Bali: now the rich must pay

Bali: now the rich must pay

A fair and global effort to tackle climate change needs wealthy states

to take the lead in CO2 cuts

Nicholas Stern

Friday November 30, 2007

The Guardian

http://www.guardian.co.uk/comment/story/0,,2219534,00.html

The Bali summit on climate change, which starts next week, will seek

to lay the foundations for a new global agreement on reducing the

greenhouse gas emissions that cause rising temperatures and climate

change. Ambitious targets for emission reduction must be at the heart

of that agreement, together with effective market mechanisms that

encourage emission trading between countries, rich and poor. The

problem of climate change involves a fundamental failure of markets:

those who damage others by emitting greenhouse gases generally do not

pay. Climate change is a result of the greatest market failure the

world has seen.

The evidence on the seriousness of the risks from inaction is now

overwhelming. We risk damage on a scale larger than the two world wars

of the past century. The problem is global and the response must be

collaboration on a global scale. The rich countries must lead the way

in taking action. And in thinking about global action to reduce

greenhouse gas emissions, we must invoke three basic criteria.

The first is effectiveness: the scale of the response must be

commensurate with the challenge. This means setting a target for

emission reduction that can keep the risks at acceptable levels.

The overall targets of 50% reductions in emissions by 2050 (relative

to 1990) agreed at the G8 summit in Heiligendamm last June are

essential if we are to have a reasonable chance of keeping temperature

increases below 2C or 3C. While these targets involve strong action,

they are not overambitious relative to the risk of failing to achieve

them.

The second criterion is efficiency: we must keep down the costs of

emission reduction, using prices or taxes wherever possible. Emission

trading between countries must be a central part of the story. And

helping poor countries cover their costs of emission reduction gives

them an incentive to join a global deal.

Third, we should be concerned about equity. Our starting point is

deeply inequitable with poor countries certain to be hit earliest and

hardest by climate change. But rich countries are responsible for the

bulk of past emissions: US emissions are currently more than 20 tonnes

of CO2 equivalent per annum, Europe's are 10-15 tonnes, China's five

or more tonnes, India's around one tonne, and most of Africa much less

than one.

For a 50% reduction in global emissions by 2050, the world average per

capita must drop from seven tonnes to two or three. Within these

global targets, even a minimal view of equity demands that the rich

countries' reductions should be at least 80% - either made directly or

purchased. An 80% target for rich countries would bring equality of

only the flow of current emissions - around the two to three tonnes

per capita level. In fact, they will have consumed the big majority of

the available space in the atmosphere.

Rich countries also need to provide funding for three more key

elements of a global deal. First, there should be an international

programme to combat deforestation, which contributes 15-20% of

emissions. For $10bn-$15bn per year, half the deforestation could be

stopped.

Second, there needs to be promotion of rapid technological advance to

mitigate the effects of climate change. The development of

technologies must be accelerated and methods found to promote their

sharing. Carbon capture and storage for coal (CCS) is particularly

urgent since coal-fired electric power is currently the dominant

technology around the world, and emerging nations will be investing

heavily in these technologies. For $5bn a year, it should be possible

to create 30 commercial-scale coal-fired CCS stations within seven or

eight years.

Finally, rich countries should honour their commitment to 0.7% of GDP

in aid by 2015. This would yield increases in flows of $150bn-$200bn

per year. The extra costs that developing countries face as a result

of climate change are likely to be upwards of $80bn a year, and it is

vital that extra resources are available. This proposed programme of

action can be built if rich countries take a lead in Bali on their

targets, the promotion of trading mechanisms and funding for

deforestation and technology. With leadership and the right

incentives, developing countries will join.

The building of the deal, and its enforcement, will come from the

willing participation of countries driven by the understanding that

action is vital. It will not be a wait-and-see game as in World Trade

Organisation talks, where nothing is done until everything is settled.

The necessary commitments are increasingly being demonstrated by

political action and elections around the world. A clear idea of where

we are going as a world will make action at the individual, community

and country level much easier and more coherent.

These commitments must, of course, be translated into action. There is

a solution in our hands. It will not be easy to build. But the

alternative is too destructive to accept. Bali is an opportunity to

draw the outline of a common understanding, which will both guide

action now and build towards the deal.