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Environment & Sustainable Development
Climate Change
DA21 Conference
"Challenging the Conventional Wisdom on Assistance
and Development"
September 30 - October 1, 1999
PLENARY SESSION 6
Economic Growth, Environmental Policy and the Control of Climate Change
CHAIRPERSON
Peter Ashton , Forestry Program Director, CID
SPEAKERS
Theo Panayotou, ESD Director, CID
Jeffrey Sachs, Director, CID
Transcript Table of Contents
Remarks by Theo Panayotou
Remarks by Jeffrey Sachs
Discussion
PETER ASHTON: The strength of the case which can be made for the economic
viability of sustainable forest management in the humid tropics if the
total, the totality, of the goods and services that these forests provide
are taken into account, not just the timber. Which is, of course, normally
what policy makers are concerned about. So I'm going to be listening to this
discussion with great interest, and I hope participating. I think we should
start now. We're way overtime. It's 20 to 2:00 now. Theodore Panayotou is
going to be our first speaker. He has 15 minutes, right, Theo? And if you go
down to 16 minutes I've got a jug of very cold water here to deal with you.
And the second speaker is Jeff Sachs, who's just coming along. And then
we'll try, I hope, to develop a really stimulating and productive
discussion. Because we have all together two hours for this session this
afternoon. So over to you, Theo.
Remarks by Theo Panayotou
THEO: I'll begin with some technical details. Obviously this cartoon was
done before the recent few years when there is a lot of talking about global
warming. I don't know if there is much doing about it. But this was
everybody does something about the weather but nobody talks about it. About
our impact on the climate, I would say that five years ago it would have
been inconsiderable to have a conference such as this and have a plenary
session on climate change. But I give you one indication. Actually, this is
a cartoon of 1989. Great moments in science 1589. The Copernicus theory is a
mere speculation and fails to conform to our theology. And this is 1989. The
greenhouse effect is mere speculation and fails to conform to our project
projections. That's OMB 1989. I mean today that would have been now, what
was really the state of affairs only ten years ago is considerable to think
that major policy makers in Washington will think of ignoring the global
warming. So it came a long way. And of course, in the international arena
there has been significant discussions from the 1992 Rio conference, the
earth summit to Kyoto Protocol [LAUGHTER]. So for those who cannot see from
there it says it's getting cold, throw another one of the Kyoto global
warming studies on the fire. And indeed our attitude, fortunately,
especially in the developed world, and this will be one thing that will come
out of our paper that Jeff maybe talk more about it is in the Kyoto
agreement we have developed countries undertaking commitments to reduce
their emissions. But we are not prepared to ratify those, the Kyoto
Protocol, unless developing countries participate. And here is, if you like,
a cartoon on the subject. This is greenhouse gases from the north, this is
greenhouse gases from developing world, the south. And this guy going on his
vacation and telling to the to the campesino there that you are going to
curb your excesses, right? I'm going to get commitments to reduce your
emissions. And that, I think, is clear indication of where the debilities of
the moment are in terms of taking effective actions. Now, in terms of taking
effective actions there are two kinds of solutions. One is the technological
solution and the other one is the economic solution. And I hope I have the
slide but if I don't I will show it to you this way. It's easy to see from
there. Trading emissions between smoke stacks. I'm coming to the paper now.
Here we have the first, the objective of the paper is to do basically a
couple of things. One is we heard a lot during the last few days about
development, about economic growth and so on. But one of the many factors we
have been ignoring in the past was the environment. And in more recent years
we began to take into account the environment in terms of the domestic
environment and its impact on economic growth and vice versa. But we have
been ignoring the impact of the larger global environment, the global
commons. And more recently we start focusing also on climate change. And
apparently economic growth has a lot to do with the greenhouse gases that
might lead to climate change. And climate change, in turn, it's going to
affect the ability of countries to grow in the future. However, this is a
statement which is, even though it talk about global commons is not so
global. Because, as it turns out from our paper, there is very skewed
distribution in the contribution to the climate change and a very skewed
distribution in the impacts. Who contributes and who suffers. And what we
tried to do is to find, A, first the relationship between economic growth
and concentrations of greenhouse gases, particularly CO2, and how this is
distributed between different parts of the world. Who does what to whom?
Which is the second part of the question of these concentrations are likely
to affect, how they are likely to affect different parts of the world. And
particularly the developing world that is of particular interest to this
conference. You may have heard a lot of people saying that the Kyoto
Protocol is a very, very costly and very heroic commitment undertaken by
developed countries which will cost significantly to economic growth. Just
looking at our data on CO2 emissions for different countries. You see what
countries we have here. This is we have France, Netherlands, Canada. And I
will also put in the United States and so on. What you see, the emissions
over time are leveling off or even declining in the developed countries. The
United States, of course this goes to 1994. In fact, we have some increase
here. And this is due partly to two factors. First of all United States got
an unprecedented period of economic growth, continuous economic growth for
the past ten years or so. Which may be attributed to a variety of conditions
to technological to the economic conditions in the rest of the world, the
financial crises and others. And the other reason is because United States
continues to have an increase in population, especially due to migration.
