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Home / Business

<i>Brian Fallow:</i> Self-interest can save planet

Brian Fallow
By Brian Fallow,
Columnist·
22 Nov, 2006 09:38 AM6 mins to read

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Brian Fallow
Opinion by Brian Fallow
Brian Fallow is a former economics editor of The New Zealand Herald
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KEY POINTS:

Where pulling our weight on climate change ends and futile self-sacrifice begins depends on what the major emitting countries do.

The meagre yield of the annual United Nations conference on climate change in Nairobi last week is a reminder that the geopolitics of global warming remain as challenging
as ever.

Participants agreed to review the Kyoto Protocol in 2008, but with the rider that the review will not prejudge action that the parties might decide on and that it shall not lead to any new commitments.

The reluctance of the world's largest emitter, the United States, and two of the fastest-growing, China and India, to go anywhere near a commitment to curtail their emissions is evidently undiminished.

In the face of this it is easy to say that while New Zealand's per capita emissions might be high and growing, we are still only four-tenths of 1 per cent of the problem and the inertia of the big boys lets us off the hook.

Former US Vice-President Al Gore offered a more sanguine, glass-half-full view in a flying visit to New Zealand last week.

American pundits often warn that the most that can be expected from the US is that it will get serious about domestic policy but that there is too strong a unilateralist tide running for it to agree to a multilateral effort like Kyoto in the foreseeable future.

Gore disagrees. "No, I don't think that's true and especially not where climate is concerned. It has been true, but I think that has now changed."

When asked whether, were he in the White House, he would have been able to get Kyoto through the Senate he said, "I would like to think so, but I must acknowledge it would be tough with this Senate to ratify anything good."

The new Senate, reflecting the recent mid-term elections, would make it easier.

"I do like to think that with sustained leadership and the use of the so-called 'bully pulpit', a president would be able to ratify Kyoto or, at the very least, join the process for negotiating a successor."

It would be easy to dismiss this as wishful thinking, but it is judgment at the most expert level. Gore, after all, presided over the Senate for eight years as vice-president.

Many of the candidates who did well in the recent mid-term elections were aggressive on combating climate change, he said.

And he pointed to the initiatives of such Republicans as Arnold Schwarzenegger in California and John McCain on Capitol Hill as signs of a return to bipartisanship on the environment. "I think it will increasingly be seen as a moral issue, beyond party."

But even if Gore is right about that and even if the electoral tide has turned against the Republican right, President George W. Bush still has two years in office.

So it is likely to be 2009 before any substantial international action on climate change is possible.

Meanwhile, it is easy to consider China and India's need to address poverty among their people alongside their immense coal resources and conclude that our planetary goose is cooked.

At a meeting of finance ministers from the 20 largest economies in Australia last week India's finance minister Palaniappan Chidambaram said developing countries were entitled to develop, which would inevitably mean more energy consumption and more greenhouse gas emissions.

"The way to moderate that is not to deny them the growth to which they are entitled. They way to moderate it is to give them access to alternative technologies, alternative fuels," AP reports him as saying.

One promising technology is carbon capture and storage. The idea is that where a lot of carbon dioxide is produced in one place, such as coal-fuelled power station, instead of putting it up a chimney you poke it into a suitable underground structure where you can be reasonably sure it will stay put.

It will always be cheaper to have a chimney, so the question for developing countries is: who will pay for this technology?

In principle Kyoto's clean development mechanism (CDM), which allows developed countries to earn offsetting credits by financing emissions-reducing projects in developing countries, provides a way to diffuse the technology.

But the Nairobi meeting has kicked the issue to touch, requesting further research with a view to deciding on the acceptability of carbon capture and storage projects under CDM in two years.

It is kind of condescending, however, to assume that China and India will go for economic growth at any environmental cost. Insofar as climate change is a long-term threat to fundamental things such as food and water they have more to lose than anybody if it goes unchecked.

"Both China and India have become quite aware of the consequences for them if the climate crisis is not solved," Gore said,

"Both rely on the Tibetan plateau [where glaciers are shrinking] for water. China now has more dust coming from the Gobi desert to coat Beijing. Their pollution problems are quite serious. These and other problems can be solved by doing the right thing where the climate is concerned. The same is true in India."

The best way to induce them to join the international process was for the US to join, and take away their principal excuse for going so slowly, he said.

He remained confident of America's "inherent capacity for moral leadership".

As for New Zealand firms' concerns about being saddled with costs ahead of their competitors, most of which have no obligations under Kyoto, Gore reminded us that the Chinese way of representing the concept of crisis was to combine the symbols for danger and opportunity.

"The first movers who adapt to the new realities of our world are gaining economic advantage in doing so," he said. "It is a new world and the nations and businesses that offer leadership will be rewarded economically, I'm convinced of it."

He is right of course. Entrenched technologies such as running internal combustion engines on petroleum products, or burning coal in air to raise steam to generate power, have served us well. But these are the technologies of the century before last.

The alternatives are not a return to candles and bullock power, but are to be found among a dazzling array of bright ideas in various stages of development.

The financial rewards for developing and commercialising the successor technologies will be very large indeed.

In the meantime current technology has an unfair advantage in our ability to offload most of its environmental costs on future generations and people in faraway lands.

But institutionalised freeloading is no sustainable basis for a business - or an economy.

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