For Oliver Tickell and the CRISIS FORUM,

Here's the second part of my comments on my second reading of Kyoto2 by Oliver Tickell.

I still don't agree with his underlying premises any more than I disagreed with them yesterday.

And there are still more comments to come...


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CHAPTER 2

page 31
-->   "Territorial accounting" - it is not true to say that "it has rather just been assumed that this is how it should be done." There exist in the lexicon of Climate Change deliberations countless transcripts of blow-by-blow accounts of negotiations that say otherwise ! Why do you think that most of the major "Cap & Something" proposals incorporate national-level administration, if not full country-based accounting ?
-->   "embodied carbon" will obviously trade across borders. Contrary to what you assert, there is indeed a "reason to hold responsible the country in which the actual emissions take place." Carbon Dioxide end-point emissions are closely correlated with wealth, and therefore the ability to pay for exceeding any quota or share. The wealth of a nation, and hence its emissions, includes the assets of the imports it makes, for example the refrigerators bought in from China to the UK. Where the assets end up is really important in determining who is the intial cause of the emissions, but the country that consents to emit in order to export, must ultimately be responsible for paying for the emissions, and they may, as they have traded the products with the embodied emissions.
-->   There are issues to do with the "energy efficiency" of outsourcing emissions : a rule of thumb offered to me was that if a product is made in China, the emissions are 3 to 4 times more than if the product is made in the UK or EU. And if a product is made in India, the emissions are up to 6 times more than if the product is made in the UK or EU. Making China and India responsible for the emissions on their own turf has the potential of making outsourced emissions more expensive, and possibly roll back energy-inefficient globalisation of production, and be a good thing.

page 32
-->   Counting emissions in the country they are made, you claim has "encouraged rich countries to deindustrialize [sic] and shift their manufacturing base to developing countries."  "Most of the incentive for this has probably come from lower labour costs, but the avoidance of controls on greenhouse gas emissions has also played a part." Hardly at all, I would argue. You are forgetting the massive promotion of globalisation, which has extensively re-located business out of Minority World (Global North) countries to the Majority World (Global South). Globalisation was sold to us on the ticket of helping the poorer nations get economic development, and to make good cheaper. Energy has remained cheap everywhere until recently, but labour costs have always been higher in richer nations. I would assert that the major and overriding factor in outsourcing manufacture has been the profit gradient, how much more profit can be made from running operations halfway across the world compared to here. Actually, there have been few costed Greenhouse Gas controls until recently, so it has not been a real factor. Globalisation has been overwhelmingly, primarily predicated on cheap labour sources. While Carbon Energy is relatively cheap in any Economy, that pressure will continue. Even though outsourcing involves extra Energy costs, such as transport fuel, refrigeration in cold chain for food, and a higher Carbon intensity offshore.
-->   Regarding "foreign" or import emissions, I would have included the reports from Christian Aid "Coming Clean : Revealing the UK's true carbon footprint" :-

http://www.christianaid.org.uk/Images/missingcarbon_tcm15-21499.pdf 

and the new (perhaps too new for your publication date) SEI report :-

http://randd.defra.gov.uk/Document.aspx?Document=EV02033_7333_EXE.pdf

-->   Being "responsible" for is not the same as "paying for". The UK is ultimately responsible for more Carbon Dioxide than it declares, but should not necessarily "pay" for it. Rather, if our trading partners are obliged to pay, the UK will realise the cost is superlative, and in-house the manufacturing once again, and pay for it ourselves in preference at the cheaper cost. This will have the effect of depressing the foreign economy as a whole, but may liberate people from the equivalent of forced labour in that economy.

-->   "absolving the rich countries of formal responsibility" : the point is that the costs of Greenhouse Gas control has been less (or zero) in the rich countries than the expensive labour - which is what has caused the global shift of production and manufacture. You are inventing a reason for globalisation that does not exist (in my view).

-->   Yes, there have been some manufacturing and industrial, even local environmental issues where there has been strong regulation in rich countries and poor regulation in poor countries, but this has inspired greater overall monitoring and controls as products would otherwise be unacceptable (e.g. poisonous food dyes, unhealthy chicken products etc)

page 33
-->   "displaced" emissions are only now coming under scrutiny - an impact of globalisation that is untenable going forward.

