Smoke and mirrors

Climate change or hunger, rich countries are reneging on their promises. At Gleneagles, the G8 had promised to double the aid to Africa, the poorest continent. But this has not materialised. Darryl D’Monte writes.

Pronouncements on climate change policies by multilateral organisations and industrial countries at the recent Delhi Summit on Sustainable Development will prove far from reassuring for emerging economies. UN Secretary-General Ban Ki-Moon told an interviewer that climate change was “by far the most urgent and serious existential threat for all humanity... the whole international community must act together... Therefore I would sincerely appeal to the Indian government to really engage in in-depth negotiations. This year, we have only ten months left [before the UN renegotiates climate change policies at Copenhagen in December].”

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In a video conference from the US, Senator John Kerry, who now chairs the Foreign Relations Committee and guides the US plan to combat climate change, said the US Congress would not ratify any greenhouse gas emission reduction target unless economies like India and China agreed to cap their own emissions at some level, at some point in the future. India’s National Action Plan on Climate Change, he added, is “notably lacking in any fixed commitments and time-lines” on capping its greenhouse gas emissions.

While everybody is watching how the Obama administration re-engages with the world on the global environmental crisis, the European Commission has recently demanded that economies like India and China should be prescribed mandatory targets. It specifies that their emissions should be lowered by 15-30 per cent below business-as-usual levels by 2020. China overtook the US to become the world’s largest emitter in 2007; India is fourth, and may overtake Russia by 2015 as the third. However, per capita emissions in these developing countries are far lower — India’s being a tonne of carbon dioxide per person per year, as against 20 tonnes per American.

The EU has fired another broadside by expecting rapidly developing countries to fund their own domestic mitigation policies and was prepared to commit 30 billion euros (Rs 1.9 trillion) per year to help poorer countries only after 2020. This is condemnable, considering that industrial countries have, over 200 years, built up global warming gases in the atmosphere, which is now impacting the poorest in all developing countries. There is an exact parallel here with the global financial crisis that the US has caused, and is prepared to spend upwards of $800 billion to mitigate at home, but, as Jeffrey Sachs of Columbia University observed in Delhi, is not sparing a penny for the rest of the world.

This is not the end of the story. The EU has also recommended that “advanced developing countries” should no longer be entitled to seek recourse in the Clean Development Mechanism, which will be renegotiated in Copenhagen. Under this Kyoto Protocol provision, industrial countries can pay developing countries to reduce carbon emissions at a lower price than the purchasers would incur domestically. India has the largest number of such projects, while China has the biggest in value. It also wants these countries to adopt emission curbs on “key emitting sectors” — read industries like steel, cement and aluminium — where they obviously have a competitive advantage.

In Delhi, several speakers called for market-based instruments and technological innovation to cope with the climate crisis. They forget that Nicholas Stern, who submitted his path-breaking report on the economics of climate change three years ago, characterised the phenomenon as the biggest market failure in history. One cited the World Bank’s experience in promoting the private sector to produce energy more efficiently, forgetting that the Bank has increased its lending for fossil fuel-based projects in developing countries ten-fold in relation to renewable energy projects.

The one market instrument that had few takers in Delhi is the carbon tax. McKinsey has calculated that at 60 euros a tonne of carbon dioxide, this would yield sufficient revenues to meet the costs of mitigation, just 1-2 per cent of world GDP. Nobel-winning economist Joseph Stiglitz is working on such a tax. As Sachs pointed out, if the rich countries didn’t agree to this tax, “everything else is mere words”. However, there is a catch here too. Countries will retain this revenue for domestic use, although the damage caused by emissions is global.

Speakers referred to a Green Deal or a new Marshall Plan for the massive transfer of resources for developing countries to tackle climate change. Development, someone said in Delhi, was the best form of adaptation.

However, rich countries are reneging on their aid commitments. At Gleneagles, the G8 had promised to double the aid to Africa, the poorest continent. But this has not materialised. Last June, the $12 billion promised in Rome to combat world hunger proved to be a mere photo-op. On the contrary, countries like France and Italy have reduced aid. Only Scandinavian countries have proved exemplary in meeting the target of 0.7 of GDP as aid, with Norway reaching 1 per cent. The US provides 0.16 per cent.

Darryl D’Monte is Chairperson, Forum of Environmental Journalists of India (FEJI)