Almost everyone seems to agree: governments now face a choice between savingthe planet and saving the economy. As recession looms, the political pressure toabandon green policies intensifies. A report published yesterday by Ernst andYoung suggests that the EU’s puny carbon target will raise energy bills by 20%over the next 12 years(1). Last week the prime minister’s advisers admitted tothe Guardian that his renewable energy plans were "on the margins" ofwhat people will tolerate(2).
But these fears are based on a false assumption: that there is a cheapalternative to a green economy. Last week New Scientist reported a surveyof oil industry experts, which found that most of them believe global oilsupplies will peak by 2010(3). If they are right, the game is up. A reportpublished by the US Department of Energy in 2005 argued that unless the worldbegins a crash programme of replacements 10 or 20 years before oil peaks, acrisis "unlike any yet faced by modern industrial society" isunavoidable(4).
If the world is sliding into recession, it’s partly because governmentsbelieved that they could choose between economy and ecology. The price of oil isso high and it hurts so much because there has been no serious effort to reduceour dependency. Yesterday in the Guardian, Rajendra Pachauri suggestedthat an impending recession could force us to confront the flaws in the globaleconomy(5). Sadly it seems so far to have had the opposite effect: a recentIpsos Mori poll suggests that people are losing interest in climate change(6).Opportunities for energy populism abound: it cannot be long before one of themajor parties abandons the pale green consensus and starts invoking an oilcornucopia it cannot possibly deliver.
The British government maintains both positions at once. In his speech lastweek, Gordon Brown said he wanted "to facilitate a reduction in short termglobal oil prices" while seeking "to reduce progressively our dependence onoil"(7). He knows that the first objective makes the second one harder toachieve. The government’s policy is to build more of everything – more coalplants, more nuclear power, more oil rigs, more renewables, more roads, moreairports – and hope no one spots the contradictions.
Is there a way out? Could we abandon the fossil fuel economy without provoking ablistering backlash? Two things are obvious. We need a global system, and thecurrent one, the Kyoto Protocol, is bust. It sets no cap on global carbonpollution, its targets bear no relation to current science and are unenforceableanyway, it contains loopholes and get-out clauses wide enough to sail an oiltanker through.
Until recently I supported an alternative system called contraction andconvergence. Every country, this system proposes, should end up with the samequota of carbon dioxide per person. The richest countries must produce much lessthan they do today; the poorest ones could pollute more. Another proposal flowslogically from this one: carbon rationing. Having been assigned its carbonquota, each nation would divide up part of it equally among its citizens, whocould use it to buy energy or trade it among themselves. These proposals havethe merit of capping global pollution, of being fair, progressive and easy tounderstand and of encouraging us to think about our use of energy.
But, after reading the proofs of a book by the independent thinker OliverTickell, to be published this month, I have changed my view. In Kyoto2: howto manage the global greenhouse, Tickell slaughters my favourite ideas(8).He shows that there is no logical basis for dividing up the right to polluteamong nation states. It gives them too much power over this commodity, and thereis no guarantee that they would pass the pollution rights on to their citizens,or use the money they raised to green the economy. Carbon rationing, he argues,requires a level of economic literacy that’s far from universal in the mostadvanced economies, let alone in countries where most people don’t have bankaccounts.
Instead Tickell proposes setting a global limit for carbon pollution thenselling permits to pollute to companies extracting or refining fossil fuels.This has the advantage of regulating a few thousand corporations - running oilrefineries, coal washeries, gas pipelines and cement and fertiliser works forexample - rather than a few billion citizens. These firms would buy theirpermits in a global auction, run by a coalition of the world’s central banks.There’s a reserve price, to ensure that the cost of carbon doesn’t fall toolow, and a ceiling price, at which the banks promise to sell permits, to ensurethat the cost doesn’t cripple the global economy. In this case companies wouldbe borrowing permits from the future. But because the money raised would beinvested in renewables, the demand for fossil fuels would fall, so fewer permitswould need to be issued in later years.
Tickell calculates that if the cap were set low enough to ensure that the worldbecame carbon neutral by 2050, the total cost of permits would be about $1trillion a year, or roughly 1.5% of the global economy. The money would be spenton helping the poor to adapt to climate change, paying countries to protectforests and other ecosystems, developing low-carbon farming, promoting energyefficiency and building renewable power plants.
But his figure seems too low. Like many of the world’s climate scientists,Oliver Tickell proposes that the concentration of greenhouse gases shouldeventually be stabilised at 350 parts per million (carbon dioxide equivalent) inthe atmosphere, and his calculations are based on this target. Last week LordStern suggested that meeting a less stringent target (500 parts per million)would cost 2% of world gross domestic product(9). If the price of the carbonpermits sold at auction were much higher than Tickell suggests, the extra moneycould be used for massive tax rebates and social spending, aimed especially atthe poor. But could the world afford it?
This money doesn’t disappear, it gets spent. Tickell’s proposal couldrepresent a classic Keynesian solution to economic crisis. The $1, $2 or even $5trillion the system would cost is used to kick-start a green industrialrevolution, a new New Deal not that different from the original one (whose mostsuccessful component was Roosevelt’s Civilian Conservation Corps, whichprotected forests and farmland(10)). This would not be the first time thatbusiness was rescued by the measures it most stoutly resists: there’s a longhistory of corporate lobbying against the kind of government spending thateventually saves the corporate economy.
Do we want to save it, even if we can? It is hard to see how the current globalgrowth rate of 3.7% a year (which means the global economy doubles every 19years) could be sustained(11), even if the whole thing were powered by the windand the sun. But that is a question for another column and perhaps another time,when the current economic panic has abated. For now we have to find a means ofsaving us from ourselves.
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George Monbiot has received an honorary doctorate from the University ofSt Andrews.
www.monbiot.com
References:
1. BBC Online, 30th June 2008. Greentarget ‘to hike fuel bills’.
2. Juliette Jowit and Patrick Wintour, 26th June 2008. Cost of tackling globalclimate change has doubled, warns Stern. The Guardian.
3. Ian Sample, 25th June 2008. Oil: The final warning. New Scientist.
4. Robert L. Hirsch, Roger Bezdek and Robert Wendling, February 2005. Peaking OfWorld Oil Production: Impacts, Mitigation, & Risk Management. US Departmentof Energy. This was originally leaked and found its way onto this site: hilltoplancers.org
5. Rajendra Pachauri, 30th June 2008. The world’s will to tackle climatechange is irresistible. The Guardian.
6. Juliette Jowit, 22nd June 2008. Poll: most Britons doubt cause of climatechange. The Observer.
7. Gordon Brown, 26th June 2008. Creatinga low carbon economy.
8. Oliver Tickell, forthcoming. Kyoto2: how to manage the global greenhouse. ZedBooks, London.
9. Juliette Jowit and Patrick Wintour, ibid.
10. Neil M Maher, 2008. Nature’s New Deal. Oxford University Press.
11. imf.org
