Green Taxes

Early last Sunday morning Connie Hedegaard, the European Commissioner for Climate Action, wrote on Twitter that: “We made it.  EU’s strategy worked.”  It was the end of another climate summit in Durban where the parties had been starkly divided into two camps: the European Union and lots of smaller countries pushing for rapid decarbonisation; and major emitters like the United States, China and India who were unable and unwilling to commit to binding limitations on their own emissions.  The same divisions meant that Copenhagen collapsed in acrimony and the negotiators at Cancun limited themselves to addressing details.  Was it really the “breakthrough” that Hedegaard claimed?  Did the EU’s strategy really “work” and secure the global deal to ration greenhouse gas emissions they want?

Taken for a ride...

No.  The EU’s negotiators were willing to accept new commitments under the Kyoto Protocol, which doesn’t include the major emitters.  But in return they initially wanted all the parties to commit to agreeing a legally binding deal covering everyone by 2015.  The major emitters wouldn’t do that and so it looked like the talks were going to break down.  Instead they got creative with the language and now the major emitters are only committed to an “outcome with legal force”.

Enthusiasts in Europe can claim that is basically the same thing, but the reality is that just about anything can be described as “an outcome with legal force”.  If the major emitters don’t want a legally binding deal to limit their emissions in 2015, nothing will stop them rejecting it.  That is why they would sign a deal with the vaguer language but not when it was more specific.

So the EU has committed itself to emissions cuts in return for a Durban Platform that pledges a deal by 2015, but that Platform isn’t made of much stronger stuff than the Bali Roadmap back in 2007 which pledged a deal by 2009.  That certainly isn’t a triumph.  It would be better described as a disastrous performance if it wasn’t for the fact that the EU was planning on going ahead unilaterally anyway with the existing 2020 targets.  The result in Durban was another breakdown, not a breakthrough.

Canada added to the environmentalist gloom by dropping out of the Kyoto Protocol on Monday.  Their Environment Minister Peter Kent said that complying would mean the equivalent of taking every motor vehicle in Canada off the roads, or shutting down their entire agricultural sector and cutting the heat off in residential, industrial and commercial buildings.  The leader of the Canadian Green Party was apparently almost in tears at a press conference responding to the announcement but there is no sign ordinary Canadians care much either way.

The European Union is now the only major economic area still committed to rationing fossil fuel energy.  It has been going ahead without the largest emitters taking equivalent action since the Kyoto Protocol came into effect in 2005.  Even if a new deal is built on the Durban Platform it won’t start until 2020.  Our leaders have already pressed ahead for six years in the vain hope a global deal was just around the corner.  There is nothing to show for it.  The global increase in emissions in 2010 was, according to the US Department of Energy, the largest ever.  Can politicians here really sustain that for almost another decade?

While negotiators in Durban were committing their countries to expensive action to reduce greenhouse gas emissions, others in Brussels were trying to save the euro.  If they are going to have any chance, they will need to credibly commit to fiscal austerity.  And that will be much harder if low and middle income families are struggling to pay higher energy bills, at the same time as benefits are cut or taxes are hiked.  If Europe could ever afford a vain attempt to lead the world into cutting greenhouse gas emissions, it can’t now.

That is why many countries are making cuts in some particularly inefficient climate policies.  Britain recently cut subsidies for small solar installations under the feed-in tariff scheme roughly in half, from 43p per kWh to a still extravagant 21p per kWh.  Environmentalists and lobbyists are up in arms but the Government insist it is needed to keep feed-in tariffs affordable.

Lots of other countries from Spain to the Czech Republic have taken similar steps, but they need to go further and consider a more realistic approach to climate policy overall.  Right now too many European politicians are still trying to work out what their allotted share of the burden would be if some disinterested world Government set climate policy.  Instead they should be asking what their country can usefully do in the real world, where even when treaties can be arranged they are invariably limited and messy products of self-interested negotiation.

Britain is a good example.  Given that less than two per cent of world emissions are produced here we can make a limited contribution by cutting the amount we emit.  But we do still have significant financial and technical resources at our disposal.  Instead of investing £200 billion in our energy sector alone, as Citigroup argue we would need to in order to meet environmental targets, squandering a large part of it on exorbitantly expensive offshore wind turbines, why not put a far smaller amount of money into directly supporting research that can make low carbon energy more affordable?

Durban definitely wasn’t an example of the EU’s approach to climate policy working, quite the opposite.  The only question now is whether or not the politicians are honest enough to admit it, and flexible enough to consider other options.

