Climate Change Negotiations: Some Inconvenient Truths
By Bhavani Prakash
This has been a week of climate pessimism. First, The Guardian on Wednesday, 9 Nov 2011 quoted the International Energy Association (IEA)’s warning that the world is headed for irreversible climate change in only 5 years. The article says:
“If the world is to stay below 2C of warming, which scientists regard as the limit of safety, then emissions must be held to no more than 450 parts per million (ppm) of carbon dioxide in the atmosphere; the level is currently around 390ppm. But the world’s existing infrastructure is already producing 80% of that “carbon budget”, according to the IEA’s analysis, published on Wednesday. This gives an ever-narrowing gap in which to reform the global economy on to a low-carbon footing.
If current trends continue, and we go on building high-carbon energy generation, then by 2015 at least 90% of the available “carbon budget” will be swallowed up by our energy and industrial infrastructure. By 2017, there will be no room for manoeuvre at all – the whole of the carbon budget will be spoken for, according to the IEA’s calculations.”
The lecture at the Institute of South East Asian Studies (ISEAS) yesterday by Professor Surya Sethi compounded the gloom. Prof. Sethi served on the Indian Prime Minister’s Energy Coordination Committee and wrote the Integrated Policy of India (2006) and also assisted in the development of India’s National Action Plan on Climate Change (2008). He is currently Visiting Professor at the Lee Kuan Yew School of Public Policy (LKYPP).
Prof. Sethi said that developments after the 2010 COP 16 Climate Change Conference in Cancun, Mexico do not give much hope that a comprehensive and binding agreement will be reached at COP17 in Durban, South Africa later this month. He also pointed to several ‘inconvenient truths’.
Inconvenient Truth #1
Markets do not have the solution to climate change or to the mindless exploitation of the world’s finite capital of water, land, minerals, other resources, or to the global commons itself. If all externalities are included, such as the environmental cost of rearing cattle, impact on water, carbon emissions associated with transportation, the cost of a hamburger, for example, would be between US$20 to US$25. However, it is sold for only 99 cents in the US and for US$3 in the rest of the world. Markets are therefore grossly underpricing natural capital which inevitably leads to resource exploitation.
Yet paradoxically, we look to the same markets which failed to keep the books straight on asset backed securities and mortgages that led to the financial crises of 2008 and the European Debt crisis this year, to deliver solutions to climate change.
The world is facing potentially disruptive and irreversible climate change triggered through rising temperatures, and non-linear positive feedback. Markets driven by greed and mathematical judgement cannot solve these irreversible effects or substitute value based decisions, which are required for equitable solutions.
If one looks at energy intensity of OECD countries, it varies from country to country a factor of 2.3 times. Even though there are no market barriers, the market is not equalising energy intensity. The financial bailout shows that politics plays a key role in deciding where funds flow.
Markets may allocate scarce resources, but they are not distributors of equity and justice. If we want to limit how much natural capital is to be used, we need to make ethical choices, which requires strong value based leadership. This was emphasised time and again by Prof Sethi.
Inconvenient Truth #2
Global carbon emissions are not coming down, and continue to rise.
- Most global projections show fossil fuel consumption as growing till 2030. There was a slight dip in 2008 due to slower economic growth because of the financial crisis, but it has picked up again in 2010. The total estimated 30.6 gigatonnes carbon (GtC) emitted in 2010 is estimated to grow to 54 to 58 GtC in the coming years. The 2 degree pathway requires a reduction to 44 GtC per annum globally by 2020. There will be an overshoot of 10-14 GtC on an annual basis.
- The absolute level of consumption of fossil fuels is still rising in developed world. If you exclude the 2008 blip, consumption of fossil fuels during the 8 years from 1999 to 2007 of OECD countries grew 2.6 times than the rate of fossil fuel consumption growth in India. The OCED has a population of 0.9 billion, only slightly less than that of India, and hence comparable in size. In China fossil fuel consumption during the 8 year period grew 7.1 times than that of India.
What this underscores, according to Prof Sethi, is that all the talk about lowering energy and emissions intensity, and delivering the next more efficient car or light bulb (which is definitely important) only means growing GDP by a larger amount with marginally less energy intensity. So even if the same barrel of oil goes longer and energy security is increased; as long as we are consuming more fossil fuels in absolute terms, we are not addressing climate change.
- If one examines the claim that Annexe 1 (developed) countries have reduced emissions from GDP over 1990 levels, this is largely because as economies in transition, they have outsourced some of their pollution overseas.If you look at emissions from consumption by Annexe 1 countries, the figures are even worse. Take the 15 EU countries – on a consumption bass, emissions have gone up by 40% over 1990 with 33% of emissions coming from imports. Gross emissions of the EU 15 countries amount to 10-12 tons per capita in addition to 3 tons per capita from imported embedded emissions, which by itself is more than the total per capita emissions of India at 1.9 tons. The 4 tons carbon emissions per capita embedded in US imports alone is more than 2 times of India total per capita emissions. China is often blamed for becoming the biggest polluter, yet 26% of all China’s emissions are in embedded emissions from exports. Yet, nobody is addressing these unsustainable patterns of consumption.
