In Paris yesterday, a top UN official said that the evidence that the world’s climate was being affected by the burning of fossil fuels and other human activities was now “unequivocal”. According to the Intergovernmental Panel on Climate Change, within this century the environmental impact of human activity on the planet is now “very likely” to cause profound changes in weather patterns and sea levels. There is, it seems, no further cause for doubt that man-made pollution is contributing significantly to the extent and rate of ever-present natural changes in the world’s climatic cycle.
The argument has thus now moved on from whether catastrophic change is a reality to how policy-makers across the globe can find a coordinated way to head off disaster. It is clear that for newly booming economies of India and China, cleaning up their environmental act will inhibit their rapid growth by raising costs steeply. This will inhibit fresh investment, slow economic activity and threaten local, if not a global recession.
It should not be forgotten that in his very first days in office, President George W. Bush trashed the Clinton administration’s support for the Kyoto Treaty because US big business thought that the costs would cripple their competitiveness. If that was the analysis in Washington, how much greater will be the financial and economic impact of environmental cleanup policies in Asia, the Indian Subcontinent and Latin America? And, considering that the US is still the world’s largest producer of carbon dioxide emissions, perhaps the biggest offender should also be the one making the most amends. This isn’t likely: Bush famously quipped about Kyoto that “the American way of life is not up for negotiation.” It’s not clear why America is entitled to be the largest consumer of energy and producer of greenhouse gases, but it’s certain that if the American model of energy consumption spreads, as it appears to be, the global environmental impact could be disastrous. And the first victims of environmental destruction will, as usual, likely be found in underdeveloped countries first.
Globalization has made the world markedly more prosperous. Nevertheless, the extreme competitiveness of international trade that has generally driven down prices means rival businessmen take no prisoners. In such rivalry, it is hard to see how the necessary programs to radically reduce greenhouse gases across the world can be implemented sensibly and successfully. A third way is needed. The United Nations Framework Convention on Climate Change was born at the 1992 Rio de Janeiro Earth Summit. It now sets mandatory carbon gas emission limits via the Kyoto Protocol, to which of course America has not signed up.
However, even if every single country had signed, there is crucially no mechanism to encourage an equitable process of cleaning up the pollution of individual countries. However the challenge seems too important to be left to the “invisible” guiding hand of the free market.
