A Global Warning

Global warming is now accepted by reputable scientists as a genuine and severe threat. The ten hottest years on record have all occurred since 1980, and the five hottest consecutive years began in 1991. In late 1995, the world's leading 2,500 climate scientists, reporting to the United Nations, declared that the recent heating of the atmosphere is caused by carbon emissions from oil and coal combustion, not by the natural variability of the climate.

As the heating of the atmosphere intensifies, it will increase sea levels by as much as three feet in the next century, causing disastrous floods. Warming surface waters will also fuel dramatically more powerful hurricanes, cyclones, and windstorms. The early stages of increased warming have already altered rainfall patterns. Spreading droughts are projected to threaten food-growing regions of continental interiors. And a number of infectious diseases are spreading as the world's insect populations—one of the most sensitive of all nature's systems to temperature change—migrate beyond traditional boundaries.

Global warming need not require a reduction of living standards, but it does demand a rapid shift in patterns of fuel consumption—reduced use of oil, coal, and the lighter-carboned natural gas to an economy more reliant on solar energy, fuel cells, hydrogen gas, wind, biomass, and other renewable energy sources. It is doubtful that market forces can bring about this shift, since the market price of fossil fuels does not incorporate their environmental costs. Nor can this adjustment be successfully delayed until its impacts become too disruptive to ignore. The most prevalent of all greenhouse gases—carbon dioxide—has an atmospheric lifetime of between 100 and 200 years. Even were the world to stop all coal and oil burning tomorrow, the new era of climatic instability would persist well into the next century.

The globalization of the economy, and attendant problems of its governability, have gotten much attention lately. But governance of the global environment may be the more serious challenge. For there is neither a political consensus about how rapidly to reduce carbon emissions, nor agreement on the appropriate regulatory mechanism.

The question of how to temper global warming divides along two axes. Commercially, it is pitting oil and coal industries against those that will bear the cost of inaction, notably the world's insurers. Geopolitically, it pits the developed countries—especially those dependent on oil and coal—against many developing nations and a few of the more enlightened European countries.

Negotiating under the United Nations Framework Convention on Climate Change, 153 countries hope to draft an international treaty to limit fossil fuel emissions in time for a final session scheduled for Kyoto, Japan, in December 1997. But there is a yawning disjunction between what may be politically feasible and the natural requirements of the planet's inflamed atmosphere. The most interventionist proposals on the diplomatic table call roughly for emissions cuts by the industrial nations of 10 or 15 percent below 1990 levels by the year 2010. Even those proposals are far greater than anything the Clinton administration is willing to endorse. By contrast, atmospheric scientists generally agree it will require emissions cuts of more than 60 percent to stabilize the global atmosphere at current climatic levels.

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The resistance to any mandatory emissions cuts has been led by the two-trillion-dollar oil and coal industry, in league with the governments of OPEC and other coal- and oil-exporting nations. While the fossil fuel lobby has fought to discredit each new scientific confirmation of the climate trend, the world's property insurance giants—who will pay the cost of global warming damage—are becoming more vocal in their advocacy of immediate and dramatic cuts in the burning of oil and coal.

In this decade, a series of floods, hurricanes, and other severe storms has sent property insurance losses to unprecedented levels. Insurance payouts for weather-related (non-earthquake) losses averaged less than $2 billion a year in the 1980s, totaling $17 billion for the decade, according to the German reinsurance firm of Munich Re. But between 1990 and 1995 just 16 floods, hurricanes, and storms destroyed more than $130 billion in property and insurers paid $57 billion in covered losses.

In the last 2 years, 61 of the world's largest insurance giants have signed a "Statement of Environmental Commitment," pledging themselves to incorporate considerations of climate impacts into their decisionmaking. There are early signs that the banking community is also beginning to take notice of the devastating potential of climate disruptions. At a 1995 conference on climate change for leaders of financial institutions, Sven Hansen, vice president of the Union Bank of Switzerland, called climate change the "single most important environmental problem for the world today." At the same conference, Hilary Thompson of Britain's National Westminster Bank urged bankers to "support businesses that are going to create sustainable wealth that will actually not only redress the historic harm that has [occurred] but also finance the research and development that is necessary to bring about change."

