Graciela Chichilnisky’s proposal (see “Saving Kyoto”) offers food for thought, and an innovative mechanism of moving money elegantly from the United States to China. My issue, however, is not so much whether the mechanism would work – as whether it addresses the right challenge.
America will not pay for China’s mitigation costs through any route. First, this is because the domestic political optics do not allow for it. Second, because carbon is more expensive to mitigate in the Chinese power sector (at US$40 to $80 per tonne) than for example in Brazil’s rainforests (at US$5 per tonne), and US business is keen to buy cheap.
Fortunately, this may not be such a problem, as China’s issue is not really about the money anyway.
China has already given up on receiving any significant windfall rent through a climate deal. China’s hopes are to sustain economic growth, development and employment growth, and ensure international competitiveness across the value chain – which means protecting dirty jobs for now, while simultaneously investing in clean-tech leadership for the future.
What China needs from the international community, led still by the United States, is: first, everyone else to reduce emissions in order to minimise the climatic threat to their survival; second, no trade protectionism in the guise of climate management; and third, shared technology development and use to prevent technology-based exclusion from international markets or a repeat of today’s costly intellectual property lock-ins, as well as to accelerate global moves on emissions reduction.
Most of all, China needs time to get its act together. It needs to ensure that its development pathway over the next decade is not disrupted by climate-related international agreements or unilateral policy initiatives by their major trading partners. Chichilnisky’s proposal seems, if I have understood it, somewhat of a solution seeking to address a problem whose resolution is both unlikely – for other reasons – and not core to what needs to be done.
Simon Zadek is Managing Partner of AccountAbility
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NEXT WEEK: Kevin Smith responds to Graciela Chichilnisky. Plus – Simon Zadek sets out his own proposal and chinadialogue authors respond.
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