In this post, University of Gothenburg economics professor Thomas Sterner chronicles his journey to and through Copenhagen. From troubling policy framework to Hopenhagen, Sterner says as long as the world is talking about the troubles of climate change, there’s still reason to hope.
COPENHANGEN -- I took the three-hour train trip from Gothenburg to Copenhagen without major illusions. Although I prefer to be an optimist it is clear that a good, viable, treaty is not within easy reach during this meeting. Positions on basic issues such as finance are too simply far apart. The most basic issue is, of course, the allocation of emission allowances or abatement burdens.
The news media constantly offering up information on different country commitments to emissions reductions—Japan 25 percent, EU 20 percent, maybe 30 percent, USA 14 percent to 17 percent. Then they start asking, “What will India do?”
The devils are, as usual, in the details. A careful look at the different proposals reveals, unsurprisingly, that each country chooses a combination of accounting principles, base years, sectors and gases that suits their domestic cause.
The very fact the debate over emissions cuts is about percentage reductions is a gigantic bias in favor of countries that are currently big emitters and is totally unacceptable to India and low-income countries like, for instance, those in Africa. It is nowhere near enough to “give them” somewhat lower percentage reductions or a few years of grace before they join in on the reduction commitments. Percentage reductions imply grandfathering or prior appropriation and are deeply ingrained into legal and popular thinking in the West, particularly in the USA. Similar principles underlie the allocation of sulfur rights in the SO2 trading program as well as—in a more general way—water law in California. It also underlies the Kyoto Protocol.
But think of this issue from the Indian perspective. Suppose the USA reduces its emissions by 14 percent from around 7 tons of CO2/per capita to 6 tons. How is that a fair answer from India’s perspective? They are currently at some 300 Kg of C02/per capita and if they tripled that their emissions would still only be one ton—or a sixth—of the USA’s. This is a far-reaching sacrifice for a country that aspires to 10 percent to 12 percent growth in GDP.
India would prefer an equal allocation per capita. This is an ethical principle we are well acquainted with and one we can hardly argue is unreasonable. This principle not only applies to our votes; it is also used, for instance, to distribute the rents from oil in Alaska. All Indians and Africans I have spoken to take it for granted that some version of equal per capita allocation is the only reasonable principle. Yet there is an abyss between grandfathering and equal allocation. The difference between the two would mean a difference of many billions of tons of CO2 per year for India—and each ton may be worth for instance $20. There is much discussion of side payments here but the Indian delegates know that they would need no side payments at all if they just got what they think is a fair share of permits.
In countries where you bargain over the price, you know that if you want to pay 10 and the seller says 12 then the price will eventually be around 11. If the seller asks for 5000 you just walk away—negotiations are too difficult and unlikely to give a satisfactory result. This is something we discussed yesterday at a CLIPORE side event in the EU Pavilion concerning long run goals. Interesting but depressing.
But on my way back to town however I stopped at “Hopenhagen” as Desmond Tutu took the stage. Within a few minutes he electrified the audience. In a few sentences he spanned everything from Apartheid to the Berlin Wall and said that God cries when he looks down and sees Zimbabwe and Darfur and says “Why did I create this?” But then he sees you in Copenhagen and he smiles.
Maybe the archbishop is right: as long as we are talking there is hope.
Thomas Sterner is a professor of economics at the University of Gothenburg, where he established and directs the Environmental Economics Unit. He is also an RFF University Fellow; his main research interests lie in the design of policy instruments.
