One solution is to give the money to their governments, a very unsatisfactory proposition in many ways.
Another is to find imaginative ways to do the distribution, maybe via mobile phones, something which is getting almost universal, is close to each individual and already involves monetary payments. In the long run, we're all dead. John Maynard Keynes
A individual carbon quota distributed world wide would suffer the same fate: most ordinary people in the world will have no use for it, as it has no barter value between individuals, so the quotas will end up being collected by local oligarchs and dictators (in developing countries) and corporations (in developed countries), wich will be indistinguishable from distributing quotas to individual countries or regions based on population size in the first place. -- $E(X_t|F_s) = X_s,\quad t > s$
This would answer at once to the argument by Chinese and others about fairness
Possibly.
For starters, these quotas would have to be calculated retroactively, probably meaning that most adults living in the developed world will have already used up the bulk if not all of their quotas by now (and if they've used up more than their quota, how does that get redressed?)
The Chinese might also say that to be truly fair, you would have to include all people who have lived since the start of the industrial consumption of oil and production of carbon emissions in your calculations. And since millions of Chinese lived and died without spending their quotas of oil and carbon emissions, their quotas should be added to those of Chinese people living today.
On the other hand, if quotas are determined to have been exceeded by those who lived and died in developed countries, then those excess amounts should be subtracted from the quotas of people living in those countries today.
I am not saying this sort of thinking would be right (for one thing, it is based on the same problematic reasoning that the descendants of slaves should be compensated for the injustices wrought on their ancestors, as if moral debts and credits can be inherited, let alone pooled by members of a tribe or nation-state). But I would bet that it would be a common response among Chinese and probably others outside the developed world. Cynicism is intellectual treason.
China has a real interest in getting a number set, because the longer it waits, the weaker its position will be, and the more efforts it will need to do to move from its unsustainable trends. Better to start the effort when their allocations is still more than they need right now than when they need to cut from their then current level.
In terms of current emissions, it is already above the world average (and growing fast), , and getting close to have its "fair" share of the total stock of emissions In the long run, we're all dead. John Maynard Keynes
Projecting out to 2030, China's share the world stock of CO2 emissions will only be 16% versus 25% for the U.S. and 18% for OECD Europe -- again, despite China's far larger population.
The last graph, "Relative contributions of nine regions to cumulative global emissions (1751-2004)", just confirms the same thing: While the USA and EU countries have contributed about 53% of cumulative emissions in that period, China has contributed only about 8%, as of 2004 -- again, despite having a much larger population over that period.
The Chinese reponse is predictable: "Unless the Western world directly compensates the rest of us for burning through its quotas of oil consumption and carbon emissions and then some, then boy whatever scheme gets set up for divvying up the rest of the world's oil and carbon emissions fairly, we are owed a whole bunch of fat quotas to make up for the West's past gluttonous self-indulgence." Cynicism is intellectual treason.
I don't recall right now where I read it, but there was a report issued recently from a summit or working group or somesuch composed of China, India (I think) and a bunch of third-world countries. I'm a bit vague on the details, either because my source was or because my memory is slipping, but the long and short of it was that the countries in question were perfectly willing to reduce emissions, but only if and when The West(TM) - who caused the problem in the first place - implemented substantial emissions cuts.
To me that looks like they are using this discourse to buy more time for bizniz as usual and to make excuses for not doing anything much. As you point out that's probably stupid, but that won't necessarily prevent them from doing it.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
Two often claimed reasons, at least in China, for continuing growth (and thus, as a regrettable but inevitable consequence, continued oil consumption and carbon emissions) are:
If they disagree with these two points, then they should do their best sensitively and respectfully to persuade the Chinese why they are mistaken. Cynicism is intellectual treason.
