Unpicking Kyoto
Jo Abbess
20 June 2010

CONTINUED FROM PART 1 AND PART 2

PART 3

Linking Climate Change to Trade

America and China are both “Carbon Intensity” first-movers – competing to make commitments that their economic production has falling associated Carbon Dioxide Emissions. The United States, China and Canada all continue to claim that their commitments on Climate Change amount to reductions in “carbon intensity”, rather than actual reductions in levels of emissions. This is a piece of policy propaganda, as proposed by linguistic strategists. A reduced carbon intensity of production would still allow countries to follow a path of economic growth, and increase carbon emissions overall. What is clear is that lower carbon intensities is not enough.

Behavioural economists, who look at both individual behaviour and collective social responses, have concluded a number of useful facts about humankind and its uses of resources. A good summary of what we know is provided by John Gowdy, writing in the Journal of Economic Behavior & Organization 68 in 2008, “Behavioral economics and climate change policy” :-

http://www.sciencedirect.com

Some of his policy “clues” point the way.

In section 5.5, he writes, “Policy Clue 2: the ability to cooperate with unrelated others is an almost unique characteristic of the human species”. And then in section 5.8, he writes, “Responding to the climate change threat depends on returning to the level of human cooperation that prevailed in pre-industrial societies. Humans may be unique among mammals in the extent of their cooperation with others, but it is also true that humans are almost unique in the extent to which they are willing to annihilate members of their own species that do not belong to the “in” group. Experiments and observation show that people are more willing to cooperate with “like” others than with outgroup persons. The task of climate change policy is to make our entire species the “in” group. This was Georgescu-Roegen’s admonishment for sustainable behavior: “Love thy species as thyself.”"

It will remain vitally important to continue Climate Change negotiations on a global scale, emphasising all sectors of society and business, and emphasising the common risks. We’re doing Climate Change policy not just for the poor, and not just for the poor in Sub-Saharan Africa, Bangladesh and the Maldives; we’re doing it for ourselves, and that includes the poor in Sub-Saharan Africa, Bangladesh and the Maldives, because they are us, and we are them.

But cooperation is not all that is required. In section 5.6, Gowdy writes, “Policy Sub-Clue 2a: cooperation depends on the ability to punish free-riders…These findings and other gametheoretic experiments are valuable in informing climate change policy. [Joseph] Stiglitz (2006) calls for using the international trade framework to impose penalties on countries (such as the U.S. under the Bush administration) that refuse to cooperate in reducing CO2 emissions. He suggests that Japan, Europe, and other signatories of the Kyoto agreement should bring a WTO case against the U.S. for unfair trade subsidization arising from U.S. energy and environmental policies. “With a strong international sanction mechanism in place, all could rest assured that there was, at last, a level playing field” (Stiglitz, p. 2–3).”

This is a strong articulation that Climate Change should be linked tightly to trade, which makes a lot of sense. In the referenced article “A New Agenda for Global Warming”, published by Economists’ Voice, July 2006, Joseph Stiglitz argues for a global carbon tax, which has been contested from many quarters, for a variety of reasons. However, other parts of his proposals seem indispensable : enforcement, cooperation and using the World Trade Organisation as the vehicle.

Copy of Economists’ Voice Joseph Stiglitz article

“The first step is to create an enforcement mechanism to prevent a country like the United States, or any country which refuses to agree to or to implement emission reductions from inflicting harm on the rest of the world. It is, perhaps, predictable that it would be the United Sates, the largest polluter, that has refused to recognize the existence of the problem…Fortunately, we have an international trade framework that can be used to force states that inflict harm on others to behave in a better fashion. Except in certain limited situations (like agriculture), the WTO does not allow subsidies—obviously, if some country subsidizes its firms, the playing field is not level. A subsidy means that a firm does not pay the full costs of production. Not paying the cost of damage to the environment is a subsidy, just as not paying the full costs of workers would be. In most of the developed countries of the world today, firms are paying the cost of pollution to the global environment, in the form of taxes imposed on coal, oil, and gas. But American firms are being subsidized—and massively so.”

Stiglitz goes on to propose “border tax adjustments”, that countries should impose import taxes on American products, but that proposal has received very short shrift from a wide audience, particularly those that argue that American manufacture is much less carbon intensive than (for example) Chinese; yet China as a whole emits far, far less than America, so an import tax would be perverse.

