Prins and Rayner on Kyoto
Not surprisingly, this Nature article by Gwyn Prins and Steve Rayner entitled Time to ditch Kyoto, has attracted plenty of attention. I’m responding quickly and therefore somewhat brusquely. I’ll try to write something more considered a bit later.
Before giving a detailed response, let me observe that a reader with limited time need only look at the following few sentences
In September, the United States convened the top 16 polluters. Such initiatives are summarily dismissed by Kyoto’s true believers, who see them as diversions rather than necessary first steps. However, these approaches begin to recognize the reality that fewer than 20 countries are responsible for about 80% of the world’s emissions.
This argument is premised on the assumption that the Bush Administration, representing the worldâ€™s largest source of emissions (though China is catching up fast), sincerely wants to do something about climate change and called the September meeting with this purpose in mind. If anyone believes this, I have just become aware of a business opportunity from Nigeria in which they may be interested.
Unfortunately, the credulity with which Prins and Rayner accept Bushâ€™s position is characteristic of their entire piece, which is little more than a recapitulation of the positions stated by the Bush Administration and (until it starting backing down a year or so ago) its Australian ally. The main claims are
(i) Kyoto has not delivered any reduction in emissions and further steps on the same lines are unlikely to do so
(ii) We need an agreement focusing on the top 20 emitters rather than a global process incorporating 170 nations
(iii) We need to pay more policy attention to adaptation and R&D and less to price incentives for mitigation
The first point is merely asserted. We donâ€™t know what would have happened in the absence of Kyoto, nor what would have happened if the US had ratified and made a serious attempt to meet its target. Prins and Rayner donâ€™t develop the point, and neither will I.
The second point is critical, since itâ€™s the only part of the argument thatâ€™s even remotely novel, and the area in which the authors seem to have at least some expertise. The crucial para here is
The notion that emissions mitigation is a global commons problem, requiring consensus among more than 170 countries, lies at the heart of the Kyoto approach. Engaging all of the world’s governments has the ring of idealistic symmetry (matching global threat with universal response), but the more parties there are to any negotiation, the lower the common denominator for agreement â€” as has been the case under Kyoto.
The central claim then, is that the problems observed with Kyoto are the result of the need to get consensus not merely of the 20 nations that count but of 150 or so that do not. But this picture bears no resemblance to the actual problem. The difficulties in reaching an effective agreement have been almost entirely due to the incompatible positions of major emitters including the EU (largely backed by Japan), the US and Australia, and the major developing countries, China and India. Restricting negotiations to a group of 20, or even 10, would not change this.
In particular, the most determined opponents of any effective action have been the Bush Administration in the US and its supporters in the Howard government (at least until its very recent capitulation). While their rhetoric almost exactly matches that of Prins and Rayner, their actions clearly indicate a desire for inaction. In particular, while the stated US position is that it is only willing to act if China and India also reduce emissions, US negotiators have actively encouraged their counterparts from China and India to hold resolutely to the opposite view, refusing any definite commitments. The resulting standoff is not a consequence of trying to reach consensus among 170 parties, but the outcome actively pursued by the US.
Turning to the final point made by Prins and Rayner, it is notable both for the extent to which it mirrors the rhetoric of those who have consistently opposed any effective action, and for its failure to take account of basic economic principles of policy analysis. As regards rhetoric,
The idea that, in the formulation of a global response to climate change, equal policy effort should be allocated to mitigating climate change and to adaptation to its consequences sounds plausible, but does not stand up to scrutiny. Emissions of greenhouse gases represent a market failure, since no private party has any incentive to reduce their own emissions. Hence, mitigation requires a policy response to ensure that this externality is taken into account.
By contrast, private parties, in deciding how to adapt to climate change, will, in the absence of policy intervention, bear the costs and receive the benefits of their decisions in most cases. There is no particular reason to expect too much or too little adaptation. Of course, there is a role for governments in the provision of information, and in large-scale adaptation decisions regarding infrastructure, urban planning and so on, but even here, there is in most cases no need for any co-ordinated international action.
A similar point may be made with respect to technology. As in other areas, there is a role for governments in undertaking fundamental public good research. But for most of the R&D required for an effective response to climate change, the crucial requirement is a price incentive to reduce emissions of greenhouse gases. Given this incentive, firms will have a natural incentive to develop innovative low-cost solutions.
Coming back to the policy debate, it is striking that, had the Australian government sought to defend its policy position as of early 2006, it could hardly have done better than to commission Prins and Rayner to write their Nature piece. That position has collapsed in the light of public and academic scrutiny, and the arguments of Prins and Rayner will do likewise.