The thing is, China is already making significant efforts to rein in pollution and encourage conservation. And we need to recognized and applaud that as a most basic prerequisite to persuading the Chinese that we are partners in this and not pushy meddlers:
Jonathan Lash: China's Climate Change Playbook is Worth Reading
... Contrary to popular belief, China is already implementing a comprehensive energy policy that addresses climate change. While China's climate-change challenge equals the U.S. in scale, China's emissions footprint is fundamentally different. In the U.S., one-third of energy use and CO2 emissions come from transportation. In China, transport accounts for just 10 percent of emissions, and industry is the biggest contributor by far. So, Chinese policy appropriately focuses most strongly on reducing emissions from industry. China is replacing old inefficient power plants with state-of-the-art new units. It closed down more than 1,000 inefficient cement plants and hundreds of power plants last year, as well as steel mills, smelters, and glass and paper manufacturers, resulting in more efficient, less polluting industries. Over the last three years, the Chinese government has introduced a series of regulations on energy conservation, resource use, and recycling. The stance of China's leaders is that energy conservation and efficiency come first -- well before the search for new fossil fuel sources. But are these policies translating into action? It looks like they are. The "Thousand Enterprises Program" -- which forces the country's biggest companies to make specific energy-reduction commitments -- is meeting its goals. By 2010, this program will reduce China's coal consumption by 100 million metric tons, approximately 5 percent of annual CO2 emissions for China or the U.S. We will all see the results of strenuous short-term measures, such as closing power plants, staggering working hours and limiting vehicles, during the Olympics. But China also has long-term policies in place for reducing coal dependence, increasing the use of renewable energy and reducing pollution.
... Contrary to popular belief, China is already implementing a comprehensive energy policy that addresses climate change.
While China's climate-change challenge equals the U.S. in scale, China's emissions footprint is fundamentally different. In the U.S., one-third of energy use and CO2 emissions come from transportation. In China, transport accounts for just 10 percent of emissions, and industry is the biggest contributor by far. So, Chinese policy appropriately focuses most strongly on reducing emissions from industry. China is replacing old inefficient power plants with state-of-the-art new units. It closed down more than 1,000 inefficient cement plants and hundreds of power plants last year, as well as steel mills, smelters, and glass and paper manufacturers, resulting in more efficient, less polluting industries.
Over the last three years, the Chinese government has introduced a series of regulations on energy conservation, resource use, and recycling. The stance of China's leaders is that energy conservation and efficiency come first -- well before the search for new fossil fuel sources.
But are these policies translating into action? It looks like they are. The "Thousand Enterprises Program" -- which forces the country's biggest companies to make specific energy-reduction commitments -- is meeting its goals. By 2010, this program will reduce China's coal consumption by 100 million metric tons, approximately 5 percent of annual CO2 emissions for China or the U.S.
We will all see the results of strenuous short-term measures, such as closing power plants, staggering working hours and limiting vehicles, during the Olympics. But China also has long-term policies in place for reducing coal dependence, increasing the use of renewable energy and reducing pollution.
That article also references this paper:
China's Booming Energy Efficiency Industry | World Resources Institute
China's energy efficiency industry is emerging as a high growth sector with the country projected to spend as much as Rmb2.1 trillion (USD300 billion) over the next five years on products and services that cut energy use. The key drivers of this development are the Chinese government's determination to curb the country's expanding energy appetite as well as higher production and energy costs. Firms that develop cost-effective energy-saving technologies, particularly for the most energy-intensive industries, are poised to capture the opportunities. If successful, these enterprises will not only become profitable, but will also help lead China to a more sustainable energy future.
So again, if we are going to talk to China about reducing their carbon emissions and energy consumption, let's at least start off on the right foot by acknowledging and saluting them for the good things they are already doing. Cynicism is intellectual treason.
"So you say that China must do something to address climate change for any strategy to be effective? Well, they are. So why, again, do you think that [insert name of your country] - which is so much richer than China - shouldn't be pulling our weight?"
but wouldn't that hurt the economies of those developed countries whose companies are doing business with/in China? sure. but how can you ask China to put the environment and resource conservation before the economy if you are not willing to do so yourself? Cynicism is intellectual treason.
Their "prosperity" is to a large extent created by their non accounting of such externalities, and it is not very real (and the same goes for ours, given that we still don't pay for that pollution ourselves). In other words, the bill will come due whether they like it or not.
