International climate talks in Bonn last weekend were trying to salvage December’s failed Copenhagen summit.

But some rich countries are imposing their own carbon limits anyway, and threatening to curb imports from poor countries that are not. We believe this will cripple the rich economies and harm the poor countries without doing much about emissions.

A number of governments want such green protection, including taxes on carbon-intensive imports, or all imports, from countries that do not cut emissions, especially the main targets, China and India.

US climate legislation before the Senate calls these policies “a border measure”.

But these ideas threaten international trade, growth and recovery. Industries in rich countries face punitive and expensive measures against climate change. Many fear they will be unable to compete with countries that do not have such emissions restrictions, and fear manufacturing and jobs will move away to them.

The EU wants to cut emissions by 20 per cent by 2020, while proposed US legislation aims for 80 per cent by 2050. Other large emitters of greenhouse gases, such as India and China, are more worried about sustaining growth and tackling poverty.

Carbon restrictions on trade will do little to reduce emissions. Taxing carbon-intensive imports from China, for example, would have negligible impact because the majority of its emissions-laden exports go to other developing countries.

Carbon barriers to trade make even less sense considering the nature of global production. “The extensive foot-printing of so many products with components across so many international boundaries makes this exercise nigh on impossible,” Australia’s Department of Climate Change stated in 2008.

Rich countries import about a third of their CO2 emissions (meaning the amount of CO2 released in making the imported goods), often from developing countries. The production of a single good often involves trading components between many countries. Complex supply chains have brought cheaper and better goods and high-paying jobs to rich countries, and infrastructure, new jobs and higher incomes to developing countries.

More than a quarter of all global trade in manufacturing is in intermediate components, not finished goods. The value of component trade rose from $US404 billion in 2002 to $US1258bn in 2004. Rich countries cannot restrict imports without damaging their own production and growth. They would just protect their inefficient companies that are vulnerable to competition at the expense of globally competitive companies.

A few months ago, the EU extended tariffs on shoe imports from East Asia at the request of its domestic shoe producers. Yet such tariffs harm EU shoe companies that have invested heavily in manufacturing in Asia: they provide EU consumers with cheap shoes and support high-value jobs in Europe in marketing, innovation and design.

Barriers to trade for the sake of climate control would have the same effect, and would push up prices everywhere.

US President Barack Obama warned during the global recession last year: “We have to be very careful about sending any protectionist signals out there.” Yet the US joined Australia, the EU and Japan in rejecting demands at Copenhagen by India, China and other developing countries that rich nations “not resort to any form of unilateral measures against goods and services imported from developing countries on grounds of protection and stabilisation of climate”.

Caroline Boin and Alec van Gelder are project directors at the International Policy Network, a development think tank based in London

Commenting on today’s walkout by African nations at the Copenhagen COP15 climate meeting, Barun Mitra, director of an Indian NGO attending the Copenhagen negotiations and representative of the Civil Society Coalition on Climate Change, stated:

“Today’s walkout at the Copenhagen climate conference is purely a negotiating tactic because there’s so much money at stake. Copenhagen is no longer about climate — it’s about cash and corruption, both for poor and wealthy countries. By accepting restrictions on carbon emissions in exchange for cash, the world’s poorest countries are offering to prevent growth and perpetuate poverty. Ultimately, this could be a tragic repeat of the aid industry in the 1960s and ‘70s, when the leaders of some of the world’s poorest countries stuffed their Swiss bank accounts — all in the name of the poor.”

The offers countries made on emissions reduction prior to Copenhagen appear to be insufficient to prevent a 2-degree global temperature rise. Should industrialised nations or developing countries be expected to raise their offers first?

Julian Morris: Neither rich nor poor countries should “raise their offers”. We do not yet know enough about climate processes to say what level of greenhouse gas concentrations would result in a global mean temperature rise of 2-degrees. Nor do we know whether 2 degrees warming would be “dangerous”.

For mild warming, adaptation is almost certainly the most cost-effective option. It is feasible that humanity could adapt at relatively low cost to a warming of 4 degrees (see e.g. the various reports at www.csccc.info). But for that to be possible, it is essential that existing barriers to adaptation be removed; especially restrictions on trade and weak property rights.

Worryingly, the introduction of restrictions on emissions of greenhouse gases, as well as further transfers to the governments of poor countries (including those done in the name of “adaptation”, or through REDD) would likely inhibit adaptation at the individual level.

With the opening of the climate confere­nce in Copenhag­en, India has an oppo­rtunity to cha­nge the climate of negotiations.

Surprisingly, Jairam Ramesh, the minister for environment and forest, decided to play for a draw with his statement in Parliament last week proposing voluntary reduction in India’s carbon intensity. Despite his strong assertion that India will not accept any legally binding international commitment to reduce emission, he proposed to reduce the intensity of the economy by a modest 20 to 25 per cent.

Just when the world of climate science was getting shaken by allegations of massaging of data to support claims of global warming, the minister acknowledged that Indians are among the most vulnerable to global warming, and then promised to announce domestic emission norms by 2011. Yet, he failed to drive home the point.

Between 1992 and 2005, India’s energy intensity, that is energy needed to produce a unit of GDP, improved by about 52 per cent, from 1,281 kg of oil equivalent per $1,000 of GDP in 1992 to 618 kilogram of oil equivalent (kgoe) per $1,000 by 2005. During this period, carbon intensity declined by 45 per cent, from a high of 3.15 tonne of CO2 per $1,000 to 1.73.