Her remarks were underscored by a recent report by London's Delphi Group, which advises large institutions on their investment policies. Delphi recommended that banks, insurers, and other large institutional investors begin to withdraw their investments from oil and coal companies, with their traditionally lucrative returns. The report noted that continuing disturbances in the global climate could easily lead to high carbon taxes and enforced reductions on oil and coal use. "As a result," noted the report's author, Mark Mansley, a former financial analyst for Chase Manhattan Bank, "climate change presents major long term risks to the carbon fuel industry [that have] not been adequately discounted by the financial markets." At the same time, the Delphi Group noted, "The alternative energy industry offers greater growth prospects than the carbon fuel industry. Diversification into this sector also offers substantial scope to offset the risks of climate change. . . ."

Last year, the Business Council for a Sustainable Energy Future took steps to position itself prominently in the international climate negotiations in order to promote development of climate-friendly alternative energy technologies. While it represents an array of small renewable energy producers, the Business Council also includes some major corporations—Honeywell, Enron, Maytag, Brooklyn Union Gas, and a number of concerned utilities.

A much more influential business group, the International Climate Change Partnership (ICCP), counts among its members such giants as General Electric, AT&T, Allied Signal, Dow Chemical, 3M, Dupont, Enron, and Electrolux. Unlike the fossil fuel industry, the ICCP accepts the findings of the world's scientists and agrees on a need for an enforceable set of carbon dioxide reductions. "The fundamental science of global warming is pretty basic," the ICCP's executive director, Kevin Fay, said in an interview. "There is some uncertainty about specific effects and impacts, but we understand that there is a long lag time for atmospheric greenhouse gases—and that it also takes a long time to develop remedies for the problem."

The ICCP wants to trade on the success of its earlier incarnation. In the 1980s its predecessor organization, composed of leading chemical companies, worked with the world's governments to achieve the Montreal Protocol, which resulted in phasing out and developing substitutes for CFCs—a class of refrigerant chemicals responsible for depleting the ozone layer. As a public-private partnership dealing with a major global environmental problem, it was a remarkable success. Unfortunately, that same formula is not applicable to the climate crisis. For one thing, the ozone-depleting chemicals constituted a small fraction of the chemical business. Fuel for heat, energy, and transportation, by contrast, are central to our collective economic existence. For another, the same chemical companies that agreed to the ban on ozone-depleting chemicals were able to develop and market their replacements. But the world's coal and oil companies are not positioned to produce and distribute solar panels, fuel cells, hydrogen gas production facilities, and windmills.

The ICCP, unlike the world's extractive industries, thinks it can profit from the development of renewable energy technologies. But though it supports specific targets and timetables to reduce greenhouse gas emissions, it shares with the oil and coal industries a general distaste for government regulation and a preference for private-sector solutions. "Our group envisions a process that produces good information on what alternative energy technologies are out there, what developments are in the pipeline, and what the deployment of those energy sources will do to the global greenhouse gas profile," according to Fay. "The next step we need to take is to assist those technologies to become competitive."

However, market forces alone are unlikely to generate a shift to renewable, non-carbon energy, because of the global fault line between rich and poor nations. Even if the United States, Europe, and Japan were able to dramatically reduce their own oil and coal use, those reductions would shortly be overwhelmed by the next pulse of carbon from China, India, Mexico, Brazil, and all the developing countries, which need energy to feed and house their expanding populations and to keep themselves beyond the undertow of deepening poverty.

Virtually all the market-based mechanisms currently being considered by international negotiators involve, in one form or another, the sale of climate-friendly energy technologies to developing countries that are barely able to feed and house their populations. These countries, not surprisingly, observe that the industrial north did not pay much attention to the niceties of pollution control until after they attained high levels of consumption. So the world's poor countries, not unreasonably, want either free technology transfer or other forms of subsidy from the north in order to finance an energy transition without increasing the burden on their poor populations.



