Lobbies of oil and coal industries, automobile companies and electric utilities, backed by the governments of developed countries, form such a powerful force that the struggle to defeat them on the crucial issue of reducing the emission of greenhouse gases is proving tough, but it has made some headway.
IT was with a lot of expectation from environmental groups that the landmark COP3 (Third Conference of Parties) took place in Kyoto in 1997, though the negotiations preceding it did not give much room for optimism (Frontline, December 26, 1997 and January 9, 1998). Small island-nations offered a 20 per cent reduction of emission of greenhouse gases (GHGs) from the 1990 levels by the year 2005, the European nations, to their credit, suggested a 15 per cent reduction by 2010, and the Japanese a 5 per cent reduction. The United States initially did not offer any reduction at all; instead it wanted its emission to be pegged at the 1990 levels by 2010.
The industry lobbies, particularly those of the oil, coal and automobile companies, went to town casting doubts on the science behind global warming projections and exaggerating the economic implications of curbing the use of fossil fuels. In the months before Kyoto, one industry association spent $13 million on a series of television advertisements that alarmed the American public about increased prices and economic collapse. A representative of this association, who was present at Kyoto as part of a huge industry lobby, said with satisfaction: "We think we have raised enough questions among the American public to prevent any numbers, targets or timetables to achieve reductions in gas emissions being agreed here... What we are doing, and we think successfully, is buying time for our industries by holding up these talks."
In a move to stiffen the American negotiating stance, the U.S. Senate passed a unanimous resolution in August 1997 that it would not accept any international agreement that does not set emission targets for developing countries - a position that was patently against the United Nations Framework Convention on Climate Change (UNFCCC), 1992, ratified by the U.S. - or that would harm the U.S. economy.
In the event, and predictably, Kyoto came up with a compromise called the Kyoto Protocol, which, maligned by George Bush Senior, was loaded against the environment. Each industrialised country was given a binding target to reduce emissions below the 1990 levels between 2008 and 2012. The average for all countries worked out to 5.2 per cent, the target for the U.S. being 7 per cent. Even this target, described as too little and too late by environmental groups, was wobbly because of a major loophole called "flexibility mechanisms" - a last- minute concession to bring the recalcitrant U.S. on board. The protocol could be brought into force only if it is ratified by at least 55 parties to the Convention, including industrialised countries, which accounted for at least 55 per cent of the total emission of GHGs in 1990. (Among the industrialised countries only Romania has ratified the Protocol so far.)
'Flexibility' meant that the industrialised countries could trade in emissions - that is, one country can assign its emission entitlement to another - and implement emission reduction projects in other countries, including developing countries, to claim these against their own emission targets. Another loophole was the allowing of 'sinks' - forests that absorb carbon dioxide from the atmosphere - to count against the emission reduction targets. The European Union, along with environmentalists, opposed this concept on the grounds that its real net effectiveness was not clearly established and that forests could be destroyed, resulting in the release of stored greenhouse gases. The Kyoto conference did not lay down rules to govern the mechanisms of 'flexibility' and 'sinks' and left these to be taken up at later meetings. COP4 in Buenos Aires set a deadline for COP6 at The Hague in November 2000 to finalise all the rules. But this crucial meet ended in failure, as the U.S., supported by Canada, Japan, Australia, Russia and New Zealand, insisted on whittling down the Kyoto provisions.
The U.S.' position can be understood from an estimate made by Janet L. Yellen, Chairperson of President Bill Clinton's Council of Economic Advisors. According to him, complying with the Kyoto Protocol would cost the country $125 for every tonne of GHG reduced and the cost would be only an eighth of that if tradable permits are allowed. She planned to achieve only one-tenth of the needed emission reduction through domestic action and buy the rest as credits, especially from developing countries.
Hundreds of industry lobbyists were tripping over one another in the conference corridors at The Hague; the oil major Shell alone fielded 40 lobbyists. Jan Pronk, the Dutch Minister for Environment who chaired the session, declared the conference inconclusive. After a round of informal consultations, it re-convened in Bonn in July 2001 but not before the new American President, George W. Bush, took his country out of the Kyoto process, claiming that it was "fatally flawed" in that it exempted major Third World countries such as China and India from emission targets. He said Kyoto would harm the American economy and questioned the science behind the global warming projections, much as the oil lobby was doing.
