[az-leader] The Climate Leadership Vacuum

  • From: "Roland W James" <roland.james@xxxxxxx>
  • To: "audubon" <az-leader@xxxxxxxxxxxxx>
  • Date: Mon, 5 Apr 2004 17:38:26 -0700

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By 2050, over one million plant and animal species, 1/4 of all species =
on earth,  will have become extinct due to global warming, concludes a =
new study conducted by leading biologists on four continents, published =
in Nature.  As the leader in greenhouse gas emissions, the U.S. is the =
largest cause.
The Bush administration has halted or reversed even minimal steps to =
address this crisis. =20

Thanks for responding,   Agarwal and Gelbspan provide to responses re =
Cap and Trade of GHG
 emissions.   "...We simply can't finesse nature with accounting =
       (McCain-Lieberman is essentially accounting tricks.)

      FPIF-PetroPolitics Special Report        Ross Gelbspan
      January 2004    www.fpif.org -- also in March/April 04 Dollars and =

      --"Cap and Trade: Environmental Colonialism?:  The global South =
has long contended that the Kyoto cap and trade system is unjust.   =
Under Kyoto, each country's emissions cap is based on its 1990 emission =
levels--but developing countries argue that only a per-capita allocation =
of emission rights is fair.    What's more, they argue, provisions in =
the Kyoto Protocol allow industrial nations to buy limitless amounts of =
cheap emission reductions in developing countries and to bank them =
indefinitely into the future.  As the late Anil Agawwal, founder of the =
Centre of Science and Environment in New Dehli has pointed out, when =
developing nations eventually become obligated to cut their own =
emissions (under a subsequent round of the Kyoto Protocol), they will be =
left with only the most expensive options.  Agarwal considered this a =
form of environmental colonialism."  Dollars & Sense 4/04   (see more =
below in Gelbspan's paper)--This requires Washington level action--What =
can we do to "leverage" Washington?   1) unelect Bush, 2) do state =
Initiatives--green taxing of vehicles re efficiency and alternative =
fuels  and more efficiency and renewables in electric systems--move away =
from coal. =20

      Toward A Global Energy Transition
      By Ross Gelbspan

            Foreign Policy In Focus =20

      This paper details a plan with a set of three interactive and =
mutually reinforcing strategies designed to reduce the world's use of =
carbon fuels by at least 70%, and at the same time, create millions of =
jobs around the world, especially in developing countries.

      The plan is driven by concerns that global climate change is =
progressing far more rapidly than scientists anticipated even a few =
years ago.

      To control the escalating pace of change and to allow the climate =
to re-stabilize, humanity has to cut its burning of fossil fuels by at =
least 70% in a very short time. That is the consensus of more than 2,000 =
scientists from 100 countries reporting to the UN-sponsored =
Intergovernmental Panel on Climate Change in the largest and most =
rigorously peer-reviewed scientific collaboration in history.

      The urgency of the threat is spelled out in two other recent =
peer-reviewed studies corroborating the UN panel's findings. One focuses =
on environmental impacts, the other on future energy consumption.

      In 2001, researchers at the Hadley Center, Britain's principle =
climate research institute, found that the climate will change 50% more =
quickly than was previously assumed. That is because earlier computer =
models calculated the impacts of a warming atmosphere on a relatively =
static biosphere. But when they factored in the warming that has already =
taken place, they found that the rate of change is compounding. They =
project that most of the world's forests will begin to turn from sinks =
to sources-dying off and emitting carbon-by around 2040.

      The other study is equally troubling. Eleven researchers found =
several years ago that unless the world is getting half its energy from =
non-carbon sources by 2018, we will be locked into an inevitable =
doubling-and possible tripling-of pre-industrial carbon dioxide (CO2) =
levels later in this century. A follow-up study by many of the same =
researchers, published in Science in November 2002, calls for a crash =
program to develop a carbon-free energy economy. Using conservative =
projections of future energy use, the researchers found that within 50 =
years humanity will need to be generating at least three times more =
energy from non-carbon sources than the world currently produces from =
fossil fuels to avoid a catastrophic build-up of atmospheric CO2 later =
in this century.

      The science is taken very seriously outside the United States. In =
other countries, hardly anybody debates whether human activities are =
seriously affecting the climate. The debates are about policy choices, =
such as how to change energy delivery structures without wrecking =
national economies. The agreement on the urgency of the climate threat =
is evident in the responses in Europe. Holland has completed a plan to =
cut emissions by 80% in the next 40 years. The United Kingdom has =
committed itself to 60% reductions in 50 years. Germany is planning for =
50% cuts in 50 years.

