The sinner's new initiative

Indonesia is gearing up for the Bali Climate Change Conference in December. This will be the opportunity for the world's nations to plan the post-Kyoto framework for GHG (greenhouse gasses) reduction, perhaps extending the existing cap and trade schemes.

At least, that was our hope until George W Bush thrust his tattered codpiece into the debate this week with his tumescent 'new' initiative (was there an 'old' initiative that we missed?). Tony Blair seemed delighted with Bush's apparent conversion to the cause, probably on the basis of 'joy shall be in heaven over one sinner that repenteth'. Indeed, the fact that Bush acknowledges climate change and accepts that some action must be taken is a some progress from the craven stance of denial and obfuscation that has so far characterized this dire and corrupt administration.

However, the plan to sideline the G8 and UN processes with a US-led initiative is probably not a sound reason for unconfined joy on the part of Blair or anyone else. It rests on the idea of allowing a number of nations to pick a GHG emissions target for the next 10-20 years and then, er, hope it all works out. In fact the whole scheme seems to be fairly loose and relaxed except that the US 'demands' all nations to cut tariff barriers to the transfer of environmental technology from US high-tech firms. Meanwhile the US has once again re-stated its implacable objection to joining in a global system of carbon emissions caps and trading.

The scheme seems to be that the US can continue much as it is now, but can put pressure on developing countries to restrict their emissions and buy US 'clean' technology. There is nothing inherently wrong with hoping that technology will save us, but there is no evidence so far that it will. Furthermore, the thrust of US efforts has been to promote corn-based Ethanol (which uses almost as much energy to grow as it gives back), or float entirely hypothetical ideas about reflective crystals in space and so forth. Both these policy options have traction because the generate massive subsidies for special interest groups (namely farmers and the military-industrial complex).

I believe that the real reasoning behind Bush's new foray into climate change is to find a way to keep China and India in check. Bush referred to energy intensity (EI), which is usually measured by Tonnes of oil equivalent (toe) per million dollars of GDP (in purchasing power parity dollars). This measures the amount of energy that a country uses in relation to its economic output. For instance, according to the World Resources Institute, the UK had an EI rating of 168.5 in 1990, which had fallen to 141.2 in 2003. This was mainly due to the changing nature of the UK economy, which has moved out of industry (which converts adds labour + raw materials + power into tangible products) and into services (which converts labour + knowledge into intangible services). The US has also seen a reduction, from an EI of 272 in 1990 to 221 in 2003.

Where has all this industrial activity gone? Well, many US politicians argue that it has been off-shored to China, so we would expect their EI rating to have risen over the same period, but in fact it has dropped from 504 to 231, so it is roughly the same as the US. India has also dropped (250 to 189), and developing countries as a whole score 224 compared to 300 in 1990. So how will Bush persuade China and India to reduce their energy intensity any further when they are already fairly lean?

Another way to look at this is the C02 intensity, which measures metric tonnes of C02 per million $ of GDP. In 2003 the USA pumped out 556 tonnes per million of GDP, compared to 684 in 1990. China pumps out 658 compared to a massive 1374 in 1990. So in the 13 year period in question China became more efficient at converting energy to GDP (by 50%), while the USA became just 19% more efficient. And all of this happened while China was experiencing the fastest economic growth of any country in history, ever.

Developing countries as a whole produced 491 tonnes of C02 per million of GDP, compared to 510 in developed countries.

This means that the US rhetoric about the profligacy of those irresponsible developing countries going hell-for-leather for growth with no thought for the planet does not stand up to analysis. It is, as usual, the insatiable consumption of developed countries that is driving the boom in places like China, which will need to keep building coal-fired power stations to supply the demand. For the US to suggest that no deal on cuts in emissions is possible until developing countries cut their own emissions is merely a stalking horse to introduce non-tarrif barriers against those countries and thus shield US industry from competition. This painted fop is protectionism dressed up as diplomacy, slumped over the exhausted steed of American exceptionalism and entitlement.