But you see that the trend is towards leveling off and in fact reduce
emissions in the developed countries in the future. So basically what is
Kyoto is nothing else but reaffirmation of what is already happening as a
result of structural change, i.e, the shift of the economic gravity from the
industrial sector towards the services, information economy and the post
industrial era which is not as energy and emissions intensive as the
industrial age. Exactly the opposite is happening in the developing
countries. The developing countries are moving into the industrial age. So
what you will see from some of our estimates is that the emissions
elasticity, the economic elasticity of emissions is close to one or is some
cases larger than one for developing countries. And it's less than one and
in fact negative in most of the strong countries, of the strong countries
taken as a group. This is significant because when we're saying that
developing countries all should take commitments have we look into the
relationship between economic growth and CO2 emissions? And what this
implies is, is that it's easy for developed countries in the post industrial
stage to say yes, let's take commitments. But what about developing
countries who are moving into that area? Somebody will say, and we had a
talk yesterday by Jeff Frankel of the Council of Economic Advisors, which
recently joined the Kennedy School, saying why not developing countries take
commitments on the business as usual scenario? Project what expect your
emissions to be based on your historical growth rate. And assume commitments
to not exceed those emissions and if you do better than that you can sell
the credits. Well, depends. If you are China maybe you say OK. But what if
you are sub-Saharan Africa? Do you like what you have experienced in the
last 20 years? Do you like the business as usual scenario? You like
stagnation or one or two percent growth rate? Is that the way to get out of
poverty? So, the business as usual scenario is not good enough for many
developing countries. Here is the relationship that I mentioned to you. What
you see here. So here is analysis that we did. I don't need to go too much
into the details but basically we split the countries in terms of GDP into
different groups. The very poor ones, with GDP per capita of $200-300,
$400-500 and so on. And then controlling for certain variables–we don't have
to go into technical details unless anybody has questions. We have run this
regression and got this relationship between economic elasticities of
emissions. For those who are not familiar with the elasticity concept,
elasticity is give us the percentage change in emissions due to a 1% change
in GDP per capita in income. And you see what happened. Here is about $300
per capita and this is approaching $20,000 per capita. From 300 to 20,000.
From Ethiopia to United States, if you like. And you see what's happening.
Don't worry very much about the kinks. The kinks have to do with, how do you
call, the functions and so on. But what you see is how most developing
countries are in this range where the elasticity of emissions with regard to
GDP is growing, and in some cases it's going even above one. And while in
the developed countries which are above $10,000 per capita it's not only
falling but it's also negative. Which means a 1% increase in GDP results in
this case in minus .4 reduction in emissions. So it's very easy for you to
sign commitments to reduce your emissions if you know that this is happening
already anyway. It's due to structural factors. But what about if you are
here and you know that you are ascending rather than descending?
FRANK: One minute.
THEO: Give me two please. I know you are British but I want two Greek
minutes, not two British minutes. Anyway, whatever I leave out, all my
mistakes will be corrected by Jeff in a moment. But this shape of
elasticities, behavior of elasticities of emission to income, is very
significant. For example, even if you compare results with somebody who is
considered very modest in the case of his global warming alarm, who gave a
talk yesterday. This is his prediction using a more or less unitary
elasticity of emissions. Not taking into account that the elasticity of
emissions with regard to GDP changes based on the level of GDP per capita
you have, on the level of development. But in our case look what's happened.
What we are predicting is higher level of emissions earlier on, in the
earlier years, and lower level of emissions later on as countries become
wealthier. So very significant in terms of basically what Jeff Sachs and
myself, we are calling this the big bulge. In fact, the big problem is going
to be over the next 20 to 50 years. After that we will be out of the woods,
as it were. If any woods are left. [LAUGHTER] What you have seen now was for
fossil fuels. We have done similar things with land use. I don't have time
to show them to you but there is an interesting table here that conveys one
thing. Basically, the bottom line in the case of land use is that forests
cannot, even if we lose all the forest of the world, and this is what it
shows but you cannot see it, so I can tell you whatever I want. But what
this shows, and we owe this exercise to my colleague Jeff Sachs, is even if
we wipe all the forests of the world there is not going to be a significant
impact ultimately on the amount of CO2 that is being concentrated in the
atmosphere. It's going to be a relatively small percentage. Today emissions
from forests count for something like 20%. But in terms of concentrations
over the long run it's not a significant effect. While losing forests will
not destroy the climate, our concern about the climate can save forests.
Because forests could be a low cost way to sequester carbon as opposed to
some of the other alternatives through energy and so on. I don't want for
you to say that I argued that we can cut the forests without concern because
there are a lot of other impacts such as loss of biodiversity, watershed
protection and a lot of other things that are going to be impacted. But in
terms of climate change the bigger game is going to be in terms of emissions
from energy use. Although I repeat that forest conservation and
reforestation can contribute to sequestration of carbon and reduction of
emissions and particularly help put more value into the forests and help
save the forests. I have only to show what would be the effect. I will show
you here. This is I show you one on the flows and one on the stocks.
[OVERLAPPING VOICES] I know. Let me just show this one. This is the best
one. Here is the emissions from 1860 to 1996. And as you see, the United
States is the pink one and this is the European Union. And if you're asking
about India here is India. And China is here. And this is the other low
income countries. This is the contributions to the stocks of emissions of
fossil fuel between 1860 and 1996. And the projected contributions in the
future, here they are. Look what's happening after the year 1996. China
shoots up, United States flats out, as does the European Union which even
comes down. This is in terms of stocks. Not come down but basically actually
maybe a bit reduced too because we have some depreciation of the stock of
emissions, of the stock of CO2 in the atmosphere. What you see, that the
contribution of United States and the European Union and other developed
countries basically has leveled off. Remember, these are stocks. The flows
is a derivative of this, is a slope of this. And the slope you see is almost
zero, especially after the year 2010. While if you look at China the stock
increase tremendously and the slope, of course, of this is very high, which
means the annual emissions are very high. But look at Africa. Africa is
still down here. We have some increase but not tremendous. And look at
India. India have some increase. So what is the bottom line of this? The
bottom line of this is that, two conclusions and then I yield to my
colleague. Is that one conclusion is that most of the stuff are put in the
atmosphere up to now by the developed countries. Developing countries have
contributed very little. In the future, in the next 50 years, developing
countries will contribute a lot. Particularly China but also other
developing countries. Still, their overall contributions with the exception
of China, will be relatively small by comparison to overall contributions of
the developed countries. However, given what you see here, if developing
countries do not participate in climate change control policies we are not
going to achieve much. The question then remains, how do we get the
developing countries to participate? Given all that I have shown about the
elasticity of emissions with regard to income and how they behave, the
relative elasticities, and second, what I said about the relative
contributions of developed versus developing countries. And developing
countries, even here you see China and the rest of developing countries,
they belong to completely different league. And when we see the damages now
and the comparison of damages to contributions you will see that China does
not belong to the group of 77. Belongs somewhere else. Jeffrey.
