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The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [30]

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politics at present is that climate change does pose a serious threat to human lives and livelihoods. So far the international policy response on climate change has been shaped by major international conferences under the auspices of the United Nations. The first international agreement was the Kyoto Protocol, signed in 1997, which came into force in December 2005. As a result various governments have announced targets for reductions in carbon emissions in their own countries. For example, the EU has said it will cut its greenhouse gas emissions up to 95 percent by 2050, with a short-term target of 20–30 percent reductions by 2020, provided that a global climate deal was signed in Copenhagen in December 2009 (it wasn’t, and as of mid-2010 EU countries were divided about whether they should adopt the tougher target unilaterally). Each nation that has accepted the treaty has started to translate these high-profile commitments into specific actions, such as limits on GHG emissions by power stations, taxes on high carbon fuels, energy efficiency incentives, and so on. However, it took some leading industrial countries many years to sign up to Kyoto. Australia didn’t accept the Kyoto obligations until the election of a new left-wing government in 2007. The United States signed but never ratified the treaty, and President Barack Obama seems (as I write in mid-2010) hesitant about what kind of international obligation could pass Congress. America was until 2008 the world’s biggest emitter of carbon, and Australia makes a significant contribution, so their hesitations make it clear that from the start the policy process had clear weaknesses.

One key weakness is a fraught debate about the responsibilities of the developed as against the rapidly industrializing developing countries. At issue is how to share the burden of adjustment between rich but slow-growing Western countries with high levels of energy use per capita and poor developing countries with low per capita resource use that is growing rapidly.

China recently overtook the United States in absolute terms as the biggest carbon emitter, and India, Indonesia, and Brazil are also now among the largest contributors of carbon to the atmosphere. But all lag far behind the industrialized economies in their levels of per capita emissions. The Kyoto Treaty embodies a principle described as common but differentiated responsibility, which places the burden of emissions reduction on the developed economies. But regardless of what the treaty says, the planetwide level of emissions can only be kept to levels that—so experts hope—will not cause catastrophic climate change if countries like India and China also restrain their energy use. By 2050, eight-ninths of the world’s population will live in the developing world, so unless poorer countries accept a share of the burden there is no hope of making significant reductions in global GHG emissions.

As Nicholas Stern puts it: “It is profoundly inequitable that the difficult starting point is largely the result of actions by the developed nations, but the numbers on population and future emissions are such that a credible response cannot come from the rich countries alone.”6 He argues that the imperatives of economic development and responding to climate change can’t be separated: if we try to tackle either one without also addressing the other, we will fail on both fronts. Either economic development will be derailed by the impact of the changing climate on agriculture and output in developing countries if climate pressures are ignored, or it will prove impossible to address global warming if the justified claims of poor countries for economic growth cannot be met at the same time.

Figure 3. Beijing traffic.

More ambitious international targets still have been sought more recently. The Kyoto Protocol will expire in 2012. The summit in Copenhagen in December 2009 tried to broker an agreement to replace it—and failed, despite the high-profile efforts of the prominent world leaders who flew there to contribute to the sense of urgency.

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