Climate Change Policy after the G8 Summit

Last month’s G8 summit was momentous. Not only did its headlines manage to compete with the worst terrorist attack London has endured, but remarkably a few concrete agreements were made--and most were a triumph for US diplomacy.

In many respects US positions on aid and debt relief, notably tying future assistance to democratic reforms in African nations, and pushing total debt relief rather than partial relief through debt servicing, were adopted by G8, and welcomed by African nations.

It was as though pre-G8 discussions were entirely straightforward --"we know you’re not going to pay this back so lets get real."

The ongoing debt "game," you know the kind of thing--"we’ll pretend you’re going pay back loans and you’ll pretend to pay us," may be over. And I would argue that something similar is happening with climate negotiations.

The G8 promoted the usual rhetoric about preventing dangerous anthropogenic interference with the climate system. But without trying to identify what such interference would look like, the leaders sensibly pushed the problem out til the 2007 4th assessment report of the IPCC, and later G8 meetings in Japan in 2008, when a G8 climate report is apparently due.

But on the whole there were few platitudes and more calls for realistic actions. I would say the new approach goes something like this. "Let’s agree there is a problem but lets get real about what we’re actually going to do." And what we (and I don’t mean we in US but we as in Western world), are going to do is not an awful lot in terms of energy reduction. The vast majority of EU nations will miss their Kyoto targets (albeit the large ones are much closer to them than those targets originally agreed by US and Australia). There doesn’t appear to be appetite for drastic reductions in emissions (those required to stabilize atmospheric concentrations) unless greater evidence than currently available shows significant harm.

And in this regard U.S. policy rhetoric is closer to what is actionable politically than EU policy rhetoric, and I believe reflects underlying public opinion.

I would say public opinion is that there is greater certainty than a few years ago that there is a problem, but also the process (including presentation of scientific evidence) is highly politicized and that the costs of action are high. Furthermore, its necessary to have China and India in the mix. But of course its difficult to gauge public opinion separate from media interpretation.

For example, take a story much in the news over the weekend--the famine striking Niger, where an estimated 3.5 million people are starving and thousands are expected to die daily. This can be spun into a climate alarmism story or a green bashing one. Some commentators, such as the BBC’s David Lyon, cite man-made climate change as a contributor: "Climate change has made Niger a more precarious place to live."

He implies that climate change is causing a new famine along the lines of the great famine of 1973 where there were three years of low rain. And with the drought has come locusts.

But this is the only evidence he presents that the current drought is caused by climate change. He fails to note that the famine of 1973 came at a time when global temperatures were at their lowest for most of the past century. Media opinion notwithstanding, the link between man-made emissions and drought in Niger is largely theoretical and tenuous. But what is certain is that western environmental policy banning the insecticide Dieldrin, means that the cheapest form of protection against the locusts which have caused such devastation is lost to Niger.

But in any case, with the BBC firmly behind the "climate change is causing ABC" it is perhaps understandable that many people in Britain including Lord May, the President of Royal Society, said the G8 summit was a "disappointing failure." For those who want urgent action it was, but for those who favor action to be in line with rhetoric, I think the meeting was most successful.--Of course ‘success’ in any agreement is in the eye of the beholder, and the people of Niger just might not agree with UNEP about priorities for insecticide elimination.

But definitions of success aside, it is pretty clear that climate change policy is not a high priority for developing nations--and according to the Copenhagen Consensus economic process it probably shouldn’t be for us either.

Part of the reason for this were exposed by the recent House of Lords Report Economics of Climate Change. It points out how previous scenarios used were unrealistic, supporting the British Treasury and the work of David Henderson and Ian Castles. Even more interestingly it highlighted the politicized nature of scientific selections to be on IPCC. Professor Paul Reiter, formerly of Harvard and now at the Pasteur Institute in Paris, and one of the world’s leading malaria experts and nominated by US government was rejected in favor of less qualified substitutes. The fact that he estimates climate change has little effect on malaria rates (opposing IPCC consensus documents), apparently was not given as the reason for disqualifying him. Such obvious politicization plays into hands of skeptics.

So to G8 Policy outcomes

It is apparent, and has been for a quite a while, that Kyoto-style targets and timetables were not likely to be sustainable. To be fair to energy restriction--Kyoto proponents--those who attack Kyoto for being costly and not having much impact I think do miss a key point. Any restrictions on greenhouse gas emissions will be extremely costly and any action would have to begin slowly (hence having little impact at first). Indeed proponents of Kyoto have always argued it is just a first step, and I buy that. And it was not a bad idea as a way to start climate action if you accept two premises.

1. Climate Change was an urgent problem

2. It was the duty of the rich countries to start action given their past contribution.

The problem is that climate change is not perceived as a large enough problem deserving of such costly (as most economic analysis dictates) action to restrict energy use. And secondly, rich nation politicians will not undertake domestically damaging action as well as provide aid to countries that directly benefit from business losses to those nations--the labor and energy lobbyists are just too good to let that happen. (This is real exporting of jobs due to legislation rather than the outsourcing for efficiency gains, which is entirely different, even if Lou Dobbs disagrees).

Furthermore, while, I argue that more people believe climate change is a problem today than 10 years ago, the same people are also skeptical about the veracity of the process.

As the House of Lords Report, Economics of Climate Change concludes: "The Kyoto protocol makes little difference to rates of warming, and has a naive compliance mechanism which can only deter other countries from signing up to subsequent tighter emissions targets. We urge the Government to take a lead in exploring alternative 'architectures' for future protocols, based perhaps on agreements on technology and its diffusion."

Technological solutions seem to be gathering steam, and for good reason, they actually provide benefit to the large current and future emitters of the developing world. G8 Communiqué talked about working with "developing countries to enhance private investment and transfer of technologies, taking into account their own energy needs and priorities."

And into this vein falls the U.S. initiative agreed to last week by Australia, China India and South Korea. If its clauses are adopted it will probably slow the rate of growth of greenhouse gases, by making their countries development, which is after all inevitable, both faster and cleaner. The G8 led by US and UK has been promoting freedom initiatives for other reasons. But there is a bi-product, a positive externality if you will--for evidence shows freer countries produce fewer emissions per unit GDP produced.

But, and I stress the but, the greens are right, clean coal and making fossil fuels use more efficient is certainly not going to be enough to reverse GHG growth.

IPCC exaggerations, poor economic modeling, politicization of scientist selection etc. have played into the hands of those who argue against such Kyoto action. One day a more encompassing style Kyoto may be warranted, but there is no appetite for it today, despite the talk from EU leaders. But I’ll leave my fellow panelists, more expert than I, to deal with more of the specifics of policy.

While the G8 pushed the notion of technology transfer, which has now seen the light of day with the American initiative, they missed an opportunity to push for the prudent expansion of nuclear power (as well as development of other technologies that are truly cost-effective). Nuclear power is probably the only way of not only reversing growth in emissions but of actually reducing them.

Finally G8 pushed off till G8 summit in Japan in 2008 to report back on the technology transfer initiative, tax credits, advantages, businesses and other proposals.

All in all the G8 was pretty successful (it missed opportunities to tackle agricultural subsidies, but that’s always a tough one), it tied debt relief and aid to economic freedom and it made climate policy more realistic--and for that Tony Blair and George Bush deserve credit.

Roger Bate is a resident fellow at AEI.

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