Remarks by Jeffrey Sachs
SACHS: Let me just review a few principles about this again to highlight a
couple of points that Theo has made and then I want to present one basic
result. And this is a complicated subject actually. The science is
complicated, the economics is complicated and the diplomacy is complicated.
So I don't think it hurts to go over a couple of points again. What's the
basic issue? The basic issue is that we are experiencing man made climate
change probably for the first time in history on a global scale because of
the rising concentration of carbon in the atmosphere. What you should
understand is that when you burn fossil fuel or cut down forests and carbon
is emitted into the atmosphere, it stays in the atmosphere and gradually
gets absorbed into the ocean. So it very slowly wears away. But most of the
carbon that goes into the air stays in the air for a long time. And the
theory says that as the carbon concentration in the atmosphere rises then
lots of climate events take place, the most important of which is the
average warming of the earth. But then because of the rise of average
temperatures also possibly large changes in rain fall patterns and in many
other climate effects. So Theo was distinguishing between the flows of how
much is put into the air each year and the stock of how much is going to
remain in the air when you add in this year's flow plus next year's flow
plus the flow of the following years. There is lots of science that is very
poorly understood about this. First, if you just try to add up an estimate
of how much carbon we are putting into the air and how much we expect the
stock of carbon to be rising and then look at the actual increases of
carbon, even those basic equations don't add up right now scientifically.
This is not something to blame on economists. This is pure science,
atmospheric science. There is something called the missing carbon, the case
of missing carbon. Nobody knows exactly where it's going but it's a
substantial percentage of what's being emitted each year. Maybe it's going
back into the soil in the temperate zone forests but nobody is sure. So
there is this carbon cycle. The carbon concentration is rising. And there
are possibly serious effects of that. In the discussion by the atmospheric
scientists about this there are two kinds of effects that are distinguished.
There are the gradual effects that come from the gradual increase of carbon
concentration. And then there is the hypothesis that there could be a strong
non linear effect, that you pass a certain threshold and terrible things
happen. So scientists distinguish between the gradual or more or less linear
effects and the possible catastrophes. What are the kinds of catastrophes
that are talked about? One is a melting of the polar ice caps, which could
have catastrophic effects. And there are some theories that that could
happen more dramatically and more suddenly than we think. Because there's
lots of uncertainty about the interactions of carbon, temperature,
reflection of the solar radiation and therefore the effects on things like
the melting of the polar ice caps. Another phenomenon that some of the
professors at Harvard are working on is the idea that the great cycles of
water in our oceans, something called the Thermal Halene Circulation, which
is a huge circulation of water around the globe, could get disrupted by the
changes of carbon concentration. And if that happened there are many
catastrophic visions that have been hypothesized. Such as Europe going back
to an ice age in essence because Europe depends on the warm waters of the
Gulf Stream and there are hypothetical models which have shown that that
could be disrupted. And some of our paleo climatologists at Harvard have
looked back to show that these kinds of sudden changes in temperature seem
to be in the archeological or geological record where in a period of 100
years you get a dramatic fluctuation of temperatures. So there are the
gradual effects and there are the catastrophic effects. So I ask you, which
one would you like to hear about? Do you want to go slowly or do you want to
go fast? OK, now, where do the economists come into this? The economists
come into this in at least two ways. One is trying to understand how much
carbon is actually being emitted and likely to be emitted in the future. And
there are the simple models that Alex Peterson, Theo and I have estimated
and those are the projections based on those simple models. The models are
simple but they're the only models around so far because more detailed
analysis has not been done for most of the world. Just for the United
States, China and maybe a few other places. So for the world scale we rely
on very simple models so far. So you make projections. How fast are the
trees going to be cut down in the tropical forests? How much fossil fuel is
going to be used? All of that depends on tremendous unknowns of technical
change, economic growth, demographic trends and so forth. So there are huge,
huge unknowns in projecting how much carbon we're going to put into the air.
But the answer is probably quite a bit for a long time to come. The second
place that economics come in is to ask what would the effect of climate
change be on human society so how much should we care about this? And
there's a big debate in the United States, for example. What's wrong with a
little global warming, people ask. Especially if you live in North Dakota
where it's very cold in the winter. So what? So there's a hypothesis, I mean
a set of issues of how much effect, how much damage this might cause. The
effects of climate change on human society are even less clearly foreseeable
than the projections of the climate change. And those are even less known
than the amount of carbon that might be emitted. So there are huge
uncertainties every step of the way. What kind of damages could come? If
there are catastrophic events then probably quite catastrophic damages. If
Europe experienced a ten degree centigrade fall of mean temperatures it
would devastate European civilization probably. If the polar ice caps melted
for the billion people living near coasts it might not be a good idea. There
are many problems. Nobody has even begun to seriously try to quantify how
these catastrophic events might impact society except to say gee, that would
be absolutely terrible, quite horrendous. Most scientists think that we're
probably not in the range of likely catastrophe for a century or more
because most of those models depend on the temperature warming very
significantly for such catastrophes to happen. And that seems to be outside
the normal projections based on the actual increases of carbon that we're
seeing right now. But then quickly our colleagues remind us of the strong
non linearities. That means that small differences in carbon input could
make huge differences of output. So we don't know. We're playing with fire.
