Reworking Kyoto from scratch

The media script was already written long before the G-8 summit concluded. The European nations would close ranks behind the German chancellor’s proposal that the eight commit to a “hard” 50 per cent reduction in greenhouse gas emissions from 1990 levels by 2050. The United States would be isolated, and Canada -- or rather, Stephen Harper -- would be forced to choose: stand alone with President Bush, or welcome the Europeans as his new overlords.

Instead, a rather different script played out...

The media script was already written long before the G-8 summit concluded. The European nations would close ranks behind the German chancellor’s proposal that the eight commit to a “hard” 50 per cent reduction in greenhouse gas emissions from 1990 levels by 2050. The United States would be isolated, and Canada -- or rather, Stephen Harper -- would be forced to choose: stand alone with President Bush, or welcome the Europeans as his new overlords.

Instead, a rather different script played out. Calculating it was better to have the Americans inside the tent than out, the Europeans let Mr. Bush off with a commitment to “substantial” reductions in emissions, with an additional pledge to “consider seriously” the 50% target. In return, Mr. Bush agreed to hold his proposed summit of the world’s largest emitting countries under the existing UN framework, a la Kyoto, rather than in competition with it. Yet it is clear that whatever emerges from the coming round of negotiations will be nothing like Kyoto. A successor to Kyoto, perhaps, but not Kyoto II.

This is all to the good. Whatever your view of the climate change question, there was never any prospect of achieving the required reductions in global greenhouse gas emissions without the US being involved, and no prospect of the US agreeing to reduce its emissions without a similar commitment from China, India and other large developing countries. If that means renegotiating Kyoto from the ground up, so be it. The story of the conference is that the Americans are in. And if the US is in, China and India will have to follow, or face almost certain trade restrictions.

For Canada, this is especially good news, and fully validates the Harper government’s gamble -- that it could walk away from the short-term targets the Chretien government agreed to at Kyoto without serious international consequence. That there was not a word of rebuke in the G8 communique suggests we will not be made to face the penalties prescribed in Kyoto in any subsequent agreement, as would have been the case under a simple Kyoto II scenario. Indeed, the Harper government’s recent commitment to a 60 to 70 percent reduction (from 2006 levels) by 2050 is mentioned approvingly.

If only we had a plan to achieve even these. We may have more realistic targets to work with, but the emission-reduction policies our political leaders have seen fit to propose remain as unrealistic as ever. That’s true not only of the government, but the opposition: the same weird mix of hysteria and complacency can be seen in every party’s platform. So, on the one hand, we have such absurd bits of regulatory overkill as the sudden edict banning lightbulbs, while on the other hand, we get the refusal of all the parties, save the Greens, even to talk about a carbon tax, or any similar device that would impress the social costs of greenhouse gas emissions on consumers. Instead, every party seems to think it is sufficient to target a handful of large corporations -- the so-called “large final emitters.” But the latter account for just half of this country’s emissions. Leaving consumers out of the equation is as silly as negotiating a “global” agreement without the participation of the United States, China and India.

Somewhere between now and 2050, we may get it through our heads that global warming, as serious a challenge as it may present, is not fundamentally different from the everyday problem of scarcity, the predominant concern of economics since its founding. Indeed, if you stop to think about it, scarcity -- the yawning imbalance between our limitless wants as consumers and the finite resources at hand to meet them -- is an even scarier prospect, implying widespread privation and conflict, and not in some far-off future but here and now.

Imagine if we were to become as seized with this problem as we are now with global warming, and imagine if we approached it in the same way: with commissions, and studies, and subsidies; with government pamphlets instructing us how to cut back on our consumption of essential foods and outright bans on peculiarly “wasteful” practices like dining out. The young might bring the same religious zeal to improving efficiency that now they bring to curbing CO2 emissions. Rock stars might encourage us to buy one shirt instead of two, to “leave more for others.”

Or we could just leave it to prices. I mean it when I say that scarcity is no less urgent a problem than climate change, and requires the same universal social commitment to frugality that is now urged upon us in the name of carbon neutrality. And in fact that is exactly what prices extract from us. No matter where we go or what we do, in any sale or purchase we make, prices are there, forcing us to economize in our use of scarce resources -- in effect, to take account of the needs of others, whether we wish to or not.

Prices are the remorseless regulators of a market economy, incorruptible and inescapable, with a reach that the most totalitarian-minded gauleiter could only envy. And they work: where prices are left to do their job, shortages are unknown. We have enlisted them to good effect against scarcity, so much so that we are hardly even aware of it. Why will we not do the same for global warming?