      By contrast, the White House has become the East Coast branch =
office of ExxonMobil and Peabody coal, and climate change has become the =
pre-eminent case study in the contamination of the U.S. political system =
by money.

      Two years ago, U.S. President George W. Bush reneged on a campaign =
promise to cap carbon emissions from coal-burning power plants. He then =
unveiled his administration's energy plan, which is basically a shortcut =
to climate hell. In a truly Orwellian stroke, the White House excised =
all references to the dangers of climate change on the EPA's website in =
mid-2003. Finally, Bush withdrew the United States from the Kyoto =
climate negotiations, and the administration's chief climate negotiator =
declared that the United States would not engage in the Kyoto process =
for at least 10 years.

      Ad Hoc Group's Plan Offers First Ray of Hope
      However, there may be an approach that could address our =
increasingly inflamed atmosphere and our reluctant political leadership =
as well. It is provisionally called the World Energy Modernization Plan.

      This plan was developed by an ad hoc, informal group of about 15 =
energy company presidents, economists, energy policy experts and others =
who met at the Center for Health and the Global Environment at Harvard =
Medical School.

      Since its development three years ago, the plan was presented at =
side conferences to the climate negotiations in Buenos Aires and Bonn. =
It has been endorsed by a number of developing countries' =
non-governmental organizations (NGOs). It received a very positive =
reception from the former CEO of Shell-U.K. who was also director of a =
Group of Eight (G-8) Task Force on Renewable Energy. It was the subject =
of a briefing with a group of oil executives in Cairo. It attracted the =
interest of a small number of senators and congress members two years =
ago. Most recently, it was endorsed by a former British ambassador to =
the United Nations.

      The plan addresses a stark reality: The deep oceans are warming, =
the tundra is thawing, the glaciers are melting, infectious diseases are =
migrating, and the timing of the seasons has changed. All that has =
resulted from only one degree of warming. It is expected that the earth =
will warm another three to 10 degrees later in this century, according =
to the UN-sponsored Intergovernmental Panel on Climate Change (IPCC).

      Against that background, we are offering this set of regulatory =
strategies. While they have been reviewed by a number of economists and =
energy policy experts, they are still provisional. Some elements may =
require major revamping. Although we happen to think this proposal is =
elegant, we are not dogmatic about its particulars.

      We believe very strongly that these strategies present a model of =
the scope and scale of action that is appropriate to the magnitude of =
the climate crisis. To date, we have seen no other policy =
recommendations that adequately address either the scope or urgency of =
the problem.

      The plan involves three interacting strategies. One is a subsidy =
switch, in which industrial countries would eliminate government =
subsidies for fossil fuels and establish equivalent subsidies for =
renewable, non-carbon energy technologies. Another is a clean energy =
transfer fund, which entails creating a pool of money on the order of =
$300 billion a year to provide renewable energy technologies to =
developing countries. The last one is a progressively more stringent =
fossil fuel efficiency standard that rises by 5% per year; its adoption, =
perhaps within the Kyoto framework, could be complemented with the =
emissions trading mechanism to help nations meet it.

      While each of these strategies can be viewed as a stand-alone =
policy, they are better understood as a set of interactive policies that =
could speed the energy transition far more rapidly than if they were =
implemented in piecemeal fashion.

      If the subsidy switch in industrial nations were implemented in =
tandem with the progressive fossil fuel efficiency standard, we believe =
those two policies alone could jumpstart an energy transition in the =
North. But, as we know, the problem is global in scope. The transfer =
fund addresses the fact that even if the countries of the North =
dramatically reduce emissions, those cuts would be overwhelmed by the =
coming pulse of carbon from India, China, Mexico, and Nigeria.

      Subsidy Switch Could Lead to Fuel Switch
      The United States currently spends more than $20 billion a year to =
subsidize fossil fuels. The aggregate subsidies for fossil fuels in =
industrial countries has been estimated at $200 billion a year.

      We are proposing that in the industrial countries those subsidies =
be withdrawn from fossil fuels and equivalent subsidies be established =
for renewable energy sources. A small portion of the U.S. subsidies must =
be used to retrain or buyout the nation's approximately 50,000 coal =
miners. But the lions' share of the subsidies would still be intended =
for the major oil companies to retrain their workers and re-tool to =
become aggressive developers of fuel cells, wind farms, and solar =
systems. In other words, we envision the subsidies as a tool to help oil =
companies transform themselves into renewable energy companies.