Because we're in a range of human behavior that we've never been in before.
So we don't know. What some people are trying to do is to ask how gradual
changes would work. And the study of this is just in its infancy. For
example, what would the effect of a doubling of carbon that produces say a
two degree centigrade mean global temperature increase mean for human
society? Very tough question. First, if you get to plan for it for decades
to come it probably means less than if it comes suddenly. Second, what it
means is going to be very different in different parts of the world. And
third, its effects are going to be felt in many, many different and
complicated ways. Let me just name a few. First, a warmer temperature will
mean an expanded, that a certain mass of water will expand and the water
level of the oceans will rise. And so coastlines will be damaged, islands
may disappear. There are those effects on coastal economies. Second, higher
temperature will affect agriculture but in quite complicated ways. If you
are in Siberia it will probably lengthen the growing season. If you're in
Burkina Faso it will probably reduce the growing season and add heat stress
to the crops. Third, carbon itself in the air has a direct effect on
agricultural productivity, it is hypothesized. Because you use carbon for
photosynthesis higher carbon concentration seems to lead to higher crop
productivity. A CO2 fertilization effect. So it's not all bad having that
carbon in the air. It could actually raise crop productivity for certain
kinds of crops. Not for other kinds of crops, though. Fourth, the warmer
temperatures are going to affect rainfall patterns. And the models are not
with fine enough resolution to even know region by region what this might
mean. Fifth, the warmer temperatures could cause an increased frequency of
extreme weather events. For example, one hypothesis is that warmer
temperature would make the El Niño phenomenon more intense. And some people
feel that the change in the El Niño patterns in the last 25 years, the
greater frequency and intensity of El Niño is already a signal of global
warming. It's hypothesized also that global warming could affect hurricane
intensity and frequency because hurricanes are just nature's way of
transferring heat from the tropics to the poles. And getting people wet and
killed sometimes in the process. And so a higher average temperature could
affect not just general weather patterns but also extreme events like
hurricanes. Now, nobody has done a good job of saying so how does Angola get
affected by all of this? What's in it for us? Nobody has done that yet
seriously. The only country that has found serious study after study, you
won't be surprised, is the United States. And after all that study some
people say global warming is good for the United States and other people say
it's bad for the United States. So in the true tradition of scholarship we
don't know. But for the rest of the world even less is known because you
don't just not have ten studies, you don't even have one study so far.
Professor Nordhouse at Yale made some absolutely heroic assumptions. Heroic
assumptions means that when you have no data and no information you take
extremely educated, very rough guesses. And we call that heroic because
you're putting your neck out. But it's the only attempt so far to say how
would different regions get affected. And what he did was the following. He
said global warming will affect the coastal areas. So if you are La Paz,
Bolivia there's no effect. But if you are Cape Cod there is an effect. So it
depends whether you're on the coast or in the mountains. Second, that the
agriculture models say that the high latitude agriculture like Canada and
northern Russia, northern United States, will benefit from global warming
whereas tropical agriculture on average tends to get hurt by global warming.
Because it's already hot enough, thank you. And you get more heat stress and
no improvement of growing season. So he mapped that. Then he made estimates
of health effects of climate change. And the health effects, for example,
include the fact that we are already seeing, although why is debated, we're
already seeing the malaria levels rise in the mountains in some places where
it seems that there's average increases of temperature. And you know,
malaria requires a warm climate. So if the climate warms some more that
could extend the range of the anopheles mosquito and the range of malaria
endemicity. So he took that into account by saying that the tropics will get
hard hit for health reasons whereas the high latitudes probably won't get
very hard hit. He added all of these things up and made what he called
damage functions. And the damage functions were mathematical attempts to say
how much damage there would be measured in units of gross national product
for each one degree increase of temperature. Not to be taken too literally
because every step of the analysis has huge unknowns in it. But it's not
useless because it points out one major factor in the international debate,
which is the one that Theo and Alex and I have been thinking about because
we're trying to think about this issue not from the US point of view but
from the developing country point of view. We're trying to ask the question,
what does it mean for developing countries, not for the United States. And
the conclusion of the analysis is basically the following. Very simple.
While there are huge scientific unknowns if you had to make a guess today
you would say that the rich countries will do most of the contribution of
the carbon and the poor countries, which are in the tropics, will suffer
most of the damage. So you might call that business as usual, in a different
way. That's a business as usual scenario. That the rich countries may make
most of the contribution and the poor countries may suffer most of the harm.
And we tried to put numbers on that using Nordhouse's estimates. And that's
what this table does. And so I want to just explain with a lot of numbers to
show you a couple of illustrations. You can ask who gets hurt by the global
warming. And we used these very, very, very imprecise guesses of Professor
Nordhouse to allocate the world damages that came from our estimates of
climate change by the year 2050. When the number is positive it means the
region is getting hurt and when the number is negative it means the climate
change is actually helping the region. Because again, if you're in Siberia
nothing wrong with a little climate change. Nothing wrong with a little
global warming, I mean. And so different regions will have different
effects. It turns out that Japan and the United States and Russia have
negative signs in this column.
