June 11, 2008
“We are committed to take strong leadership in combating climate change”: That was the key message from Heiligendamm in June 2007, with the German chancellor in the Chair.
A year later, the G8 ministers of energy met in Aomori, Japan, in order to prepare the Hokkaido G8 meeting at the end of July. They had also invited their colleagues from China, India and Korea, following the useful Heiligendamm practice.
The meeting took place at the very moment when oil prices peaked to a new record of $ 138/b. They issued a declaration focusing on energy efficiency and oil prices, of which the media hardly took note.
As a follow-up to Heiligendamm, they decided to set up an “International Partnership for Energy Efficiency Cooperation”, spawning a new beast of multilateral energy cooperation, which is unlikely to have a noticeable impact on spreading advanced energy technologies.
They declared that the high oil price was a “matter of great concern” to them. The US and Australian ministers urged producing countries to expand output. The Japanese chairman projected the spectre of a global recession if oil prices continued to stay at what he considered as unjustified levels. And his Chinese colleague defended his country’s high oil subsidies as a means to maintain social and political stability.
Fortunately, the markets did not heed these conflicting messages. Oil prices stayed at very high levels.
What a difference compared to declarations issued by Central Bank Governors from the EU or the USA: the slightest allusion to a possible change of central bank interest rates modifies exchange rates and stock prices.
The G8 is a “teeth-less animal”. Their annual declarations have become a diplomatic routine. Nobody takes them serious. They lack bite, because the Eight are not agreed among themselves about what to do against climate change. At best, their declarations contain well-drafted diplomatic formulas that gloss over underlying discords. At worst, as at the latest ministerial meeting in Japan, participants issue divergent bilateral statements.
What therefore to expect from the G 8 Summit in July?
The cynical answer is: Nothing.
The Japanese Chair is under great pains to take tough climate action so as to live up to the modest Kyoto reduction commitments. The US President will not abandon his stubborn opposition to any binding climate targets. The Australian and Canadian prime ministers will hardly be more forthcoming. The EU is far from having adopted the necessary measures for effectively implementing the ambitious targets heads of government had agreed upon in March 2007.
A more optimistic, even naïve answer would wish the G8 Summit Declaration to deliver the following three elementary messages:
- Humanity has no choice but to reduce its fossil energy demand and replace it by energy sources that do not emit C02. High oil prices are a clear signal to humanity that its present consumption habits are unsustainable and should force us to adapt, however painful.
- All governments should abolish subsidies on oil and gas as rapidly as possible.
- The G 8 countries are committed to decide on vigorous action at the international climate conference in Copenhagen. They will lead the way and set an example, provided emerging countries will bear their share of the burden.