Excerpt From Green Economics: Confronting the Ecological Crisis

Can It Sell in Brussels, Beijing, and Buffalo? 

Can the simple modifications proposed in chapter 10 gather enough political support to be incorporated into a post-Kyoto treaty? Even if these changes would make an international treaty more effective, efficient, and fair—which they would—they are of limited interest if they are politically impossible…. Particularly in light of the setback in Copenhagen and the failure of the United States Senate to pass any climate legislation whatsoever, it is easy to be skeptical about the prospects for an effective and fair climate treaty. Nor does the present alignment of political power particularly favor progressive forces…. But perhaps the best way to pose the question is this: Do these demands give us our best chance of winning something worthwhile? 

The EU: The EU has a better track record of being willing to support an effective and fair climate treaty than either the United States or China, so let us begin in Brussels…. Placing caps on national emissions in all countries should please Brussels since it gives the EU more global emission reductions in exchange for its own reductions. Since the program allows for full carbon trading, it also allows the EU to lower the cost of meeting its commitments while ensuring that bogus trading by others cannot puncture holes in the global cap. If the EU’s historical resistance to full carbon trading was based on fears about holes, this program should assuage those fears….

China: China has argued forcefully that its underdeveloped status should exempt it from any mandatory cap. So it might appear there is no chance of selling this program in Beijing since it replaces China’s non-Annex-1 exemption from any mandatory cap with a mandatory cap, no matter how lenient. The question we need to ask is how China might be induced to do something it is not willing to do at this point—accept a mandatory cap. The program outlined above offers some important inducements. While China would not get nearly the free ride the Republic of the Congo would get under the Greenhouse Development Rights Framework, it would certainly be treated fairly given its low per capita cumulative emissions and low per capita GDP relative to the United States, Europe, and Japan…. Moreover, the five-point proposal would also permit China to sell more credits since MDC purchases would no longer be limited, as is the case under Kyoto. If China’s main concern is economic competitiveness vis-à-vis the United States, the EU, and Japan, this program would guarantee China a permanent competitive advantage compared to any country whose GDP per capita remained higher than China’s. China might also risk the anger of poorer countries and lose leadership status among LDCs if it blocks a treaty that would provide countries that are considerably poorer than China with more preferential treatment. Finally, if China continues to reject any mandatory cap, no matter how favorable, and insists instead on cutting emissions voluntarily, it will discover that the price for this kind of sovereignty is quite high. Voluntary reductions buy no quid pro quo reductions on the part of others in exchange, and as the most populous country in the world China benefits more when others reduce their emissions than any other country.

The United States: Of course the U.S. Senate—even when the Democratic Party had a sixty-seat majority—would not have ratified the treaty outlined above. The recommended changes do address the most common reason Senators voiced for rejecting Kyoto, namely that emissions were not capped in China. Moreover, the proposed changes increase the scope for carbon trading, which the United States has long demanded. But those were never reasons—they were merely excuses—for not ratifying Kyoto. As long as the United States continues to insist on riding for free on whatever sacrifices the rest of the world makes to avert climate change, does this mean “game over”?

In the case of the United States there are two questions worth asking: (1) Do the proposed changes provide the best opportunity for eventually winning U.S. support for an international climate treaty that is effective and fair? If not, (2) do the proposed changes best equip the rest of the world to proceed without U.S. ratification for the time being and to increase the pressure on the United States to join the civilized world in the long run?

We could easily demonstrate that the proposed changes are the best deal the United States should hope to get. But perhaps more importantly, the proposed modifications permit the rest of the world to proceed as they should without U.S. ratification for the time being. It keeps U.S. intransigence from derailing the only process that has any chance of preventing climate change equitably. It also gives the rest of the world the best opportunity to put more and more pressure on the United States to come around.

Just as it was possible to implement Kyoto without U.S. participation, it is also possible to implement the kind of treaty outlined above beginning in 2012 without U.S. participation. When the United States refuses to ratify and participate in an effective, fair, and efficient post-Kyoto treaty, the rest of the world can argue even more powerfully and irrefutably that this is a clear case of free riding by the country most responsible for causing the problem it refuses to help solve and most capable of shouldering burdens necessary to solve it. At that point the only kinds of pressure the world can ever bring to bear on the world’s greatest military power and largest economy can be considered: travel restrictions for U.S. citizens; expelling the United States from the Olympic Games and the World Cup; recalling foreign ambassadors to Washington; expelling U.S. ambassadors abroad; United Nations resolutions condemning U.S. behavior. The World Trade Organization has already signaled its willingness to authorize retaliatory tariffs against countries that unfairly award themselves competitive advantages by refusal to curb carbon emissions. While none of these measures will sway a U.S. government that persists in remaining obdurate, they do impose real costs that a rational calculation by U.S. policy-makers should weigh in the balance.

Green Economics: Confronting the Ecological Crisis by Robin Hahnel is available from M.E. Sharpe. To purchase the print edition please click here. To order 180-day online access from the Sharpe E-text Center click here. Coming soon from Google eBookstore and Barnesandnoble.com.