Ladies and gentlemen,
Thank you very much for your kind welcome. Today’s meeting is an honour for me and a very important opportunity to share my point of view about an essential issue of internal and international politics, a topic absolutely central to the future of Euro-American relations: climate change strategies. As a member of the Italian Parliament and a former member of the European Parliament, as well as a representative of the Italian center-right coalition, I will give you my opinion, hoping it could be useful for the Congress deliberations.
I will start by underlining these key points:
– Global warming is not necessarily an emergency to fight, but a probable event to face; climate change’s consequences should be set in a rational perspective, avoiding apocalyptic scenarios;
– Emission cap standards and their most famous example – the Kyoto Protocol – are ineffective instruments to face the climate change challenge, as they don’t consider technological progress in the medium-to-long run and they inhibit growth rather than promote “clean” growth;
– No agreement will be credible without a real commitment by China and developing countries;
– Adaptation could be the only solution to global warming.
From a European and Italian point of view I will focus on these other remarks:
– European Union chose the “struggle” against global warming as a way to characterize itself on the international “arena”;
– The first phase of European Union’s Emissions Trading Scheme (ETS) under Kyoto Protocol isn’t working;
– European public opinion and the media generally support Kyoto, seeing it as a paradigm of a “good” globalization;
– European leftist parties’ approach towards the environment tend to be a synthesis of anti-industrial, anti-market and anti-American feelings;
– European center-left parties support heavy government intervention in environmental issues;
– European center-right parties don’t have yet a recognized political program on environmental issues; they let leftists set the agenda on global warming.
After taking into account all these elements, I will conclude with a political observation.
As listed above, the first element I point out is that we can’t consider global warming an emergency to fight, but a probable event to face.
It’s not just a matter of words: since the Roman Empire, emergency is a state that allows government to suspend normal laws, may require citizens to alter their normal behaviours, or may order government agencies to implement extraordinary plans. It can also be used as a reason for suspending liberties.
Global warming is not an emergency for several reasons. First of all, climate change in itself is a normal phenomenon. Climate has changed for millions of years. The history of our planet is the history of climate change, from cold ice ages to warmer periods.
Second, the prevailing view of global warming – inspiring the Kyoto Protocol – postulates that human activities are the main, or even the unique cause, of observed climatic changes and that these changes have costs but no benefits.
Such a presumption is not justified by any scientific evidence. Scientists often observe that our knowledge is much lower than advocates of catastrophic scenarios believe. As Carlo Stagnaro – from Bruno Leoni Institute in Italy – argued, we really don’t know what’s happening and how to measure it.
As a matter of fact, global warming is likely to create some local comforting. These benefits may possibly be overwhelmed by costs, but it’s nevertheless an issue to focus on.
The political debate about climate change is conditioned by prejudices and lack of scientific severity. Last month Italy’s Minister for the Environment – the Green Party Leader – organized a national conference on climate change, to which only a few scholars were invited. Some of the most pre-eminent climatologists in the country protested, not because they had not been invited, but because the organizers were presenting incorrect data. One datum was absolutely ridiculous: they claimed it was a fact that Italy’s temperature is increasing 4 times faster than the rest of the world.
This “unreasonable” mistake has been a good gift for “reasonable” people: after the Conference, scientists’ criticism had such an echo that you could find more than a few sceptical opinions on newspapers or on TV. Probably for the first time in Italy, anthropigenic causes have been questioned not only by haggard groups of “negationists”, but by public opinion.
Nonetheless, European climate change strategies remain undeniably inspired by human-causes theories and by a view of global warming as an emergency.
As a matter of fact, European Union chose the “struggle” against global warming as one of its focal policies and as a way to characterize itself on the international “arena”. I understand this Europe’s will but I’d like Europe to choose a different issue, such as promoting international trade openness, enhancing world economic stability and global growth, spinning innovation, competitiveness and free market, supporting democracy and individual rights worldwide, guaranteeing international security against terror.
Emission “cap and trade” standards are ineffective instruments to face the climate change challenge, as they are a massive government intervention, a “command and control” scheme and they don’t consider technological progress in the medium-to-long run and they inhibit growth rather than promote “clean” growth. So, Kyoto could hold back the EU from its attempt to stimulate innovation and competitiveness for the Old Continent.
To summarize, the EU’s decision to ratify it has not been supported by any cost-benefit analysis. When President George W. Bush declares that greenhouse emissions cut can’t inhibit economic growth, his words are commonly considered in Europe as a preference for “growth at any cost” rather than a reasonable emphasis on a cost-benefit analysis. Not surprisingly, there is enough literature about Kyoto costs and benefits in non-Kyoto countries, like US and Australia, but very few in Europe, and most of this literature has been produced after the adoption of the Protocol.
But the Protocol is terribly expensive.
According to International Council for Capital Formation (ICCF), if the ETS were imposed to every sector of the economy, including transportation, there would be a significant impact on GDP and on employment. In 2010 Italy would spend among 1.1 and 5.3 billions € (1.5 to 7.4 billions $) per year in buying credits; the price of energy should increase by 26%. Who would pay? Tax-payers and consumers. In the worst scenario, Italian GDP could decrease by 0.5% per year.
According to Bjorn Lomborg, the typical cost of cutting a ton of CO2 is currently about 20$, while the damage from a ton of carbon in the atmosphere is 2$. Spending 20$ to do 2$ worth of good is not smart. We need to reduce the cost of cutting emissions from 20$ a ton to 2$. The only way to achieve this is to invest on research and development. As Lomborg proposes, every nation should commit to spending 0,05% of its GDP exploring non-carbon-emitting energy sources. This spending could add up to about $25 billion per year but would still be seven times cheaper than the Kyoto Protocol.
