Rhein on Energy and Climate

Three months ahead of the Copenhagen Climate Conference international attention risks being diverted to a side show: droughts, floods and rising sea levels, the unavoidable consequences of climate change.

This is the wrong debate at the wrong moment. The UN should have killed this debate long ago instead of fomenting it. The central objective for Copenhagen must be to reach a deal among the leading emitter countries to reduce their emissions or slow down their future increase of emissions.

China, USA, EU, Japan, Russia and India account presently for almost three quarters of global green house gas emissions. Their action will determine the earth’s climate until the middle of the century before other emerging countries might join the pool of climate polluters.

At Copenhagen, they must strike a deal that may serve as an example for others. They must put in place the necessary policies and the regulatory frameworks, on which will depend the effectiveness of whatever targets fixed. They dispose of the necessary technologies and even the financial resources for raising energy efficiency and investing in alternative technologies to replace fossil energy sources.

But they lack the political will and courage to act.

The high cost of fighting climate change is a myth invented by fossil energy companies and lukewarm governments to delay effective emission caps. In macro-economic terms, the charge of fighting climate change is presently negligible, but potentially rising to 20 percent of the global economic product by the middle of the century (Sir Nicolas Stern), if humanity fails to take effective action now. Of course, it implies higher prices of fossil energy through C02 taxes or equivalent measures like emission caps. But these will not constitute a cost to society if offset by lower income or social security taxes. Nor will they affect international competitiveness if all major industrial countries act in unison. This is the main unresolved issue between China/India on the one hand and Western countries on the other, on which the negotiations need to be focused.

It is too early to take international action concerning adaptation to climate change. What can the international community effectively do to alleviate droughts in the Sahel zone, India or China, typhoons in the Caribbean or a rising sea level? Is there any sense in spending billions of euros today without the slightest guarantee of long-term safety? There can be no protection against the melting of Greenland glaciers and the consequent rise of the sea level!

Economically it makes much more sense to concentrate all resources on fighting climate change rather than give the false impression that humanity will find technical gimmicks to adapt. Adaptation will be a cruel process stretching over decades and centuries with potentially hundreds of million people losing their livelihood, migrating or perishing.

Only when political leaders start realising the full impact of climate change might they finally agree to take the draconian action that is required to minimise the impending climate cataclysm.

The recent flurry of “climate cost estimates” for developing countries, varying between € 100 and 600 annually depending on assumptions, are rather meaningless. Of course, humanity will have to invest amounts of that magnitude for the transition to a post-fossil energy society, but the bulk of them in the advanced countries, China and India.

The UN and the EU have come to the conclusion that a substantial financial package in favour of developing and emerging countries is the “price” for their alignment on more or less vaguely formulated climate targets. But what is the value of vaguely formulated climate targets like reducing emissions increase to 15-30 percent below business as usual scenarios? And what is the credibility of Chinese estimates according to which reducing Chinese emissions (by how much?) will cost more than $ 400 billion by 2020. Such figures do not mean anything and should not unduly impress European negotiators. They are part of normal negotiation tactics.

For an effective outcome of the Copenhagen Conference it is essential not to put the cart before the horse. The success of Copenhagen hinges on:

The willingness of the OECD countries and Russia to proceed with deep emission cuts. The USA has to come up with a convincing offer; so have Australia, Canada and Korea.

A commitment by the OECD countries to effectively help China, India and other major emerging emitter countries in their fight against climate change. The details of these bilateral cooperation programmes, which should include finance, should quietly be hammered out after Copenhagen.

Beware of long texts that nobody understands. They will be treacherous and a clear sign that the international community has failed to agree on a meaningful climate agreement!

Brussels, 09.09.09 Eberhard Rhein

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