-->   "One solution...more sophisticated system of territorial accounting...enormous carbon audit and accounting exercise..." : so don't do it then ! There's no need. Let's adopt the simple division of upstream and downstream accounting already being deployed. For the direct consumption of Fossil Fuels, each country must account. For the Carbon content of each product each company must calculate the Carbon Dioxide emissions value. For example : a 34.5g packet of Walkter's Cheese and Onion crisps has a rating of 75g of Carbon Dioxide. This emissions labelling should be the responsibility of each corporation that trades and obviously includes the base Fossil Fuel emissions, burned to produce it, but shows the product total in the country of sale (the end consumption point). Then you have two sectors - country-by-country direct Fossil Fuel consumption emissions and country-by-country end product consumption emissions. These two things are different and should be treated differently.

-->   "The solution proposed by Kyoto2 is therefore to do away with territorial accounting altogether, and replace it with 'upstream accounting' based on the production of fossil fuels, and of other industrial non-fossil greenhouse gases". This is the angle that the European Union Emissions Trading Scheme EU ETS eventually plumped on - point emission, but it neglects consumption "pull" factors in drawing other country's emissions into traded goods.

-->   "when it is created through political action, rather than emerging spontaneously, business will seek to influence the design for commercial advantage". Exactly, which is why I don't want to see a Kyoto2 style Auction imposed.

-->   The Kyoto Protocol's "legally binding reductions in greenhouse gas emissions" : has any country has actually cut their Carbon ? The UK has certainly not met it's Kyoto commitment.

page 34
-->   Annex II (non-Annex-I) countries : the "rate of increase of their emissions has shocked the world" - or rather - it hasn't. It was all part of the grand plan - the reform and development of "primitive" economies. Nobody was really considering the Carbon outcome from China taking up a "free" market economy strategy. Economic development worldwide has been hugely supported by the global institutions, encouraging nations to develop by globalised trade - the reason behind a third (at least ?) of China's emissions are for export. But look, Annex I countries have been exploding too : your figures show that Canada increased emissions by 30% between 2002 and 2007, as China increased emissions by 7.5% between 2005 and 2006.

-->   Not even a mention of VERs (voluntary emissions reductions) as a potential traded commodity.

-->   The ERUs (emissions reduction unit) between Annex I countries under Kyoto Joint Implementation have only been tradable since the start of 2008.

page 36
-->   Yes, there has been "creative accounting" over hydropower projects, many of them sponsored, it has to be remembered by an overweening World Bank, who thinks it has been doing us all a favour with this.

-->   Yes, the CDM Clean Development Mechanism has been scandal after scandal.

page 37
-->   "the price of Russia's and Ukraine's participation in the Kyoto Protocol" - I'm not sure if you can validly claim this.

-->   Here would be a good place to include a little about such things as eucalyptus plantations in Brazil and land appropriation for said projects etc

page 38
-->   Actually, I agree with Gordon Brown when he says "to include a binding emissions cap for all developed countries, for only hard caps can create the framework necessary for a global carbon market to flourish" : in other words : real restrictions on Carbon have to be made - real reductions in Carbon emissions. It's not all about the Carbon market for him, clearly, as this quotation reveals.

-->   More clarity required with the phrase "atmospheric concentration"

page 39
-->   Yes, the HFC 23 saga is a scandal.

-->   "This has created a perverse incentive to persist with the production of HCFC's..." : your evidence please ?

-->   "Indeed, in the industrialized world similar manufacturers have chosen to reduce their emissions voluntarily." This conflicts with your statement at the top of the page "the [Kyoto] Protocol has been ineffective in accelerating and HFC phase-out." If people reduce emissions without having a financial "incentive" or stick to beat their backs with, all to the good.

-->   "pay them for the extra cost" : yes, for specific issues, it will be more cost-effective to avoid all forms of Carbon or GHG market altogether. Yes, the proceeds of an Auction or windfall tax or general Carbon tax could be used effectively in direct payments to fix things, but only in a few limited cases.

-->   "the windfall profit 'has not gone to the companies and communities who are taking action on clean energy and energy reduction projects, but rather to big industrial polluters who are then at liberty to reinvest the profits into the expansion of their operations.' " : this is always a risk, and could happen when "big industrial polluters" call on a global fund from Auctioned permits as well.

page 40
-->   The Kyoto Protocol has failed to provide the long-term, secure price signals needed to encourage significant investments in low-carbon energy infrastructure..." - agreed. But why is this ? Would a global Auction of permits to industrial players achieve that either ?

-->   "fraught with price instability" and an Auction of permits would solve that ? In fact, major CDM schemes have a seemingly level price per sector and type of scheme (can't recall the reference for this). I'm not saying that CDM is working, but the price of certain Carbon products could automatically be quite stable or predictable.

