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.

Legislation to limit greenhouse-gas emissions recently squeezed through the US Congress, with a “cap-and-trade” scheme similar to the European Union’s. This Waxman-Markey bill now faces resistance in the Senate, upsetting President Barack Obama’s hopes of influencing the Copenhagen international climate-change meeting in December. Either way, he faces a real threat to international relations from this bill’s effect on jobs and trade.

“Nothing the United States can do is more important for the international negotiation process than passing robust, comprehensive, clean energy legislation as soon as possible,” Obama’s climate envoy Todd Stern said on 10 September.

This legislation, however, would do little to lower carbon emissions but much to raise energy prices, destroy jobs and prolong the recession–with the extra sting of tariffs on foreign goods triggering a trade war. And far from aiding the negotiations, a bill that ties US negotiators’ hands could scupper international agreement.

One of Obama’s many election commitments was to reduce US carbon emissions to 1990 levels by 2020 but, after months of debate, the bill imposed much less stringent restrictions but still imposed great cost on the economy.

An extra problem was the addition of tariffs on imports from countries without similar carbon restrictions. Obama denounced the protectionist tariffs when the House bill passed in June but, in August, ten Democratic Senators announced their votes depended on keeping “a border adjustment mechanism.”

The Senators argue that higher domestic energy costs caused by the new legislation would send manufacturing abroad, killing local jobs and undermining the USA’s global emission-reduction aims. So they want tariffs to protect US firms and workers: punishing importers should convince other governments to introduce carbon controls, so the argument goes.

But this idea is seriously flawed. Firstly, most energy-intensive imports to the USA–up to 80 percent, depending on the product–come from other “clean” rich countries, most of which already have emissions curbs. China, the focus of many fears of job transfers, accounts for only a small share of US imports and only 17% of steel imports. Moreover, China exports only about one percent of its most energy-intensive goods to the USA, a July 2009 study by the US Government Accountability office says. So US carbon tariffs would do little to fight global emissions.

Secondly, the protectionist Senators forget that other countries have their own ideas about who should pay for cutting emissions. Total Chinese greenhouse-gas emissions overtook America’s in 2006 but per-capita emissions in the United States are well above everyone else’s: roughly four times China’s and fifteen times India’s. If other countries imposed their own carbon tariffs based on per-capita emissions, US exports would be badly hit.

Any tariffs present a real and immediate danger: the protectionism of the Smoot-Hawley Tariff Act of 1930 set off a series of tit-for-tat retaliations by America’s trading partners, turning a major recession into the Great Depression.

Obviously, a trade dispute during an economic downturn would not be in the interests of the United States or any other country (although French President Nicolas Sarkozy obstinately stated “a carbon tax at the borders is vital for our industries and our jobs,” speaking to trades unionists recently).

Unilaterally imposing Green tariffs will alienate trade partners who may also be crucial to Obama’s environmental ambitions at Copenhagen and when he attempts to rally the world at a UN climate meeting on 22 September in New York. Just a couple of days later he must attempt to convince the G20 countries in Pittsburgh that his climate policies will not stall economic recovery. Many European politicians share this vision. Swedish Environment Minister Andreas Carlgren, whose country holds the EU presidency, recently said: “if the Senate would pass it, there would be no reason for China not to sign up” to emission reduction.

Back in the real world, Chinese and Indian officials have repeatedly condemned the idea of “carbon tariffs.” Todd Stern admitted that “developing countries tend to see a problem not of their own making that they are being asked to fix in ways which, they fear, could stifle their ability to lift their standards of living.” Obama may have a lot of explaining to do when he visits China in November, as if his recent decision to impose tariffs on Chinese tires had not stirred up enough animosity.

Trade is mutually beneficial, promoting competition, innovation and economic development–providing more money for environmental protection. Carbon tariffs like Waxman-Markey’s or Sarkozy’s will do little to the climate and do plenty of damage to economies everywhere.

Sallie James is a policy analyst at the Center for Trade Policy Studies of the Cato Institute think-tank, Washington, DC.

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