Home > A closer look at the G8 Climate Agenda

Post-conference Review (8 July 2005):

It is clear that some progress has been made at the G8 conference this week. A concensus is forming among countries that action needs to be taken to tackle the issue of climate change.

The US has gone some way to recognising the scientific link between global warming and human activity. In return, the rapidly emerging nations of China and India have been invited to take some responsibility for their own actions. Finally, the common ground on which the world can unite to fight climate change is based upon the idea of embracing new technologies as the best way to control CO2 emissions.

The G8 have invited the US back into a climate concensus from their Kyoto winter, by agreeing to the US view. Being fair to the US, post Kyoto, it is probably right that the rapidly emerging economies of the world should also play their part in controlling CO2 emissions.

As we speculated in our preview of the conference below, the G8 have agreed upon an ultra free market view of controlling global warming, based upon introducing new technology to achieve it and without setting any targets that force countries to manage/reduce their CO2 emissions.

As we also suggested, it appears G8 Governments will not be offering incentives to encourage companies to develop these new technologies, and for producers and consumers to use them, in the shape of grants and/or tax breaks - unless they choose to do so independently. It looks like the world bank will probably be offering loans to countries and/or companies to develop the new technologies and to enable other countries to buy them - and so the race will be on for countries to become world leaders in this field, so that their companies can prosper by selling to other nations. However, in practice, this will likely be the most technologically advanced countries selling to developing nations - all underwritten by world bank loans. Accordinging to the G8, the perfect market solution to global warming.

By all means, introduce new technology, but surely targets should have a role to play as well, because if the scientists are right, we may not have much time before the effect of global warming becomes irreversible.

© Ethical Earth Ltd. 8th July 2005.

Preview of the G8 Climate Agenda (27 June 2005):

The G8 Governments' meeting at Gleneagles is now only a couple of weeks away, with their main topics of discussion being Africa and climate change.

Why has the UK Government chosen to make climate change a hot topic at this point? Perhaps this is because, without the US on board, Kyoto is a non starter. So maybe the UK is initiating the first round towards building a concensus to replace Kyoto with a new accord?

The US has mainly objected to Kyoto on the basis that they are unconvinced of the scientific facts, George Bush said in March 2001 that he wasn't convinced completely that global warming was real; and also because of the impact it would have upon American jobs to implement it. His concerns for American job propects were founded on the belief Kyoto would make the US uncompetitive, because Kyoto excluded developing countries from meeting CO2 emission targets. Kyoto arrived at this position reasoning that developed countries are far and away the bigger polluters and that developing countries couldn't afford the technology to reduce emissions in any case.

It is probably true that developing countries such as India and, more so, China are developing quicker than imagined at the framing of Kyoto in 1997 and are raising their CO2 emissions just as developed countries begin to lower theirs - although the UK for instance are struggling to reduce emissions anyway. It is odds on that 'fast track' developing countries, like China and India, will also have to meet CO2 emission targets set by a new accord to please the US while 'slow track' developing countries won't have to.

It is no coincidence that the G8 agenda for climate change, or 'Gleneagles - son of Kyoto', is heavily scewed towards a free market approach, namely:-

1. To achieve a concensus based upon the scientific evidence.
2. To achieve CO2 emission reductions based on new technology.
3. To achieve a mutual concensus with major developing countries.

In other words, The US will agree to point 1 if the rest of the G8 agree to point 3 and bring China and India into containing CO2 emisions from their emerging industries. As far as point 2 is concerned, this ties the world into reducing CO2 emissions purely through the introduction of new technologies. The point of principle here for free marketeers is freedom of choice, which means nobody will need to change their behaviour - conveniently American and UK consumers will still have the freedom to drive around in their S.U.V's - although in hybrid models of course.

It appears that Gleneagles will offer the world a free market solution to climate change, where although carbon reduction targets exist under Kyoto, they will not be properly met by its signatories, because they will be loathed to fully implement it if their economic rivals in the shape of the US and China are exempt. Gleneagles itself will probably set informal targets, again because of free market constraints.

But is the free market the best place to abate climate change? In a market based on price alone producers are unlikely to choose the environmental option because it costs too much and makes them uncompetitive. Proponents of Government intervention will argue legislation to limit CO2 emissions forces producers to be environmentally friendly, or that taxbreaks to make new technology affordable gives companies the incentive to invest. Either through legislation or incentives, a level playing field is created on which they can compete on equal terms thereafter.

In the same way, are there enough concerned consumers willing to purchase more expensive environmentally friendly products and services? On this website, there is enough choice and variety to allow consumers to lead an orgo-eco-ethical lifestyle, but it is often more expensive and currently very much a niche market. The more that people do it though, the better in our view.

Again, should the Government allow consumers to decide, or intervene to make the environmentally option more attractive? Is the threat of irrevocable damage to our climate so large that allowing private industry alone to find the new technologies to reduce CO2 emissions reckless? Or should the best scientific minds be given research funds to find new sources of energy that are carbon free?

It seems sensible that an international accord should set CO2 emissions targets determined on the best available scientitifc opinion, and allow national Governments to use legislation and or subsidies to meet them, while ensuring the playing field on which companies subsequently compete is fair and level worldwide. This way, you get a blend of pragmatism and creativity, the accord sets the level of the bar and the market responds to it.

Whatever your view, it appears most likely the ideological answer from the G8 will be to let the market decide, wait for it to produce new technologies, wait for producers to take up these new technologies as they become economically viable and to wait for consumers to voluntarily change their habits as environmentally friendly products and services become cheaper, all with the minimum of state interference. Targets, levies, tariffs, incentives, grants, tax reliefs are all taboo in this climate of change. We all better hope they've got it right.

You can find out more about the G8 conference at the UK Governments website; about the G8 at the University of Toronto G8 information centre; and about the Kyoto Treaty at the BBC news website.

Copyright © Ethical Earth Limited 27 June 2005

 

Source material:

www.g8.gov.uk/climate change

www.ciel.org/Climate/devcountrycommit.html

www.harpers.org/GeorgeWBush.html

 

 

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