Kyoto - Doomed or Domed?
Kyoto will cost money, but not as much as doing nothing. International insurance companies have noted that if the increase in claims due to climate change that has been seen over the last 30 years continues, the cost will exceed global GDP some time in the second half of this century. It doesn’t take an economist to translate what that means for the real world. flop. no economy. So what if a minority of businesses want to whinge and say “I don’t care if the ship is sinking, I’m not bailing ’cause they’re not bailing, look, those guys are just playing cards…”? Action needs to be taken internationally, and if support for a rushed treaty is what it takes to get the ball rolling that that is what has to happen. If the New Zealand government isn’t prepared to support Kyoto until something better comes along, it might as well stop pretending it cares about the environment, disband DOC, remove all the endangered species from protection and set fire to anything else that looks cute and fluffy, ’cause all this is small fry next to atmospheric CO2 and they know it.
China and India’s reservations about participating in global emission reduction program was one of the major reasons the US didn’t Ratify Kyoto. The developing world was never in the treaty, as the international community thought it was only fair to give them a small chance to enjoy a little of the environmental free-for-all that the west has been enjoying for the last century. If we can’t innovate and adapt to a low carbon economy first, how can we expect nations without clean water, health and education to manage it? We have to lead the way, and if you don’t want to, and would prefer to play trombone with the brass band from the Titanic to get you to the top half of the OECD, then good luck.
Will we have to spend out $500 million because of Kyoto? We don’t have to buy credits if we actually do something and clean up our act. How’s about that for an idea? And as for saying New Zealand shouldn’t bother to do anything because it only accounts for 0.2% of global emissions? You might as well say - don’t bother to vote, you only get one, it wont make any difference. In any event, if there is an economy in the future, low carbon technology will be a big part of it, so why wait until everyone else has got in on the act? The planet is basically saying, it’s my way - or the highway.
July 11th, 2006 at 9:34 pm
Oh come on. Linking to a 6 year old Red Guardian article with one solitary expert? Hardly a convincing case for the collapse of the world economy. More likely that overpriced coastal areas will not be able to get insurance, and development there will slow. This must also be due to the global property boom- prices in developed countries have gone through the roof, therefore insurance is more risky, one Katrina and you have billions in claims.
“If the New Zealand government isn’t prepared to support Kyoto until something better comes along, it might as well stop pretending it cares about the environment, disband DOC, …”
There is no hypocrisy in protecting native flora and fauna while reconsidering a flawed political treaty that puts signers at a massive disadvantage to non-signers. It was only a few years ago that climate change was shown to be linked to CO2, it will take a long time (if ever) to change the momentum of the world economy. Kyoto had major flaws in the science and may be unworkable, and the government should certainly keep a sceptical eye, especially with regards to what other countries are doing.
Carbon-based fuel runs the economies of the world, and this cannot be changed overnight, in a decade, or maybe even in a century. While we have some great technology, it is not easy to innovate your way to renewable energy-no matter how much you want to, no immediate alternatives are available for transport fuel or major power generation (for example).
It makes no sense to cripple NZ’s economy through ill-advised regulation or ‘think-big’ projects if none of our trading partners are doing so- all it will ensure is that the next government will get elected on an anti-kyoto, anti-environment message.
While I agree it is frustrating to see such little action being taken globally, it is unlikely that NZ can really do that much. Incremental changes perhaps, such as rebuilding public transport and rail freight networks, a favourable regulatory environment towards wind, geothermal and hydro power development, and introducing a gas-guzzler tax for large cars. Imagine how many cycle lanes you could build for $500m.
As for Kyoto, it will soon be abandoned IMHO. Is there a scorecard of how badly the world is doing? I would be surprised if any signatories apart from the former USSR are meeting their obligations.
“You might as well say - don’t bother to vote, you only get one, it wont make any difference.” If voting cost $500,000,000 I don’t think many people would.
July 12th, 2006 at 7:47 am
Maybe we cannot prevent climate change but we certainly can improve our sustainability goals and be prepared for the need to change the way we produce food. Our recent events such as very severe snowfalls and flooding will enforce regional civil defence groups to improve their responses.
Hobbits and rings, David and Goliath - whatever, we must try. Joy.
July 12th, 2006 at 8:50 am
The assertion that insurance claims will exceed global GDP is utter bollocks. It may look that way on a graph by extrapolating from today, but reality doesnt behave the way graphs do all of the time. Going with the invalid theory for just a minute, for the insurance industry to continue to be profitable, premium income would have to exceed claims payments, and thus premium income would have to exceed global GDP. Yeah, right.