Bush's retraction came in handy to countries such as Japan and Australia, which started making noises that without U.S. participation Kyoto was as good as dead and that they too could reconsider their stand. But the strong European reaction to Bush, the general outcry from green movements around the world and the cold fact that all of them had to present their cases and credentials before the Earth Summit in Johannesburg in August 2002 prompted them to look at the reality - climate change is for real, time is running out for the earth, only cooperative international action can avert disaster and complex international agreements like Kyoto take years to conclude. They also realised that in this situation it made little sense to throw it all away unless, of course, you were so short-term-oriented and so arrogant as to look all other countries in the eye and say, "I do not care for the rest of you."
Member-countries of the Organi-sation of Economic Cooperation and Development (OECD) except the U.S. could not, thus, allow Bonn to fail; in fact, it was in nobody's interest, including those of developing countries and of the small island-states, to let the talks collapse. But with the business lobby chipping away at the European resolve too, the stage was set for a compromise worse than the "indecent proposal" - as an environmental group called it - made by Pronk earlier to break the deadlock. With such a grand compromise, Bonn 'succeeded' in saving the Kyoto Protocol.
Bonn concluded that flexibility mechanisms could be used to meet the emission targets without any quantitative restriction. The 50 per cent cap advocated earlier as a compromise went out of the window; instead a fond hope that domestic action would constitute "a significant element" of the effort by developed countries finds a place in the Bonn agreement, much like the earlier 'aim' of the UNFCCC. The 'sinks' were in, with some qualifications. Urgency was shown to start projects, including afforestation, in developing countries under what is known as the Clean Development Mechanism (CDM) so that the developed countries could claim credit against their targets. The suggestion to impose reparations for damage caused to the climate owing to the failure to meet the targeted reductions was rejected. Instead, a penalty of doubtful value was incorporated. The penalty was that the shortfall should be made up with 30 per cent additional burden during the subsequent target period. More important, the "legally binding" character of the agreement was jettisoned in favour of a "politically binding" language on the insistence of Japan. The legal steps to make these agreements actionable and facilitate their ratification by countries were to be decided at COP7 in Marrakesh in Morocco in November 2001.
At COP7, what was expected to be an easy ride of legal drafting proved to be another exercise of hard bargaining on issues all over again, with Russia getting its sink allowance doubled and Japan getting the compliance regime watered down, among other instances of backtracking. Yet, Marrakesh - described by the Greenpeace movement as "a hard-won battle for a token outcome" - represents the most powerful and binding environmental agreement so far among nations and has shown that the world is determined to move on with or without the U.S.
At the end of COP7 it was expected that a sufficient number of industrialised countries would ratify the Kyoto Protocol to bring it into force before the world community meets in Johannesburg in August 2002 for the World Summit on Sustainable Development, also known as Rio+10. The numbers are a little dicey, as the U.S. accounts for 36 per cent of the 45 per cent-plus industrial country emissions needed to scuttle the Protocol. But with Japan (8.5 per cent) tilting the balance in favour of Kyoto, the Protocol appears to be very much in business though its backsliding has not stopped. Coal-exporting Australia has refused to ratify the protocol, citing the U.S. example. While Canada dithers, Russia has said that it will not ratify the Protocol until the end of this year. However, Japan and the European Union, ratified it in June 2002, sending a big cheer around the world. So, Kyoto cannot come into force till next year, if at all. (By mid-June, 21 of the 34 industrialised countries accounting for 36 per cent of the emissions in 1990, had ratified Kyoto; if Poland and Russia ratify it, the 55 per cent mark will be crossed.)
The U.S.' stance on Kyoto has triggered strong reactions from environmental groups, non-committed public and even from sections of the business community in the U.S. Said a Boston Globe commentator: "The environment has become the issue that most nakedly fixes the arrogance of the United States toward the rest of the world, an arrogance not seen since Vietnam.... Bush does speak for us because we are now the world's most self-absorbed people. Our desires have become a demand on global resources that too much echoes the imperialism that once sucked developing continents dry of people and raw materials."
