Save the planet and the third world will pay

Barun Mitra, co-author of Climate change and sustainable development (released 29 November 2004), writes "Not surprisingly, Kyoto does not sound convincing to the world's poor. For what this present debate over climate change has done is to divert attention from the core issue of mankind ó poverty."

Mitra discusses a salient economic lesson from history ó "increased consumption stimulates efforts at improving efficiency, which in turn contributes to conservation, economic and environmental... The Kyoto protocol seeks to reverse this relationship by focusing on reducing consumption through punitive taxes and so on, which will not ultimately help conservation goals."

My article titled Save the planet and the third world will pay was published In Sunday Times on December 5 2004.

The Kyoto protocol was finally ratified a few weeks ago. It seeks to promote energy efficiency and alternatives to fossil fuels, and insists on reductions in the emission of greenhouse gases by the industrialised world in the hope that the climate may stabilise.

Tony Blair has declared it his intention to make climate change the cornerstone of the British government’s international policy and Margaret Beckett, the environment secretary, has gone around the world emphasising the need to adopt a more climate-friendly approach.

But the problem for the citizens of the poor countries, about two-thirds of humanity, is that they cannot afford to consume modern and clean energy. Consequently, even if all the rich countries were to meet their Kyoto targets, the impact on global climate might be marginal because the poor countries will consume much more energy and that will undercut any reduction in greenhouse gas emissions by the rich countries.

To persuade poor countries to sign up for the climate-change deal, schemes such as “tradable emission quotas” and the “clean development mechanism” are being offered as carrots to help finance the transition, and provide access to modern technologies. But if the record of foreign aid and development finance is any guide, the climate-linked funds are unlikely to help, as most will just prop up corrupt regimes while perpetuating poverty.

If all this sounds a bit academic, let me use a few snapshots from daily life in my own country, India.

My wife and I decided to do our bit to reduce energy consumption by buying a modern refrigerator a few months ago. It is CFC-free and much more energy efficient because it uses a frost-free technology that prevents the formation of ice inside.

But in a country where electricity is in short supply and power blackouts are common, the frost-free and energy-efficient technology can be a major handicap. The ice that formed inside the old-generation fridges no doubt made them less energy-efficient but during the long hours of a power cut that ice kept the contents cool. We, on the other hand, finished up with a fridge full of useless food.

The electricity sector is heavily regulated, and the service is mostly provided by monopoly public sector utilities that fail to meet the demand, causing frequent blackouts. So modern energy-efficient devices that rely on a constant supply of electricity are obviously not the best for the job. The Kyoto protocol does little to bring the energy sector under the discipline of competitive market forces, and fails to usher in much needed reforms that might reduce power cuts.

Many Third World problems, like ours in India, are linked to unreliable energy supplies that stop us using greener technologies rather than to excessive energy consumption.

It is a similar case when it comes to fuel tax (beloved of conservationists). Typically, an Indian pays about 100% extra on petroleum fuels in taxes and duties, and similar levies are imposed on vehicles. But far from reducing consumption or pollution, it has the opposite effect.

Indian cities are characterised by pollution caused by inefficient cars and adulterated petrol. The cost of fuel is so high that we can’t afford to buy more modern and efficient ones.
The high cost of transport also contributes to congestion, as people jostle to live as close to their workplace as possible. This exposes them to much higher levels of pollution, not because of their high consumption, but because of their inability to afford to live further out.

Such overcrowding was a feature of the Bhopal gas tragedy in 1984. High transport costs contributed to the large number of people living in close proximity to the Union Carbide plant. The poor paid the price for that tragedy.

It is a paradox that the poor who have the most to gain from fuel efficiency are least able to afford the technologies that make conservation possible.

For instance, if all the light bulbs in Delhi could be replaced by efficient compact filament lamps the city could overcome its daily electricity shortfall without adding any generation capacity. But 70% of households cannot afford the transition.

The problems of the poor and rural Indians are even more acute. Even today fewer than six in 10 of Indian households have electricity, while 150m households rely on traditional fuels such as firewood, dry cow dung cake and agriculture waste for cooking. These fuels are 20 times less efficient and more polluting than electricity or gas. When they are used in poorly lit and unventilated rural dwellings, they contribute to 1m premature deaths each year.

Supporters of climate change theory rightly warn that the poor are most vulnerable to natural calamities such as hurricanes, floods and droughts. Yet Kyoto protocol policies seek to retard the economic growth that would enable the poor to leave poverty behind and adapt better.

One hundred years ago 1m Indians died annually because of drought and malnutrition while annual floods and hurricanes killed about 100,000 people during the monsoon season. Pristine coastlines and natural mangroves did little to protect the poor then, but now, as a result of development, the monsoon kills only 10,000.

Not surprisingly, Kyoto does not sound convincing to the world’s poor. For what this present debate over climate change has done is to divert attention from the core issue of mankind — poverty.

In the past two decades the world had been slowly moving towards a more market-oriented approach and ensuring greater freedom for people to make their own decisions. But the emergence of the new environmentalism has put the environment, rather than people, at the centre of decision-making.

Consequently, every effort is aimed at reining in man’s creative talents, and curtailing demands for higher consumption. Not surprisingly, the climate-change debate has renewed the faith of old socialists who have found a new chain to enslave man through global regulations.

It may be counterintuitive but there is only one economic lesson from history — increased consumption stimulates efforts at improving efficiency, which in turn contributes to conservation, economic and environmental.

The Kyoto protocol seeks to reverse this relationship by focusing on reducing consumption through punitive taxes and so on, which will not ultimately help conservation goals.

If we can develop, the poor will be able to afford energy-conserving measures. Without development they cannot and the present cycle can only continue.