Climate protection

A climate compatible with human life and endeavors is the most global public good imaginable. This is why it is so difficult to protect it. The provision and protection of public goods call for collective decisions and government enforcement of the measures required for the purpose. This is one of the primary tasks of a government. Now, there is no world government, and what this implies in effect is that no single government will see itself as responsible for the protection of global public goods.

Another obstacle that needs to be addressed in order to come up with an effective world climate policy is the responsibility of industrialized countries. Developing nations have rightly pointed out that, in the 200 years of their - fossil-energy-driven - industrialization, the developed countries have been responsible for the lion's share of the greenhouse gases accumulated in the atmosphere today. This is the reason, they continue, why industrialized countries need to bear the main burden of global climate policy. This is all the more the case as the level of economic and technological development the industrialized countries have reached makes it far more easy for them to do so than the emerging countries.

China, India and the other emerging countries are intent on advancing their own economic development before they begin to assume the costs of an effective environmental protection. They are bound to build many more coal-fired power plants, and their middle classes, numbering hundreds of millions of people, have set out to emulate the lifestyles of the rich industrialized nations by eating more meat, driving their own cars and flying around the world on vacation.

Are we, in all seriousness, to try to tell the Chinese and the Indians that they had better take leave of their dreams in the name of climate protection? At the same time, more and more Germans and Americans are climbing into their four-wheel-drive SUVs to drive down to the neighborhood shop to buy a loaf of bread - or, with the climate in mind, are driving out to the local farmer to buy regional products for their alleged climate-friendliness.

Fossil energies must be in balance

Even if we, in Germany and in Europe, left our cars at home as often as we possibly could, heated less in the winter, did without air-conditioning in the summer, and used nothing but energy-saving light bulbs, the hoped-for relief for the world's climate would still fail to materialize.

The reason for this must be sought in the equilibrium of supply and demand in the world oil market - and, by inference, in the coal and gas markets, as well. The effect of our reduced consumption would be to depress the price of fossil energies or, accordingly, to decelerate the rise in price levels. In this way, it would permit breathtakingly dynamic and energy-hungry emerging countries like China and India to satisfy their growing import hunger at constant costs. They would, in effect, consume the fossil energies that we have saved.

After all, and there is no reason to make light of this, we, with our climate policy and the development of climate-friendly technologies it inevitably entails, are furnishing the developing countries with broader scopes for development based on fossil energies than we would be if we failed to save energy. True, in reducing merely our own consumption of fossil energies, we would not (yet) be protecting the climate. But we would at least be contributing to a more equitable distribution of development chances between industrialized and developing countries. Our "good example" - or so we may hope - even encourages the willingness of these countries, or at least of their internationally networked middle classes, to join us in adopting more and more environmentally and climate-friendly practices as they forge ahead with their economic rise.

If we create the technical wherewithal for the purpose, because our climate policy encourages the development of energy-saving technologies and renewable energies, then so much the better! Indeed, it is quite likely that far greater efforts will be needed in technology development if we are to meet the ambitious reduction targets set for greenhouse gas emissions by mid-century.

Preventing the depletion of global public goods

There is an uneasy sense we may have that we, with our national as well as common European climate policies, are contributing virtually nothing to reducing global greenhouse gas emissions as long as other countries, which are not firmly committed to reduction targets, simply use up the oil we do not consume. That is an unpleasant fact of life that is often banished from the minds of German climate guardians.

There is no other way to explain the fuss that Hans-Werner Sinn provoked with his so-called "green paradox." In his 2007 Thuenen Lecture, Sinn, president of the Munich ifo Institute for Economic Research, had shown that our national climate policy is not only climate-neutral but that it, under certain circumstances, may even accelerate climate change. That would be the case if the "oil sheikhs" - his term for all suppliers of fossil energies - came to recognize that our fossil energy savings were being emulated by more and more industrialized countries, and gradually followed by an increasing number of developing nations.

This would lead to a long-term decline in oil prices despite energy needs on the rise worldwide. In this case, the oil sheikhs would accelerate production to turn their oil into money before their subterranean "capital" was faced with the collapse of global prices that must inevitably ensue. This rationale, Sinn argued, would affect in particular the cliques ruling the politically insecure oil countries. They would have to face the possibility of being unable, in the wake of a coup, to go on profiting from future oil revenues. If, in other words, our climate policy were to spark a hectic supply reaction in a good number of countries, this would serve only to accelerate climate change.

The "green paradox" has prompted vehement critical responses. But all of the objections and critiques miss the key point that must be inferred from the logic of global collective goods with or without Sinn's "green paradox." A global public good, such as the atmosphere's capacity to absorb greenhouse gases, will inevitably be overexploited if there are no effective institutional arrangements in place to bar free riders and to induce all countries to comply with agreed reduction targets. The oil, as well as coal and gas reserves that are still under the ground are bound, sooner or later, to be extracted and burned down to a residual amount that would cost more energy to produce than could be gained from its use. This is the case as long as there is no international agreement in place that functions along the lines of a global demand cartel, leaving the oil sheikhs no substitute markets to sell whatever oil they may have left.

The only alternative would be for the international community to purchase all of the oil not yet extracted by the oil sheikhs. This would entail compensating the oil sheikhs for "services rendered for global climate protection." However, there would not likely be much political support for an additional income transfer above and beyond a scarcity rent for a set of oil sheikhs already spoiled by the random geological givens of our planet.

Sharing climate-friendly technologies

Mind you, our concern here is not to point to the futility of national efforts geared to reducing greenhouse gas emissions in order to undercut the motivation to save energy and make life easier for gas guzzlers and energy wasters in general. Scientific analyses have indicated for some time now that we may already have overstepped the earth's carrying capacity. We, with our material economic growth, may be in the process of negligently reaching several tipping points of the global ecosystem, with unforeseeable negative consequences for our world.

However, it is essential not to delude ourselves about the effectiveness of environmental measures and to ensure that we do what is right and necessary. We should do it as soon and as effectively as possible. We need to conclude an effective international climate convention, to create the conditions needed for comprehensive energy savings and substitution of renewable for fossil energies. We should initiate, worldwide, the changes in human behavior required to set the stage for efforts to reach, without undue delay, the reduction targets without which there can be no beneficial development of the world's climate.

If we are really intent on seeing the developing countries commit to binding and effective reduction targets in an international climate convention, we will need to demonstrate our will to do so by providing them access to climate-friendly technologies. These involve both those already available here and those yet to be developed. Also, we need to facilitate, in the framework of development cooperation, their broad-based adoption and use in the developing world.

This column represents the author's personal opinion.

Dr. Juergen Wiemann works in the section 'Economic Development and Employment' at the German development organization, Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ). He is the former Deputy Director of the German Development Institute (DIE).