Insurance is a commercial activity, not a right, so insurance will simply become harder (and then impossible) to find. Ask folks who live in flood prone areas…
July 12th, 2006 at 11:05 am
Ok, so accepting the premise that we need to do something about C02 emissions why is Kyoto the right answer for NZ? $500 million is serious money so we need to make sure that it is spent well and IMO Kyoto does not do that or indeed take real steps to achieve the purpose of reducing CO2.
This is mainly because the credits that we “have” to buy are going to be sourced from countries that either:
1) Were never going to emit them in the first place because their inefficient Communist era industries collapsed.
2) Negotiated limits up to 10% *above* 1990 levels so that they, unlike us, don’t need to make a reduction.
Not to mention that there is evidence that other countries are cooking the books by under reporting emissions and over counting mitigating factors.
All of which leaves me highly sceptical about the justice and the benefits of sending $500 million overseas.
My solution is to spend it right here in NZ so that we get the benefit and we can see that it is actually spent efficiently on its intended purpose. Things like extending the Green’s excellent idea of free / subsidised solar water heaters and building more renewable power generation. That way we can save the world, improve our immediate environment, and receive the follow on economic benefits.
July 12th, 2006 at 12:04 pm
I agree with Joy … We must try.
Like everything else, it is much easier to have a big academic discussion about the “macro level” than it is to radically change one’s individual way of living at the micro level.
If every human in the developed world really worked at making changes in his/her own lifestyle and sphere of intererst … that would be a very good start.
As the saying goes: “Let the change begin with me.”
July 12th, 2006 at 12:27 pm
If the article is a bit short on support, here is some more. The expert quoted is Andrew Dlugolecki, Director of General Insurance Development world’s for the sixth largest insurance company (Aviva). He doesn’t think that the world economy is doomed, or that the rapid growth in natural disaster claims is necessarily due to climate change. But it is know that this is what all the climate models predict for the future, the world economy can’t function without insurance, and that the industry is not set up to deal with the likely long term future.
Granted crossing the two graphs and hitting 2065 is over simplified, but it’s only meant to be indicative of an approaching problem. It says “if current trends continue”, but the insurance industry works with trends, which might explain why they are nervous. Climate Change and the Financial Services Industry’ was a 2002 report launched by Swiss Re with the support of 295 banks, insurance and investment companies:
“losses as a result of natural disasters appear to be doubling every decade and have reached $1 trillion in the past 15 years. The increasing frequency of severe climatic events, threatening the social stability or coupled with significant social costs, has the potential to stress insurers, reinsurers and banks to the point of impaired viability or even insolvency”
and also from the UN environment programme:
by 2050 …”Most countries can expect their losses to range from a few tenths of a per cent to a few per cent of their gross domestic product each year. And certain countries, especially small island states, could face losses far exceeding 10 per cent,”
So if global growth is only predicted to be between 2 and 3% during this period, a few percent per year would put the planet into permanent recession. You could reply “It’s ok, we’ll work it out” and maybe we will. but any form of international emissions agreement is probably a good place to start.
And to back up the general trend extrapolated by Andrew Dlugolecki is this report which doesn’t extrapolate them by Evan Mills of Lawrence Berkeley National Laboratory, USA
” it will take a long time (if ever) to change the momentum of the world economy” - I think it’s going to change one way or another, and the global reinsurance industry is keen to see it changed actively as they seem to be one of the few people thinking long term, due to the profit cycle of their business. I think I’ll leave it with a final quote from that irresponsible doom sayer Munich Re:
“We need to stop this dangerous experiment humankind is conducting on the Earth’s atmosphere.”
Thomas Loster, Munich Re insurance
July 12th, 2006 at 1:50 pm
The New Intrenationalist magazine, http://www.newint.org, has exposed the folly of carbon credits in their latest edition.
Investing in forestry will only add to environmental problems as they will ultimately add to the increasing levels of carbon when they are eventually felled. Tree planting creats a short term solution and often has other environmental impacts through fast growing cash crops replacing indigenous forests, negatively changing soil conditions and damaging the economies of local communities by tying up land use.
Planting trees also provides an excuse for continuing environmental damage.
The only real course of action to have a lasting effect is for countries to bite the bullet and make the hard decisions to stop our depedence on fossil fuels!
July 12th, 2006 at 3:07 pm
Nice thoughts, Dave
Waste minimisaton would be a start.
Let’s get serious about understanding the over-consumption is the biggest part of the Kyoto committments.
