Fresh air

There's an alternative plan to Kyoto, and the US would accept it, so why is no one paying attention?
May 19, 2001

Amidst the panic and recrimination over President Bush's decision to withdraw from the Kyoto Protocol, the startling fact is not that the US should have pulled out. It is that a credible alternative policy framework exists that can encompass the apparently incompatible demands made by the EU, US, developing world and others; and yet the media and the environment NGOs have been almost silent about it.

The concept, known on the international climate scene as "contraction and convergence" (C&C) was developed ten years ago by the Global Commons Institute, a tiny British organisation with virtually no resources that was set up (and is still run) by Aubrey Meyer, a professional violinist and composer. Unlike any other option on the agenda, C&C meets US demands for developing country participation, developing world equity concerns, private sector needs for flexibility and efficiency, and (most importantly) EU and NGO calls for a framework with environmental integrity.

The logic of C&C is simple and transparent, in contrast to the extravagant complexity so typical of Kyoto. The "contraction" refers to a global emissions reduction trajectory for specific greenhouse gases. The trajectory could be modified at any time in line with the emergence of new data.

The next question is how to allocate the emissions available under this trajectory, and this is the "convergence" part: national emissions entitlements are deliberately designed to converge by an agreed date at equal per capita emission entitlements for all countries, so that emissions allowances are then proportional to population.

Crucially, C&C also allows for full emissions trading between countries: so if the US wishes to, it can purchase credits from, say India, as long as India is willing to sell them. This allows for the efficiency that the private sector demands in order to be able to meet climate change abatement in the lowest cost manner available. C&C would yield significant cashflows to the developing world from the sale of spare emissions, but would also give them an incentive to invest some of this income into additional energy efficiency projects, since this would allow them to sell still more emissions. And, since all trading would take place beneath the global cap on emissions, trading would not undermine the environmental integrity of the system.

The political implications of C&C in the current situation are enormous. The US Administration has made clear that it takes climate change seriously and that its opposition is not to precautionary action per se, but to the Kyoto Protocol in particular. This is due largely to long-standing US demands that developing countries accept emissions limitation commitments, not least in the famous 1997 Senate Resolution (passed 95-0) that decreed that the US would not ratify any climate treaty that did not include developing countries. However, both EU and developing country governments have made clear that there is no question of fully global commitments until developed countries have "taken a lead," as enshrined in the 1992 Climate Convention: rich countries have far higher per capita emissions and a greater share of historical culpability for climate change. Why, after all, should developing countries be forced to pay the price of a problem that is not of their making-especially when they are heavily burdened in other ways?

Right question; wrong answer. A cap on emissions, such as those accepted by the developed world at Kyoto is, by definition, also a property right-and one that can be traded. The EU, in committing to reduce its emissions to 8 per cent below 1990 levels by 2010, has acquired a tradeable right to pollute up to that level. What Kyoto in effect did was to initiate a form of atmospheric enclosure: the privatisation of the climate, with property rights accruing solely to the richest, highest per capita emitters. The developing world, vastly more energy efficient in per capita terms than the north, is on the verge of missing out on an unprecedented windfall.

Therefore, rather than opposing US calls for their participation, developing countries should be rushing to congratulate President Bush on his offer of a share of the climate cake. For the end point of Bush's stance is unavoidable: if developing countries are to have atmospheric allocations, the only logical, transparent and fair basis for emissions entitlements is equal per capita emission rights. It was only just possible to agree differentiated commitments for 38 countries at Kyoto, and as recent events have shown, even this deal may yet unravel. With 180 or more countries participating, one straightforward rule for allocations will be needed if negotiations are not to sink back into a morass of complexity and horse-trading.

Yet C&C offers massive advantages to the US as well. Economic efficiency, President Bush's top priority, is provided for in that full emissions trading would be allowed. C&C would allow Bush to defer domestic emissions reduction for two full presidential terms through purchasing developing world emission quotas, if needed; the net environmental integrity and emissions contraction of the global framework would remain.

Above all, environmental integrity, the main concern of EU governments, is ensured by the presence of the overarching global cap on emissions, which would taper downwards over time to aim at a specific, safe concentration of CO2 in the atmosphere. This factor, more than any other, is the key strength of C&C. No one in the climate debate has yet come up with a way of solving the problem faster than it is being created. It is essential to start with the question not of "what reductions are countries prepared to offer?" but of "what level of atmospheric CO2 concentration is safe, and what is the path to get there?" EU governments and mainstream environment NGOs are making an appalling tactical error in attacking the US for being "unfair" or "immoral." Such attacks on the US are doomed to failure since rebutting them confers upon Bush a positive advantage with climate hawks in Congress and industry. Instead, the world should respond to Bush's withdrawal from the protocol by pushing the US to take a position on developing world participation, and then playing the debate on purely logical grounds.

The outlook for C&C has improved dramatically in recent months. The framework has been backed by governments as diverse as those of France (Jacques Chirac proposed the framework as the ultimate objective in the Hague), India, Sweden, Belgium, the Africa Group and the Non-Aligned Movement. It is supported by John Houghton, head of the science working group on the UN Intergovernmental Panel on Climate Change, by Raul Estrada-Oyuela (chair of the Kyoto talks), and by Jan Pronk (chair of the Hague talks).

In Britain, too, C&C is advancing up the agenda rapidly. It was put forward as the best international climate framework by the Royal Commission on Environmental Pollution in its report on climate change last year and advocated recently by Liberal Democrat leader Charles Kennedy. Perhaps most interestingly, C&C now has the backing of the insurance industry, waking up at last to the potential of climate change to sink it altogether. In a report on climate change published earlier this year, the Chartered Insurance Institute (the largest professional body for insurers in the world), argued that "above all, the industry must show some leadership by coming out in support of the principle of C&C," adding for good measure that "as the insurance companies own the oil companies (through equity stakes), insurers form the only industry that has the collateral and need to adopt the C&C logic."

As to why C&C has remained the best kept secret in international climate change, the responsibility lies in no small part with mainstream environment NGOs. For forgivable but strategically flawed reasons, the international arms of organisations such as Greenpeace, the WWF and the World Resources Institute took a decision in the late 1980s and early 1990s to push for the principle of developed countries "taking a lead"; even now, they can be seen defending this tenaciously. Perhaps these organisations were unable to compute the dramatic implications of allocating property rights to the atmosphere, and consequently tried to defer the issue; yet, as Kyoto shows, there is no way around the question of how to allocate these entitlements. Like it or not, Kyoto is a rights-based framework-and one that confers no rights at all on developing countries.

In walking on eggshells around the question of atmospheric rights for developing countries, with all of the implications that this has for northern consumption, southern equity and the future of the climate, we have ended up with a fudge that suits no one. n

The Global Commons Institute website is at