Block’s Indicator of Sustainable Growth

by Ray Block

The quote is from Yves de Boer, Executive Secretary of the UN framework convention of climate change (UNFCCC). He was presiding at the Bonn climate change talks in the four day talkfest 10-14 August 2009.

Reaching some sort of agreement on the costs of climate change adaptation, availability of technology and building skills in developing nations is becoming urgent, as the countdown to COP15 December meeting in Copenhagen gets ever closer.

De Boer’s message is that ” a climate deal in Copenhagen this year is an unequivocal requirement to stop climate change from slipping out of control.”

The climate scientists are saying that deep cuts in carbon dioxide should start no later than 2015 or 2016, otherwise the climate change risks become unmanageable.

Chinese leaders, who are more keen on growing their economy to be at least the equal of United States rather than balancing this with controls on carbon emissions, are saying they will be ready to impose a 50 per cent reduction on carbon emissions in 2050. But nothing much before then.  

The Financial Times (September 1 2009) reports that Zou Ji, head of the environmental economics and management  department of Renmin University in Beijing , says that his research shows that China would face a cost of US$438 billion a year in reducing emissions by 2030.

This represents a cost equivalent to 7.5 per cent of China’s  gross domestic product in 2030. 

Confusing the situation even further, the Chinese Academy of Sciences is reported as saying that ”with major technological support from developed nations, China could see its emissions peak between 2030 and 2040.”  (Financial Times August 14 2009)

Alternatively, if you costed out o.5  to 1 per cent of GDP, says China and India, as  the price richer countries should pay developing countries each year for adaptation to climate change, it would be more than $300 billion a year.

The Royal Society in London reviewing earlier estimates of adaptation to climate change by the UN, Nicholas Stern, World Bank, Oxfam and others says the adaptation costs are going to be much higher than previously estimated.

The World Bank in 2006 had estimated adaptation costs to developing countries for 2010-2015 at $9 to 41 billion a year. Stern’s estimate was for $4 to 37 billion a year. Oxfam had suggested in excess of $50 billion a year and the UNDP $86 to 109 billion a year.

The Royal Society’s review suggested an all up cost of $300 billion a year.

How you reconcile this with the Chinese estimate for that country alone of $438 billion a year shows  that the wide variations in the estimates are degenerating into farce.

When you realise that the so called rich countries are not going to pay very much at all, the top down studies of adaptation costs are of limited value. What is urgently needed are bottom up estimates of adaptation costs by country.

For example, take Indonesia, with the fifth largest population in the world at 240 million in 2009, but vulnerable to overpopulation. The Jakarta Post is saying that if the annual population increase of 1.3 per cent was maintained, the population would surge to 470 million by 2060.

The CIA Factbook lists the Indonesian environmental issues as subject to flooding, severe droughts, tsunamis, earthquakes, volcanoes, forest fires. Deforestation is a major problem, as is water pollution from industrial wastes, sewage, air pollution in urban areas, smoke and haze from forest fires.

The Indonesian National Climate Change Council is proposing an ambitious 40 per cent cut in carbon emissions by 2030, compared with 2005 levels. The Council is saying that such a cut in emissions could be achieved if reforestation was pursued and peatland areas protected.

Australia as the nearest rich country, and  a neighbour could take on the mission of putting the funds together,along with know how and manpower to achieve the Indonesian environmental ambitions.

United States could take on the same role in Latin America. Japan, China, South Korea and India could help their Asian neighbours, and the European Union could achieve the same objectives in Africa and the Middle East.

The donor countries could use offset arrangements similar to the Clean Development Mechanism under the Kyoto Protocol to help bring down emissions. The UNFCCC could then take on the task of being the climate change auditors to ensure progress was being made.

This would be a lot more practical than the UN handwringing exercise of being the climate change convenors, without any powers at all.