The Emissions Trading Scheme is supposed to be the EU’s main policy tool – within the Kyoto framework – for reducing emissions. But so far, it has been a failure. In its first phase of operation, more permits to pollute have been printed than actual pollution. The price of carbon has collapsed from 33€ to 0.20€ per tonne, creating no incentive to reduce emissions.
Worse still, since some countries (such as the UK) had set tough quotas on emissions, and others set lax targets, the system acted as a wealth transfer mechanism, effectively subsidising emitters in states which were making little effort by taxing states with more stringent allocations. Overall there are about 6% more permits than emissions. However the UK has to buy about 22 million tonnes worth of permits a year, while firms in France and Germany could sell off a surplus of around 28 and 23 million tonnes respectively.
As the House of Commons Environmental Audit Committee noted: “there is little or no evidence that Phase I is leading to any cutbacks in actual emissions at all, whether in the UK or elsewhere in the EU.” In its first year of operation (2005 to 2006) emissions covered by the ETS rose 3.6% in the UK, and rose by 0.8% across the EU as a whole.
We agree with Open Europe – an English think tank – when they argue that in fact things have gone backwards for the ETS. In the second phase of the ETS, which runs from 2008 to 2012, member states will be able to “import” external Kyoto “credits” from developing countries in order to meet their targets for reductions. This might be unobjectionable if these ‘imports’ reflected real emissions cuts. But these credits have already been exposed as highly flawed, and often fraudulent. They don’t always reflect absolute reductions in emissions, while many of these credits are generated from projects in developing countries that would have happened anyway. Such credits actually mean increased pollution.
It is highly likely that the majority of CO2 reductions in the next ETS phase will be simply ‘bought in’ through these imported permits. That means the ETS won’t reduce emissions in Europe, and won’t encourage companies to invest in innovative technologies.
Far from creating a credible basis for EU level action on climate change, the ETS has instead established a web of politically powerful interest groups, massive economic distortions and hidden industrial subsidies. It will do practically nothing to reach its supposed aim that is to fight climate change.
Someone could agree with EU Commission that insists it has learned its lesson, and has reassured that the second phase of the scheme will work better because it has cut the overall allocation of permits. Even in this case, are the supposed benefits of the mitigation worth enough to justify these costs? No.
According to the Intergovernmental Panel on Climate Change, to have an impact on global warming, anthropogenic emissions should be cut by 60-80% compared to 1990 level. If all the countries joining Kyoto reach their target, global emissions decrease by less than 3%.
Moreover, in the next decades greenhouse emissions from China, India and developing countries will out-match western countries emissions by far. According to Fulvio Conti, CEO of Enel, a major Italian energy firm, yearly Chinese CO2 emissions are augmenting more than the rate of reductions the EU should have to meet its 2012 targets.
As designed, the Kyoto Protocol risks being just a regional European agreement to be respected on a voluntaristy basis. What is worse, its respect seems to be due not by proven effectiveness – actually, it is ineffective – but by the necessity to satisfy public opinion conditioned and scared by apocalyptic campaigns.
While many consider it taboo, “adaptation” needs to be recognized as a better alternative than “mitigation”. As Daniel Sarewitz from Arizona State University said, “the obsession with researching and reducing the human effects on climate has obscured the more important problems of how to build more resilient and sustainable societies, especially in poor regions and countries”.
Let me conclude with a political point.
Environmentalism has become an “inconvenient” ideology, both in Europe and in America. In Europe, it has deeply conditioned leftist parties. Their approach towards environment is a synthesis of anti-industrial, anti-market and – unfortunately – anti-American feelings.
Socialdemocrats support heavy government intervention in environment.
European conservative parties don’t have yet a recognized political program on environmental issues; they allow the left to set the agenda on global warming and they are too weak to campaign against the established alleged trade-offs of “development versus environment” or “business interest versus environment”.
As a center-right politician, I am working to create a conservative platform on the environment and global warming. A “reasonable” European position on global warming will be a precious ally for Washington, but it’s important that the United States adopt an active position in the international debate. I found President Bush’s speech last week encouraging, because he indicated that the U.S. wants to develop this discussion among the major economies, and get into the substance.
President Bush said his purpose was to begin setting a new worldwide goal for cutting carbon dioxide emissions after 2012 and to help developing nations pay for the changes that would be needed. Reasonable people should refuse to sign onto mandatory emission-reduction obligations – as their weaknesses have become apparent – preferring to encourage the development of new technologies and other voluntary measures. Still, western countries should not participate in any talks toward a global agreement that do not include polluters from China, India, Brazil and the developing world.
International action should focus on setting national targets for greenhouse gas reduction, but should leave decisions on how to reach those targets to individual countries. This approach would give national governments the flexibility to explore solutions to the problem without stunting economic growth, as development will be the main – and probably the unique – tool to adapt to a changing world.
The ability of human systems to adapt to and cope with climate change depends on such factors as wealth, technology, education, information, skills, infrastructure, access to resources, and management capabilities. There is potential for both developed and developing countries to enhance and acquire stronger adaptive capabilities and build resiliency in their societies.
Hon. Benedetto Della Vedova
Member of the Italian Parliament and formen member of the European Parliament