The Groupthink Global Initiative
By Alvaro Vargas Llosa : 04 Oct 2007
tcsdaily.com
NEW YORK -- One would expect some diversity of opinion at a gathering of heads of government, CEOs and nonprofit organizations from different sides of the political spectrum. That was not the case at the Clinton Global Initiative meeting last week, devoted mostly to climate change. From the CEO of Duke Energy Corp. to the president of the Natural Resources Defense Council to Al Gore, everyone agreed on the need for draconian limits on carbon emissions worldwide. The proposals varied from taxes on a carbon "cap and trade" system, but the assumptions on which they were all basing them were the same -- and they seem somewhat premature. No one was too concerned with the costs that a blanket limit on emissions worldwide could inflict on millions of desperate people trying to pull themselves out of poverty.
The main assumption was that most of the warming has been caused by rising levels of carbon dioxide. But scientists have not yet reached a consensus on that. The average temperature has risen a bit less than 1 degree Celsius in the last 100 years. While greenhouse gases have risen substantially since the 1950s, half of the warming took place in the early half of the 20th century -- according to professor Phil Jones of the School of Environmental Sciences at the University of East Anglia, in a study titled "Global Temperature Record."
The second assumption is that all CO2 is poison. Actually, about 40
percent of it is reabsorbed by plants and trees, as a paper by Stephen
Pacala in the journal Science has shown. The statistics on carbon emissions
usually disregard the percentage that is reabsorbed.
The third assumption is that the climate-change models used to predict
global warming are consistent. Actually, as a recent pamphlet by the
National Center for Policy Analysis demonstrates with the use of clear
graphics, those predictions have varied widely in recent years.
Finally, everyone seemed to assume that government imposition works
better than voluntary action. They kept citing the case of the European
Union, where a cap and trade system establishes a general limit on carbon
emissions and allows companies to exchange carbon "rights." However, in the
last 10 years the rate of growth of carbon emissions has been much lower in
the United States, where there is no federal limit, than in Europe. There
was even a reduction of 1.3 percent in carbon emissions in the United
States last year.
There are those who argue that even if these assumptions turn out to
have been premature, there is no harm in protecting the environment. That,
of course, is a comfortable position to take if you happen to live in a
prosperous nation where you can afford to make costly mistakes. But
developing nations are already being hurt. According to the International
Monetary Fund, the price of food worldwide went up by an average 23
percent in the last 18 months because of the rising demand linked to
biofuels. It is true that biofuels will eventually create business
opportunities for developing countries too, but for that to happen, Europe
and the U.S. will need to scrap their protectionist policies. Brazilian
sugar cane ethanol is the obvious example. The U.S. imposes a 54 percent
tariff in order to protect corn farmers in Iowa, Kansas and other states.
Corn is a much less efficient source of ethanol than is sugar cane.
Private companies are well ahead of the politicians with regard to the
environment. They are investing in new technologies, making more efficient
use of energy and beginning to develop financial instruments that will
provide liquidity to nascent ecological markets. For instance, Jeff
Bortniker, the CEO of Equator Environmental, is creating financial assets
and carbon credits linked to reforestation in Brazil that can then be
traded internationally. "The market is by far a better solution," he tells
me, "and we are already showing that without bureaucratic interference we
can create value and at the same time protect the environment." Brazilians
will appreciate it -- they have lost nearly 150,000 square kilometers of
Atlantic forest since 2000, not to mention the hundreds of thousands of
Amazon rain forest lost in recent decades because no one felt the need to
protect land that was nobody's property.
Governments need to look at the science more closely before taking actions that could have damaging consequences. We also must remember that, when it comes to protecting the environment, private enterprise can be more successful than governments.
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