Commentary

A Climate Summit That Matters Little

You might think from the media coverage that the Copenhagen summit on climate change is epochal. Wrong. Copenhagen hardly matters. If it doesn’t produce an agreement, it clearly won’t matter. But even if it yields an agreement, that will matter very little.

Why? Because reducing carbon emissions by 80% from the 1990 levels — the target for 2050 for rich countries — depends on technological breakthroughs, not political pledges at Copenhagen. Without technological breakthroughs, reducing carbon emissions by 80% will erode living standards in the countries concerned. No government will deliberately engineer economic distress for the sake of climate change, no matter what it signs at Copenhagen. Through history, treaties have been junked if they become politically inconvenient.

No government will deliberately engineer economic distress for the sake of climate change, no matter what it signs at Copenhagen.”

In 1947, India signed treaties guaranteeing 500-odd princes privy purses and tax exemption in perpetuity, in return for their accession to India. Yet, when Indira Gandhi felt it politically convenient, she abolished the privy purses and tax privileges. International law allows sovereign governments to scrap any prior treaty.

In the Kyoto treaty on climate change, 37 rich countries pledged to reduce their carbon emissions to 5% below their 1990 level. But most actually increased their emissions. These very treaty-breakers now propose another treaty!

The US signed an anti-ballistic missile treaty with the USSR during the Cold War. But subsequently the US scrapped the treaty, with impunity. The Maastricht Treaty, setting up the European Union, mandated a fiscal deficit ceiling of 3% of GDP for member states. But several members, including Germany and France, have been running deficits far higher than this, with impunity. When political and economic conditions change, treaties hardly matter.

Now, research may yield technological breakthroughs — or steady, major improvements — that curb carbon emissions at modest cost, or even with a saving of costs. Aerosol cans once used CFCs. When these were phased out by the Montreal protocol, companies found it was actually cheaper to use natural gas in place of CFCs.

While governments can try to promote technological change, they cannot guarantee it. After the 1973 oil crisis, the OECD countries spent billions to develop alternate fuels (synthetic crude, shale oil). They also financed projects for solar, wind, wave and ocean thermal energy. None of these technologies proved cost-effective.

Meanwhile, thousands of innovations by individual companies reduced the energy-intensity of every conceivable appliance and practice. This halved the energy-intensity of GDP in the US and reduced its oil imports, breaking the power of OPEC in 1986. This was a typical technological surprise, not the result of governmental planning.

Something similar may happen in the case of carbon emissions. Government subsidies, carbon taxes, cap-and-trade systems, and research projects will aim to create conditions that encourage more research. These will surely yield new technologies and improvements. But these may or may not reduce emissions by 80%. With luck, a breakthrough may come in five years. Without luck, no breakthrough at all may occur. We simply do not know. That is why target dates set by governments are meaningless.

If new technologies cannot reduce emissions by 80% save at a huge cost that causes economic distress, governments will abandon emission targets. They will not deliberately create deep recessions just to curb emissions.

Will this lead to climate disaster? Maybe and maybe not. Scientific knowledge of the weather is very limited, and Intergovernmental Panel on Climate Change (IPCC) projections are just intelligent guesstimates. IPCC scientists may be the best in the world, yet they cannot predict the weather more than five days ahead.

Can they predict the next drought in India? No. The next El Niño? No. The number of hurricanes in the Caribbean next year? No. So, can they accurately predict the weather 100 years hence? Surely not. When we know very little about a problem, we tend to worry endlessly about worst-case scenarios. That does not make the worst case certain, or even probable.

Despite climate uncertainties, it makes sense to mitigate emissions as insurance against a disaster that may never happen. Treaties are often signed to provide mutual insurance against political and economic risks. But if the insurance premium becomes costly enough to threaten economic distress, governments will abandon the treaties (à la Maastricht). No government will create a recession today to avoid a future disaster that may not happen anyway.

The lesson for Indian strategy at Copenhagen is clear. India should talk tough and not worry about being called a deal-breaker. When a deal’s value is so uncertain, it matters little whether it’s broken or not. India should keep its commitments light, and be ready to jump ship if others do. Never assume that others will actually implement climate pledges.

Swaminathan S. Anklesaria Aiyar is a research fellow at the Cato Institute’s Center for Global Liberty and Prosperity.