It is widely seen that Bush and Vice-President Dick Cheney, both with backgrounds as Chief Executive Officers of oil companies, are paying back for the millions of dollars they had received as campaign funds from the fuel companies. Bush even reneged on a campaign promise that he would set legal limits for CO2 emissions by power plants, saying he had made a mistake in calling CO2 a pollutant! His energy plan calls for the creation of 1,500 more power stations and natural gas pipeline of a total length of 68,000 km in the next 20 years. He allocated $150million for coal research and in the same breath cut down 37 per cent of the funds allotted for renewable energy research. The funds for research on renewable energy have always been sought to be pared down by the fossil fuel industry - from a high level of $1,200 million under President Jimmy Carter while the country was reeling under the oil price shock, it declined dramatically under Ronald Reagan and Bush Sr., going down to $200 million under the latter, before it climbed again to $500 million under Clinton. The present President whittled it down further.
In February 2002, Bush unveiled his long-promised climate action programme, which does not make any commitment but sets a national target for year 2012; that is, to bring down by 18 per cent the amount of GHG gases the country produces per unit of Gross Domestic Product (GDP) through voluntary action. The Worldwatch Institute calculates that this would take the U.S. emissions in 2010 to a level 35 per cent higher than the Kyoto target.
Bush's claim that there is not enough evidence of human-induced global warming was repudiated last year by a National Academy of Sciences study that he had commissioned. More recently, the Environmental Protection Agency, a U.S. government department, submitted to the U.N. a report, which categorically acknowledged such human influence on the environment. Bush shrugged it off as something "put out by the bureaucracy".
His other claim that compliance with Kyoto would severely damage the U.S. economy has been nailed by a leading climate scientist and a Swedish energy economist in their forthcoming article in the journal Ecological Economics. Using the IPCC estimate of the cost of stabilising GHG gases at twice the pre-industrial levels - $1 trillion to $8 trillion - and the accepted 2 per cent annual growth rate of world economy, they show that people of this earth would be five times richer by 2100 if no action is taken to mitigate climate change and that if the full cost is incurred they will reach that stage just two years later, in 2102. In fact, full compliance with Kyoto would only mean that the industrialised counties would become 20 per cent richer in July 2010, rather than in January 2010.
But then it would be wrong to consider Bush as some kind of an anachronism, an extremist out of sync with his nation, notwithstanding a recent New York Times/CBS News opinion poll that showed 57 per cent of Americans as willing to pay higher prices for electricity and petrol in order to protect the environment. In 1990 itself, the other George Bush reacted to a similar situation by roundly declaring that no international treaty would be allowed to interfere with the "American way of life". Guided by American business interests, Clinton's objective had all along been to avoid domestic emission reduction as much as possible and push the flexible mechanisms to occupy center-stage in all international discussions. In reaching this objective, he was ably supported by Al Gore, who has authored a book on global warming and who led the U.S. team at Kyoto.
The oil and coal industry, the automobile companies and the electric utilities in the world form such a powerful force that the struggle to defeat them on this crucial environmental issue is not going to be easy; but it is making some headway. Conscious of the rising public sentiment, companies such as British Petroleum, Texaco and Ford have adopted a nuanced stand so as to appear to be on the right side of the issue; they admit that global warming is happening and make some investment in the promotion of renewable energy technologies, even if very small.
But time is running out. Making a presentation to the Bonn meet in July 2001, Dr. Bert Metz, co-chairman of the mitigation working group of the Intergovernmental Panel on Climate Change (IPCC), pointed out that the world has at most five to 10 years to start serious action on containing GHG emission. If we take action now, the emissions could peak in 10 to 15 years and then keep declining. This could stabilise the CO2 level in the atmosphere at 450 PPM (parts per million). He said: "Even 450 is not safe: lots of bad things are happening to the climate at this level. But if we do not take action it will go higher and higher, up to 1,000 PPM in some estimates. That would be very very dangerous for the human race."