If the carbon price is increased throughout the world, then China's real competitive advantage should not be endangered - unless that advantage is just their willin gness to poison their own citizens in the name of growth. In the long run, we're all dead. John Maynard Keynes
We should include taxes on imported goods reflecting the quantity of pollution and carbon emissions embedded in such imports.
I was under the impression that China had enough coal to fuel double-digit growth for plenty long enough to lift the entire country to "developed world" status.
But this article, Richard Heinberg's MuseLetter: Coal in China, if I read it right, says that China may hit peak coal in about 20 years or sooner.
In its conclusion a familiar line of argument/persuasion to get the Chinese to rein in coal consumption/carbon emissions can be discerned: proactively self-induce the pain now in a controlled fashion in order to avoid the uncontrolled crash of running into peak coal:
Richard Heinberg's MuseLetter: Coal in China | Global Public Media
If and when China ceases to have enough new energy to support continued economic growth, there are likely to be unpleasant consequences for the nation's stability. If such consequences are to be averted, the country's leadership must find ways to rein in economic growth while reducing internal social and political tensions, meanwhile investing enormous sums in non-fossil energy sources. A serious attempt to reduce greenhouse gas emissions would entail an identical prescription. It is a tall order by any standard, but serious contemplation of the alternative--which, in the worst instance, could amount to social, economic, and environmental collapse--should be bracing enough to motivate heroic efforts.
In other words, if the Chinese government imposes significant taxes on coal consumption, it will force the Chinese to make adjustments in a gradual steady manner: essentially the same strategy that we have been talking about for dealing with peak oil in the U.S., but which the U.S. did not implement. Cynicism is intellectual treason.
increasing pollution might aggravate the health and healthcare situation in Chinese society and ultimately put more of a burden on the aging and shrinking pool of laborers than decelerated economic growth in a relatively cleaner -- and healthier -- environment would.
this is pure speculation, but i wonder if quantitative analyses could be made that would make such a scenario plausible -- and frightening -- enough to worry Beijing bureaucrats. Cynicism is intellectual treason.
What is its thrust and application here?
The Chinese can do the numbers, and some most certainly have. I am simply proposing this as one possible way to convey the importance of getting the environment in shape over continued aggressive growth. Cynicism is intellectual treason.
her point is well taken (if i understand correctly) that in the long-run (around 150 years), current birthrates do not really matter as far as the resulting make-up of "working age" vs. "non-working age" segments of the population.
i will see if i can find some numbers on what the changing demographics of China's population are, in particular with respect to the balance of working age to non-working age people. Cynicism is intellectual treason.
As a pure layperson, it seems to me that such a significant drop in the ratio of the working to non-working population is likely to pose a big challenge to Chinese society in the next four decades. Cynicism is intellectual treason.
So I think the talk about the global demograpic crisis is overblown. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Depending on what you consider "constant", China may not be a typical society in this respect.
The number of non-productive citizens went from 50.8% in 1950 to 57.5% in 1970 to about 40% today.
This is probably due in large part to China's birth control policy, among other things China went through in the last 60 years (and more). Cynicism is intellectual treason.
Good point. The Africans probably have the highest per capita amount of unspent quotas. Depending on how that per capita quota amount is finally determined, China may very well find its population to be over their collective alloted quotas already (though not nearly as much as Western countries and, I assume, Japan). (But if the quota amount is set that low, I doubt the Chinese would feel much incentive to participate in this program. I suppose the optimal level would be such that China collectively has "spare quotas" to use, but developed nations are already over their quota limit.)
China has a direct interest in finding a global solution given that it is the first direct victim of all the pollution caused by the industries that need the carbon-burning. The country is going to be poisoned, full stop.
The Chinese would totally agree -- as long as they don't feel that they are being lectured to, in particular by Westerners who have abused the planet far more than they have, even projected out until 2030, if I read those graphs correctly.
And again, the longer it waits, the less of a case for a favorable treatment it will get.
From their point of view, there would be nothing favorable, or at least, preferential about it. It would simply be fair and just. Cynicism is intellectual treason.
A truly global solution would be to give each citizen on earth equal quotas of two things (to start with): oil and carbon emissions.
