Blanket immunity for developing nations has stifled climate hopes
THIS week, diplomats in Bonn must face up to a crumbling international consensus on climate change. United Nations negotiations stalled in Durban last December. Japan, Russia and Canada recently joined the US by walking away from an extension of the Kyoto Protocol’s emission cutting targets – while China, Brazil and India weren’t bound in the first place. Australia and New Zealand remain perched on the fence, leaving the EU to go it alone with just seven other developed countries locked into binding targets. What went wrong?
The dual vices of Kyoto were developing countries’ blanket immunity from emission cuts, and a corrupting bureaucracy. The first is based on the fiction that rich countries are exclusively responsible for global warming. Today, rich countries’ share of responsibility has been eclipsed by rising emissions from the rest of the world, including the rapidly expanding Bric economies – which account for 58 per cent of the total. No durable deal to cut emissions can allow those countries a free ride indefinitely.
Kyoto’s second vice is the Clean Development Mechanism (CDM), set up to allow polluting companies in rich countries to earn Certified Emission Reduction (CER) credits by paying for projects that cut emissions in developing countries. The idea was to help the poorest nations green their economies. Yet, as of March 2012, 90 per cent of this massive subsidy had benefited so-called “middle class” countries – 60 per cent to China, 16 per cent to India, 9 per cent to South Korea and 7 per cent to Brazil. Far from helping the poorest, the CDM is a giant handout from the West to her economic rivals.
The UK cost of the CDM rose by 31 per cent between 2008 and 2010, peaking at just under £100m per year. UK consumers pick up the tab, as the combustion, manufacturing and power sectors – companies like E.ON, Corus and Cemex – fund projects in return for credits. But, the CDM is not just an expensive subsidy; it creates a market for polluting gases. Over two-thirds of CER credits have been issued for projects to destroy two noxious gases, trifluoromethane and nitrous oxide. Producing trifluoromethane has become a nice little earner, with polluters paid 24 times the actual cost of destroying them. Timorous steps to scale back these perverse practices have not stopped them from expanding.
Then there are the local horror stories. In Durban itself, the CDM funds a project at the Bisasar rubbish dump, burning methane. Experts estimate the project will generate credits worth tens of millions of pounds. Far from promoting sustainable environmental practices, it has a history of toxic leaks. Six out of ten residents on a local estate have reported cancer. Norwegian and Italian firms back another project in the Niger Delta, which burns unwanted gas associated with oil deposits. Medical reports suggest the resulting gas flares have reduced local life expectancy and increased infant mortality. Who authorises the projects? Kyoto established a validation process, monitored by Designated Operational Entities (DOE) – supposedly reliable companies with requisite expertise. Yet, in 2010, the Öko-Institut, in Berlin, reviewed five leading DOE and ranked all of them between D and F (on a scale from A to F, with A the highest).
Looking forward, experience since Kyoto holds two lessons. Firstly, all major emitters must be locked into any new agreement to cut emissions. If a global deal won’t stick, limit negotiations to the 20 nations responsible for 80 per cent of emissions – instead of haggling among 190 governments. That would be more likely to fix the problem, while sparing the poorest countries from onerous economic sacrifices. Either way, it is pointless for Britain to endure the economic pain of further cuts without broader international buy-in.
The second lesson is to avoid the warping bureaucracy of the CDM, which should be scrapped. Plans for a new international Green Climate Fund risk spawning another white elephant, unless its remit is sharply focused and rigorously monitored. It should be limited to supporting the transfer of genuinely innovative green technology and bolstering local environmental defences in the poorest countries – not paying Brics to pollute more, so activists can feel good billing rich countries to clean up the mess.
Dominic Raab is the Conservative MP for Esher & Walton.