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The Copenhagen Climate Extortion

Friday, October 23, 2009

Going into the Copenhagen climate change summit, the delegates appear to be competing over who can offer the most ambitious and least realistic targets.

If the upcoming Copenhagen climate change summit fails to result in substantive agreements, as increasingly seems likely, look for the global warming lobby to turn up the extortion heat. Here’s the dilemma:

The United States, Europe, Japan, and other developed countries are steadily cutting per capita emissions. But there remain contentious divisions about what future cuts are technologically and economically feasible. Going into the talks, the delegates appear to be competing over who can offer the most ambitious and least realistic targets so everyone can return from Copenhagen satisfied that they did their part to save the world, at least on paper.

Using 1990 as the benchmark, Britain pledges to reduce emissions by the year 2020, or shortly thereafter, by at least 34 percent. Japan pledges a 25-percent cutback. The U.S. House of Representatives bill passed in June of this year, less ambitious by the airy standards of climate geopolitics but no more realistic, assures a 17-percent reduction from 2005 levels.

But as Roger Pielke, former director of the Center for Science and Technology Policy Research, notes, “the problem with all these promises to achieve deep and rapid cuts in emissions is that no one knows how these cuts are going to happen, and most simply cannot happen as promised. So these countries have turned to designing very complex policies full of accounting tricks, political pork, and policy misdirection.”

Making promises and expecting the future to miraculously take care of itself appears enough to satisfy many enviro-romantics.

Making promises and expecting the future to miraculously take care of itself appears enough to satisfy many enviro-romantics. But the narrative gets worse, far worse. Someone will have to pay for attempting to achieve this scientific Great Fantasy, particularly in the financially strained developing world—and that’s where the extortion factor comes in.

The Stern Review on the Economics of Climate Change, commissioned by the British government, estimates that reorganizing the world energy economy could cut GDP growth by upwards of 1 percent, and perhaps as much as 5 percent, per year. Under current Copenhagen treaty drafts, developed countries are expected to cover the modernization and clean up of the energy sector in developing countries, which could result in an annual transfer of $150 billion by 2020.  

Now, some measure of wealth redistribution can have merits, including greater global stability. And if indeed the world faces environmental disruptions from greenhouse gases and the more prosperous countries are in a better position to finance mitigation efforts, then expediency if nothing else dictates that targeted foreign aid to address climate change may be warranted. But there must be limits—and strings. And there’s no sign yet that’s in the cards.

The issue was put in play earlier this month, rather bluntly, in an interview with the incoming president of the summit, Connie Hedegaard, the Danish minister for climate and energy. It’s the obligation of North America, Europe, Australia, and Japan to “prove … to the developing world [that] we know we’re going to pay, or there will be no agreement,” she said.

This alliance of developing countries is aggressively promoting what amounts to a wealth-transfer scheme to lure countries with the dirtiest and fastest growing industrial sectors into the cap-and-trade fold.

Let’s be clear on what she is saying. The economically successful countries of the world are being threatened into reducing emissions far beyond what is possible, its impact on growth and world economic stability be damned, while simultaneously financing the transition of the rest of the world to a lower-carbon economy. Driving the push for a funding mechanism is the Group of 77 (G-77) and China. Its 130 member states from the developing world make up a solid majority in the United Nations. This alliance of developing countries, complimented by a collection of nongovernmental organizations (NGOs), aggressively promotes what amounts to a wealth-transfer scheme to lure countries with the dirtiest and fastest growing industrial sectors—China, India, and Brazil are the Big Dirty Three—into the cap-and-trade fold.

Hedegaard is merely echoing the talking points of developing countries, egged on by anti-globalist NGOs demanding that the industrialized West face its “historical responsibilities” for growing its economies on the back of low-cost coal and oil.

“Developed countries have been accumulating a climate debt for the past 200 years, based on their fossil fuel intensive development,” declared Stephanie Long, a spokesperson for Friends of the Earth. “This climate debt must be repaid … [t]his means that those that are historically responsible for climate change must reduce their emissions to give more resources to developing countries so they can develop sustainable economies.”

Seizing the moment, Ambassador Lumumba D'Aping of oil-rich Sudan, home to the genocidal government of Omar al-Bashir and a member of the G-77, has attacked the developed world as climate terrorists, intent “to maintain their profligate consumption lifestyles at the expense of the rest of humanity, and to do that by spinning it as if the rest of the world is responsible for damaging the environment.” His piece of flesh: “5 percent of the developed countries’ (annual) GDP.”

Reorganizing the world energy economy could cut GDP growth by upwards of 1 percent, and perhaps as much as 5 percent, per year, according to one estimate.

The suddenly emboldened emerging countries want the best of both worlds: limited environmental regulation so they can keep growing, with the West covering their under-funded mitigation and modernization efforts. Can you say “free rent”?

Granted, any person—or as in this case any country—with an opportunity to come into easy money would grab at it. But public policy experts are well aware of the “resource curse” theory, also known as the paradox of plenty: the easier you come by your wealth, the more you waste and the less accountable you are. It applies to mineral and oil rich countries in Latin America, Africa, and much of the Arab World, home to the misgoverned, but also to anybody getting a free lunch. Let’s not fool ourselves. We’re talking about welfare handouts with very few strings attached, and anytime someone or some country gets buckets of money under those conditions, accountability and restraint go out the window.

Climate change activists and their friends in economic dynamos like Denmark not only want the “U.S. and Co.” to share in the cost of modernization, they propose a no-deductible insurance policy covering any and all “climate events” that may—or more than likely may not—have been caused by the incremental carbon emission contributions of developed countries. Every time a typhoon, such as Ketsana that recently roared through the Philippines, wreaks havoc in the developing world or a drought or natural disaster hits, they will expect “rich nations” to foot the bill.

This amounts to naked extortion by emerging economies, aided and abetted by anti-globalist advocacy NGOs. Either the United States and other “rich nations” agree to allow developing countries to belch ever-increasing amounts of carbon and massive industrial pollutants—indeed to increase their per capita emissions—while forking over billions in aid dollars or they face political wrath. If the transfer from the most productive economies to the least efficient occurs at the projected magnitude, a nightmarish growth-dampening scenario is a real possibility.

As Pielke suggests, the world may come out of Copenhagen with the joke on NGOs and climate activists: “they will get just about everything they campaigned for, except any prospect for actual reductions in future emissions.” The more immediate question may be: what price will the growth engines of the world be forced to pay for this latest demonstration of eco-narcissism?

Jon Entine is a visiting fellow at the American Enterprise Institute and co-director of Global Governance Watch/NGOWatch, which just launched a new series, "Gateway to Copenhagen," monitoring the key climate change issues that will be addressed at the December summit.

FURTHER READING: Entine wrote “Green Revolution in the Balance” on the battle developing over food security and research into bio-engineered crops.

Image by Darren Wamboldt/Bergman Group.

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