In the climate negotiations, the postures of even the most pro-environment governments are guided by pure self-interest. The strongest position was taken by a group of small island nations calling themselves AOSIS, an acronym for Alliance of Small Island States, including the Philippines, Jamaica, the Marshall Islands, and Samoa—states that understandably fear being flooded into oblivion. AOSIS proposed a stringent emissions standard for the industrial nations of the world—a reduction by 20 percent of their 1990 greenhouse gas emissions levels by the year 2005.

Among the rich nations, Germany and Britain have proposed emissions cuts in the industrialized countries by 10 percent below 1990 levels by the year 2005 and 15 percent by the year 2020. But the United States, Australia, and OPEC charge Germany with cynically playing to its domestic constituency, which includes the largest Green Party in Europe. Germany, critics say, can readily afford to sustain a large emissions cut by virtue of West Germany's reunification in 1989 with East Germany, which is far less industrial and emits far less carbon dioxide—bringing German emissions nearly within the limits of that target with no additional hardship.

Britain, likewise, readily supports the emissions targets at no cost to British consumers, critics say. In 1991 the U.K. decided for budgetary and political reasons to terminate its program of coal subsidies and to switch, instead, to far cheaper and cleaner North Sea natural gas. So the seeming German and British high-mindedness actually involves no sacrifice, according to their critics. Even worse, they charge, the German and British positions allow room for other, poorer countries of the European Union to increase their burning of fossil fuels under an aggregated European Union cap. That situation would allow some of the less affluent European countries—Ireland, Portugal, Spain, and Greece—relatively high emissions margins so they can continue to develop their own economies with no cuts to their own fossil fuel consumption. And if, as anticipated, the E.U. expands by another 15 countries to include a number of former communist nations in eastern Europe, the combined cap for an enlarged E.U. would also provide them even more latitude to increase greenhouse emissions.

German officials counter that their citizens are bearing a significant tax burden to help finance an environmentally friendly reindustrialization of East Germany, costs that would be unacceptable to Americans. And British officials say that, whatever their initial motivations, they have in the last two years come to regard the climate crisis as very real and worthy of strong international action. Britain's environmental secretary, John Gummer, went so far as to call for an emissions reduction target of 50 percent beginning with an end to all subsidies for oil and coal use. "There is no point," he said, "in seeking to mitigate the effects of carbon dioxide while providing an inducement for people to use more."

Other members of the E.U. have gone their own ways. Denmark has already enacted a carbon tax as well as efficiency standards for its utilities in order to attain a 20 percent emissions reduction below 1990 levels by 2005. And the Netherlands has declared it intends to stabilize its emissions at 1990 levels by 2000 and reduce them by 3 percent five years later. By contrast, Norway, with its lucrative North Sea oil reserves, wants no emissions limits at all.

But the divisions within Europe pale before the yawning split between the wealthy world and the poverty-stressed, less-developed giants like India, China, Brazil, and Mexico. While the United States, Europe, and Japan can afford to give at least lip service to the high priority of the climate issue, the large developing countries, fighting to keep their economies above water, cannot. And until the issue of international equity between the world's wealthy and poor countries is addressed with some degree of authenticity, no developing country will adhere to any agreement that restricts its energy consumption.

Many Western diplomats attribute the recalcitrance of countries like China and India to an attitude of indifference to the planet. But that cynical dismissal lets the northern countries off the hook in two respects. It ignores the fact that industrial countries consume the lion's share of fossil fuels. And it minimizes the leadership that the United States and its developed allies could exert if they chose to make a priority policies that reconcile economic development of poor countries with concerns for the global environment. The developing nations will likely reject any international agreement that does not address their own overriding issues of poverty and underdevelopment.



Under the terms of the United Nations Climate Convention, any target for reducing coal and oil emissions would apply, initially, to only the world's industrialized countries. But diplomats envision subsequent similar restrictions for the world's poor countries, since it is clear the developing world will not be able to continue the potentially catastrophic growth of their own fossil fuel burning.

