Tough love needed for climate change to stop

24.06.07 Publication:

Nowadays, we all think that the planet needs to be saved and we all want to do our bit to save it. That, at least, is what a visitor from outer space might conclude if they had been lucky enough to land just when the Group of Eight (G8) summit was being held in Germany on June 6-8. The government leaders queued up to offer their proposals for dealing with climate change: Angela Merkel of Germany, Japan’s Shinzo Abe, Britain’s Tony Blair and even, to the shock of many, the Toxic Texan himself, George W. Bush. They even reached agreement, albeit a vague one, on the need for a successor to the Kyoto Protocol when it expires in 2012.

 But are they really serious? If our visitor from another planet were to read their proposals, and was smart enough to understand both economics and human behaviour, then the alien’s conclusion would surely be that Planet Earth remains doomed. Governments are not truly committed to doing very much about it. And the reason is that politicians think that the public is not very committed either. The proposals they are putting forward are designed to be soft and pain-free. This means that they will not work.

There is no doubt that the politics of climate change have altered in the past year or so. Previously, politicians everywhere thought that what was required of them was to give speeches saying that the climate was an important long-term issue and, unless they were from America or Australia, to sign up to commitments made in Kyoto in 1997 to reduce emissions of the gases that cause global warming—and then largely to ignore those commitments. That is certainly what the Japanese government did when it pledged at Kyoto to reduce greenhouse gas emissions by 6% below 1990 levels by 2012; today, Japan’s emissions are 8% higher than in 1990.

Now, politicians have concluded that the public wants some action on climate change, not just sweet speeches, and that conclusion has reached America and Australia too. The popularity of Al Gore, who has made global warming his personal crusade; initiatives in California to reduce emissions; high energy prices: all have contributed to this change of mind. Both Congress and the president want to get in on the act. Hence also the enthusiasm of Shinzo Abe to show that Japan too wants to curb emissions.

If so, Mr Abe will need to do what he hates doing: to borrow a slogan of his predecessor, Junichiro Koizumi. Mr Koizumi was fond of saying that there can be no gain without pain. A British prime minister in the 1990s, John Major, used to say the same thing. Both were talking about economic reform. But the same applies to the environment.

Most of the politicians’ proposals consist of waffly attempts to dodge the issue of pain. They talk of setting targets for reducing greenhouse gas emissions: a cut of 50% by 2050 is now the popular figure, though Mr Abe, in his policy speech of May 23rd, studiously avoided setting a base year, since a cut from today’s higher Japanese levels would be less painful than one from 1990 levels. They talk of the need for innovative technologies. Some, especially in Europe, talk of emissions-trading schemes. They like using the word efficiency, and they like to talk about alternative energy sources such as solar, wind, hydro-electric, nuclear and biomass.

Yet for emissions to be reduced substantially, people—which means households as well as corporate executives—will have to change their behaviour, and permanently. Never before has a behaviour change occurred without a continuing and substantial incentive to make that change. There are only two methods of introducing that incentive: tax and regulation. But politicians have become used to using the word “tax” only together with the word “cut”, and the word “regulation” only with the prefix “de” for deregulation.

Innovative low-carbon technologies will not be developed just because politicians call for them, nor even just because they hand out a few research grants. They are likely to emerge only as and when a continued dependence on existing technology is seen to be too expensive. For all the excitement about “hybrid” car engines from Toyota and Honda, the fact is that such vehicles make up only a minuscule portion of new car sales. And for all the European boasting about emissions-trading schemes, the fact is that such schemes only reallocate the right to pollute. They don’t reduce pollution unless governments set sufficiently stringent targets to require a big reduction: and companies, of course, lobby fiercely against such a cut.

Behaviour will not change unless there is pain involved. Governments, including Japan’s, should not be taken seriously on the issue of climate change until they start talking honestly about pain, which means high taxes on fossil fuels and other sources of harmful emissions, and stringent regulations.

Many governments will be tempted to try to use regulations rather than tax, because they will be afraid of being voted out of office if they raise taxes. Yet regulations are a blunt instrument, for they require expertise to be set correctly; taxes are a more flexible tool. But there is a way round this problem, if political leaders can be sufficiently persuasive. This is to propose big new taxes on the use of carbon, but at the same time to propose equally large cuts in other taxes by way of compensation. Convincing voters will be tricky, as there is so much mistrust over taxation. Still, Mr Abe should not be taken seriously on climate change until he tries it.