Aside from the details of how these quotas get calculated (what I focused on in my other response), the overall thrust of this idea would strike a positive chord in that it aims at fairness, at putting developed nations on the exact same playing field as developing countries. Furthermore, this strategy is patently solicitous and cooperative, rather than self-righteous and imperious. This spirit and approach to solving the energy and pollution crisis are critical for getting true buy-in from the Chinese (and I imagine other developing countries.) Cynicism is intellectual treason.
what else is the us national debt, held by the rest of the world?
our middle classes are becoming dispossessed, their middle classes is nascent and growing fast.
spreading the wealth, they call it...
i call it heading for the 'universal constant', aka a portugese peasant lifestyle for all.
and yes, there will be many people who'd wish this away, (and as many fervently wishing the trend to continue), were it possible, but time and globalisation stand still for no man! ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
well, it might not be popular, but how else to describe the billions we're forking over to russia for energy we could be creating ourselves? what else is the us national debt, held by the rest of the world?
A third way is needed. Peak oil is not an energy crisis. It is a liquid fuel crisis.
i should have added digitised portugese peasant lifestyle, or po-mo PPLS perhaps.
you know, the one where the farmer doesn't have to be bent over the hoe from dawn till dusk, dying toothless at 50.
he/she does a modest 2-3 hours of medium work (no gym fees) a a day, eats out of a (solar powered rototilled) garden, irrigated by solar powered irrigation, has millions of napsterised movies and documentaries and skills training video-hours available for very modest fees, microloans and small artisan (borderline zero-taxed) businesses, and so that it sticks, high quality education for all. (big difference, along with the entertainment factor.
most people associate the peasant lifestyle with poverty, backbreaking grind, and endless monotony.
version 2.0 won't be like that.
people will lose so many of the 'diseases of civilisation', and there will be a lot less neurosis.
but yes there is the sharpest of hairpins ahead, and if keep on at this breakneck speed we will flip and roll.
if we want to stay on the road at all, we will need to slow down a lot. the hairpin is a metaphor for all those will do anything to block that change they fear so much.
we will continue to lose 'engagements', but long-term survival depends on people coming out of comfort zones, whether pro-actively in order to try and head this off at the pass, or post-actively because that effort didn't succeed.
let's bear in mind if we can that 4/5ths of the world would consider the PPLS a giant step_forward_, and unless you have seen, touched, tasted and smelled (above all, smelled) the 3rd world in all its fecund glory, your appreciation of that factoid may be a tad um, theoretical!
what people tend not to get about this, (unless perhaps they are buddhists), is that we'll feel so much better spiritually when this happens, we won't miss our gorging consumerism nearly as much as we think.
pretty useless to ask peeps to accept that on sheer faith, i know, your point is nothing if not valid, and well taken. i wish i could find a way to do just that though.
so thanks for your reply, starvid. ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
A truly global solution would be to give each citizen on earth equal quotas of two things (to start with): oil and carbon emissions. These would be tradeable.
To politically attribute and impose a value to something inherently valueless is the proposition which underpins emissions trading. No surprise therefore to find the principal proponents were those who attribute value to IOU's created by "credit institutions" based upon negligible amounts of value.
As the guy said:
"If you want to keep a donkey healthy, you don't regulate what comes out of it, you regulate what goes in".
It is the energy in carbon that actually has inherent value, and IMHO our starting point in creating a viable system must therefore be to capture carbon-based energy transactions.
This is the concept that I have been advocating for some seven years now, and which I referred to when giving evidence to the UK Parliament's Treasury Committee recently.
It was picked up by the Glasgow Herald
here
and in my view could give an energy agency (if one is necessary) both access to market data and a meaningful power of sanction (by suspending or terminating the ability to "clear" transactions) when upholding agreed market standards.
It could - if coupled with a guarantee/ default fund arrangement - form the basis of the "International Clearing Union" proposed by Keynes at Bretton Woods, but with an energy-based "Carbon Dollar" rather than a "Bancor"
In other words, I am proposing that we monetise energy, rather than continue with the inherently unsustainable (and indeed currently moribund) monetisation of bank-created credit on the one hand, or the monetisation of equally worthless CO2 emissions on the other.