-->   Regardless of price instabilities, these don't impact the main message : the future is clear : Carbon will be priced, therefore having less Carbon emissions from your business will be better : negative Carbon has a value, whatever the exact amount is.

-->   Yes, quick buck projects, such as fast-growing eucalyptus trees in Brazilian ex-rainforest...

-->   "energy research" : we know what we need to know mostly, already - what is needed is funds for deployment of technologies. There comes a time when research is over, development is over, and we just have to get on with installation.

page 41
-->   "climate policy uncertainty does weaken investment incentives for low-carbon technologies", only because it's not clear to people which technologies will be adopted. The policy itself and the trend, direction, is very clear ! It needs to be specified in more detail - no "clean coal" etc

-->   "[aviation and shipping] To omit them from any control under the Kyoto Protocol is an substantial failure by any reckoning." Yes.

page 42
-->   Re : the discussion on the "front-loaded" emissions impact from aeroplanes : there should be some consideration made not only of the operational impact but the Carbon emissions involved in the manufacture of the aircraft. The same arguments have to be included in the discussion on all forms of energy production and transport and even "white goods" in the home. 

-->   "a drastic curtailment of aviation emissions would rapidly reduce short-term climate forcing" : an excellent reason to stop flying.

page 43
-->   "the EU's targets are now reflected in the Union's own legislation" : this is a good thing. We should have less UK-bashing in the media, as all good reporters should realise we are part of the European Community and bound by these targets...

-->   "the market for CERs and related instruments..." : it has been viewed by some that CERs from the CDM have been a way of engineering funds transfer to the Global South so have been supported unquestioningly.

-->   "CO2 emissions from fossil-fuel burning and industrial processes have been accelerating at a global scale" : one reason being put forward as to why this is tolerated or unchecked is that it has been assumed that the increased concentration of Carbon Dioxide in the atmosphere is encouraging plant growth ("fertilisation") which is compensating for it : yet another myth on the road to hellish conditions.

page 44
-->   Globalisation is mostly responsible for the growth in the use of Energy and hence Carbon Dioxide emissions : outsourcing of manufacture into regions of lesser Carbon Efficiency.

-->   "No region is decarbonizing its energy supply". You have to ask "why ?" The old investment hurdle problem must be one key to this puzzle.

page 45
-->   "The Kyoto Protocol has no firm scientific or economic basis" : I disagree. It was strongly influenced by the free-market economics ethos. Also, it was ever only seen as a first step on the road from the Climate Convention - a test of approach. It's true that "the policy lacks any connection to ultimate economic or environmental policy objectives", but that's because it was a trial run to see if emissions could be cut in real numbers. Criticism of the baseline year by William Nordhaus is fatuous in my view.

-->   The net effect being that the Kyoto Protocol operates like "a 'cap and trade' system, but without an overall cap - leaving on the 'trade' element" is a fairly accurate observation.

-->   That the Kyoto Protocol is a "fundamentally flawed approach" cannot be accepted if you believe that a free, liberalised, unregulated, privatised, globalised market for Carbon can be made to work. We all know that it will need to be regulated at source, to construct a value for Carbon. It will not be completely necessary to submit to those certain parties who will claim or require ownership of the Carbon Rights in order to agree to play the game. Personally, I don't believe a market in Carbon can create the incentives to de-Carbonise Energy production or supply, and that the Carbon market is creating a get-out clause for those profit-making organisations who don't want to spend lots of their shareholders' stakes on new Green Energy technologies. But the question is : can this be re-negotiated at this stage ? According to the Bali Roadmap, probably not. We will have to live with Carbon Trading.

page 46
--> "funding the transfer of low-carbon technologies to developing nations" : why not do it at home first ? Surely that would be economically more efficient ? You have no intention of cutting the Carbon at home ? I see. So we have the UK Government  being utterly patronising about leading on Carbon Capture and Storage to inspire poor, dirty China...

-->   Yes, there are dangers in including forestry in the Son-of-Kyoto deal. There are already documented cases where people are being swept aside, off traditionally-held lands, in order to do CDM projects. It will only get worse.

-->   "This gives countries with large forest endowments an interest in increasing deforestation in order to establish a high baseline, and so increase future payments." Evidence, please ?

-->   "areas designated for special protection...specifically excluded." In my view, a good thing. What's your reasoning otherwise ?

TO BE CONTINUED...

jo.
+44 77 17 22 13 96
http://www.changecollege.org.uk

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