Joseph E. Stiglitz, 2001 Nobel Laureate and Professor in Economics at Columbia University, concludes that world leaders at the Copenhagen climate conference failed not only to reach a binding agreement, but also to agree on how to save the planet. An entirely new strategy is needed, he says, to effectively address climate change:

“Perhaps it is time to try another approach: a commitment by each country to raise the price of emissions (whether through a carbon tax or emissions caps) to an agreed level, say, $80 per ton. Countries could use the revenues as an alternative to other taxes – it makes much more sense to tax bad things than good things. Developed countries could use some of the revenues generated to fulfill their obligations to help the developing countries in terms of adaptation and to compensate them for maintaining forests, which provide a global public good through carbon sequestration.

We have seen that goodwill alone can get us only so far. We must now conjoin self-interest with good intentions, especially because leaders in some countries (particularly the United States) seem afraid of competition from emerging markets even without any advantage they might receive from not having to pay for carbon emissions . A system of border taxes – imposed on imports from countries where firms do not have to pay appropriately for carbon emissions – would level the playing field and provide economic and political incentives for countries to adopt a carbon tax or emission caps. That, in turn, would provide economic incentives for firms to reduce their emissions.”

This is an interesting idea, as it essentially shifts the focus away from getting each country to meet hard emissions reduction targets to setting the price of carbon, a simpler proposition from an economic point of view. Agreeing to hard caps can be politically contentious. Stiglitz’ approach might be more viable.

Both environmentalists and climate change skeptics should read this opinion piece in the Wall Street Journal by Nigel Lawson, who for years was Chancellor of the Exchequer in Margaret Thatcher’s Government.

Lawson is long-time critic of the Kyoto Protocol and, for a while at least, sided firmly with global warming skeptics. He’s nuanced his arguments in the last few years recognizing now that global warming is a reality that will have a negative, albeit moderate, impact on us. But he has little time for alarmist and apocalyptic statements from climatologists and climate change policy advocates.

Lawson proposes we “abandon the Kyoto-style folly that reached its apotheosis in Copenhagen last week, and move to plan B,” which essentially boils down to adaptation, plus modest increases in government investment in technological research and development.

This hardly amounts to much of a solution, however Lawson’s analysis of why Copenhagen failed is spot on:

1. The massive cost of decarbonizing the world’s economies because carbon-based energy is likely to remain the cheapest form of energy for the foreseeable future

2. Solving climate change is about negotiating a solution on how to share the burden between the developed world, responsible for the bulk of past emissions, and the developing world, which will likely be responsible for a sizeable chunk of future emissions.

His most insightful comment on the dilemma facing the developing world is this:

And the overriding priority for the developing world has to be the fastest feasible rate of economic development, which means, inter alia, using the cheapest available source of energy: carbon energy.

Moreover, the argument that they should make this economic and human sacrifice to benefit future generations 100 years and more hence is all the less compelling, given that these future generations will, despite any problems caused by warming, be many times better off than the people of the developing world are today.

For an interesting debate pitting Nigel Lawson and author Bjorn Lomborg on one side against Green Party leader Elizabeth May, and George Monbiot, on the other, check out the Munk Debates site.

Not sure how productive Copenhagen was, but this blow by blow account of the negotiations has Obama getting down in the trenches and making things happen, good read. Any agreement on emissions targets has two very large issues to confront:

1. Attaining the targets and
2. Verification of claims that targets were met.

For example, most countries signed onto Kyoto, but pretty much none have reached the goals set out under the document. In fact, Europe has had carbon emissions increase, so what does this say about the power of these “binding” agreements. If no one enforces the application of an agreement, there isn’t really an agreement in place. The US team seems to be pushing very hard on transparency in China and in general. My guess is that they feel that without transparency and accountability there will be a lot of fudging of the emissions numbers. Making predictions is a dangerous business, but my sense is that the only way to get countries to respect an international greenhouse gas treaty is to impose import tariffs on products from places who fail to comply. We shall see.

Aeronautics is a key high technology sector in Quebec. All in all it accounts for an estimated 250 companies and 40 000 jobs, mostly concentrated in the Montreal region. And another thing: it’s estimated that 80 per cent of its production is exported.

Has someone explained to Jean Charest that the aviation industry accounts for 4-9% of the total climate change impact of human activity?

Eric Reguly of the Globe and Mail reports from Copenhagen that Canada is clearly in the proverbial doghouse. And indeed, one gets the feeling it’s Canada’s amateur hour at the talks. Still, the seemingly unanimous chorus of disapproval is odd, considering that our reduction targets are broadly similar to those of the U.S. But the difference is: Canada ratified Kyoto. The Americans didn’t. They took their licks when the Bush administration decided to withdraw U.S. support for the Protocol. Defenders of Canada’s position tend to argue that we must not share the burden alone, or that China should do more. But remember: Countries that ratified the Kyoto Protocol agreed to reduce emissions of six greenhouse gases that contribute to global warming. At the end of the day, Canada’s problem in Copenhagen is one of broken trust, based on its behaviour over the last few years. Both Conservative and Liberal governments have themselves to blame for that.