Cool on warming – The financial crisis could derail progress on the growing threat of climate change
Michael Richardson – SCMP – Updated on Oct 17, 2008
Are we entering the worst of all worlds, one in which financial turmoil and recession make it increasingly difficult for governments and the private sector to tackle a less immediate but more serious long-term threat to human welfare and stability in Asia: disastrous climate change?
Until recently, many advanced economies put controlling greenhouse gas emissions at the top of their reform agendas, after a series of reports from scientists advising the United Nations warned that growing levels of solar heat held in the atmosphere by a blanket of carbon dioxide and other man-made pollutants is intensifying extreme weather, melting glaciers, raising sea levels and aggravating drought and water shortages.
Today, however, the credit crisis and economic slowdown have forced a change of priorities. Recession is expected to reduce the rapid rise in global warming emissions. But it is likely to be only a temporary respite. The chief concern now is to revive the very economic growth that is contributing to climate change. Much of the growth is energy- and carbon-intensive. It is based on fossil fuels and converting forests to farmland.
The preoccupation with restoring loans for business investment, while spurring growth and consumption to create jobs, will make it even more difficult for the international community to reach a new agreement on curbing climate change by the end of next year, when a high-level meeting in Copenhagen is supposed to finalise a global warming deal to succeed the Kyoto Protocol, which expires in 2012. The longer and deeper the recession, the more difficult it will be to reach a deal on effective emission control. In the worst case, the talks might collapse, as happened last July with the global trade negotiations.
Yu Qingtai, China’s climate change envoy, said last week he was “fairly pessimistic” about prospects for the climate negotiations, adding that progress achieved so far was extremely limited. Yvo de Boer, the UN climate chief, admitted he was also worried about the outlook as governments focused on keeping their banks and economies afloat.
“There’s a risk that less public money will be available in the north for co-operation with the south on technology and capacity building,” he said. “Taken together, there’s a risk that short-term concerns will prevail.”
This is a make-or-break issue for China, according to Mr Yu. The point was reinforced last week in Beijing at a meeting of East Asia Summit countries on climate change. Wan Gang , the minister of science and technology, told officials from the 16 summit nations and UN agencies that developed economies should speed up the transfer of clean energy technology to developing nations and lower the cost.
Kyoto binds 37 industrialised countries to cut greenhouse gas emissions by an average of 5 per cent below their 1990 levels by 2012. It sets no targets for developing countries. But now that China, India and other rapidly developing economies have emerged as major contributors to global emissions, they are under pressure to join a post-Kyoto accord and cap their pollution.
Part of the bargaining price for doing so will be a transfer of technology and resources from industrialised countries to cushion the cost of economic development based on cleaner energy. Yet the current economic and financial crisis is likely to result in less aid to developing nations to curb their soaring emissions.
Recent sharp falls in the price of oil, coal and gas tend to reduce the incentive to improve energy efficiency. But consultants McKinsey & Co think that the best hope of slowing climate change in the current crisis is to promote energy conservation schemes that save money. They reckon that emissions-cutting measures such as better building insulation, lower fuel consumption and more efficient lighting and air conditioning, pay for themselves over time via lower energy bills.
However, McKinsey researchers found that the most costly projects, such as capturing carbon dioxide from coal-fired power plants and storing it underground, refining bio-diesel, and some renewable energies that are far more expensive than fossil fuels, are likely to be casualties of prolonged recession. So, too, is expanding nuclear power, with its high capital costs, even though it emits no carbon dioxide.
Michael Richardson is an energy and security specialist at the Institute of Southeast Asian Studies in Singapore. mriht@pacific.net.sg