SERIOUS action was not what Kyoto was about. It was to have been just a beginning. Bonn and Marrakesh have made it an even weaker beginning; the real setback is that the industrialised countries have shown that they are not yet ready to address the basic issue of changing their pattern of growth. And this is not because of lack of technological choices. Renewable energy technologies and the one using hydrogen as automobile fuel need only a little more research to become economical.
The costs of solar energy and wind energy have dropped by 94-98 per cent over the past 20 years and are now close to market profitability. And these resources are not meagre. Solar cells covering just 1/40 of the Sahara desert could supply the energy needs of the entire earth. Two Stanford University professors have estimated that building 225,000 wind generators will eliminate the need for nearly two-thirds of coal-generated electricity in the U.S. The wind electricity would cost 3-4 cents (Rs.1.50 to Rs.2) a kilowatt-hour, the same as coal electricity; but if one factors in the indirect health and environmental costs, the price of coal electricity is around 5.5 to 8.3 cents per kilowatt-hour. But, for this to happen, the government must be willing to offer the manufacturers of wind turbines the same kind of investment opportunities and tax incentives as given to the more established coal, gas and oil industries.
Getting away from a carbon economy is not merely eco-sustaining but makes for sound economic policy. In an article in Fortune, Harvard Professor Gregory Mankiw points out that a 10 per cent reduction in U.S. income taxes coupled with an increase in the gasoline tax hike by half a dollar a gallon would lead to more rapid economic growth in the U.S. He says: "This may be the closest thing to a free lunch that economics has to offer." But not to the oil industry.
There are also other technologies - such as pumping CO2 into disused oil wells and sealing them or storing the gas deep under the sea. Predictably, these are the technologies - costly, but non-threatening to the fossil fuel industry - that President Bush is now backing in an attempt to look good in front of a world community that has snubbed him on his Kyoto stand. Several scientists have warned against interfering with nature in such a manner without a full knowledge of possible consequences.
Developing countries have been shortchanged in all this jockeying for positions. The IPCC has established that the developing countries are twice as vulnerable as the developed world from an atmospheric warming caused by the latter. (In 1999, the G-7 nations - the U.S., Canada, Germany, the U.K., Japan, Italy and France - with only 12 per cent of the world population accounted for 42 per cent of the total carbon emissions in the world, at a per capita level more than five times that of the remaining 88 per cent of the world population.) But in the COP6 discussions, as in others before, their voice was feeble. Dr. Klaus Toepfer, Director of the United Nations Environment Programme, said that developing countries were not being heard in Bonn as they needed to be: "People in the rich world should realise it is the poor who bear the costs of their lifestyle. Making this connection is a moral necessity." This is partly because of lack of unity in the developing world with some countries falling for the crumbs offered by the CDM, as structured at present, and some others subjecting themselves to Western pressures. But even large countries such as India and China have not done enough to bring the issue of equity to the forefront in the global arena. They are getting dragged into a situation that would not merely maintain the present iniquitous world order, but would further it by impeding the growth of the poorer nations.
The focus now is on trading emissions and claiming credits, not on curbing the emissions, which is what is needed for real environmental safety. In participating in such an arrangement, the South risks selling away to the North the credit for all its low-cost efficiency actions, to be faced with high-cost actions in the future when it has to accept binding targets. Besides, this would create 'efficient' carbon-based projects that would give the North credits at a lower cost compared to zero carbon technologies such as solar energy; it is the large investment made in such carbon technologies that hangs like a millstone round the necks of developed countries now. It makes no sense to go the same way when the future calls for renewables.
A more insidious development is that the Kyoto targets for the countries in the North, which are based on their current consumption levels, are being turned into 'entitlements' with the obvious implication that the 'entitlements' of the countries in the South, when they are established, will be on the same principle of their current, depressed, levels, maybe with some small adjustments. It is obvious that the earth can take only so much more CO2 into the atmosphere for safety, and this limit would largely be used up by the industrialised country 'entitlements', leaving very little to the developing countries when it becomes their turn to take on binding commitments.
C.E. Karunakaran is an engineer who has studied and worked on issues relating to carbon credit trading.
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