Without setting a global carbon tax, or creating carbon border tax adjustments, it would still be possible to create the “level playing field” that Stiglitz proposes, through several mechanisms in the trade system :-

1. Green Trade

The vast majority of international trade is conducted through contracts of procurement, between companies/firms, or from public sector organisations and companies/firms. It would be possible for the World Trade Organisation to assert that procurement contracts should be based around “green trade” principles as a very basic start. What “green trade” means would need to be ironed out, but it would be easy to make a start. Many local authorities in the United Kingdom have a “green procurement” policy that dictates a large proportion of their spending. This is an excellent model to adopt on the global level.

2. Abolish Fossil Fuel Subsidies and “Dirty” Energy Investment

Since energy is considered a basic utility in most developed countries, its provision is assured by global subsidies on Nuclear, Oil, Gas and Coal energy, offering tax breaks and public infrastructure and plant investment. For example, the United Kingdom Government is likely to offer public money for the liability insurance required from the building and operation of a new fleet of nuclear reactors.

The G20 economic leadership group has made it clear that they would consider phasing out subsidies to fossil fuel industries, and this could become the basis for a more general understanding about what should be invested in and what should not.

A very practical first step would be to ban new coal-fired power plants.

3. Development Rights

In some cases, the exploitation of fossil fuel and other mineral resources causes a “curse” to fall on the countries of extraction – the citizens of the country suffer environmental pollution, but very little in terms of monetary benefit from the exploitation of those resources, often conducted by foreign companies. Examples could include the Niger Delta, Iraq, West Papua, Colombia, and even coal mining areas in industrialised countries. The “resource curse” usually results in a reversal of social and economic development – yet the world has undertaken to uphold the Millenium Development Goals and other targets.

The World Trade Organisation could insist on “conflict-free petrol” or “social development Natural Gas” as a recognition of global development rights.

A lot of the debate around the Kyoto Protocol focuses on development rights – should the global carbon budget be shared per person ? Meaning that poorer, undeveloped people get the opportunity to sell carbon, and the right to continue to grow their economies.

If development rights were enshrined in global trade rules, overcoming the “resource curse”, then this would answer many of the UNFCCC calls, without recourse to universal carbon budgeting.

4. Green Development

The poor have the right to follow an economic development path – but they also have the right to follow a green economic development path. The poor have a human right to access to green energy, and access to green markets.

The way that green energy is delivered to the developing countries will have to be different to the way that energy has been organised in industrial countries – which has been so wasteful and polluting.

For example, in rural Africa, India and China, green electricity may be highly localised and not available on a national grid.

For global support of the growth of green energy systems, international trade must “pay back” for the raw resources from developing countries. Transnational and global companie should be required to pay a certain percentage of their profits towards green electrification in developing countries where they source their cheap raw materials.

The poor need access to green markets. This is best achieved by expanding the Fair Trade system to incorporate green principles.

If these four principles were undertaken, it may not be necessary to enforce border tax adjustments on carbon (which would punish developing countries, perversely), or set a global carbon tax (the effectiveness of which is questionable).

It might even get the Doha Development Round talks re-started :-

http://en.wikipedia.org/wiki/Doha_Development_Round

He seems to be content to be cynical about the Consumers in the Free Market Economy, without questioning the role of the Producers of the Energy and goods consumed.

David J. C. Mackay, Paul Mobbs and Laurie Michaelis, all come with different viewpoints to the question of Material Consumption, all provide figures to show that “Stuff” constitutes one of the highest components in an individual’s Carbon Emissions basket :-

David J. C. MacKay on “Stuff”, Chapter 15 of his book “Sustainable Energy Without The Hot Air” SEWTHA (as of the date of this post, it has exceeded its bandwidth) :-

http://www.withouthotair.com/

David posted on his web log that he knows that the SEWTHA website has gone down and points us to another website :-

http://withouthotair.blogspot.com/

http://www.inference.phy.cam.ac.uk/withouthotair/

Here is Chapter 15 :-

http://www.inference.phy.cam.ac.uk/withouthotair/c15/page_88.shtml

And here’s the page with the diagram that shows “Stuff” takes a lot of Energy use :-

http://www.inference.phy.cam.ac.uk/withouthotair/c15/page_94.shtml

By the way there was a group read of SEWTHA at OpenDemocracy in 2009 :-

http://www.opendemocracy.net/article/economics/energy-without-hot-air-start

In Paul Mobbs’ analysis, the Energy that goes into Food is even worse than other forms of Consumption :-

http://www.fraw.org.uk/download/ebo/less_presentation-2008.pdf

See how he projects where we need to use Less on slide 49 “The Potential for Reduction”.

