XIV. The Risk of Global Climate Change

Since the beginning of industrialization, economic development in most countries has been accompanied by growth in the consumption of fossil fuels, with more and more coal, oil, and natural gas being burned by factories, electric power plants, motor vehicles, and households. The resulting carbon dioxide (CO2) emissions have turned into the largest source of greenhouse gases—gases that trap the infrared radiation from the earth within its atmosphere and create the risk of global warming. Because the earth’s environmental systems are so complex, the exact timing and extent to which human economic activities will change the planet’s climate are still unclear. But many scientists believe that the changes are already observable.

According to the 1995 report of the Intergovernmental Panel on Climate Change, by 2100 the mean global temperature could increase by 1.0–3.5 degrees Celsius and the global sea level could rise by 15–95 centimeters if current trends in greenhouse gas emissions continue. The 2001 report of the same Intergovernmental Panel has corrected the range of predicted temperature increase to 1.4-5.8 degrees Celsius. Though these may still seem like minor increases, they could have multiple adverse consequences ( along with some uncertain benefits). Forests, coral reefs, and other ecological systems, unable to adapt to changing temperatures and precipitation patterns, will be damaged and irreversible losses for biological diversity will result. People will also suffer—and those in poor countries are likely to suffer the most, being less prepared to cope with the changes.

Many developing countries in arid and semiarid regions may see their access to safe water worsen. (As things stand today, more than one billion people lack access to safe water.) Tropical diseases may spread farther to the north. Droughts will become more frequent and intense in Asia and Africa, and flooding will likely become a bigger problem in temperate and humid regions. While food production could become easier in middle and high latitudes (in areas that tend to have higher per capita incomes), in the tropics and subtropics yields will likely fall. Large numbers of people could be displaced by a rise in the sea level—including tens of millions in Bangladesh alone, as well as entire nations inhabiting low-lying islands such as those in the Caribbean Sea and the Pacific Ocean.

Most threatening is the fact that, according to current understanding, the global climate is a finely tuned mechanism that can be pushed out of balance and irreversibly set on a course toward catastrophic consequences that scientists can’t even fully predict. These risks are hard to evaluate, but they appear credible enough to demand urgent attention.

Whose responsibility is it?

The amount of carbon dioxide a country emits into the atmosphere depends mainly on the size of its economy, the level of its industrialization, and the efficiency of its energy use. Even though developing countries contain most of the world’s population, their industrial production and energy consumption per capita are relatively low. Thus at this point there seems to be little doubt that the primary responsibility for creating the risk of global warming lies with developed countries (see Map 14.1; Figures 14.1 and 14.2).

The United States is the largest contributor to global greenhouse gas emissions. Although it contains just 4 percent of the world’s population, it produces almost 25 percent of global carbon dioxide emissions. Russia was recently replaced by China as the second largest emitter, but on a per capita basis it is still far ahead of China (see Figures 14.1 and 14.2).

Traditionally, increased energy consumption—accompanied by increased carbon dioxide emissions—was directly linked to economic growth (so that the greater a country’s GDP, the higher its energy consumption and pollutant emissions). However, in the 1980s and 1990s carbon dioxide emissions per dollar of GDP declined substantially across developed and developing countries (see Data Table 5). This occurred because environmentally cleaner technologies were introduced, and energy use became more efficient. In addition, the share of the service sector--which requires proportionately less energy than industry--increased in many countries (see Chapter 9). Unfortunately, these changes were not sufficient to stop the growth of global carbon dioxide emissions. To eliminate the risk of global climate change, concerted efforts are needed from the governments of most countries to further increase energy efficiency and move away from today’s heavy reliance on fossil fuels.

At the 1992 Earth Summit in Rio de Janeiro (Brazil), developed and transition countries agreed to work toward stabilizing their greenhouse gas emissions at 1990 levels by 2000 (in the Framework Convention on Climate Change). However, by 1997, when representatives of 165 countries gathered in Kyoto (Japan) for the United Nations Conference on Climate Change, it was clear that most countries —including the United States—were falling far short of that target. The Kyoto Protocol, adopted at the conference, was for the first time meant to become legally binding and called on all wealthy nations to reduce greenhouse gas emissions by 6–8 percent below 1990 levels by 2008-12.

This agreement is still considered the most ambitious global environmental undertaking in history, given the high cost of reducing global greenhouse gas emissions, the broad range of economic activities that will have to be affected by climate-friendly technological change, and the long-term nature of the environmental risks under consideration. Thus it is no wonder that achieving a broad international consensus on the ways of implementing the Kyoto Protocol proved extremely difficult. Developing countries’ participation in it was postponed and concrete mechanisms of implementation remained to be further negotiated. At the next global conference in The Hague (Netherlands) in 2000, representatives of 184 states still failed to agree on specific mechanisms for Kyoto Protocol implementation. Moreover, in 2001 US President George Bush officially refused to proceed with its ratification, referring to the possible damage to US economic interests and asserting that the scientific proof of the risk of global climate change was , in his opinion, still not sufficiently valid and that too many countries were not prepared to share in the global efforts.

True, most developing countries refuse to commit to reducing greenhouse gas emissions, arguing that

• the problem was created mostly by developed countries, and
• such commitments would undermine their economic development and impede poverty alleviation.

