Dec 26, 2007

Differing Views On The Solution To Climate Change?

There is an apparent difference of view between articles carried in today’s Otago Daily Times (incredibly you can read The Economist leaders for free but to read an opinion piece in the ODT online you have to pay $1!!) and in the Christmas issue of The Economist .

The Economist notes that the glacial pace of global negotiations on climate changes argues in favour of local, sectoral regulations (the article does note, however that this would be second best to a global solution based around a global carbon price set by either a carbon tax – The Hive’s preference – or by a cap and trade system – like the New Zealand Government’s proposed system).

In the ODT Peter Lyons writes a thoughtful analysis which concludes that self interest will stand in the way of action at nation state level but hopes that global warming might be a big enough issue to force national to put self interest aside and agree to some form of supra-national government structure to help solve the problem. We agree with much of what Lyons has to say, and commend his summary of the “tragedy of the commons” and the “prisoner’s dilemma” and suggests all our negotiators read the article.

We are less accepting of his treatment of the WTO and UN systems in the same breath. The UN is rightly held up be Lyons as an example of what doesn’t work, but the WTO dispute settlement process is pretty effective and the best that the world has yet to come up with. Radical as this idea might be, The Hive believes that a solutions to the global emissions challenge that should be given very serious consideration is looking at how the WTO might take a lead. Aside from giving solutions some real teeth through the WTO’s dispute settlement mechanism, the WTO is best placed to deal with the big problem confronting most countries when they consider showing leadership on climate change – industry leakage (industry being rendered less or non-competitive by carbon taxes or emissions trading regimes and then moving offshore to locations without these policies). Lyons highlights this problem in his “prisoner’s dilemma” comments.

For the record we believe that both The Economist and Lyons are right. In the absence of a global solution lets begin to act locally in a carefully considered way. But lets not give up on the global solution goal.