Laurie Michaelis’ Climate Change worksheet includes several components that relate to material consumption :-

I beg to differ. Utah Phillips once said, “The earth is not dying. It is being killed, and the people killing it have names and addresses.”

There are many good and noble people working in corporations and companies, but the net output of some of these businesses is ruination. If the corporation were a person, it may well be likened to a psychopath :-

http://www.thecorporation.com/index.cfm?page_id=2

Anthony Giddens writes : “No matter how much we are told about the threats, it is hard to face up to them, because they feel somehow unreal…”

Of course the risks of Climate Change seem unreal, because people have been “zorbed” – absorbed into a system of unnecessary material consumption and money exchange. Anything that critiques this cosy network of incentives and rewards would be bound to be met with a wall of incomprehension. It is the Brave New World of Aldous Huxley that George Monbiot writes about in the The Guardian :-

http://www.guardian.co.uk/commentisfree/2010/jan/04/standard-of-living-spending-consumerism

Anthony Giddens coins the term the “Gidden’s paradox”, an inertia against social change because of a lack of recognition of the risks posed by Climate Change. Actually, he just stole the Precautionary Principle identified at the 1992 Rio Declaration, and turned it backwards : the “Gidden’s paradox” is the “Unprecautionary Observation” :-

Principle 15 :-
http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=78&ArticleID=1163

Anthony Giddens writes : “Attitude surveys show that most of the public accept that global warming is a major threat; yet only a few are willing to alter their lives in any significant way as a result.”

Yes, that’s right. Only 20% of the population care. And only 20% of the population will ever care, in trying to search out the right way to live given the parameters of Earth’s limits.

But that doesn’t make the other 80% wrong or evil. And it doesn’t mean that there should be massive public communications to try to make the other 80% “convert”.

Personal choices in a consumer society should stay just that. Freedom to choose is an important element of democracy.

What should happen is that the choices available to people should all become equally Low Carbon.

Anthony Giddens wonders : “Why do many young people take up smoking even though they are well aware that, as it now says on cigarette packets, ‘smoking kills’ ?”

Well now, that would be that teenagers have been identified as a huge, burgeoning consumer sector, and are subject to massive levels of advertising; rebellion is equated with purchases; alternative culture is inauthentically mass-produced and sold on chain store shelves. British kids are allowed to take their driving test at 17, a full year before they are allowed to purchase alcohol or vote. What will they do after they have their Driving Licence ? Make one of the biggest consumer purchases they will make for perhaps 10 years. Selling driving, selling cars, is a way to sell freedom to dynamic, antsy turbulent youngsters. And thereby corrupts them forever, dragging them into the Consumer paradigm. Cigarettes : same deal. You want what you can’t have, so the advertisers throw the concept of rebellion at you while you’re too young and make you into a pre-consumer; ready to jump at the chance to smoke as soon as you are legally permitted (or before).

Anthony Giddens writes : “Think back to the SUV. In the US, lots of people drive them, partly because, under the presidency of George W. Bush, no attempt was made to impose the taxes on gas-guzzling vehicles that some other countries have levied.”

No, that’s quite incorrect. It should read “no attempt was made to stop the SUV class being manufactured”. If it’s not produced, it can’t be sold. Why blame the consumer ? They’re only doing what they’re told and shopping for the health of their country’s economy.

Anthony Giddens ponders : “one shouldn’t underestimate the sheer force of habit” as a comment on consumer choice, but he neglects to mention the habits of the manufacturers. Advertising is too strong a pull on culture. Habits in SUV purchase will only change when the SUV businesses collapse. Oh yes, they’ve done that already.