      Fund to Help Poor Countries Go Green
      The second element of the plan involves the creation of a new =
$300-billion-a-year fund to help transfer renewable energy resources to =
developing countries. Virtually all poor countries would love to go =
solar; virtually none can afford it. Among them are countries with the =
smoggiest cities in the world today, such as China, Mexico, Thailand, =
and Chile.

      The late Dr. Stephen Bernow, assistant director of The Tellus =
Institute in Boston, came up with the estimated need for $300 billion =
per year for up to a decade to transfer non-carbon energy technologies =
to developing countries. One attractive source of revenue to fund the =
transfer lies in a so-called "Tobin tax," named after its developer, =
Nobel prize-winning economist Dr. James Tobin. This tax is levied on =
banks and other agents that conduct international currency transactions.

      Tobin conceived his tax as a way of damping the volatility in =
capital markets by discouraging short-term trading and encouraging =
longer-term capital investments. But it would also generate enormous =
revenues. Today the commerce in currency swaps by banks and speculators =
amounts to $1.5 trillion per day. A tax of a quarter-penny on a dollar =
would, for technical reasons, net the $300 billion a year, which could =
go for wind farms in India; fuel-cell factories in South Africa; solar =
equipment assemblies in El Salvador; and vast, solar-powered =
hydrogen-producing farms in the Middle East.

      Since currency transactions are electronically tracked by the =
private banking system, the need for a large, new bureaucracy could be =
avoided simply by paying the banks a fee to administer the fund. That =
administrative fee would, to some extent, offset the banks' loss of =
income from the reduction in currency trading that would result from the =
imposition of the tax. The involvement of the private banking system in =
administering the fund would also help in minimizing corruption in =
recipient countries by the banks' establishment of clear benchmarks for =
payment to contractors.=20

      The system, moreover, would give recipient countries latitude in =
negotiating contracts with renewable energy vendors. That way they could =
ensure domestic ownership of new energy facilities and require =
substantial employment of local labor in their construction and =

      Several developing country commentators have suggested that =
corruption could be further reduced by requiring recipient governments =
to include representatives of ethnic and indigenous minorities, =
universities, NGOs, and labor unions in making decisions about the =
procurement and startup of new energy installations.

      The only additional bureaucracy would be an international auditing =
agency to monitor transactions to ensure equal access for all energy =
vendors and to review contracting procedures between banks, vendors and =
recipient governments.

      If a Tobin tax proves unacceptable, a fund of the same magnitude =
could be raised from a tax on airline travel or a carbon tax in =
industrial countries, although both these sources are more regressive. =
Florentin Krause, of the IPCC's Working Group III, and Stephen DeCanio, =
former staff economist for the Reagan Council of Economic Advisers, =
estimate that if carbon emissions were taxed at the rate of $50 a ton, =
the revenue would cover the cost of transferring clean energy =
technologies to developing countries.

      (At this point, we have not calculated what would happen to =
transitional prices of carbon fuels if subsidies were removed and a =
carbon tax imposed simultaneously. That may, or may not, cause too large =
an economic shock in the short term.)

      Regardless of its revenue source, the fund would be allocated =
according to a United Nations formula. Climate, energy use, population, =
economic growth rates, and other factors would be used to determine each =
developing country's annual percentage.

      Individual countries would decide how to utilize their share. For =
example, if India were to receive $5 billion in the first year, it could =
pick its own mix of wind farms, village solar installations, fuel cell =
generators and biogas facilities.

      In this hypothetical example, the Indian government could then =
entertain bids for these clean energy projects. As contractors reached =
specified development and construction benchmarks, they would be paid =
directly by the banks. And the banks, as noted, would receive fees for =
administering the fund.

      As developing countries acquired technology, the fund could simply =
be phased out, or the money in it could be diverted to other global =

      The fund would not be a conventional North-South giveaway. Rather, =
it is envisioned as a transfer of speculative, non-productive resources =
from finance sector transactions to the industrial sector for intensely =
productive, wealth-generating, job-creating investments.

      The fund also could be a critical investment in U.S. national =
security by improving developing nations' economic wellbeing. The global =
climate envelops us all. What is needed is the kind of thinking that =
gave rise to the Marshall Plan after World War II. The plan converted =
impoverished and dependent European nations into prosperous and robust =
trading partners. We believe a clean energy transfer fund of this sort =
would have a similar impact on developing and transitional economies.