Early last Sunday morning Connie Hedegaard, the European Commissioner for Climate Action, wrote on Twitter that: “We made it.  EU’s strategy worked.”  It was the end of another climate summit in Durban where the parties had been starkly divided into two camps: the European Union and lots of smaller countries pushing for rapid decarbonisation; and major emitters like the United States, China and India who were unable and unwilling to commit to binding limitations on their own emissions.  The same divisions meant that Copenhagen collapsed in acrimony and the negotiators at Cancun limited themselves to addressing details.  Was it really the “breakthrough” that Hedegaard claimed?  Did the EU’s strategy really “work” and secure the global deal to ration greenhouse gas emissions they want?

Taken for a ride...

No.  The EU’s negotiators were willing to accept new commitments under the Kyoto Protocol, which doesn’t include the major emitters.  But in return they initially wanted all the parties to commit to agreeing a legally binding deal covering everyone by 2015.  The major emitters wouldn’t do that and so it looked like the talks were going to break down.  Instead they got creative with the language and now the major emitters are only committed to an “outcome with legal force”.

Enthusiasts in Europe can claim that is basically the same thing, but the reality is that just about anything can be described as “an outcome with legal force”.  If the major emitters don’t want a legally binding deal to limit their emissions in 2015, nothing will stop them rejecting it.  That is why they would sign a deal with the vaguer language but not when it was more specific.

So the EU has committed itself to emissions cuts in return for a Durban Platform that pledges a deal by 2015, but that Platform isn’t made of much stronger stuff than the Bali Roadmap back in 2007 which pledged a deal by 2009.  That certainly isn’t a triumph.  It would be better described as a disastrous performance if it wasn’t for the fact that the EU was planning on going ahead unilaterally anyway with the existing 2020 targets.  The result in Durban was another breakdown, not a breakthrough.

Canada added to the environmentalist gloom by dropping out of the Kyoto Protocol on Monday.  Their Environment Minister Peter Kent said that complying would mean the equivalent of taking every motor vehicle in Canada off the roads, or shutting down their entire agricultural sector and cutting the heat off in residential, industrial and commercial buildings.  The leader of the Canadian Green Party was apparently almost in tears at a press conference responding to the announcement but there is no sign ordinary Canadians care much either way.

The European Union is now the only major economic area still committed to rationing fossil fuel energy.  It has been going ahead without the largest emitters taking equivalent action since the Kyoto Protocol came into effect in 2005.  Even if a new deal is built on the Durban Platform it won’t start until 2020.  Our leaders have already pressed ahead for six years in the vain hope a global deal was just around the corner.  There is nothing to show for it.  The global increase in emissions in 2010 was, according to the US Department of Energy, the largest ever.  Can politicians here really sustain that for almost another decade?

While negotiators in Durban were committing their countries to expensive action to reduce greenhouse gas emissions, others in Brussels were trying to save the euro.  If they are going to have any chance, they will need to credibly commit to fiscal austerity.  And that will be much harder if low and middle income families are struggling to pay higher energy bills, at the same time as benefits are cut or taxes are hiked.  If Europe could ever afford a vain attempt to lead the world into cutting greenhouse gas emissions, it can’t now.

That is why many countries are making cuts in some particularly inefficient climate policies.  Britain recently cut subsidies for small solar installations under the feed-in tariff scheme roughly in half, from 43p per kWh to a still extravagant 21p per kWh.  Environmentalists and lobbyists are up in arms but the Government insist it is needed to keep feed-in tariffs affordable.

Lots of other countries from Spain to the Czech Republic have taken similar steps, but they need to go further and consider a more realistic approach to climate policy overall.  Right now too many European politicians are still trying to work out what their allotted share of the burden would be if some disinterested world Government set climate policy.  Instead they should be asking what their country can usefully do in the real world, where even when treaties can be arranged they are invariably limited and messy products of self-interested negotiation.

Britain is a good example.  Given that less than two per cent of world emissions are produced here we can make a limited contribution by cutting the amount we emit.  But we do still have significant financial and technical resources at our disposal.  Instead of investing £200 billion in our energy sector alone, as Citigroup argue we would need to in order to meet environmental targets, squandering a large part of it on exorbitantly expensive offshore wind turbines, why not put a far smaller amount of money into directly supporting research that can make low carbon energy more affordable?

Durban definitely wasn’t an example of the EU’s approach to climate policy working, quite the opposite.  The only question now is whether or not the politicians are honest enough to admit it, and flexible enough to consider other options.