Can Poorer Countries Afford Low-Carbon Development? Point 1
(Developing countries can't pay, and wealthy countries can't help them) (888)
This is the first of six exchanges in a series of e-mail debates between two climate change specialists. Commenting here is Steve Hayward, research fellow at the American Enterprise Institute for Public Policy Research .
Summary: Developing countries will not reduce carbon dioxide emissions because they need cheap energy to fuel economic growth, Hayward says, and wealthy countries cannot afford to help them. In previous global agreements, wealthy nations were able to lead in finding ways to reduce pollutants and assist developing countries. Now, the cost of developing alternative energy sources to reach international emissions targets is too high. Even if wealthy countries end their dependency on fossil fuels, the emissions reduction would not offset the increased emissions from developing countries. Paradoxically, if wealthy nations stop using fossil fuel, it will become cheaper for developing nations to use. - Editors
Dear Gernot,
I am glad for the opportunity to engage you and our international audience on the crucial issue of low-carbon development and the economic burdens it will impose on those least able to afford them.
Climate change is not the first arena in which nations seek to negotiate phased global agreements that take a step-by-step approach to solve a major problem. The agreements on trade liberalization and the Montreal Protocol of 1987 that phased out chlorofluorocarbons (CFCs) assumed that rich nations were better able to go first in reducing trade barriers and CFC emissions. Early efforts to tackle global climate change, including the U.N. Framework Convention on Climate change (UNFCCC) and its first serious agreement, the Kyoto Protocol, also were based on this principle.
But climate change is different. Lowering trade barriers would enrich all nations almost immediately, while in the case of CFCs reasonably priced substitutes were ready to bring to the global market at sufficient scale. Neither of these important economic conditions is true of climate change and the problem of reducing greenhouse gas (GHG) emissions; hence the stalemate between wealthy nations that accepted emission reductions targets in Kyoto and rapidly developing nations (especially India, China, and Brazil) that resist making similar commitments in the successor agreement that was supposed to be reached in Copenhagen.
Developing nations such as India, where more than 500 million people lack access to electricity and still live in dire poverty, make the sensible calculation that the trade-offs (including the full spectrum of environmental trade-offs) of continued economic growth outweigh the risks of climate change. At the very least, they demand that wealthy nations pay enormous capital costs for developing nations to adopt low-carbon energy sources at sufficient scale. Under current and forecast budget scenarios for the developed Organisation for Economic Co-operation and Development (OECD) nations, this is simply not going to happen.
ENERGY KEY TO DEVELOPMENT
Energy has rightly been called the master resource because it is fundamental to everything else in the economy. There is a robust correlation on the global level between energy consumption and human well-being, and the key is cheap energy. There are no examples of a nation that grew wealthy on expensive energy. Not a single wealthy nation currently forecasts adopting low-carbon energy sources in the next 20 years that are on a scale sufficient to match the rising energy demands of developing nations during that same period. If wealthy nations are not willing or able to adopt low-carbon energy on a sufficient scale, how are developing nations supposed to do so?
This leads to two grim paradoxes for global climate policy. The first is that wealthy nations cannot alone achieve the targets that climate orthodoxy now says are required to avoid dangerous climate change. Even if the U.S. and other industrialized nations somehow achieved at great expense the 80 percent GHG emissions reduction target now called for to stabilize CO2 concentrations at 450 parts per million (ppm) by the year 2050, it would have virtually no climate benefit. As the International Energy Agency concluded, "the OECD countries alone cannot put the world onto the path to 450 ppm trajectory, even if they were to reduce their emissions to zero." In other words, even if the 30 OECD nations disappeared from the planet, rising emissions from developing nations will carry us well past the 450 ppm target.
Second, if wealthy nations did somehow manage to wean themselves rapidly off fossil fuels, it would ironically make fossil fuels more attractive to developing nations. Roughly 80 percent of the world's hydrocarbon fuels are located in non-OECD nations. If the wealthy nations decide to eschew fossil fuels, they will become even cheaper for developing nations to use. No wonder China and India are cheering us on while steadfastly refusing to accept emissions limits for themselves.
I'll stop here, Gernot, and look forward to your reply.
Best regards,
Steve
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