MAN: And China.
SACHS: And China, which means that according to Professor Nordhouse's model,
those regions are actually helped by global warming. Let me make clear one
point. These are not taking into account the risk of catastrophe. This is
just the kind of normal damage, not the fact that everything could really go
wrong. So we took one piece of all of those possible risks and used
estimates by Professor Nordhouse for that non catastrophic part. It might
not be surprising under the circumstances that the public uproar about this
maybe isn't so great. Because, I don't know but, well, every hot summer
Americans get worried about it but they don't stay worried throughout the
year very much. And the amount of sense of damage and urgency in the United
States is very, very small right now. Europe, by the way, has a big positive
number. Not big but it's 1.5% of the world's damages. And the reason is that
Europe is mainly coastal. Europe is low lying country. Some of it even
essentially at sea level, like the Netherlands. And rising ocean levels in
Nordhouse's model then lead to more damages. So that's one side of the
ledger, who gets hurt. The other side is who makes the damage. And there you
can be the US is a very big player. So this column says who contributes to
the 100% of world carbon increase. The US contributes 18% of the carbon
increase by the year 2050, according to our model. But it incurs no damage.
So it puts out a lot of carbon but no cost to itself, according to this
model. Whereas Africa, for example, only contributes 2.5% of the world's
carbon stock by the year 2050 but it incurs 21% of the world's damage from
this. And India is another case. 7% of the world's contribution to the
carbon but 31% of the world's damage takes place in India. So this is what
our paper is about. It's saying wait a minute, how come the US Congress is
saying you guys have to join, you're not doing your part rather than saying
here's $100 billion of compensation. Which we haven't heard yet. But I'm
expecting to any moment when they read this paper.
So our view is that really what the negotiation should be about is the
developing countries saying look at what you're doing to us. Don't tell us
about our role in this until you're ready to compensate us for the damage
that the rich countries are doing to the world environment which is hitting
us the most. This is going to be an interesting discussion. It's also not
going to be solved in the next few years. Why? Because the scientific
uncertainty is huge. Because the winners and losers are very different.
Because nobody really knows much about the damages of this. Because it's a
long term problem, we think, not a short term problem. Because it involves
everybody in the world. So you put all those pieces together and you have to
decide this is about the hardest public policy problem that the world has
ever confronted. The objectives are unclear, the standards are unclear, the
science is unclear, it's very long term in the future with very great
unknowns around it. And so the best thing to say is let's forget about it.
Except for the fact that the consequences could be absolutely enormous. So
that's where we are right now. I think it's going to take many, many years
to start sorting this out. One thing that we in the institute have thought
about is probably we're not going to contribute to the atmospheric modeling
but we have colleagues that do that very well. We thought that where we
could make a contribution would be to help the developing countries assess
better what this might mean for them both in terms of their own
contributions to the problem, which are probably small, but also the damages
that they're likely to feel in the long term. Because knowing that might
help us get to an equitable global solution, one where it's not the US
Congress getting indignant, like in Theo's cartoon saying cut your excesses.
But rather saying look, we have to invest tens of billions of dollars into
research into alternative energy sources, into clean energy like solar which
might be very appropriate for the tropics, in other mechanisms that might
make a real solution to this rather than the very artificial solution of
saying let's just agree to cap our emissions. Which is not really going to
be a very realistic approach on a world scale to the problem in the long
term. So I'll stop there. [APPLAUSE]
ASHTON: I thought my colleague here was an economist. That was a remarkable
achievement. You can see at once that we have a tremendous challenge. Not
just we in this room but the world. There was one point I just wanted to
highlight actually in that presentation from the Nordhouse data. And that
is, should we be so optimistic about the temperate regions because I suspect
those predications have been made solely on climate. What about soil? If you
think about either Eurasia or North America, if the climate moves north you
move into tundra and tiger where the soils are unsuitable for agriculture so
you have to carry the soil of the Midwest into Canada. That is a non trivial
issue. The second thing is that the arable prairie regions of North America
will move from one country into another to a substantial extent. That also
is a non trivial problem. So I think we have three kinds of challenges which
we should at least discuss this afternoon. And I hope the discussion
concentrates on possible solutions, possible ways in which we can do some
trading. The first point is I would say that the data are not likely to be
adequate in time to give watertight predictions for policy makers. They're
not adequate now. They're not going to be adequate in the future. The second
point I would make is the policies are going to have to be international
policies. National policies will not do. And that's not going to be easy.
And the third point is that the kind of policy decisions that are going to
have to be made are policy decisions that are going to be costly to our
current electorates in order to determine the very fate of our children and
grandchildren. And I don't think the world has ever had to face with that
kind of policy before.
SACHS: I think it might be worth mentioning, everybody no doubt knows it but
it's good to be explicit about it, when you put the carbon up in the air
within 30 days it's uniformly mixed all over the world. So there's no sense
in which a carbon emitting city just has a barrier of carbon over it.
Unlike, for example, putting sulphur particulates up or other kinds of
pollutants which can affect you locally, this is a global issue. It doesn't
matter where you put it up. Everybody suffers uniformly the consequences of
it. That makes it very different from controlling air pollution in Los
Angeles. Hard enough but at least the Los Angeleans understand it's for
them. Whereas this issue is what do we care, it's not hurting us. And that's
a big view of many people about this. There was a book last year, for
example, by a quite known economist who in conservative US circles is a
known individual at Stanford University who wrote an entire book about why
do we care about climate change arguing that look, the US won't get hard hit
by this. That was maybe a fallacious assumption but that was his argument.
