Climate change: let’s make a deal

Published: July 7 2008 19:54

President George W. Bush believes that climate change cannot be tackled effectively without the co-operation of China and India, and he is right. Yet the question of who must now take action on climate change has become hopelessly confused with the separate issue of who is responsible for previous emissions. In their discussions on Tuesday and Wednesday, the Group of Eight must cut through the confusion and reach agreement on a framework for a future deal on climate change.
China and India, both outside the G8, can rightly point out that G8 members have produced most of the carbon emissions now warming the planet’s atmosphere. The US, especially, has dragged its heels at every opportunity to make amends.
Yet fast-growing China is now the world’s largest carbon emitter. India, another stellar performer in terms of growth, is also a major polluter. What is more, countries least able to cope with climate change, such as the sub-Saharan African nations, fall into neither camp.
So far, political attempts to resolve this conundrum have been unforgivably muddled. But the basic problem is easy to state. The historical problem, the stock of carbon dioxide already in the atmosphere, is largely of the G8’s making. The solution has nothing to do with the existing stock and everything to do with stemming future flows of carbon dioxide into the atmosphere. That is the developing world’s problem as much as the developed world’s.
To put it another way, a fair solution will reflect the G8’s historical culpability, but an effective solution will require action from developing countries, especially India and China. That is partly because of their sheer scale, and partly because their capital stock is still growing rapidly, offering the prospect of “leapfrogging” to low-carbon technology.
The shape of a future deal ought to be fairly clear. Rich countries would acknowledge their historical role and offer substantial compensation, whether in cash or investments in new technology. In exchange, developing countries would agree to bear their fair share of future abatement costs, through full participation in a carbon tax or an auction of tradable permits. This is preferable to horse-trading over national targets, and to the troubled Clean Development Mechanism, the current system for engaging developing nations.
Yet merely to sketch such a deal is to realise the strength of leadership that will be required to reach agreement. Whatever their current problems at home, it is time for the G8 leaders in Japan to deliver.
Copyright The Financial Times Limited 2008