Dispatches From the Moderate Left

Monday, September 26, 2005

Damning With Faint Praise

I wrote a little while ago of my extreme scepticism regarding the new climate change treaty being put up as an alternative to Kyoto by a bunch of countries who or who hadn't signed up to it. These countries, primarily the US, Australia, India and China are responsible for the majority of global emissions of greenhouse gasses and the treaty at the time got a lot of very good press. I was sceptical because it hardly seemed to be worth the paper it (wasn't yet) printed on. Details were hazy and it while technology sharing is a laudable goal, there didn't seem to be anything in the treaty which would actually force countries to make or subsidise industry take up of greenhouse reduction technology and so I couldn't see it having any real effect. I was willing to give it the benefit of the doubt, though, if and when further details emerged.

Anyway, it's been about two months since then and I finally ran into an article, headlined "The Greening of Howard and Bush" which covered it. I thought to myself, great, maybe there's been some details and maybe the treaty will actually do something to reduce global warming. Unfortunatley this article, which attempted to argue that the treaty was a good thing, is woefully incoherent in its argument and has left me even more sceptical about the chances of this treaty doing anything. It starts off claiming that this treaty is good and, for good measure, that Kyoto is worthless:
THE recent agreement on climate change between Australia and the US, Japan, China, India and South Korea represents a welcome development in global greenhouse policy. Although the Asia-Pacific Partnership on Clean Development and Climate is in an early stage, it has the potential to bypass the sterile debate on the Kyoto Protocol and provide the basis of a comprehensive international approach to addressing climate change after 2012.

There are several positive aspects of the deal. Firstly, it focuses on accelerating technological change, particularly in electricity generation. Although technology is obviously the key to reducing greenhouse gas emissions, a weakness of Kyoto is an insufficient emphasis on supply-side incentives to develop greenhouse-friendly technologies.

More on that last sentence later. It lists three reasons for this optimism:
  • It focusses on the supply side
  • The partnership's partners emit over half of global emissions
  • It's a stepping stone to a "son of Kyoto" agreement

None of this actually gives any indication that the treaty will lead to concrete action or have any influence over the real world. This is merely an argument that it looks good on paper and that it might be a good idea. When it goes on to talk about steps which might help reduce global warming, things look even worse:
While the Asia-Pacific Partnership will be influential in developing these technologies, the supply-side effort will need to be complemented by a market signal. Greenhouse-friendly generation technologies are likely to be more expensive than current fossil fuel technologies for the foreseeable future.

The private sector, therefore, is unlikely to commit significant funds to R&D or invest in deploying new technologies unless it has some degree of confidence that the future price of carbon will make them commercially viable.

And right there is the biggest problem with the treaty. It doesn't actually create any supply side effect. There's no indication that it's going to include any substantial funds to help industry implement or research this technolog and there's no indication that carbon would actually be priced or that any of the countries will agree to binding emissions targets. All the treaty says (as far as we know) is that the parties to it agree to share technology. There is no market signal.

This point makes the earlier side swipe at Kyoto completely bizzare. Kyoto does create a market signal. True, it doesn't do so directly, but by signing up to binding emissions targets, individual signees have to come up with some way of meeting them. New Zealand was the first to introduce an across the board carbon tax, which is the form of supply side signal economists most like (a pigovian tax which prices an externality). But others are taking market based measures to meet the emission targets, most notably creating a carbon trading market. This is what Kyoto does. It indirectly forces greenhouse gases to be priced, which is the first step to creating the supply side influences this article claimed Kyoto ignored. And, once again, there is no evidence that the Asian-Pacific Partnership will do anything of the sort. My provisional opinion stands - it's a fake climate change treaty designed to get good publicity and take a sideswipe at the UN, Kyoto and multilateralism. It does not represent the "greening" of Howard and Bush.

3 Comments:

  • Interesting that, isn't it? Such lip-service to market forces whilst leaving it up to individual state intervention in order to create them. You're spot on when you say it's incoherent.

    It's a real pity that we're not going to see anything further out of this Australian government than their 'jobs for the boys' mandating of ethanol levels in petrol, to prop up the inefficient and dying sugar cane industry. A bit of an irony that the laissez-faire free-marketeers of the Liberal Party are trying to cheat the international market by keeping the industry alive.

    I'm no fan of protectionism but a little bit of subsidisy or phased-out tariff programs would go a long way for fledgling (and infinitely more sustainable) industries such as hybrid cars or windfarming. When will they learn!

    By Blogger Freeworldnik, at 11:44 PM  

  • My hope for Kyoto is that it could become a foundation for future efforts to address the problem.

    By Blogger Charles Watkins, at 3:11 AM  

  • ...was that a Freudian slip referring to Howard as 'Hoard'??

    By Blogger John Provis, at 6:41 AM  

Post a Comment

<< Home


 

Listed on BlogShares