But the whole book didn't even mention the rest of the world except in a
couple of paragraphs. So that's the mindset also which is a very difficult
one. If you ask just what does it mean for us, not what does it mean for the
world, it also makes it more complicated.
ASHTON: Theo, I think you had a point.
THEO: I had just one point. I'd just like you to see this comparison between
China and India. These are percentage of damages, global damages, percentage
of contributions. China receives actually minus 2% of the damages which
means minus 2% of the benefits but contributes 21.5% of the damage and
receives a benefit for impact. In the other control it has only 7.7% of the
damage and receives 21.1% of the damage. The point I was making is the
difference between China and India, remember these two countries, both of
them are in the group of 77 and in fact China leads the group of 77. It's
called the group of 77 and China. And China contributes 21.5% of the global
damage to climate change, of the concentrations to damage, but receives back
not only 0% of the damage, it receives minus 2% of the damage, i.e. it
receives net benefits. India contributes 7.7% of the concentrations of this
of the damage and receives about 51% of the damage. These two countries
belong to the same camp, the same group, and China is in the lead. And of
course we have no surprise then you don't get the developing countries
talking much about doing anything about climate change because one of the
leaders actually benefits from [OVERLAPPING VOICES]. But the other point I
was going to make, also the situation with regard to where the negotiations
are today is we know what is the situation. By the way, the Protocol has
been ratified by nine countries only. It will not become a law until 55% of
the emissions and of the contributions have been countries that make 55% of
the contributions have ratified. So, the US Congress even refused to allow
the administration even to do voluntary emissions. They say any discussions
before developing countries take commitments is illegal, should not take
place. Don't talk about it. Developing countries, on the other hand, refuse
not only to participate in meetings which there may be a possibility to
discuss commitments of developing countries but developing countries refuse
even to participate in meetings that might discuss the possibility of
holding meetings that possibly might discuss this. So you understand what
are the state of affairs. And the main reason for that is because neither
group tries to face the root of the problem. The root of the problem is the
fact that the south feels that they have the short end of the stick, they
feel that they are on the receiving end. And they feel also they don't
understand the problem. They haven't done the analysis, they haven't done
the research. All the research has been done in the north and therefore they
are afraid that if they get into these meetings then they will be forced to
take responsibilities and meet those responsibilities that will constrain
their ability to grow and develop in the future. So this is the state of
affairs and, at least myself, I don't see an end in the next, say in the
next five or so years.
Discussion
ASHTON: It's very much time for your participation now in this discussion.
Would you like to start the ball rolling?
KYLE: Steven Kyle, Cornell University. I looked at this a couple of years
ago and I came up with many of the same conclusions that you did. Which is
that you can't really say anything with certainty. And there is even more
uncertainty on some of it than even you said. Some of my plant scientist
friends said hey, weeds grow too, not just crop plants so don't get
[OVERLAPPING VOICES]. Yeah. But one thing that did seem clear with a lot of
the people I spoke to was that one of the solutions is pretty obvious. If
the problem is we're burning too many fossil fuels we know how to stop that.
We put a tax on that. It works. And also politically that's a far more
viable solution than any international transfers. We're not going to be
sending billions of dollars from one country to the other. It's just not
going to happen. Half of Congress doesn't have passports and is proud of it.
And so it's just not even, it's a non starter. On the other hand, trying to
convince countries to tax fuels and keep the money for themselves, you might
have a prayer there of convincing them to do that because they get to keep
the money. On the other hand, now I'll end up on a pessimistic note, we have
had for 25 years real good reasons to tax fuels of all kinds and some places
have done it and some places haven't done it. This is not for most countries
the most compelling of those reasons. But we can try and make it more so.
SACHS: Let me make a prediction, a response. I think you're absolutely right
in the policy sense. I think you're actually a little too pessimistic in a
way about what is a starter and a non starter. I would bet that within the
next 20 years we'll have a global carbon tax and that it will have highly
redistributive functions as well. But I would also agree with you, the
chance of happening in the next five years here I would put at zero. I've
come to the same conclusion. We're creating, the US view of this whole issue
was trading carbon permits. So the idea of the US is each country would be
allowed a certain amount of carbon that they could emit for free and if they
wanted more you'd have to buy permits and creating this kind of complicated
tradeable permit system. Economic theory says that this is very close to
having a corrective tax, to have a tax levied on carbon whose tax rate is
the same as the price that you have to pay for a permit. Basically it's
quite equivalent. So why has the United States gone in for this complicated
tradeable permits business? It's because we have a super allergy in this
country to taxation. And when President Clinton gave a speech about this a
year ago it was very notable because in wonderful eloquent words, as he's
very capable of making, he said this is the most important issue facing our
children and our children's children, the very survival of the planet. But
then he quickly turned around and said but we will never accept even a one
penny per gallon tax in this country to do something about it. This is not
serious policy, I believe. And I don't think that we're going to stop here.
The next administration probably still not. But eventually we're going to
get there because this is too unreal. When you have such a large discrepancy
between need and method on the one hand and will on the other it tends to
narrow over time. So I'm a big believer that what's right eventually becomes
politically more acceptable. The other thing I would say, I'm going to just
make a bald statement that there are so many needs for international funding
right now, whether it's for this or for global research efforts or for aid
transfers or for hurricane and earthquake and volcano relief and so forth
and we have no international funding system. I think we're going to go to an
international funding system within the next generation where we have a
global tax. And the only one that seems even remotely feasible is a global
carbon tax. So I'm making a prediction that when we have this conference in
the year 2020 that we will have a global carbon tax in place and I will say
I told you so [LAUGHTER].
