Happy Holidays, everybody. I’ll keep this short, since we’re all out of school and busy with family. I just had a few thoughts on the further deliberations about climate change in Copenhagen.
Some observers might be disappointed about how little was achieved there, but I think that such a view would be based on expectations that were entirely unrealistic. It would seem impossible to get 193 different nations to agree on anything! The process is long and difficult, and we could not have expected more than a step or two in the right direction.
Certainly we could not expect a major leap into stringent mandatory reductions of all greenhouse gas emissions. The world does not yet have enough experience with climate policy, in order to know how it works, how expensive it will be, what are the abatement alternatives, and how the permit trading will operate. Only some of the nations of the world agreed to the Kyoto Protocol in 1998, and that was viewed as a major achievement. Even that agreement delayed the first major mandatory cuts by ten years, to 2008-2012. To prepare for that mandatory phase, the European Union instituted a Phase I of permit trading to meet its own voluntary reductions during 2005-2008. This “emissions trading system” (ETS) became the largest pollution trading market in the world, and it offers several lessons to the rest of us. It started with only moderate emission reductions, and a price of only 10-15 Euros per ton of carbon dioxide. The businesses and other institutions gained experience with permit trading and are now ready to participate in Phase II.
Similarly, it would be a great achievement to involve more nations of the world, even with only slightly more stringent emissions reductions, to gain more experience before leaning on the rest of the nations to participate.
Much of the debate is about whether the U.S. should enact legislation unilaterally, without any new international agreement. It might be dumb to give everybody else a major advantage in term of production costs. Again, I would point out the difference between initial small steps, as opposed to the large steps that are needed eventually to deal seriously with climate change. If we all wait until all nations agree to major cuts, it may never happen. An important and viable alternative is for the U.S. to lead the way with some small steps, even by ourselves – to establish a climate policy, to impose some moderate emissions reduction, to set an example for the rest of the world, and to proceed then to lean on other nations to join an agreement.
I’d recommend reading the blog by Robert Stavins of Harvard. He provides a very useful summary of the Copenhagen agreement and some analysis of it. As inducement to click on his link, I’ll paste just his concluding paragraph here:
“The climate change policy process is best viewed as a marathon, not a sprint. The Copenhagen Accord – depending upon details yet to be worked out – could well turn out to be a sound foundation for a Portfolio of Domestic Commitments, which could be an effective bridge to a longer-term arrangement among the countries of the world. We may look back upon Copenhagen as an important moment – both because global leaders took the reins of the procedures and brought the negotiations to a fruitful conclusion, and because the foundation was laid for a broad-based coalition of the willing to address effectively the threat of global climate change. Only time will tell.”