      Equitable International Emission Standards
      The third and unifying regulatory strategy of the plan calls on =
the parties to Kyoto to subordinate the ineffectual and inequitable =
system of international emissions trading to a simple and equitable =
fossil fuel efficiency standard that becomes 5% more stringent each =

      This mechanism, if incorporated into the Kyoto Protocol, would =
harmonize and guide the global energy transition in a way that emissions =
trading cannot.

      The system of international emissions trading at the heart of the =
Kyoto Protocol is based on the concept that a country that exceeds its =
allowed quantity of carbon emissions can buy emission credits from a =
country that emits less than its allowed quantity. Under this system, =
the United States, for instance, can pay Costa Rica to plant more trees =
to absorb carbon dioxide and subtract the resulting reduction from its =
own allowance.

      This system of international "cap and trade," as it is called in =
the jargon of the Kyoto negotiators, has significant failings.

      Emissions trading can work relatively well within nations. =
Domestic cap-and-trade programs can help meet the goals of a =
progressively more stringent fossil fuel efficiency standard because =
they are easy to monitor and enforce.

      However, internationally, the cap-and-trade system breaks down on =
several counts. It is not enforceable and is plagued by irreconcilable =
equity disputes between the countries of the North and South.

      Industrial and developing countries are at odds over allocating =
emission rights. The industrial nations participating in the Kyoto =
process determined that each country's emission rights would be based on =
its 1990 levels to protect their economies. By contrast, developing =
countries contend that only a per capita allocation is fair. But if the =
emission quota for each U.S. citizen were the same as for each citizen =
of India, that would decimate the U.S. economy.

      Another equity issue was articulated by the late Anil Agarwal, =
founder of the Centre for Science and Environment in New Delhi. Agarwal =
criticized the provisions in the Kyoto Protocol that allow industrial =
nations to buy limitless amounts of cheap emission reductions in =
developing countries and to bank them indefinitely into the future. This =
means that when developing nations eventually become obligated to cut =
their own emissions (under a subsequent round of the Kyoto Protocol), =
they will be left with only the most expensive options. This clearly =
constitutes a form of environmental colonialism.

      International carbon trading cannot be the primary vehicle to =
propel a worldwide energy transition. Even if all the problems with =
monitoring, enforcement, and equity could be resolved, it could at best, =
be used as a fine-tuning instrument to help countries meet the final 10 =
to 15% of their obligations.

      We simply can't finesse nature with accounting tricks.

      Instead, the parties to the Kyoto talks should increase their =
fossil fuel energy efficiency by 5% every year until the global 70% =
reduction is attained. That means a country would either produce the =
same amount of goods as the previous year with less carbon fuel or =
produce more goods with the same amount of carbon fuel use as the =
previous year.

      Since no economy can grow at 5% for long, emissions reductions =
would outpace long-term economic growth, benefiting the environment.

      Every country would begin at its current baseline for emission =
levels, which would eliminate the inequities inherent in the =
cap-and-trade system. In tandem with the fund, this would ensure the =
participation of developing countries.

      During the first few years under the proposed efficiency standard, =
most countries would likely meet their goals by implementing low-cost =
improvements to their energy systems. After a few years, however, more =
expensive technology would be required to meet the progressively higher =
standard, making renewable energy sources more cost effective in =
comparison to fossil fuel solutions. The demand would create the mass =
markets and economies of scale for renewables.

      This approach would be far simpler to negotiate than the current =
protocol, with its morass of details involving emissions trading, =
reviews of the adequacy of commitments, and differentiated emission =
targets for each country. It would also be easier to monitor and =
enforce. A nation's compliance would be measured simply by calculating =
the annual change in the ratio of its carbon fuel use to its gross =
domestic product. That ratio would have to change by 5% a year.

      The approach has a precedent in the Montreal Protocol, under which =
companies phased out ozone-destroying chemicals. That protocol was =
successful because the same companies that made the destructive =
chemicals were able to produce their substitutes with no loss of =
competitive standing within the industry. The energy industry must be =
restructured in the same way. Several oil executives have said in =
private conversations that they can, in an orderly fashion, decarbonize =
their energy supplies. But they need the governments of the world to =
regulate the process so all companies can make the transition in =
lockstep without losing market share to competitors. A progressive =
fossil fuel efficiency standard would provide that type of regulation.