With such an energy accounting system in place it is then possible to apply a levy on carbon non-renewables at the clearing level; to invest the resulting "Energy Pools" of funds in future production of renewable energy ("MegaWatts") and energy savings ("NegaWatts") - thereby funding both; and to distribute equitably the "Units" in the "Energy Pools".
These Units would be redeemable against renewable energy consumed or as repayment of "energy loans" made (say) to retrofit CHP etc etc. and would therefore have a value in exchange.
ie we would have monetised energy and "reversed the polarity" of our deficit-based global monetary system.
Since energy is only a relatively small proportion of value in circulation today - but constitutes a large proportion of cross- border trading - we would also have to address another principal source of value - ie land rentals - but that, as they say, is another - domestic - story. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
The case for regulating carbon emissions is to a large extent unrelated to the case for a different paradigm for energy use (indeed, some argue that you can have one problem but not the other, given that one is "not enough of" and the other is"too much of" carbon-based stuff).
We need to make people pay the price for creating a negative externality in the form of additional carbon in the atmosphere. There is value there, and a simple case to be made to put a price on it in order to get people to "increase value", ie to reduce carbon emissions.
I fail to see how this is different from your scheme, altogether. In the long run, we're all dead. John Maynard Keynes
CO2 emissions have no value in exchange other than that imposed by fiat - exactly as with conventional "money as debt".
The energy value of carbon on the other hand is exchanged millions of times a day for money, and all such transactions are currently captured, albeit in a fragmented way.
Value in exchange is what markets are about and I believe I'm proposing a workable one, whereas TBG pithily pointed out the problems implicit in taking emissions trading to a "retail" level.
I see no evidence that the existing and proposed market architecture could ever achieve its professed aim of cutting emissions, but I do see it as achieving the aim of those who developed and promoted it to enrich themselves.
Jerome a Paris:
We need to make people pay the price for creating a negative externality in the form of additional carbon in the atmosphere. There is value there, and a simple case to be made to put a price on it in order to get people to "increase value", ie to reduce carbon emissions. I fail to see how this is different from your scheme, altogether.
I fail to see how this is different from your scheme, altogether.
The mechanism I advocate gets a handle on value (by essentially monetising energy value) in a way which emissions trading can never do.
You advocate "putting a price" on emissions - a purely political act.
I advocate a compulsory carbon levy, collected at the clearing level, and therefore inescapable. The funds collected go into a "Pool" which is then "unitised" into "Units" which are redeemable either against renewable energy actually consumed, or in payment of "energy investments" advanced to pay for energy efficiency projects.
This Pool is invested in suitably appraised projects for both MegaWatts (eg off shore wind) and Negawatts eg retrofitted CHP - which as William Orchard points out on Claverton is far and away the most cost effective mechanism there is.
Either way, the skills of experts like you would be needed to decide which projects stack up and deploy the necessary investment form the Pool.
The "Units" in the Pool would essentially be "Carbon Dollars" redeemable against something of value ie energy - instead of against something with only a "fiat" value and subject to manipulation, cheating and political whim.
Moreover, if the redeemable Units are distributed equally as an "energy dividend" there will be a net transfer from those with above average use of carbon energy to those with below average use of carbon energy. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Why do we even bother then? In the long run, we're all dead. John Maynard Keynes
So don't start at that end of the donkey.
Why do we even bother then?
I believe in attempting solutions that I think, based on my own experience, have a good chance of working.
Emissions trading is not one of them IMHO, not in a million years.
I lost a good livelihood, and everything I had, on a matter of principle when I blew the whistle on the exact same manipulation that the CFTC have just disciplined Optiver over.
Only now, seven years on, am I being vindicated.
Why did I bother? Because I believed it was the right thing to do...
If you can think of a way to make emissions trading viable, then I will regard you as not just a top rate banker, but a miracle worker. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
Here's a workable scenario:
http://www.cdc.gov/flu/avian/outbreaks/current.htm
