The Challenge of Managing Both Climate Change and Developing Countries' Growth

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Image courtesy of kevindooley

If there's one thing we learned from the botched climate talks in Bali - other than the fact that, even under pressure, the best we can hope for from the U.S., as Paul Krugman put it, is that it agrees "not to actually do anything about climate change, but to talk about doing something about climate change" - it is that accommodating both developing countries' economic growth and emissions concerns remains as thorny an issue as ever. Indeed, unless a climate change policy is seen as being consistent with the growth needs of countries like China or India, it is not likely to go very far.

Economist Paul Klemperer of Oxford University believes that carbon taxes or a cap-and-trade system won't be able to do the trick; the key, he argues, is to find a "cheap clean substitute" to the fossil fuels of this world through innovation. Because developing nations are not "going to give up the immediate aspirations of their (often growing) populations for climate-change benefits that are largely in the future," the U.S. and Europe will need to work with them to ensure that they adopt emissions-lowering technologies, such as Carbon Capture and Storage (CCS), and cleaner renewable sources. Even nuclear energy may need to be on the table if they continue to develop it - more as a way for the West to resolve any storage and handling issues that may arise than for its actual usage. And this is where the real challenge, as Klemperer sees it, lies:

"If large-scale nuclear power is politically unacceptable, substantial investment in clean energy R&D; is the only alternative. But the private sector will not do this unaided . . . So it is catastrophic that public expenditure on energy R&D; has been falling in most countries over the last 30 years, and it is shameful that Europe spends a much smaller fraction of GDP on public energy R&D; even than the USA and Japan. The UK is one of the worst offenders . . . Finding a clean energy source that is cheaper than those currently available is the only politically-plausible way of curbing continuing growth in developing nations’ emissions."

This, of course, makes the U.S. Senate's recently approved energy bill all the more disappointing, as the LAT underlined in a recent editorial:

"Most disappointing, a mandate for the country to get 15% of its electricity from renewable sources like the sun and wind was removed. Also deleted were provisions that would have helped pay for all that clean energy by revoking tax breaks previously doled out to the oil and gas industry . . . The bill's approach to renewable fuels is its most troublesome element, though there are good points along with the bad. It requires 36 billion gallons of biofuels by 2022, compared to roughly 6 billion gallons produced today -- the vast majority of the current supply being ethanol made from corn. The mania for corn ethanol is already driving up food prices, polluting waterways and having other negative effects on the environment, and the energy bill will only worsen the problems."

Via ::VoxEU: What is the top priority on climate change? (blog)

See also: ::China Launches $3 Billion Fund For Clean Projects, ::UN Backs Down on Strict Guidelines as Leaders Reach Tentative Agreement, ::China To Top U.S. in Greenhouse Gases This Year

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