      On economic grounds, this plan makes perfect sense. Recently, =
Swiss Re-Insurance said it anticipates losses from climate impacts to =
reach $150 billion a year within this decade. Munich Re, the world's =
largest reinsurer, estimates that within several decades, losses from =
climate impacts will reach $300 billion a year. They will affect the =
banking and insurance industries; cause property damage; raise health =
care costs; ruin crops; and destroy energy, communications and =
transportation infrastructures. Last year, the largest re-insurer in =
Britain said that unchecked climate change could bankrupt the global =
economy by 2065.

      By contrast, the dramatic expansion of the overall wealth in the =
global economy from a worldwide energy transition would create new =
markets and significantly invigorate existing ones.

      Development economists agree that energy investments in poor =
countries create far more wealth and jobs than equivalent investments in =
any other economic sector. We believe a plan of this magnitude would =
create millions of jobs in developing nations. It would raise living =
standards abroad without compromising ours. It would allow developing =
countries to grow without some of the budgetary burdens of importing =
oil. And in a very short time, it would nudge the renewable energy =
industry into the position of leading global economic growth.

      A global energy transition requires governments to regulate some =
of the worlds largest corporations. On the record, corporations =
reflexively resist any move toward new regulation. But history indicates =
that if regulations are non-discriminatory, industry-wide and =
predictable, then corporations can depend on them in formulating their =
strategic plans, and business leaders will accept them. These strategies =
provide a viable option to the multinational oil majors: Submitting to =
new regulations, they will gain a $300-billion-a-year market.

      When it comes to the issue of sustainable development in a rapidly =
deteriorating biosphere, many commentators have observed that changes in =
values frequently follow changes in technology. It is hoped that the =
very act of addressing the true proportions of the climate crisis will =
bring home to everyone the realization that we are living on a planet =
with limits-and that we are now bumping up against those limits.

      Ultimately, a crash program to rewire the world with clean energy =
would hopefully yield far more than a fuel switch. It could very easily =
lead to closed-loop industrial processes, smart-growth planning, far =
more recycling and reuse, the adoption of environmental accounting in =
calculating national GDPs, and, ultimately, a whole new ethic of =
sustainability that would transform our institutions, practices and =
dynamics in ways we cannot begin to imagine.

      Energy Transition Could Be Global Pilot Project
      The realization that we are all part of a larger and increasingly =
vulnerable community could engender a new sense of common purpose. We =
could all keep very busy for years to come by applying energy transition =
strategies and then forging the effort into a global project for =
redesign of the entire human enterprise.

      This perspective may well be overly ambitious. But the =
alternative-given the escalating instability of the climate system and =
the increasing desperation caused by global economic inequities-is truly =
too horrible to contemplate.

      A meaningful solution to the climate crisis could potentially be =
the beginning of a much larger transformation of our social and economic =
dynamics. A solution that is appropriate in scale and magnitude also =
could serve as a pilot project that could begin to democratize the =
global economy.

      Just as we are seeing the globalization of the economy, we are =
also seeing the globalization of communications among activist groups. =
NGOs can use the UN Framework Convention on Climate Change to influence =
the energy transition process. In the long run, they cannot only help =
step up the pace of emissions reductions, but they also can intervene in =
other areas of global economic governance.

      It is just possible that the act of rewiring of the planet could =
begin to point us toward that optimal calibration of competition and =
cooperation that would maximize our energy, creativity, and =

      Ross Gelbspan is a former reporter for the Boston Globe and the =
author of The Heat Is On: The High Stakes Battle over Earth's Threatened =
Climate (www.heatisonline.org) His latest book, Fevered Planet, is =
scheduled for publication in 2004 (Basic Books).

      introduction | politics | climate | war | development | =
alternatives | resources
      FACT SHEETS: industry | greenhouse gas producers | oil & war | oil =
& poverty | subsidy shift=20


            Published by Foreign Policy In Focus (FPIF), a joint project =
of the Interhemispheric Resource Center (IRC, online at =
www.irc-online.org) and the Institute for Policy Studies (IPS, online at =
www.ips-dc.org). =A92003. All rights reserved.

            Recommended Citation
            Ross Gelbspan, "The Global Record," Foreign Policy In Focus =
(Washington, DC & Silver City, NM: Interhemispheric Resource =
Center/Institute for Policy Studies/SEEN, January 2004).

            Web location:

            Production Information
            Writer: Ross Gelbspan
            Editor: Miriam Pemberton, IPS=20
            Layout: Tonya Cannariato, IRC

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