- Pledges made in Cancun by Annexe 1 countries are actually lower than pledges by non-Annexe 1 countries. So far, all pledges of Annexe 1 countries add up to 5% to 17% below 1990 levels, which compares poorly to what the Intergovernmental Panel on Climate Change (IPCC) expects, i.e., at least between 25 to 40% emissions reductions below 1990 levels are required to keep within 2 degree C temperature rise.
The non-binding pledges in Cancun puts the world on an auto-pilot mode of 3.5 to 5 degree C temperature increase.
Inconvenient Truth #3
The lack of equity in talking about climate emissions reductions is the third issue.
- If the world has to remain bound to a 2 degree temperature rise, then going forward the Annexe 1 countries between 2010 to 2050 must have a negative carbon emissions of 1.5 GtC. For the 350 GtC total carbon budget to be equitably distributed, richer nations have a climate debt owed to the developing world of US$ 10 to 13 trillion, depending on the price of carbon. The developed world does not accept historical responsibility of carbon emitted over the last century to fuel its economic growth. However the common and differentiated responsibility principle which underpins the UNFCCC negotiations is built upon the bedrock of historical responsibility.
- We live in a world with extreme inequality. The top 20% of the world, and some live in India and China too, are today responsible for 85% of private global consumption while the bottom 20% live on less than 1 dollar ppp(purchasing power parity) per day. 40% of the population is below the poverty line in India earning below the threshold of 70 nominal Singapore cents in cities and 55 Singapore cents in villages. This kind of inequality which will lead to greater instability in the world in terms of social and political unrest.
The huge transfer of international funds required to pay for climate debt is as much a question of equity for the bottom 20%.
Inconvenient Truth #4
The final inconvenient truth is that there is very little climate finance being made available to developing countries for mitigation and adaptation.
The scale of funding required is to the tune of more than a trillion dollars, but Cancun’s Green Climate Fund is only for $100 billion.* The reality is that the developing world is spending a higher and higher portion of its GDP on adaptation and lowering energy intensity e.g., India is spending 2.3 to 2.4% of its GDP on adaptation, though it is doing it for gaining energy security than for climate change.
* At the COP15 Copenhagen Climate Change Summit in December 2009, the proposal was to mobilise US$10 billion per year between 2010 and 2012, and up to US$100 billion by 2020 annually – which represents only 0.8% to 8% of developed countries’ national defence budgets”
Climate finance requires massive resource transfers from the developed to the developing world. The existing multilateral agencies like the World Bank do not have the instruments or capacities for these. According to Prof. Sethi, the World Bank’s net disbursements between 2002 and 2008 were between minus 0.8 billion to minus 4.8 billion without IDA (International Development Association). With IDA the disbursments were between to minus 2.9 bn to +5.4 bn US dollars. These agencies are at best equipped to do project lending, and not to deliver the scale of funds transfer required for climate finance.
According to Prof. Sethi, unless there is some disruptive technology in the coming decade, the climate change challenge cannot be tackled in time.
What will wake up the world to the climate reality? Prof Michael Quah, Deputy Director, Energy Office at the National University of Singapore who chaired the ISEAS event, quoted the former International Energy Agency director, Nobuo Tanaka who spoke in the CNBC energy opportunities brainstorming session held in Singapore recently. Tanaka had said, half jestingly, that perhaps we need another tsunami, another Katrina, and other similar disasters to rouse the world to action. Stark as this may sound, it looks as if the world is headed that way, unless collection and drastic action is taken steered by strong global leadership.
The theoretical model and practical framework exists to create solutions with equity and justice, as Prof Sethi acknowledged after the event when I raised the Contraction & Convergence model by the Global Commons Institute. It is a science based model to allocate emissions reductions to different countries, and also allow for compensation to nations which emit less than their allocations. As far back as 2003, Janos Pasztor (who is now with the Climate Change Task Force), had mentioned as a member of the UNFCCC Secretariat that “Stabilisation inevitably requires ‘Contraction and Convergence” .
The challenge as Prof Sethi pointed out is the lack of political will to agree to the scale of emissions reduction envisaged and large scale transfer of funds to the developing world to deal with mitigation and adaptation.
To conclude, a world that has US levels of consumption can only house 1.4 billion people and not 9 billion people as we are projecting by 2050. Prof Sethi came back to the profound wisdom of Gandhi for what we need for a truly sustainable world:
About the Writer:
Bhavani Prakash is the Founder of Eco WALK the Talk .com. Despite the climate pessimism in this article, she believes individuals and communities can play an active role in changing behaviour, and also in influencing policy decisions as well as industry action required to tackle climate and biodiversity issues. She writes and conducts talks and workshops on sustainability and can be contacted at bhavani[at]ecowalkthetalk.com. Follow Eco WALK the Talk on Facebook,Twitter, Linked IN and YouTube
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