By Nick Silver, published in the Huffington Post, 8 December 2011
In a scene in the BBC comedy series set in the WW1 trenches, “Blackadder Goes Forth”, Captain Blackadder enquires as to the wisdom of the British Army’s tactics –was going “over the top” for the 16th time a good idea, when it had been a total disaster last 15 times? Ah, replies General Melchett, (played by Stephen Fry), the Germans couldn’t possibly expect the British to be so stupid as to make the same mistake 16 times in a row, so they will be taken completely by surprise!
The international negotiations over climate change, where the 17th Conference of Parties (COP) is now taking place in Durban go one further than Melchett – the main question being how can so many clever people persist in an enterprise that has failed 16 times in a row? My conclusion is that it suits all the parties concerned. First of all developing world governments; they can continue to blame rich countries whilst becoming the world’s largest emitters, and at the same time trying to get some money out of them. Meanwhile the US can blame China for blocking negotiations and the EU can blame the US, whilst all of them have an excuse for doing nothing. On the other hand “green” groups can blame governments, especially rich countries, safe in the knowledge that none of their proposed policies would get implemented which would make them very unpopular (a la Liberal Democrats) and mean they would have to sacrifice their principles or look hypocritical (on issues such as nuclear energy).
The process is under the auspices of the United Nations; an organization that was set up to avoid wars – two antagonistic nations would be persuaded to talk to each other at the UN, by the time they had gone through all of the UN’s procedures, they become so bored and fed up that they forget what they were arguing about and give up – the UN’s purpose is to prevaricate and delay, not to get things done. The only people who have some belief in the UNFCCC process seem to be the climate “skeptics” who have a mis-placed worry that a global deal might be achieved which will damage the economy. Let them be rest assured that there’s a snowball’s chance in hell of this happening.
The process did result in the Kyoto protocol and the carbon market. This has been a great success if you define success as the transfer of resources to vested interest. However, if you measure success by reductions in greenhouse gas (GHG) emissions it has been an unmitigated disaster – emissions have persistently increased by more than scientists’ most pessimistic predictions.
Climate change is, indeed, an intractable problem, which is why such an unprecedented amount of hot air has been expended on the subject. The main issue is the co-ordination/free –rider problem – it’s hugely expensive to reduce your own emission but everyone else benefits. However, there is a simple, viable solution, which has been proposed by a wide range of commentators from climate-“skeptic” Nigel Lawson, to scientist-activist Jim Hanson (that’s the climate change equivalent of Ian Paisley and Gerry Adams).
All individual governments have to do is put a substantial tax on GHG emission. If this tax is high enough it would massively incentivize people to use less, and for business to supply low carbon goods and services. Investment in low carbon economy is undermined by policy risk – investors, don’t trust incentives (with good reason as witnessed by the fiasco over solar feed-in tariffs), whereas taxes are almost never removed once the revenue have their teeth into them and are therefore very credible.
However, no one likes taxes. But governments raise lots of taxes anyway, so as long as the revenue from the carbon tax replaces an existing tax then the net burden of tax on the economy will not change. And most people would agree, even the most die-hard skeptics, that carbon is a “bad” (for example for reasons of energy security). Yet lots of things are taxed which are unambiguously good – for example employment. If, for example the UK imposed a tax of £80 per tonne of carbon, this would initially raise approximately £50 billion per annum. This would be enough revenue to remove income tax entirely for people earning less than £30,000 per annum. The result would be that the UK would become much less competitive in intensive energy using manufacture, but this would be more than compensated by a massive boost in employment and earnings for lower paid, hard-working people.
There would obviously be a number of difficulties to overcome – for example we would have to impose a tax on imported goods which would be difficult to calculate and would probably contravene some international trade treaty or other. But I’m sure these are not beyond the wit of man to solve.