On the other hand, it can be argued that

• the share of developing countries in global carbon dioxide emissions is rapidly increasing, and
• without developing countries’ cooperation any progress achieved in developed countries could be offset by “leakages” beyond their borders. For example, an energy-inefficient steel plant could move its operations to a developing country not covered by an agreement instead of switching to a more energy-efficient technology. As a result, the global greenhouse gas output could rise in spite of the Kyoto Protocol implementation.

Developed countries are expected to take the lead in preventing global climate change even though in less than 20 years developing countries will likely surpass them as the main emitters of carbon dioxide. But it will take much longer than 20 years for per capita energy consumption in developing countries to become comparable to that in today’s developed countries. So, in terms of fairness, today’s poor countries have every right to continue polluting the atmosphere. The real question is whether it would be wise for them to follow a model of development that has already proven unsustainable? And is it true that environmental concerns cannot be addressed without impeding poor countries’ economic growth? An inspiring example is set by China (not a party to the Kyoto Protocol), which in 1996-2000 managed to increase its GDP by 36 percent while still reducing its carbon dioxide emissions, largely through industrial restructuring and fuel improvements. Many analysts believe that the sooner developing countries take advantage of cleaner production technologies and more efficient ways of generating and using energy, the better it will be for their long-term development prospects.

Assume, for the sake of fairness, that every person on earth has an equal right to the atmosphere as a resource. In that case carbon dioxide emission quotas for countries would be determined by population size. Low-income countries would not yet have reached their quota and would have the right to continue emitting carbon dioxide. Middle-income countries would have almost reached their quota (if China with its 21 percent of the world’s population is included among them) or already exceeded it (if China is counted among low-income countries, as it was till the end of the 1990s). Most important, high-income countries would have exceeded their quotas almost by a factor of three (compare Figures 2.2 and 14.3).

Will the North-South cooperation work?

The challenge of agreeing on concerted global action in response to the risk of global climate change is complicated by the fact that the costs and benefits of such action are distributed unevenly among countries. For example, the Alliance of Small Island States (AOSIS), whose members are directly threatened by the prospect of the rising sea level, has already adopted unilateral carbon abatement measures. But to most other developing countries, with much higher greenhouse gas emissions, increased burning of fossil fuels in the course of their industrialization and continued burning of forests for agriculture appear to be much higher economic and social priorities.

The potential benefits of preventing the global climate change are estimated to be several times greater for the group of developing countries—avoiding the loss of up to 9 percent of their GDP compared with 1.0–1.5 percent in developed countries. At the same time the costs of prevention of greenhouse gas emissions are considerably lower in developing countries as compared with developed, where energy production and consumption are already relatively efficient and simple improvements are harder to make. According to some estimates, reducing carbon dioxide emissions by 1 ton can cost over US$12 in developed countries, but only US $2-3 in many developing countries, where introducing modern, energy-efficient technologies (already widely used in high-income economies) can make a big and quick difference. Does not this mean that developing countries should be more interested in taking action against the global climate change?

In fact, low-income countries can rarely afford any long-term planning, and the cost of US$2-3 per ton of carbon dioxide emissions prevented is still too high for them in the presence of many other urgent socioeconomic needs. Is there a way to further increase the benefits of climate-friendly programs for developing countries and to further reduce their costs?

The Prototype Carbon Fund (PCF) established by the World Bank in 1999 with contributions from interested governments and private companies was a first attempt to deal practically with this task. The underlying idea is to create a market for trading carbon dioxide emissions reductions between developed countries, on the one hand, and developing and transition countries, on the other. Developed countries contributing to the Fund sponsor the introduction of cleaner technologies in the less developed countries, the resulting emissions reductions are independently verified and certified, and the Fund’s contributors are then allowed to count these reductions towards their Kyoto Protocol commitments. If this type of deal becomes widespread, many developing countries may additionally benefit from greater foreign investment and easier access to modern technologies, while the global problem of climate change prevention may be solved at a much lower cost.

The very first PCF deal happened to take place with Latvia, as part of the Liepaja Solid Waste Management Project. This project, financed jointly by the government of Latvia, the city of Liepaja, the World Bank, the Nordic Investment Bank, and the Swedish International Development Agency, is aimed at replacing several outdated landfills in the Liepaja region, many of which pose a risk to local groundwater resources, with a modern regional waste treatment facility. With the PCF contribution, a state-of-the-art energy cell system will be installed to collect landfill gases produced by decaying waste. These gases, containing 50 percent methane, will then be used to generate electricity and heat. It is expected that, over the project lifetime of 25 years, an equivalent of about 2 million tons of carbon dioxide will be prevented from entering the earth’s atmosphere by (1) capturing the methane-containing landfill gases and (2) substituting this methane for natural gas in generating electricity for Latvia’s power grid. In addition, the citizens of Liepaja will get a lower-cost, cleaner waste disposal facility using a minimum of land and sustainable for an indefinitely long time.

At the time of this writing, the Kyoto protocol has been ratified by many countries but still has not entered into legal force, because these countries represent less than 55 percent of all the 1990 greenhouse gases emissions of developed countries. Meanwhile, the need for action is truly urgent, given that any longer-term solution to reducing and stabilizing greenhouse gases emissions would require switching the world to alternative, zero-emission energy sources such as hydro, wind, and solar power. As of 1999, these sources accounted for only 5 percent of total energy production (mostly hydropower). Intensified research and development is still needed to make them economically competitive, and even then it might take 30-50 years more to completely replace the old energy-producing and energy-consuming stock of equipment and structures. If countries fail to commit to concerted emissions control without further delay, triggering catastrophic and irreversible climate change might become unavoidable.