The End Game for smoking will be a total ban on public puffing, and further restrictions on conditions of sale. It will die out eventually. This happy ending of over ten years of campaigning could have been precipitated by just banning tobacco sales. But it’s never right to question a company’s right to trade, is it ?

With Climate Change we don’t have ten years to affect a social change on Energy consumption through piecemeal cultural adjustment. We should just ban Oil and Gas and Coal outright. Now. With a short timeframe lead-in for diversification to Renewable Energy resources and a massive ramp down in Energy consumption.

The Recession has done a fine job in securing just that aim, but if the fabled “green shoots of recovery” are just around the corner/mountain, then we will need pragmatic approaches to keeping trade in its place, lying flat in the dog basket.

How about shopping by bicycle ? Even with suitable trailer or bags you can’t cart as much stuff about, and that will have a definite impact on your consumption levels.

It will also encourage innovative and imaginative ways to acquire the bigger things you do eventually justify needing. Van sharing, and man-and-van sharing, might well be the vogue of the future.

In fact, I need a man (or a woman) with a small van right now, for picking up some digestate/compost (commonly as “muck”). Now, where can I find someone in my community to help… ? And can I “incentivise” them, (to use a term from economics), with food instead of money ?

http://www.guardian.co.uk/environment/2009/may/13/green-movement-hijacked-politics

“”Much of the green movement isn’t a green movement at all, it’s a political movement,” said Lord May, who is a former government chief scientific adviser and president of the Royal Society. He singled out Greenpeace as an environmental campaign group that had “transmogrified” into one with primarily an anti-globalisation stance. “Maybe they are right, but I wish they would wear the uniform of the army they are fighting [under],” said May, adding that he used to be involved with Greenpeace in the 1970s.”

My first reaction on reading this was to ask myself, “when was environmental campaigning ever non-political ?”

My second question was to ask, “what has globalisation ever done for us ?”

Let’s take a brief, but exhilarating tour of the last few centuries of the development of international trade.

First there was general exploitation of New World and old : ships sent out on journeys of “discovery”, returning to Europe laden with goodies, gold, silver and spices. And ruinous tobacco of course.

Then there came the Industrial Revolution Trade Triangle : ironwork being traded in Western Africa for slaves being traded in the West Indies for sugar.

Arguably, this had a huge impact on the Continent of Africa, setting in motion the impoverishment of African societies, as it led on to colonisation and appropriation of resources, first by Empires and then by Corporates, a process which has not stopped to this day.

Globalised trade followed pretty much the same patterns but in different places for a while, but then had a massive boost in the development of the “consumer culture” with its emphasis on growth in consumption, feeding on goods, products and services from the cheapest sources worldwide.

This has caused massive exploitation of natural and human resources : for example, the destruction of rainforest for timber, toilet tissue and soya growing for beef rearing.

I’m sure the good Lords would approve of Fair Trade, that goes some way to compensating such people as subsistence coffee farmers from the abuses of “foreign investment” monoculture.

Wherever globalised trade has sought out new sources of supply it has created new scourges on the landscapes, animals and peoples.

The system of trade is deeply biased, as evidenced by the calcuable fact that raw commodities and skills fed into the global trade machine by the Global South is up to ten times more than those contributed by the Global North. And yet the Global North is still wealthier. Because they own and control the trade.

I was on the London Tube the other evening, listening to a little girl asking her father questions about an advertisement of a little African boy on the carriage wall.

“Well,” he explained, “some people in the world are poor. They don’t have as much money as we do. They can be hungry sometimes.” And he explained about giving money to the people who don’t have the good things we have.

Where’s the analysis ? People in countries with rich natural resources haven’t made themselves poor, have they ? Why did not this father tell the truth : that people like us have made people like the little boy poor by taking everything away from him ?

Climate Change is yet another way to make poor people more poor. It’s a side-effect of the rich living of the people in the industrialised countries, and the way it’s been done is through the unfair system of globalised trade.

Globalisation has done nothing for us except made billions of people poor, and destroyed natural environments, and our ability to sustain Life on Earth.

I would have every good reason to be an anti-globalisation campaigner.

Although I tend not to join things in order to stay as neutral as I can, the ridiculous opinions of the two noble, honourable Peers of the Realm nearly convinced me to join Greenpeace, right there and then.