These figures are impressive, and comparable to the major economies of the world, which varied in 2005 from 0.44 tonne per $1,000 for the US, 0.252 tonne for Europe area and 2.44 tonne for China.

India’s GDP in 2008 was estimated by the World Bank to be $1,217 billion (current dollar). At 2005 energy intensity level of 618.46 kgoe/$1,000, this required total energy of 752,969 million kg of oil equivalent (mkgoe).

But in 1971 energy intensity was a high 2,259 kgoe per $1,000. To achieve the GDP level of 2008 would have required 263 per cent more energy than it actually did. Likewise, at 1981 energy intensity of 1,154, would have required 87 per cent more energy. And at 1991 energy intensity of 1,409, would have required 127 per cent more energy to attain the GDP level of 2008.

The improvement in energy intensity is mirrored in carbon intensity. At 2005 carbon intensity level of 1.73 MT per $1,000, the GDP of 2008 emitted 2,094,083,144 MT of carbon. But at carbon intensity levels of 3.08 (1971), 1.96 (1981) and 2.72 (1991) the GDP of 2008, would have emitted 79 per cent, 14 per cent and 58 per cent more carbon, respectively, than it actually did.

This suggests that between 1992 and 2008, effective saving in total energy used was 127 per cent and effective decline in total carbon emission was 58 per cent, for the 2008 GDP level. The decrease in carbon intensity between 1992 and 2005 was a whopping 82 per cent from the 2005 base, and energy efficiency improved by 56 per cent, according to an analysis of the World Development Indicators.

The minister’s defensive strategy became apparent, when invoking national interest he offered to do domestically, emission reduction and emission standard, while vehemently rejecting similar measures under any international legal mandate.

The dramatic improvements in energy use since 1992 were not a coincidence. Equally, there was little conscious effort aimed at such environmental goals. The real secret of this amazing transformation is the economic liberalisation initiated during this period, which unleashed greater competition, ushered in a relatively free trade regime and facilitated investment and technology adaptation.

Globally, however, decarbonisation of the economy has been going on for the past 400 years as societies moved from fuel wood to coal, oil and electricity, driven by economic needs, leaving a safer environment in its wake.

Given this track record, rather than seeking to balance economics and environment, we need to push ahead with economic reforms with much greater vigour. We need to recognise that cleaner and safer environment is like value added products, which become accessible only with higher economic growth and prosperity.

We need to recognise that the poor are vulnerable to natural hazards, were so in the past, are in present and will be in the future, because of their poverty, quite irrespective of any change in the planet’s climate. If we are really concerned about the plight of the poor, then it is the intellectual climate that we need to change.

Even at a nominal economic growth rate of 8 per cent annually, India’s GDP will rise 150 per cent from 2008 level to over $3,000 billion by 2020. At our current carbon intensity level of 1.73 MT of CO2 per $1,000, the total carbon emission could increase by 2.5 times. But if our carbon intensity falls to European or Japanese levels, 0.252, prevalent today, the total carbon emission would fall by a sixth. This is possible at current levels of technological development.

And this could happen irrespective of whether man-made carbon is the cause of climate change or not. It would happen because of the economic need to improve energy efficiency. This is the real “business as usual” model.

The minister will emerge as a true ‘deal maker’ in Copenhagen if he succeeds in changing the intellectual climate at the negotiations. Economic freedom generates gre­ater wealth and makes energy ac­cessible, and that in turn, enables people to better insulate themselves from the vagaries of nature.

A slightly longer version, with charts and graphs, is available on our website.

The writer is director of Delhi-based Liberty Institute, an independent think tank.

(Courtesy of the TPA) From this morning till 18 December 15,000 delegates will descend on Copenhagen to work towards negotiating a treaty to succeed Kyoto and reduce emissions. However, even before the conference has begun, there have been questions over whether a new deal will be struck.  US President Barack Obama and Danish Prime Minister Lars Lokke Rasmussen have conceded that the conference is unlikely to produce a treaty to replace the Kyoto Protocol, and are beginning to make arrangements for a delay until the next conference, in Mexico.   British officials also do not expect a new deal, with binding restrictions, to be agreed this year.

In light of that and the large number of other international conferences that have been held this year, taxpayers around the world – who will be supporting the conference and the delegations being sent there – might question whether the conference will constitute good value for money.  This research note provides the first estimate of the total cost of the conference.

Key findings:

• A conservative estimate of the total cost of Copenhagen is £130 million ($215 million, €143 million).
• This estimate is based on the Danish government budget and the costs to participating governments of sending 15,000 delegates – including flights, accommodation, food, conferencing facilities and salaries paid to delegates while they are at the conference.  It is a conservative estimate as it leaves out costs such as the need for supporting work by staff in the home countries.

Download the full report: Taxpayers Alliance website (PDF).

Matthew Sinclair, Research Director at the TaxPayers Alliance, says:

The politicians and bureaucrats going to Copenhagen seem to think that its unlikely that theyll reach a deal and they know that even if they can get something signed, an increasingly sceptical public arent going to accept ever more expensive climate change policies. This means that a huge amount of money is going to be spent on the summit, and thousands of tonnes of carbon dioxide emitted to get there, just to give the delegates a good photo opportunity. Politicians need to stop this expensive jamboree and instead focus domestically on bringing down the ruinous cost to ordinary families of green taxes and regulations.