MAN: I think that you need to add some thoughts about the theory. I read a
lot of documentation about it and what they say is that the winters are
going to be colder in the northern sphere and the summers are going to be
hotter. Which mean that the melting process of the snow will create a lot of
floods. So it's not only the coastal areas that are going to be affected all
the rivers and the interior of the economy is going to be affected. The
second problem is that if we, of the third world, developing countries are
suffering the effects of the CO2 it will affect our crops and our crops are
part of the crops that you, industrial countries, are consuming. So the
effect will be for both of us, which means that we are all together in the
same ship facing the same problem. It doesn't matter if you are in the air
conditioned rooms and we are at the machine areas. The whole boat is going
to suffer the consequences, so I think that this is something that we have
to get together and solve. There is another consideration in addition to the
CO2 is that pollution in general is affecting, with acid rain, is affecting
also the water treatment plants here in the United States because they were
built to treat different type of water and now the polluted waters are
creating problem. And that is why water is a big business now in
supermarkets. So it's a whole concept. I don't think we should base the
study only in CO2. It has to be a whole. And also how it will affect the
fauna and the flora of the world. I mean all the animals, all the resources
which are considered the bank of genes for the future of medical treatments.
And you know that, I don't know, near 50% of the prescriptions, the
medicines are based on the products of the flora fauna of the third world,
the jungles of the world. So all this has to be all together, not only the
CO2.
SACHS: We have at the table two people faking it and somebody who really
knows. And Peter Ashton is a Professor of Botany and one of the world's
leading experts on tropical forests and everything else I've ever asked him
too. So Peter, maybe you could make some remarks on that.
ASHTON: Only to agree. I mean I think your points are quite correct. And in
the geological past, of course, there were big changes in climate and in
fact there were times when the world was much, much warmer than it is at
present. But those plants have disappeared as the world has cooled that were
adapted to those situations. We only have the plants and animals that exist
on earth at the present time and they have to be able to move as the climate
changes by the fragmentation that we have created, by the way that we have
used the land, leaving little islands in which the original fauna and flora
survive increasingly. Originally, of course, in the temperate regions of the
world. I mean all these wonderful forests you see on the plane as you come
down here into Boston, there's not a single piece of original forest left
here. Nothing. It's all cut down during the colonial and post colonial
period. There's nothing. Of course, the forest has a greater capacity here
to recover, for ecological reasons, than in the humid tropics where the
biodiversity which you're referring to is so concentrated. That is just an
ecological fact of life we have to deal with. But no, I don't have a lot to
add to that other than what I've just said. And the impossibility, of
course, of rescuing all those genes, gene sequences really, germ plasm, and
moving it along through our own action. That's not a possibility. So I think
your point is very well taken. Does anybody else have, yes, please.
MAREK: Marek Dabrowski, Warsaw. I want to ask Jeff because it is clear that
all these problems which are discussed in this session needs solution going
out of one country, even so powerful as United States. Do you believe that
it can be solved without any kind of evolution of international political
structure, without any kind of supernational government? For example, during
next 20 years we will have carbon tax. It's very hard to imagine to have any
kind of universal tax without universal government, because always you find
some country which will try to benefit from free-rider.
SACHS: I don't have a crystal ball. But I have a theory in my own head,
which is that there are two basic possibilities that I would argue. One is
that if we stay peaceful globally and avoid a catastrophic economic crisis
at a global scale, that we will gradually evolve towards global governance.
Even with the IMF as one small branch. Of course, it's going to be relocated
to Rwanda and we're going to take it out of US control. But I think that's
actually one of the reasons why I don't like to attack the IMF per se,
because I do believe in these international institutions. But I don't
believe in misusing them. A, I don't believe in them when they function so
badly and B, I don't believe in misusing them by powerful countries. If you
look at my own basic interpretation, philosophical interpretation is that if
you take the last couple hundred years of history we had two long stretches
of peace. Relative peace. Not peace for everybody but relative peace. And
that was a long 19th century in which there was a tremendous expansion of
global integration, although a lot of it under imperial rule. And now the
post World War II era. It's not peace for a lot of the world but it's peace
for the most powerful countries. And now there's another tremendous wave of
technological and economic integration. The first wave was broken up by 30
years of war in Europe which destroyed that variant. And it took a lot to
break up the pre World War I structure. It took two full world wars to
destroy. Two world wars and great depression. [OVERLAPPING VOICES] Yeah, the
Bolshevik revolution didn't help but it probably would not have even gone so
far had it not been for the great depression and everything else that led to
World War II. So I think that the underlying logic of globalization is
extremely powerful. And that's why whenever we're in a country in a deep
crisis right now it's almost never the case that the country really says OK,
I'm getting out of the world system, no matter how deep the crisis is.
Because they know there's no point of escape in the world except if you are
the Taliban in Afghanistan. And my argument would be that we need global
institutions. They're not powerful enough, they're not doing their job and
most important, they're not funded right now. And so I think there's a deep
logic of international public goods that if we remain peaceful will prevail
in the end. But we also have a tremendous capability of shooting each other.
In which case we're not going to get to a global tax or global governance.
On the whole I believe we're going to go that way. Again, I invite you all
in the year 2020. We'll see how far we got.
MAN: I find the paper a bit troubling in the following sense. That it seems
to me it's very much in the style of the papers that were done some decades
ago about natural resources scarcities. And it seems to me there are two
lessons that one learns from those papers. One, the resource base turned out
to have been a lot better than was thought. I think we're discovering that
oil is not just rotting dinosaur dung but it's a much more complex process
and that therefore there may be a lot more of it than was thought. But the
other one is technology. And actually, Jeff, you made a comment on this, I
think, yesterday. That shouldn't we be talking somewhat less about global
taxes on carbon and somewhat more about massive investments in alternative
energy sources? And I say this as a non scientist but it isn't just solar
energy and so on. There's the whole question of nuclear fusion is there and
so on. And we have a country now that's cutting back, I suspect, rather
substantially in research in that area. And that may be more serious than
the problems that we've been discussing the last several minutes. Thank you.
