Many countries have committed themselves to making reductions in their emissions of carbon dioxide and other so-called greenhouse gases, initially under the terms of the Kyoto protocol. Since the stated aim of the international effort on climate change mitigation is to limit the total global emissions of gases which can raise average temperatures – the likely extent of which is still the subject of intense argument – national figures are only parts of the overall jigsaw puzzle and it is the big picture which counts.
One of the criticisms of the current situation is that policies in Europe push up energy prices for business, which results in accelerated loss of international competitiveness and an effective export of jobs to lower-cost developing countries not subject to the same policies. Not just that, but growth in those countries is fuelled to a large extent by producing consumer goods which are then exported to Europe and other developed economies.
The net effect of such policies, therefore, is to decrease the emissions from EU Member States and countries with similar policies, while increasing those from countries producing goods for export. Some commentators argue that the correct measure of emissions should be based on consumption rather than production. On this basis, Europe is making little or no progress on emissions reduction.
The UK House of Commons Select Committee on Energy and Climate Change issued a report of its inquiry into the issue in 2012 (Consumption-Based Emissions Reporting). In the accompanying press release (Government should be open about ‘outsourced emission’ according to Committee), the Committee contrasts a reported 20% reduction in CO2 emissions from 1990 to 2009 (figures from DECC) with a 20% increase when estimated on a consumption basis (Defra figures).
Since the carbon dioxide emissions prevented in Europe by a range of costly measures, including highly subsidised renewable energy projects, are in effect merely moved elsewhere, some lobbyists have suggested imposing tariffs on imports of ‘high-carbon’ goods. The intention would be to force competing economies to bring down their own emissions. Although it does not spell out the mechanism for achieving this, the Energy and Climate Change Select Committee also says “Acknowledging that UK consumption is driving up territorial emissions in other countries could increase the UK's leverage over those emissions and help to secure a binding global agreement on carbon cuts.”
However, such a policy would be a disaster. Any attempt to use trade sanctions would break WTO agreements and fly in the face of the move towards freer markets, but even other policy tools would have a significant impact on the economies of lower-cost manufacturing countries. As an example, take Malaysia or Thailand, often used to assemble electronic and other consumer goods for western markets. By our fortunate industrialised world standards, employees may be poorly paid and work long hours, but by local standards they will be the lucky ones.
Developing economies are still much more dependent on agriculture than is the industrialised world, and much of that enables families to feed themselves but does little to help them lift themselves out of poverty. Factory jobs are sought-after and a big contributor to improved standards of living. Taxing their exports in the name of climate control would compromise the ability of poor people to improve their lives.
The consequences when we consider China could be even more serious. The nominally-Communist government has retained power with little serious dissent by allowing the economy to develop using a distinctively Chinese model of capitalism. The high rate of growth has enabled an autocracy to persist, but the regime’s grip on power would be jeopardised if trade barriers slowed the trend.
Already, the benefits of a growing economy are rather unevenly spread across society, but if the more privileged city-dwellers began to feel the pinch, the Party would find itself in a difficult position. While Malaysia or Thailand may complain, the world’s most populous country would surely raise the stakes. China has already flexed its muscles in a land dispute with Japan, but the consequences of a trade war could be much more serious.
The same would apply in India, set to overtake China in terms of population before 2030. The country’s growth rate has lagged well behind that of China and it will rely increasingly on manufacturing industry to satisfy the aspirations of its burgeoning population. While a democracy, its government is equally unlikely to react passively to trade restrictions.
There has been little in the news on this issue in recent months, which might mean that the folly of deliberately impeding growth in developing economies has been realised. But other attempts to globalise emissions policy are still with us. In particular, the EU is still trying to bring aviation and shipping into the scope of emissions reduction policy.
The European Commission had originally intended to bring flights into the Emissions Trading System, levying charges on all airlines flying through EU airspace, based on the entire length of the journey. After strong opposition from China, India, Russia and the USA, this levy was suspended and in principle now applies only to flights wholly within European airspace. However, some non-European airlines are still refusing to pay, which has fed a political row.
The latest chapter is a vote by the European Parliament Environment Committee, which is strongly in favour of applying the Emissions Trading System to all flights in EU airspace, wherever they start and finish (MEPs defy EU states on aviation emissions law). This is seen as a test of EU sovereignty and the credibility of its policy, so there is a lot at stake.
Overall, these attempts to broaden the scope of what we mean by national greenhouse gas emissions is helpful if only because it emphasises the extent to which this is a global issue. In an ideal world, it would help to convince politicians that attempts to slash global emissions over the next few decades are doomed to failure with current energy technologies. Forget the wind turbines and solar panels, let alone tidal and wave power. If we truly want to re-engineer our energy generation and use, much more effort should be going into developing new types of generation and storage, without picking winners.
Martin Livermore
The Scientific Alliance
St John’s Innovation Centre
Cowley Road
Cambridge CB4 0WS