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Oct. 28, 2015

Green Supply Chain News: Developing Countries and CO2 May Yet Detail UN Climate Talks

 

The Under-Reported Challenge of Reaching "Climate Justice"

 
By The Green Supply Chain Editorial Staff

We are now just weeks away from the 2015 UN Climate summit in Paris, at which several year ago the majority of countries committed, however vaguely, to reach a global accord of some kind to reduce carbon emissions.

But there are some major bumps in the green supply chain road, succinctly put a few days ago by Shikha Dalmia of the Reason Foundation, in a guest column on The Week.com: "The world can either avert climate catastrophe or seek "climate justice," not both," she wrote.

 
The Green Supply Chain Says:
Developed countries could try to impose heavy trade sanctions again countries that aren't seen as doing their fair share. Would Western countries have a trade war with China over CO2?

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Here is the basic issue: the goal of a UN agreement would be for all countries, developed and developing, to commit to CO2 reduction targets that would in total add up to declines sufficient to keep global temperatures from rising more the 2 degrees Celsius above pre-industrial levels – at least according to various computers models, which of course have proven highly inaccurate to date but that is beside the point at the moment.

The 1995 Kyoto Protocol, adopted by many Euro countries, Japan and Canada (but not the US) encompassed only developed economies. But as noted, the plan is for a new climate agreement to include all nations, developed and undeveloped, rich, poor and in-between alike.

And theirs is the rub. Many of the developing nations are seeing rapid growth in their economies, with ultimately hundreds of millions or even billions of people moving into the middle class over the next few decades. Those billions will want to drive cars, heat and their move expansive homes, buy goods from factories in their own countries, etc.

Developed economies made this transition on the backs of fossil fuels to power automobiles and provide home comforts. Under a UN pact, developed economies will be asked to largely look to much great use of more sustainable and cleaner energy sources – but that move will come at large costs versus the fossil fuel path.

So who is going to pay?

The negotiations will boil down to an essential question: How much should each country cut and therefore whose idea of "climate justice," as Indian Prime Minister Narenda Modi has termed it, should prevail?

Oren Cass, a Manhattan Institute analyst, has noted that fighting climate change is a particularly vexing problem because the individual cost to each country, especially developing ones, will be immediate and substantial, while the benefits are much more distant and uncertain.

"The notion that emission cuts can pay for themselves through increased energy efficiency is at best fanciful and, at worst, a lie," Dalmia write.

There is also the "free rider" problem to deal with. If all nation's but one, with the possible exceptions of China and India, were to abstain from any CO2 reduction initiatives, it likely would do little to change the overall levels of CO2 in the atmosphere on an aggregate basis. So a given country could go down a more traditional, lower cost fossil fuel path, and still benefit from an overall global decline in CO2.

The UN agreement is in theory supposed to be legally binding, but whether that will really be true (there is some thinking the US will go for voluntary reduction targets, to avoid the need for the Senate to approve the deal as a treaty) is one issue, as is probably the more substantive one regarding how such legally binding agreements would be monitored or enforced is anything but clear.

Take India. Dalmia writes that "India has to keep boosting its energy use - and therefore carbon emissions - for at least another two decades to eliminate dire poverty, which is why its reduction plan only commits to slashing "emission intensity" - its emission rate as a percentage of its GPD - not emissions themselves."

Even just doing that, India claims, will require up to a $2.5 trillion investment over the next 15 years in renewable energy sources and adaptation technologies. While that number may be exaggerated, it may not be that far off either. Where is that money going to come from? India doesn't have it.

A growing number of developing economies expect those dollars to be flowing from developed ones. Indeed, at another UN Climate Summit a few years ago, Western countries pledged provide $100 billion in funding annually starting in 2020l to developing countries to offset their climate change costs and move directly to clean energy sources.

Just a few problems with that idea. First, how that money would be raised was not defined, nor was how it would be allocated to leaders of developing economies no doubt excited by the opportunity for a financial windfall. And by the way, many developing economies say that $100 billion is far too little to meet their needs (see India's estimate of the total required above), with many demanding that developed economies should also pay reparations for the CO2 that have put into the atmosphere over the past 200 years.

Put all that together, and you have quite the potential for chaos in Paris.

And add this to the mix: Some observers are suggesting that if rising temperatures are really going to be as catastrophic as some predict, "the harsh reality is that it might be more cost-effective for America and the West to impose their will by military force," Dalmia notes - attacking offending countries to force them to reduce COS emissions. We supposed bombing their coal-powered electricity plants would indeed have that effect.

Less dramatic, the developed countries could try to impose heavy trade sanctions again countries that aren't seen as doing their fair share. Would Western countries have a trade war with China over CO2?

This aspect of the upcoming UN summit is clearly being underreported. Our guess: a deal is in fact reached, but one that largely skirts this huge issue.


What's your take on this issue? Will Western countries really write giant checks for carbon mitigation to developing ones? Let us know your thoughts at the Feedback button below.



 
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