Thursday, June 25, 2009

Everyone must do their bit

I HAVE described the mitigation of human-induced climate change as a diabolical policy problem. The most difficult of its challenging dimensions is that there can be no effective mitigation without all countries of substantial size making major contributions to the solution. And yet each country has an interest from a narrow national perspective in doing as little as possible, so long as its own free riding does not undermine the efforts of others.

The apparent national benefits from free riding make climate change mitigation a more difficult subject of international negotiations than trade or arms control. With trade, unilateral reduction of protection will make a country richer whatever other countries do. And yet it is hard enough to achieve agreement on mutual reduction of protection. With arms control, at least unilateral reduction of defence expenditure has a national benefit for the budget and economic growth.

The climate change problem requires the co-operation of the whole world. It is not amenable to a local solution. Therefore a solution will not emerge country by country as each country becomes rich. The problem is made even more difficult because the international community agreed at the beginning of the UN Framework Convention on Climate Change in the early 1990s that the developed countries would make commitments to and implement major actions to reduce their emissions before developing countries would be expected to take these steps. Further, developed countries would be expected to meet the incremental costs of mitigation in developing countries.

There was some justice in this approach, since the countries that are now developed had been responsible for the increase in concentrations of greenhouse gases in the atmosphere that had taken the world to the threshold of dangerous climate change.

In 2009, the constraints are much tighter. In the early 21st century, emissions have been growing much more rapidly than before and than previously anticipated. We have squandered the time and headroom we had in the early 1990s. Developing countries now account for about 40 per cent of emissions. In the absence of mitigation, they would be likely to account for about 90 per cent of the growth in emissions over the crucial two decades ahead.

There will be no solution if those who want effective action rely on slogans rather than analysis of the international situation. There will be no effective mitigation from unilateral action in single countries, however good that may feel to some people in those countries. Indeed, taking a step too far on a unilateral basis may set back the global mitigation effort.

It is much more costly for one country to achieve a specified degree of mitigation alone, than it would be to achieve the same level of mitigation within a global agreement. The high costs of achieving high mitigation targets unilaterally may demonstrate to others the difficulty rather than the feasibility of action.

It seems unfair that developing countries must accept major commitments to mitigation when the countries that grew rich before them were not so constrained. Unfair or not, there will be no effective global mitigation without all substantial countries reducing emissions significantly. The differentiated treatment in favour of developing countries, of which the UN framework agreements speak, must take the form of obligations that are consistent with continued strong economic growth.

The world's challenge is not to reduce emissions by reducing material living standards. There is no chance at all of Australia or any other country committing itself to mitigation on those terms. The challenge is to break the nexus that has always been present in the past between growth in living standards, and the growth in greenhouse gas emissions. Fortunately, the economics says that it is possible to reconcile reduction in emissions with continued economic growth in the world as a whole and in each of its parts.

There is a deal to be done, within what is politically feasible in the major countries. China, for example, has committed itself domestically to do as much and more than the Garnaut review suggested would be required of it by 2020, within an agreement directed at concentrations of 450 parts per million.

But China is a long way from committing internationally to deliver that outcome. Australia's proportionate contribution to an effective global agreement to achieve an ambitious (450ppm) international agreement would require us to commit to reduce emissions by 25 per cent from 2000 levels by 2020, and by 90 per cent by 2050.

This would be difficult. But it could be done consistently with continued growth in living standards. Australia would need to increase considerably its public expenditure on research, development and commercialisation of low-emissions technologies. It would also need to raise significantly its development assistance for climate change adaptation, particularly to our neighbouring countries in South-East Asia and the South-West Pacific.

The numbers are not plucked out of the air. They are derived from the idea that entitlements should converge on equal per capita allocations by 2050. There has been much international discussion of this basis for allocating entitlements. World leaders must discuss alternative ways of dividing up a global emissions budget that add up to avoidance of high risks of dangerous climate change.

A global agreement that avoids high risks of dangerous climate change in December in Copenhagen this year won't be reached in one step. There is, however, a chance that a set of principles is agreed in Copenhagen that is the basis of an effective global agreement that significantly reduces the risk of dangerous climate change. That would need to be followed by detailed and highly technical discussions of numbers that add up to a solution.

Resolving these issues remains the most difficult international as well as national policy problem that we have ever faced. But in June 2009, with Australia and the US having decided to play for the international team rather than against, there is now a chance.

Professor Ross Garnaut is a vice-chancellor's fellow at Melbourne University. This is an edited version of his speech yesterday to the United Nation's Association of Australia Model UN Conference on climate change

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