If we decreased unneccessary consumption (at a cost to producers of unneccessary crap, but who cares…) there would be a lot less to be worried about on the homefront “coalface” of individuals trying to work out what Kyoto limits apply to them personally.
More public transport, efficent energy use and insulation of houses, more re-use and recycling, reducing waste in packaging and distribution of product to consumers, these are all aspects that no-one talks about becasue they want to do the whole “plant 5 trees so I can still use my SUV” trip.
During the school holidays, I drove around the country a bit with my kids. The contrast between leaving town and returning after the floods was enormous, and I found myself snorting “and these people deny climate change?” as I passed through borough and district council areas where there was definitely no impetus to call the unusual weather events of the past ten years a new trend, rather than a “100-year weather event”, for which changes in flood management techniques might be necessary.
Rebuilding homes in flood-prone areas is going to be impossible soon, as the insureres are starting to fight back against the inertia of climate-change denial. This is going to hurt a lot of small people far more than it hurts the government, the local bodies, the earthquake and natural disasters commission, or any other official entity. The powers that be need to start to get honest with the people living in their jurisdictions, and admit that the environmental situation has got away on them, and they’re not in control of the flooding potential of their districts.
It’s got beyond apocalyptic “people are gonna die” statements, to the level where people are seeing their re-built houses (from the floods two years ago) vanishing before their eyes into a similar lake of brown water. Farming in some marginal areas is going to be difficult, verging on “walk-off-the-land” impossible, under these conditions.
I am one of a generation of children who left their rural roots to qualify for city jobs, and I shudder to think how the families that stayed in my old district are coping, with roads compromised and sometimes electricity and telephone cut off or intermittent.
We have become a society based in urban experience, but this is not where 80% of the land is, despite 25-30% of the population living in Auckland. Rural services are stretched to breaking point by these types of weather events, but the answer from those in charge of budgets in the capital is more likely to be “get a committee together” than re-resourcing rural civil defense and rescue budgets as a matter of course.
Now, if one of our answers was not to plant forestry, but to re-generate native bush, as permanent reserve (ie: increasing the crown native forest reserves) then we might be starting to make a difference. How about starting with some of the slip-prone gullies that fall into rivers and create flooding in the first place?
July 12th, 2006 at 4:14 pm
Thanks for this post.
I have a question, for any helpful and informed person: during the negotiation of the Kyoto protocol, were any ideas were mooted around inviting developing countries in and simultaneously compensating them? ie compensating them in recognition of their development status and for the hardship of more expensive energy, fuel, material etc.
Because it seems that a major downside (in terms of CO2 emissions, not necessarily in terms of goals for poverty, development, wealth, etc) of leaving out developing countries is their impending industrialisation and development along the same energy- and environmentally- inefficient lines as the Western countries. Sure, not exactly the same path (since oil will be more expensive than the Western countries grew up on) but an inefficient path nonetheless in terms of carbon emissions. We all agree that adjustment to a cleaner more efficient way of living will be difficult for NZ, and by adopting Kyoto and thus influencing price signals could the developing countries not avoid this trap? Perhaps some contract of compensating them in exchange for joining Kyoto would be the best way to get them (and thus possibly the USA) on board and provide the best chance of making real cuts to CO2 emissions.
One, more general question - does anyone know where to find a good ‘potted history’ of the Kyoto protocol? eg who the early drivers were, what arguments were tossed around, etc
(In more somber moments) it strikes me that this whole process - the realisation of the Co2 problem, and the evolution of the international response to it - would be fascinating to watch, (from a social-science, political, economic point of view)… were it not so deadly serious.
It’s surely the biggest “collective action problem”, or prisoner’s dilemma, in the history of humanity. The costs to getting it wrong are so massive
*the destructiveness and costliness of more fluctuating weather patterns,
*the end of international stability as wars over resources and land intensify,
*sunset on potential progress on global poverty,
*the destruction of natural environments and species…
And the mix of actors is exceedingly complicated
*some with more to lose than others,
*each government guided by different internal political systems,
*each national population with different information about the parameters of the problem,
*each national population with a different capacity to take on board information about the problem, via different education systems, media systems, social structures, etc
And finally, our international institutions for solving collective action problems are weak, and have struggled to solve much simpler problems in the past. Take the invasion of Iraq as an example. One desirable goal which requires international co-operation is “peace between nations” - freedom from being attacked…. (I presume this is articulated officially somewhere, after all what is the security council for?), but the UN completely failed to prevent Iraq being invaded.
