Challenges Facing the Climate Change Conference

As delegates gather for the U.N. Climate Change Conference in Bali, Indonesia this week, world leaders will try to devise a comprehensive agreement on reducing greenhouse gas emissions. The conference comes at a critical moment in the debate over climate change and how to move forward post-Kyoto. Brookings scholar Warwick McKibbin says the issues are complex with both environmental and economic considerations.

Transcript

“I don’t think too much will happen at Bali. It will be part of a process that we’ve been moving towards for many years. This is held every year, this particular talk, and between times there are additional talks across the different country groupings. The real action will be probably 2009 in Copenhagen where we’re getting close to having to have a decision to what happens after 2012 when Kyoto expires.
 
“Well, it’s quite a complex set of issues, the developing countries do not have any binding commitments; the industrial countries who ratified Kyoto do have binding commitments. Most of those countries that took on targets haven’t achieved them. The U.S. and Australia haven’t yet ratified the Kyoto Protocol, so you might argue that they’re not part of the agreement process, at the moment. But the real problem is the Kyoto Protocol is not really going to achieve what’s needed and that’s why we haven’t got a consensus on how to move forward.

“The basic flaw in the Kyoto protocol is it’s all about targets and time tables independently of the cost. The reality of the situation is countries will only take action if they’re willing to bear a certain amount of cost relative to the benefits. If you don’t know what the cost is you’re not going to undertake action. So, what you need is an arrangement where the target is being approached but at the lowest cost possible. And once you bring the balance between cost and environmental outcome to the fore of the agreement, then countries are more likely to take action.

“There are several problems with the Kyoto Protocol. One is that it starts from the top and works it way down. So, you reach an agreement and you force countries to participate. My view is that you don’t do it that way; you start with individual countries taking their own actions and you act cooperatively. So, you create a system where the countries feel it’s in their own self interest to participate. You have a set of rules, monitoring and enforcement standards and then you cooperate just like we do with the global monetary system. We’ve tried various of these centralized approaches in various areas–whether it’s in monetary economics, trade policy, a whole range of areas–and the centralization approach doesn’t appear to work effectively. What we need is a different strategy, which is really from the country level with serious policies at the country level coordinated in a global system, not the other way around.

“And the second issue is the issue I raised before. That what matters is not just the environmental outcome but how expensive it is to reach that environmental outcome, at a point in time. And I think you have to balance the environmental with the economic outcome or you won’t get countries to effectively participate.

“But if you ask any developing country—whether it’s China, India or Brazil—what is the key issue that they worry about, it’s child mortality, it’s infectious diseases, it’s standards of living where people are living on a dollar a day. It’s not climate change. So, what you need to do is make them understand that eventually they will be willing to pay for climate change and climate change will have a big impact on these economies. And, so, they need to start moving in a way where they can balance all of their priorities–not just economic growth but all their health and development priorities with the climate outcome for the global community. And that’s the key. You don’t tell them that they have to have a particular target that they hit by a particular date, which is the Kyoto strategy, because they will not do it and they have said that they will not do it.  And that’s why we have a stalemate at the moment; people keep pushing an approach, which can’t actually work for developing countries because it hasn’t worked for industrial countries where the growth rates are so much lower and capacity to do something is so much greater.”