Relative to initial expectations, and given that the heads of almost all leading nations attended, the recently concluded United Nations climate change summit in Copenhagen was an embarrassing failure. The final accord was only a statement of intention, and had no binding pledges on actions to reduce greenhouse gas emissions, although the majority of attending nations did agree to ''take note'' of a vague last-minute compromise document by President, Barack Obama, and the leaders of four major emerging powers: China, India, Brazil and South Africa.
The most important issue on the initial agenda was to reach agreement on major worldwide cuts during the next several decades in greenhouse gas emissions. Yet the final Copenhagen document removed from an earlier draft a proposal to target a 50% cut in world greenhouse gas emissions by the year 2050. The final document does acknowledge the need to limit world temperature rises to less than 2 degrees centigrade above pre-industrial levels, but it does not include any way to enforce achieving this goal.
The second major aim of the US, Europe, and other rich countries was to get agreement from China, Brazil, India, Russia, and other important developing countries to greatly reduce their greenhouse gas emissions during the next couple of decades. China has become the world’s largest producer of carbon dioxide, supplanting the US, now in second place. In return for agreeing to large reductions in emissions, developing countries hoped to receive substantial aid from the rich countries. This effort also failed. The only firm deal on aid in the final accord is for developed countries to provide a paltry $30 billion to help developing nations cope with the effects of climate change from 2010 to 2012, although the rich nations indicate that they will try to jointly provide $100 billion year to developing countries by the year 2020.
It is easy to see why the fundamental difference at the Copenhagen meeting was between the developed and developing world (the second most important difference was within the developed world, where Europe and Japan wanted more aggressive emission cuts from the US). A well documented finding by development economists is that as per capita income grows in the course of economic development, countries become more concerned about both local and global pollution, such as global warming. This is why the BRIC countries-Brazil, Russia, India, and China- and other developing countries feel it is unfair to ask them to take actions that the developed countries themselves did not take when they too were much poorer.
This fundamental conflict is the reason why rich countries were willing to discuss possible aid, or “bribes”, to developing countries if they undertook large cuts in their carbon dioxide emissions (see the proposal along these lines in my post in December 2004 on our old website Becker-Posner-blog.com.) This explains the goal of providing $100 billion of annual aid by 2020.
$100 billion is a lot of money, but it is paltry compared to the GDPs of the most important developing countries, and even to their industrial output base. For example, China, the largest of the developing countries, has a GDP of about $8 trillion, adjusted for purchasing power parity, compared to the $14 trillion of the United States. Since China is the world’s largest exporter of goods, its industrial sector- where carbon emissions are concentrated- accounts for almost half its total output. Even if we suppose, unrealistically, that China receives a full half of the proposed aid, or $50 billion annually, that is only 5/8 of one per cent of its current GDP. So China would be economically much worst off if, in return for this $50 billion, China had to cut emissions enough to reduce its growth rate by only a little. For example, if cuts in its carbon dioxide emissions reduced China’s annual growth rate for the next decade from 8% to 7.37%, the lose in GDP from the lower growth in the first year would just offset the $50 billion in aid. However, in later years, China would lose much more than the aid from rich countries since its GDP base would be much larger due to its rapid economic growth.
The difficulty in reaching agreement on enforcing compliance was a major obstacle to getting rich countries to agree to large amounts of aid. China and other developing countries argued that monitoring of their compliance with their pledges to reduce emissions of greenhouse gases infringed their sovereignty as independent nations. Yet without serious monitoring of compliance, such agreements are of dubious value since developing countries, especially non-democratic ones, may accept aid from rich countries, and then fudge their published records on degree of compliance.
The rich countries of Europe, Japan, and the United States may still implement further steep cuts in their own carbon emissions. But that is likely to have only a modest effect on worldwide carbon emissions if the BRIC countries and the other almost 200 countries are not included. A major reason why the 1997 Kyoto Protocol failed is that it exempted developing countries from any targeted cuts in emissions. Large cuts by rich countries alone would speed up the already rapid shift of economic power to Asian and other developing nations. Some companies in Western countries would transfer much of their most polluting outputs to developing countries, and industrial companies from China and elsewhere would grow at the expense of American, European, and Japanese companies.
So my conclusion is that either rich nations have to pony up a lot more money to get developing countries to agree to large cuts in their greenhouse gas emissions when monitoring of compliance would be limited. Or rich countries have to go it alone in cutting their emissions, and then accept a much smaller impact than they would like from their own cuts on worldwide emission reduction. Even the strongest proponents of immediate sharp cuts in world emissions of greenhouse gases –which I am not- have to recognize the implication from the failure of the Copenhagen meeting that large worldwide reductions in emissions are not achievable in the near future.