How about building nuclear reactors in Africa?
The proper response to climate change is a massive expansion of energy supply rather than Scrooge-like curbs on demand.
The consensus on how to handle climate change has become suffocating. There is near universal agreement that the solution lies primarily in rationing energy consumption. On an individual level this generally means the imposition of ‘green taxes’ to make such activities as driving and air travel more expensive (see A Stern lifestyle lecture, by Mick Hume). On a larger scale the emphasis is on ‘carbon trading’, which is about reducing greenhouse gas emissions from businesses and the public sector.
This lack of debate is tragic, as the challenge of global warming could provide an invaluable opportunity to transform the world for the better. A huge investment in energy would enable humanity to tackle climate change and end the curse of world poverty at the same time. Such investment would not even require the invention of new technology – although more innovation would be hugely beneficial. Nuclear power and hydroelectric power could potentially provide plentiful energy without greenhouse gas emissions. Carbon sequestration – capturing carbon dioxide emissions and storing them – could make energy derived from fossil fuels far less harmful. The extra energy could fuel economic growth without doing significant damage to the climate.
If the solution is so obvious, why is it not recognised? The answer can be gleaned by examining the Stern report on the economics of climate change, commissioned by the British government, which was published yesterday (1). Although the report is more nuanced than any minister’s speech, it is informed by a neurotic small-mindedness that is characteristic of the climate change discussion. Rather than boldly search for imaginative solutions to the challenge, it is steeped in anxiety and caution.
The starting point of the Stern report is the argument that climate change reveals the flaws of capitalism. ‘It is the greatest example of market failure we have ever seen’, says the report (p1). The fact that the market system is seen as driving the world to disaster is a strong indication of the nervous mindset of its authors and its government sponsor.
Stern portrays climate change as what in economics is called an ‘externality’ (p23). In other words, the costs of greenhouse gas emissions are not paid for by those who create them. For example, if someone drives a car the cost of the damage it does to the environment is not factored into the price the driver pays to purchase or run the vehicle. Similarly, the environmental costs of using plentiful electricity are not paid by the rich consumers of the West.
From these assumptions it is easy to draw the conclusion that rationing must be central to any solution. Stern gives many examples of how this can be achieved. Putting a price on carbon – whether through tax, trading or regulation – is seen as central. Encouraging ‘behavioural change’, for example through public ‘education’ (read government propaganda), is also portrayed as important.
To be fair to Stern, the report does discuss other policies that are not reliant on rationing. The possibility of switching to low carbon technologies which do not emit greenhouse gases is considered. It also sees a role for adaptation – for instance, building modern flood defences. But the discussion of these options often seems half-hearted or secondary to the alternatives. In any case, when it comes to the government’s imminent climate change bill, it looks certain that rationing will be at the centre of its approach.
Stern is also sensitive to the charge that a strategy based on rationing could curb economic growth. It points out, correctly, that economic growth has historically been closely correlated with rising greenhouse gas emissions (p169). It is almost an iron law of economics that as societies become richer they use more energy per head. And historically, fossil fuels have supplied the vast majority of the world’s energy needs.
One way Stern responds to this recognition is to downplay the economics costs of its approach. It estimates that the strategy it proposes need only cost 1 per cent of GDP by 2050. But its limited horizons are apparent in the notion of sustainable development that it advocates: ‘Future generations should have a right to a standard of living no lower than the current one.’ (p42) So Stern seems to find it acceptable that humanity should continue in its present state of widespread poverty. This in a world where more than a billion still live on less than one dollar a day, and 2.7 billion live on less than two dollars (2).
More dishonest is the report’s counterposition between an approach based on rationing and ‘business as usual’. It argues – correctly – that doing nothing could ultimately have enormous economic costs. But why should the alternative to rationing be doing nothing? No one is suggesting that Bangladeshis should be left to drown or that Africans should be condemned to die of drought. Nor should malaria or other diseases go unchecked.
On the contrary, rapid economic growth would be enormously beneficial to the Third World, as well as bolstering its ability to tackle climate change. Economic growth would enable Africans, Asians and Latin Americans to share the benefits of prosperity that we in the West take for granted. It would also give them the resources to reduce their vulnerability to climate change. A subsistence farmer clearly has little flexibility to react to changes in his environment. A modern city-dweller, by contrast, has access to networks and resources to protect himself from the climate. Why should anyone die of heatstroke if they live in an air-conditioned building? How can there be drought if there are the resources to build desalination plants? Why should malaria continue to be a threat with modern preventative measures and hospitals?
So the time to act against global poverty and to tackle climate change is here. Let’s have a massive investment in new global energy supplies. With modern innovations there is no reason why it should lead to significant increases in greenhouse gas emissions. Indeed, over time there could be reductions. The challenge of climate change could be turned into an opportunity to transform the world into a better, richer place.
Visit Daniel Ben-Ami’s website here.
(1) The Stern report is available at www.sternreview.org.uk
(2) Fast Facts: The Faces of Poverty, UN Millennium Project press room
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