Carbon Reduction or Poverty Reduction, Not Both
Ron Bailey files his second dispatch from the UN global warming conference in Nairobi, Kenya.
NAIROBI—Immediate steep global reductions in the emissions of the chief greenhouse gas, carbon dioxide, turn out to be a fantasy. This was made plain by a panel discussion today which featured the release of a report by the Brussels-based Centre for European Policy Studies. The panel aimed to outline the "economic case for action on climate change, but the realities of global poverty overwhelmed it.
First, the CEPS report itself with the fetching title, Revisiting EU Policy Options for Tackling Climate Change, was a kind of Stern Review-lite. The Stern Review released by the British government the week before the Nairobi climate conference convened argued that avoiding climate change must begin now and was surprisingly affordable. It achieved that conclusion by among other things positing a very low discount rate so that investments made now to avoid climate change look cheap when compared to the costs of adapting in the future to climate change. The CEPS report also applied a relatively low discount rate and included measures for the "social costs" of externalities and for valuing energy security. The CEPS report amounted to interesting intellectual exercise that focused on the sorts of expensive actions that already rich countries can afford to take even if they turn out to be economic dead ends.
The CEPS report made the magnitude of the proposed reductions clear. In order to make sure that the CO2 concentrations do not rise beyond 550 parts per million in the atmosphere by 2050, the current annual level of global emissions of 33 billion tons of CO2 would have to be slashed by 25 billion tons by 2050. A drop of around 70-80 percent. However, if no emissions reductions policies are put in place, the CEPS report notes that global emissions would rise from 33 billion tons of CO2 today to 51 billion tons by 2050. For comparison, the European Union's Kyoto Protocol reductions amount to 400 million tons of CO2 by 2012.
Next, Surya P. Sethi, the principal energy policy advisor to the Indian government, showed that the CEPS study is basically an exercise in climate change policy whimsy. Sethi began by reviewing the development challenges faced by India. He pointed out that 50 percent of its people have no access to electricity; cooking was the largest use of energy for 75 percent of households; and 70 percent of cooking was done using traditional biomass, wood and dung. In addition, 35 percent of India's people live on less than $1 per day and 80 percent live on less than $2 per day. He pointed out that lack of access to modern energy supplies correlates with high infant mortality, low life expectancies, high gender inequality, and low literacy rates.
Sethi then noted that India's economy must grow at 8 percent per year for the next 25 years in order to lift the bottom 40 percent of its people to a decent standard of living. He pointed out that India was falling behind in achieving it Millennium Development Goals of reducing poverty due to persistent energy shortages. "Energy is central for development. Our energy consumption must go up," declared Sethi. Today India uses 471 million tons oil equivalent (MTOE) of energy each year of which 327 MTOE is primary commercial energy. The rest comes from burning traditional biomass. In order to achieve its poverty reduction goals, Sethi asserted that India needs to grow its energy supplies by 4.3 to 5.1 percent per year and to consume 1536 to 1887 MTOE by 2031. (For comparison the US consumes around 2300 MTOE annually now.) "India will need to tap all available energy supplies and pursue all available energy efficiency technologies. For India it is not a choice between energy supply and energy efficiency. It is both." said Sethi.
Sethi contrasted India's current total primary energy supply (TPES) per capita energy use with other countries. TPES per capita is calculated as the energy equivalent of the amount of oil in kilograms (kgoe) a person consumes per year. In China the amount is 1090 kgoe, Brazil 1094, Denmark 3852, UK 3906, US 7835, Japan 4052, and the world average per capita energy use is 1688. Where does India stand? The average Indian consumes the equivalent of 439 kilograms of oil. The eight percent annual economic growth that Sethi hopes India will experience over the quarter century would mean that the average Indian would be consuming between 1065 and 1279 kgoe in 2031. That's about what the average Chinese uses now and is only 70 percent of world's current per capita average.
Sethi said that India could cut projected CO2 emissions between 2012 and 2017 by 550 million tons at an additional cost of $25 billion for more energy efficient technologies. However, he pointed out that the Indian government spent that amount on its social and poverty reduction goals in the last five years. He then pointedly added, "I do not have the funds for both. My choice is to improve the lot of India's poor or reduce CO2 emissions so the developed world can breathe easier." Paying for the new energy efficiency technologies would also raise the price of power and thereby delay its delivery to the poor. Besides, Sethi observed, Indians already pay the highest rate in purchasing power parity terms for energy in the world. In fact, the average household spends one and a half times more on energy than it does on food. Finally, Sethi told me that even after implementing the most efficient energy conservation technologies over the next 25 years, India will still be emitting 4 times more CO2 in 2031 than it does today.
A Swede in the audience reminded Sethi that the Stern Review had declared that urgent action toward reducing CO2 emissions is needed now. Sethi's response made it clear that restricting the access to energy by world's poor was unacceptable. "You cannot tackle climate change unless you make dramatic lifestyle changes in the West," replied Sethi. I think it is a safe bet that few Westerners will decide for the sake of the climate to live like poor Indians. So humanity will have little choice but to adapt to any future climate change. Fortunately, economic growth makes that easier to do.
Tomorrow—the environment ministers finally gather here in Nairobi to ratify and complete what their underlings have been negotiating for the past week which, as far as I can tell right now, isn't much. A couple of side events intrigue me so I may cover sessions on climate and forests, the role of policies the enable adaptation to climate change once the Kyoto Protocol comes to an end in 2012, and another that asks if it is time to set a long-term global climate. The last is basically asking where humanity wants to set the planet's thermostat.
Disclosure: I gratefully acknowledge that the International Policy Network in Britain is paying my expenses to cover the conference in Nairobi. Here's what the folks at Exxonsecrets say about IPN and here's what they say about me.
Ronald Bailey is Reason's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.