If I were running the Milky Way betting agency, I would have very short odds on
* virtually no CO2 reduction,
* small and very costly reductions when they do belatedly occur,
* massive increases in poverty and environmental problems,
* and a dispersal of citizens from powerful nations across the globe to wherever is comfortable to live.
And I’m sure many people agree with me. Of these many people, it seems that what separates Greens and spineless losers is their willingness to try and beat these odds. So I’d like to add my vote to Eredwen and Joy with “we must try”
July 12th, 2006 at 11:55 pm
somebody’s cost is somebody elses income. Are you really saying that GDP will DOUBLE the size of the world economy. Thats fantastic news. Perhaps we should accelerate it.
Perhaps you need to get a grip on reality. business will adjust. the world will still boom. and environmentalists will still cry wolf.
July 12th, 2006 at 11:59 pm
make that
somebody’s cost is somebody elses income. Are you really saying that Climate change will DOUBLE the size of the world economy. Thats fantastic news. Perhaps we should accelerate it.
Perhaps you need to get a grip on reality. business will adjust. the world will still boom. and environmentalists will still cry wolf.
July 13th, 2006 at 8:34 am
Why should society tolerate freeloading by polluters ?
Theye should be paying for the costs and inconvenience incurred by others (e.g. increased insurance costs, reloaction and other mitigation).
July 13th, 2006 at 10:04 am
Tom:
Very well stated.
The problems which come from people (and countries) who say things like:
“What I do won’t make any difference.”
“I’ll make the most of it while I still can …”
“Why should I (have to) do this when others don’t ?”
“They won’t notice if I just … ”
“I don’t have time to … ”
“It’s too late anyway so it won’t matter if I …”
“There is no proof that …”
“God won’t allow this to happen.”
“This is just a natural cycle. The world is coming out of an iceage.”
“We have a responsibility to our shareholders to… ”
“Our customers need … at an affordable price.”
“If we … jobs will be lost.”
AND the wonderful “one track mind” comment of sagenz (above)
are going to take a lot of (patient) education, thought and resources to deal with.
This is an ongoing job for all of us, collectively and individually, at all levels in all areas and in a variety of ways … often/always leading by example.
eredwen
July 13th, 2006 at 12:38 pm
It’s obvious Kyoto is going to fail - the agreement left out some of the worst polluters on the planet, i.e. India and China (nearly 40% of the world population).
Doing this also provided an incentive for polluters to migrate to countries that didn’t have to cut pollution levels.
The EU are giving away more carbon credits than there industry can use.
I think technological solutions need to be looked at - nobody is going to cut there standard of living.
July 13th, 2006 at 3:45 pm
Katie:
Consumption is the key, I agree. Interesting news yesterday from the New Economics Foundation - Vanuatu is the happiest place on earth. The survey is vindication of the need to de-couple success and consumption. US, “the great consumers” rank 150th. http://www.neweconomics.org/gen/uk108thinhappyplanetindex120706.aspx
Tom (and Mark):
Kyoto is one part of the solution to the environmental impasse we have reached. It was never intended as the be-all-and-end-all. Kyoto stops at 2012 by mandate. Nobody expects the problem to be sorted by then.
Last year France promoted a proposal by Brasil to tax “rich” nations for the ecosystem services provided by a group of “poor” nations. The Coalition for Rainforest Nations (http://www.rainforestcoalition.org/eng/) is a formal organisation that takes this concept a little further. The concept makes sense. Its a means of leveraging (some) developing countries into climate negotiations.
But as Brian Cohen said, “you’re all individuals”. It IS up to each of us. Maybe we can all seek a little more happyness and read the “Happy Planet Index”.
July 17th, 2006 at 10:51 am
For all this effort on supporting the unworkable (Kyoto) our government has abbrogated its core mission - first identify what will work, not neccesarily the electorally optimal solution, and move forward. There is nothing in Kyoto other than good intentions clouded by obsfucations. Politicians from all sides of the spectrum stumble under the suffocating complexity of carbon charges while ignoring the elegant simplicity of contraction and convergence [C&C]. (Greens included)
I lobbied the Prime Ministers Special Inquiry on Climate Change promoting an investment based scenario, evidencing the trillion$ of bricks and mortar players… and why C&C is the vehicle for effective climate management.
Kyoto is to little to late. It is a poor metaphor for a problem’s solution. It will not serve to fix what is broken. (and hasnt so far, the candle keeps on burning)
C&C, (see http://www.gci.org.uk) is the only tractable solution put up so far that can at least model realistically ‘alternative scenarios’. Now thats a start.
If intergenerational equity is the destination then C&C is the roadmap.