The climate crisis requires both measures by the industrial north to reduce fossil fuel consumption, as well as a transfer of wealth—in the form of new energy technologies—to assist the poorer countries to leapfrog beyond carbon fuels to an industrialization powered by renewable energy sources. Without such assistance, there is very little hope of avoiding a doubling—and probably a tripling—of atmospheric carbon dioxide concentrations. Today, for instance, as it staggers under the pressure of an increasingly fragile food supply and diminishing water resources, the government of China at this point sees no alternative to promoting its own economic growth as rapidly as possible. While energy consumption in the United States, Europe, and Japan rose by about 28 percent between 1970 and 1990, it rose by almost 10 times that amount—208 percent—during the same period in China. Under current estimates, moreover, Chinese coal consumption—which equaled that of the United States in 1990—will more than double America's ten years from now.

The situation in China is so bad it is sparking alarm even among its government researchers, despite the regime's commitment to rapid growth powered by conventional energy. Oceanographers with China's State Oceanic Administration estimate that rising sea levels will trigger massive flooding if current trends continue. "Sea levels will rise up to three feet during the twenty-first century,"' said Du Bilan, an agency official. Without a massive program to build coastal-protection bulwarks and seawalls, the researchers project that economic losses from a 12-inch rise in sea level would be devastating "since coastal areas are home to about half of China's cities and 40 percent of the country's total population of 1.2 billion," Du said.

And China, as large as it is, is only one of many sources of the emerging Asian boom in greenhouse gas emissions. In May 1996, the environment ministry of Japan estimated that emissions of carbon dioxide and other greenhouse gases from 15 Asian nations will more than double in 30 years—a projected increase of 150 percent of 1990 levels by the year 2025. Using data from other Asian countries as well as from the World Bank, the Japanese report noted that the greenhouse emissions from the region will account for 36 percent of the world's emissions by the year 2025 and for 50 percent by the end of the next century.

The massive gap in economic pressures and priorities between northern and southern countries is more than the source of diplomatic deadlock. It has provided a most useful wedge for those who most want the negotiations to fail. Throughout the ongoing negotiations, the OPEC nations and their industry allies have warned the large developing nations that the "climate scare" is based on flawed science and is basically a plot by the wealthy countries to keep them relatively poor. Consequently, they have urged those large developing giants to accept nothing but the most minimal future restrictions. At the same time, the OPEC nations and the representatives of the oil and coal industry have put the United Nations on notice that they will accept no restrictions that do not fall equally heavily on the developing world. Anything less, they argue, is fundamentally unfair to fossil fuel producers, whose income depends on their sales of oil and coal.

It is a strategy designed to guarantee the failure of the climate negotiations. The rich nations have built their industrial wealth on fossil fuel consumption. Any attempt to impose the same restrictions on the poor countries—whose per capita consumption of coal and oil has been but a fraction of ours—amounts to "environmental colonialism," according to Sunita Narain, an Indian researcher and co-author of a report titled, "Global Warming in an Unequal World." This idea of environmental colonialism, of course, is precisely what the fossil fuel lobby pitches to developing countries. The success of the negotiating tactics of Saudi Arabia and Kuwait, in league with representatives of the U.S. oil and coal industry, has, in effect, precluded negotiators from moving forward on any truly meaningful measures.

Given this backdrop of nearly stalemated diplomatic and economic agendas, it is understandable that U.S. Undersecretary of State Timothy Wirth called it a "big deal" last July when he announced that the United States would support some level—albeit minimal—mandatory emissions reductions. It is not only Wirth who thinks so paltry a response to the disruption of the global climate is a "big deal." Clearly the oil and coal lobby think so as well. That is why they are feverishly mobilizing key leaders in Congress to defeat the ratification of any treaty that requires those mandatory cuts.

All of this, in the end, leaves the resolution of perhaps the most ominous environmental problem ever confronting humanity to the mercy of the global marketplace. Under the current scenario, our ability to avert a climate disaster may well depend on whether we can get China to buy our conservation technologies, whether we can sell our solar panels to Brazil and our windmills to India, and whether our marketing experts can persuade the poor governments of the world to put the nutritional and medical and educational needs of their people on hold and divert their overstretched resources to revamping their national energy systems with technologies we will sell them at the right price.

Meanwhile, the world's glaciers are melting, the world's oceans are warming, plants and insects are migrating northward, the zooplankton are dying in the Pacific Ocean, the Antarctic ice shelves are breaking up, and the planet continues to heat at a faster rate than at any time in the last ten thousand years.

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