₂ intensity[1] can be brought down is difficult to estimate, given that many “old” technologies inevitably linger. Between 1995 and 2005 China reduced its intensity by 28% and the US by 18%, but the China’s intensity is thrice that of the US (not adjusted for the fact that China is the manufacturer of last resort). Sharing the benefits from the past would be a reasonable approach. The US$ 100 billion Green Climate Fund would be a step in the right direction. Is it workable? Experience with development[2] is not too promising. Massive resource transfers tend to go to waste. Most damaging, however, are the assumptions underlying UNFCCC, which are counterproductive in my view. On the one side experts “know” for sure what’s to be done, how and how much – as if anyone did. Scepticism about the long term evolution of our climate grows in proportion to the forbidding examples of impending doom[3]. Quantitative targets are set, to which compliance is compulsory –to be enforced by pecuniary punishment. Canada would have had to pay over $ 14 billion in fines next year. The centralising “command and control” approach reflects the underlying worldview that cooperation can only be enforced from on high. Alas, to presume non-compliance is to invite it. If there is something we should have learned from history is that cooperation may come natural to mankind – but only if it is based on consent. What the UNFCCC System seems to lack today is legitimacy, and strident prophecies of blood-curdling doom will not yield it. The goals of the UNFCCC are to bring CO₂ emissions under control as well as (a) atone for past sins; (b) share today’s burden fairly; (c) prevent future catastrophes – and all this done fairly. Too many objectives – too many burdens are heaped on our shoulders. While we bicker about targets and “fairness” everyone is holding back lest voluntary or adaptive efforts be ignored when determining abatement obligations (meanwhile goodwill among many mutates first into jaded indifference, and then into smoldering guilty denial). The curse of “path-dependent outcomes” now comes into play: no one dares to change course and risk losing face. Yet fundamental change is needed. What is to be done? If the key issue is legitimacy, jumping the gun to implementation would be counterproductive. Haste has cost us 20 years so far, and continuing along this strategy may not improve much on the current situation. Emulation rather than recrimination might be a better strategy and “best efforts” what we can hope for, at least in the near future. Is it going to be enough? I don’t know – I’m not a prophet. The only thing I know is that kicking an obdurate mule hardly is the answer.

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