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What do the endlessly repeating cycle of futile Eurozone rescue talks and the endlessly repeating cycle of futile annual UN climate summits have in common? Put more plainly, what accounts for the unreality of both efforts, such that “breakthrough” agreements are soon recognized to be ineffective, if not fraudulent?
“It is probably not a coincidence that the Euro currency was launched at about the same moment as the Kyoto Protocol in the late 1990s, and that both are hitting the rocks at about the same time.” –Steven HaywardIt is probably not a coincidence that the Euro currency was launched at about the same moment as the Kyoto Protocol in the late 1990s, and that both are hitting the rocks at about the same time, and for the same reason: both flew in the face of economic reality. But as the inexorable economics of a common currency used across uncommon economies, and fossil fuel suppression in an energy-hungry world, have become more evident, the European and UN diplomatic corps (often the same people) have simply doubled down, holding bigger meetings, giving longer speeches, and crafting more paper agreements to find a process to develop a framework to come up with commitments to adopt meaningful measures and policies that will . . . do something. In the future. The proverbial can has been dented so hard and kicked so far down the road that it’s no longer fit for the recycling bin.
It is tempting to chalk up the farcical solutions to simple ignorance of economics. In the case of the Eurozone crisis, the constituent nations of the European Union are resisting the implications the debt crisis poses, namely, the unsustainability of the lavish welfare states built increasingly on borrowed money and the asymmetries between northern and southern European economies. The hope is that another declaration of “we’re-all-in-this-together” along with a new fillip of a bailout package that is a tiny fraction of the unpayable debt of the Euro’s laggard nations will soothe the markets and extend the illusion that the political class has got things in hand. It worked the first few times, but the financial markets have stopped buying the inevitable sequels.
In the case of the climate change circus, the unreality of steep near-term emission cuts and the asymmetry between rich and “developing” nations like China and India turned the entire scheme of climate change diplomacy into the biggest farce since the Kellogg-Briand Pact promised to eliminate war in 1928. And so in recent years we’ve gone from the Bali Roadmap to the Copenhagen Accord to the most recent “Durban Platform,” all of which promise to craft a legally binding treaty for real emissions cuts by everyone . . . a decade from now. In future years I expect we can look forward to the Frankfurt Farce, the Rio Reneg, the Tokyo Two-Step, the Melbourne Mumble, and the Marrakesh One-Two.
Politicians everywhere, enthralled primarily by their own will to power, always hope that they can bend economic forces to their desires, and all eventually come to grief. Milton Friedman, Martin Feldstein, and other eminent economists warned at the outset of the Euro that it would not survive the first serious debt crisis and the glaring asymmetries of Europe’s different nations. In the climate circus, everyone has blithely ignored what the non-skeptic climate analyst Roger Pielke Jr calls “the iron law of climate policy,” namely, that “when the trade-off is emissions reductions versus economic growth, the economy wins every time.” The entire edifice of climate orthodoxy, Pielke notes, requires “magical thinking” to believe.
It is tempting to call this particular form of diplomatic wishful thinking “Europeanism”-literally true in the case of the Eurozone, but the European form has dominated the global climate circus from the beginning. And the one partial holdout from both has been the English-speaking world.
British Prime Minister David Cameron is taking heat for resisting the modifications of the EU Treaty that would further erode the economic sovereignty of EU member states. In this he is embracing the Euro-skepticism of Margaret Thatcher, who warned early on that “(A unified) ‘Europe’ is the result of plans. It is, in fact, a classic utopian project, a monument to the vanity of intellectuals, a program whose inevitable destiny is failure: only the scale of the final damage done is in doubt.” (She also predicted, “The European single currency is bound to fail, economically, politically and indeed socially, though the timing, occasion and full consequences are all necessarily still unclear.”)
But British clarity about the shortcomings of “Europeanism” are bipartisan. Back in 2005 Prime Minister Tony Blair recognized the futility of the Kyoto Process, when he said “The truth is no country is going to cut its growth or consumption substantially in the light of a long-term environmental problem. I don’t think people are going, at least in the short-term, to start negotiating another major treaty like Kyoto.” For this Blair was blasted by environmentalists, even as European unionists are attacking Cameron now.
It has been a source of outrage that in the Eurozone negotiations, and in climate negotiations, it is the English-speaking democracies that have been the main dissenters from “Europeanism.” It calls to mind another of Thatcher’s great observations: “During my lifetime most of the problems the world has faced have come, in one fashion or other, from mainland Europe, and the solutions from outside it.”
She didn’t need to say the solutions came from the English-speaking world.
Steven F. Hayward is the F.K. Weyerhaeuser Fellow at AEI.
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