Thursday, 24 July 2008

Keep ecology at the forefront

Canberra Times
Wednesday 2/7/2008 Page: 13

The Kyoto Protocol is broken, but there is another way, George Monbiot says.

Almost everyone seems to agree: governments now face a choice between saving the planet and saving the economy. As recession looms, the political pressure to abandon green policies intensifies.

A report published by Ernst & Young suggests the European Union's puny carbon target will raise energy bills by 20 per cent over the next 12 years. Last week, advisers to British Prime Minister Gordon Brown admitted his renewable energy plans were "on the margins" of what people will tolerate.

But these fears are based on a false assumption: that there is a cheap alternative to a green economy. New Scientist has reported a survey of oil industry experts, which found most of them believe global oil supplies will peak by 2010. If they are right, the game is tip. A report published by the United States department of energy in 2005 argued that unless the world began a crash program of replacements 10 or 20 years before oil peaks, a crisis "unlike any yet faced by modern industrial society" was unavoidable.

If the world is sliding into recession, it's partly because governments believed they could choose between economy and ecology. The price of oil is so high and it hurts so much because there has been no serious effort to reduce our dependency. On Monday, the Intergovernmental Panel on Climate Change chairman Rajendra Pachauri suggested an impending recession could force its to confront the flaws in the global economy. Sadly it seems to have had the opposite effect: a recent Ipsos Mori poll suggests that people are losing interest in climate change. Opportunities for energy populism abound.

Two things are obvious. We need a global system, and the current one, the Kyoto Protocol, is bust. It sets no cap on global carbon pollution, its targets bear no relation to current science and are unenforceable anyway, it contains loopholes and get-out clauses wide enough to sail an oil tanker through. Until recently I supported an alternative system called contraction and convergence. Every country, this system proposes, should end tip with the same quota of carbon dioxide per person. The richest countries must produce much less than they do today; the poorest ones could pollute more.

But, after reading the proofs of a book by the independent thinker Oliver Tickell, to be published next month, I have changed my view. In Kyoto 2: How to Manage the Global Greenhouse, Tickell slaughters my favourite ideas. He shows there is no logical basis for dividing up the right to pollute among nation states. It gives them too much power over this commodity, and there is no guarantee that they would pass the pollution rights on to their citizens, or use the money they raised to green the economy. Carbon rationing, he argues, requires a level of economic literacy that's far from universal in the most advanced economies.

Instead, Tickell proposes setting a global limit for carbon pollution then selling permits to pollute to companies extracting or refining fossil fuels. This has the advantage of regulating a few thousand corporations rather than a few billion citizens. These firms would buy their permits in a global auction, run by a coalition of the world's central banks. There's a reserve price, to ensure that the cost of carbon doesn't fall too low, and a ceiling price to ensure the cost doesn't cripple the global economy.

In this case companies would be borrowing permits from the future. But because the money raised would be invested in renewables, the demand for fossil fuels would tall, so fewer permits would need to be issued in later years. Tickell calculates if the cap were set low enough to ensure the world became carbon neutral by 2050, the total cost of permits would be about $US1 trillion ($A1.04 trillion) a year, or roughly 1.5 per cent of the global economy. The money would be spent on helping the poor to adapt to climate change, paying countries to protect forests and other ecosystems, developing low-carbon farming, promoting energy efficiency and building renewable power plants.

But his figure seems too low. Like many of the world's climate scientists, Tickell proposes the concentration of greenhouse gases should eventually be stabilised at 350 parts per million (carbon dioxide equivalent) in the atmosphere, and his calculations are based on this target. If the price of the carbon permits sold at auction were much higher than Tickell suggests, the extra money could be used for massive tax rebates and social spending, aimed especially at the poor. But could the world afford it? This money doesn't disappear, it gets spent.

Tickell's proposal could represent a classic Keynesian solution to economic crisis. The money the system would cost is used to kick-start a green industrial revolution, a new New Deal not that different from the original one (whose most successful component was Roosevelt's Civilian Conservation Corps, which protected forests and farmland). This would not be the first time that business was rescued by the treasures it most stoutly resists: there's a long history of corporate lobbying against the kind of government spending that eventually saves the corporate economy. For now we have to find a means of saving its from ourselves.