Categories
Economics Environment Politics & government

[1257] Of a sensible US proposal but a better German option

Anthropogenic climate change is a contentious issue in the international arena; it is a tragedy of the global commons. The latest high profile debate took place at the Germany-hosted G8 summit in the week of June 6 2007. The discussion stayed true to the current trend that no longer doubts the existence of human-induced climate change but rather, seeks to mitigate the effects of climate change. At the meeting, two road maps were presented: one by Germany and another by the United States with the former being supported by a clear majority. Within this context, I fall within the majority but that does not necessarily mean I reject the US version outright.

The German proposal calls for the halving of the 1990 global carbon dioxide level by 2050. Such suggestion would limit temperature increase to between 1.5 and 2.5 ÂșC. If it is adopted as the son of Kyoto, it would be binding just like Kyoto. As a note, the Kyoto Protocol demands a 5% cut of carbon dioxide as well as five other greenhouse gases from the 1990 level by 2012.

The US has refused to that proposal and has come up with an alternative of its own. Instead of reducing the level of carbon dioxide in the atmosphere, it seeks to concentrate on reducing carbon intensity. Carbon intensity is simply a fancy word describing the ratio of carbon emissions to gross domestic product (GDP): the lower the figure, the more efficient the economy operates in term of carbon emissions.

While politically angry at the US, I am sympathetic to the US suggestion after giving it a fair inspection.

It is typical to blame countries with the larger total annual emissions of contributing to climate change. Applying the total annual national emissions as a basis of comparison is dependent on the size of the country, population and geography-wise. The larger a country is, the higher the emissions would be with all else equal. For instance, Malaysia contributed 0.6% of global emissions in 2002. If ASEAN is to be taken as a state, it, inclusive of Malaysia, would produce approximately 3.7% of global carbon emissions in 2002. That would rival a smaller Germany which contributed 3.3% of global emissions in the same year; Germany according to Wikipedia, based on figures produced by the United Nations Statistics Division, was the sixth largest emitter of carbon dioxide in 2002. Such comparison does not control for population or economy size. Without such control, the data is noisy and produces misleading conception.

In other words, using annual national carbon emissions for comparison purpose is almost meaningless and unfairly put too much blame related to climate change on the shoulders of large countries. What would be better for comparison purpose is the carbon intensity measurement as proposed by the US. Or, perhaps, my favorite, emissions per capita.

Take a look at annual national emissions in 2002:

GFDL. Wikipedia. http://en.wikipedia.org/wiki/Image:Ratio_of_GDP_to_carbon_dioxide_emissions.PNG

Then, observe carbon intensity in 2005 (in this graph, the red is below world’s average and green is above; the dimension is GDP/emissions. The inversed dimension means higher figure equals to higher efficiency):

GFDL. Wikipedia. http://en.wikipedia.org/wiki/Image:Countries_by_carbon_dioxide_emissions_world_map_deobfuscated.png

For emission per capita in 2003:

GFDL. Wikipedia. http://en.wikipedia.org/wiki/Image:Countries_by_carbon_dioxide_emissions_world_map_deobfuscated.png

Despite me preferring carbon intensity used as comparison purpose to annual national emissions, why would I not lending my support to the US proposal?

The answer is this: we need to lower the level of carbon dioxide in the atmosphere. In fact, not just carbon dioxide but other sensible greenhouse gases. Lower carbon intensity alone does not do that job. Indeed, effort to lower carbon intensity does not mean lower global carbon level. During a period of economic boom and technological progress, efficiency as well as the carbon level could increase. Depending on the rate and volume, it would lead to increase in carbon level in the atmosphere.

How is that possible?

Efficiency is essentially a multiplier and it basically could reflect emissions reduction know-how. Greater technological level could permit greater efficient; lower rate. Then we have volume which could be interpreted as economic activities. Finally, of course, there is some rate of carbon absorption by nature. The diagram below illustrates the flow versus level model which is typical in economics:

By Mohd Hafiz Noor Shams. Some rights reserved.

The product of efficiency and volume, subtracted with the amount of absorption could be positive. To make it clearer, assuming increased efficiency leads to lower emissions, ceteris paribus, a sufficient increase in volume could erase any reduction made possible through higher emissions if volume is held constant.

The US proposal does not address that but the German proposal does. Hence, my support. Despite that, the German proposal should incorporate the other suggestion without losing sight of the level reduction goal.