The only certainties about how the world will tackle carbon emissions are that it is going to be very expensive and that initially at least the effort is going to be plagued by muddle and argument.
How big the arguments will be at next month’s Copenhagen climate change meeting were demonstrated by the wrangling that went on at the EU summit last week. While it was agreed that the climate change bill would come in at around $148 billion a year by 2020, no definitive figure for the EU’s contribution toward this vast outlay was decided. It was settled only that the EU would pay its “fair share”.
The money will go in part to developing countries to help them acquire the technology to mitigate their own carbon production but also to defray the rising economic cost of climate change, such as flooding in Bangladesh or drought in East Africa and desertification in sub-Saharan states.
It is not yet clear from where the money will come. On the “polluter pays” principle, major emitters of greenhouse gases must buy carbon credits. In Europe these are currently trading at $20 a ton. However, the consultants McKinseys have estimated the cost of the still-developing technology of carbon capture and storage is going to be between $88 and $132 per ton. There are clearly some big circles to be squared, especially considering technical doubts that there are sufficient depleted hydrocarbon reservoirs in which to store all the carbon that will be captured.
Then there is the little considered issue that the cost of enforced polluter purchase of carbon credits will inevitably be passed on to customers. Thus national treasuries and hovering speculators may become much richer, but the world may not become significantly less polluted.
Grappling with recession, governments are inevitably trying to finesse their environmental spends into economic boosters. But it is not always working. This week it was learned that 80 percent of a planned $22 billion US alternative energy investment has so far gone not to US but overseas firms. Congressional muttering at the “theft” of US jobs overlooks the reality that these alternative energy projects will benefit the US first and foremost. Climate change investment surely has to be seen as purely that.
Any spin-off cut in unemployment is a bonus, not a requirement. Nor it seems China is necessarily now the leading villain of the carbon emission piece. A report from the respected Washington environmental think tank, the World Resources Institute, suggested Friday that Beijing was actually doing more, by certain measures than Washington in the effort to reduce greenhouse gas output. Its research found, for instance, that by the end of next year, the Chinese are on target to achieve a 20 percent reduction in “energy intensity”, which is calculated on the amount of energy used per dollar of GDP.
Clearly come Copenhagen, the different slicing and dicing of performance figures will be displayed in earnest. But will firm agreements really disappear beneath a blizzard of contradictory statistics or can substantial decisions be made?
