3.19.2009

The Copenhagen Climate Fairness Problem

Here's my comment/response to a blog post by Devin Stewart where he relays the climate change fairness concerns of a Toyota exec:

This Toyota exec's frankness points out some of the key problems with climate negotiations, specifically how difficult it is to accomplish development and reductions simultaneously. First of all, Japan is unlikely to meet its own Kyoto targets. In fact, their emissions have increased over 1990 levels. So either they're not trying hard enough, or the Kyoto mechanism is simply useless.

Second, it's a little ironic for an automobile executive to be talking about the unfairness of emissions targets and reduction mechanisms, given the enormous contribution of his industry to the problem. I would be curious, though, to see Toyota-specific statistics on whether the company has reduced its own emissions.

Third, I'm highly skeptical of the ability or willingness of a business association like Keidanren to make much of a dent through voluntary cajoling of its members. Though, to be fair, they do have both a charter for ethical behavior and a charter on the global environment. Does this go deeper than greenwash? Tough to say.

Fourth, if Japan is truly a "nation of seafaring traders," then it's likely to resist appropriate taxation of shipping fuel. As Elisabeth Rosenthal reported in the IHT last year, "Under longstanding trade agreements, fuel for international freight carried by sea and air is not taxed." This raises the specter of whether green trade tariffs will be necessary, especially given the recent rumblings in both Chinese and American political circles over trade, consumerism, protectionism, and who should pay for carbon.

Fifth, the Toyota exec is onto something with the concept of harmonized standards. From a trade perspective, cars should meet minimal common standards that would give them access to all similar markets. But this approach might lead to the lowest common denominator dominating.

Sixth, the Japanese culture of thrift often takes some of the blame for the country's economic stagnation, once again highlighting the perils and paradoxes of trying to grow an economy, be ecological, and be generous internationally.

Fundamentally, though, the Toyota exec's gripe about Mittal steel points to a major hiccup in climate negotiations: the clash between internal inequality and international inequality. Because countries are the negotiating bodies, the internal differences of commercial power and social development are smoothed out, and the negotiations become a competition for reaping the rewards of development and avoiding the bill for cleanup.

To solve this in a transparent way, perhaps the responsibility question can be generalized into the following categories:

Historical contribution to emissions (justice)
Current contribution to emissions (severity)
Per capita emissions (development)
Capacity to respond (efficiency)
Domestic inequality (fairness)
Full participation (common sense)

Each of these factors could be weighted in calculations to determine a country's level of cuts, with an inequality measure such as the GINI coefficient used to mediate the inequality problem. The greater a country's internal inequality, the deeper their cuts must be. But all countries would be required to cut. This is a global problem; We're all Annex I countries now. Time is running out.

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After reviewing my list I might also add "Emissions trend" as a factor, representing intention. Countries with emissions that are declining or whose growth is slowing would be rewarded with less stringent targets on a sliding scale.

Adapting to climate change is going to hurt, one way or another. But Lance Armstrong never won any races by taking the easy route on training day. Setting strong targets is necessary to make even the most minimal progress.

The other key thing that the Toyota guy points out is a distaste for carbon as a commodity. It's "subprime" as he says. My sense is that he's correct, but only in the short term because the global market for carbon is in its infancy. It's not a global standard. Were carbon neutrality required everywhere, then adding carbon to a corporate or national balance sheet would make perfect sense. Is that the way forward: Carbon Zero Growth?

One downside of trading carbon is that it may be just another way to distance ourselves from the true cost. Behavioral economist Dan Ariely shows that using an intermediate token that can be redeemed for cash tends to increase cheating.

1 comment:

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