SACHS: The two fit together. Because on the one hand, if you tax carbon you
give very decentralized distributed process of incentive for getting non
carbon based energy sources. And second, since a lot of that alternative
energy has to be based on basic science, funded as public goods, I presume,
you also happen to have, it's not logically necessary but that would also
give you a logically handy source for this. So I don't view them as
competing hypotheses. [OVERLAPPING VOICES] I couldn't agree more with that.
I'm about to say that when we turn to the next session.
THEO: May I make a small comment on that, John? In the climate change
conference in Washington in 1997 President Clinton mentioned a number of
technologies that are available today. And he says not even in the White
House we don't have efficient light bulbs. And he said why? And it has a lot
to do with the price. Prices of energy in the United States, particularly
gasoline, is one third of Japan, half of Europe and they are lower than they
were in 1973. And let's not take this lightly. I agree with Jeff's
prediction of having a carbon tax by 2020 is extremely safe. Because he
allow himself 20 years. But I would say it's very unlikely to get a carbon
tax for many years to come, maybe for the next five or ten years–I will
agree with this prediction–primarily because we should not overestimate the
fact that low energy prices in the past generate low energy prices in the
future. Because these low energy prices you have for a long time have been
capitalized into land values of the suburbs. And you have all this sprawling
urban development and this sprawling infrastructure because we have low
energy prices that make it profitable to travel and unprofitable to have
mass transit systems. So people's mortgage land values will fall if the
prices go up. Some people will default on their mortgages. It's impossible
for American people, it's part of the political economy, part of the
culture. And that's the reason President Clinton is very astute when he says
no energy taxes. Because that is no-no politically. And you have to be
careful in their policy recommendation in developing countries not to get
developing countries on the same path of actually institutionalizing in the
whole culture, in political economy, subsidized energy prices which will
lead to the same kind of sprawling cities and the same objections to any
carbon taxes.
PETER: Would you like to reply to that?
MAN: Yeah, it was quite related to that. Which was that if you look at
history, and I was going to say that there's yet more uncertainty in these
projections because if you look at history 100 years ago we were getting
most of our energy from coal and we were using horses. You go back a few
hundred years before that, it was wood. And so these kinds of non
linearities are as important on the gas producing side as they are on the
effects side. And another comment is that the price mechanism is quite
important. I wouldn't want to minimize the need for public investment in
this. But in fact, why did the Europeans move to coal? Because they cut down
all the trees. Why did they move to oil from coal? Because they dug up all
the coal. So maybe we don't want to do this by burning all the oil. But we
could at least pretend that we did by making it more expensive.
MAN: Might I inject some contrarian notions here?
SACHS: No [LAUGHTER].
MAN: Because I'm not at all convinced by the thrust of what I've heard. I
don't believe there will be a world carbon tax in 20 years. I'll take you up
on that. Pick a date and I'll give you $10 if you're right. [LAUGHTER] Why?
Because most of the folks here that are going back to Angola or --
SACHS: Is that in present value or in current value?
MAN: As a concession it's present value. 2% real. Because most of the folks
that are going to go back to Kenya or to Angola at the end of this
conference, when they talk to their colleagues and the colleagues say what
did you really discuss at Harvard, oh, this wonderful and terribly important
stuff on global warming, we've got to get to work straight away. Not going
to happen. On the scale of priorities for economic development global
warming is down here. And I would argue that on the scale of priorities for
environmental issues global warming should be down here also.
SACHS: How can you know?
MAN: Why was there global cooling between 1940 and 1970? Why did the CIA in
1964 publish a report on the dangers of global cooling? We know even less
than is claimed about the link between global temperatures and carbon or
anything else. The only thing we know is that carbon is accumulating in the
upper atmosphere. But link, we don't know if it's a trend or a cycle, for
example. And that makes a huge difference. Second, I think that this is not
the first or possibly only important case where human activity has changed
climate. I would argue that --
SACHS: On a global scale.
MAN: Then perhaps. On a wide spread scale in west Africa, for example.
SACHS: Agreed.
MAN: And I would argue that that probably is something we can do more about
and might have a higher payoff than what we're arguing about on global
warming. Third, if Nordhouse's figures are even in the right order of
magnitude they are very small. 3% of India's GDP. By the year 2045 they
should be able to shrug that off in six months. This is not a major amount
of money. And even if we were to pay India today the present value of that
loss at 10% real, which must be their rate of return, we're talking about
$1-2 billion. Probably the scale of current aid to India. So if we're
talking about conscience money we're probably already paying enough.
[LAUGHTER] And this therefore is largely a non issue. We should be spending
our various intellectual capital on other questions. [LAUGHTER]
PETER: Who's going to answer that? Those figures of cooling for the period
that you're talking about, what surely you're talking about is that there
are fluctuations in the overall rise. Not that there is a cooling. It
depends on the scale you choose.
MAN: The evidence as I see it is that there was a period of cooling during
that period.
PETER: There was indeed, yes.
MAN: We can debate the numbers but it was a concern at the time.
SACHS: I think that the general notion, though, is that it was the rise of
particulates that was probably behind that slowdown of the increase or the
timing. The two points that I would disagree with you are I think the weight
of the evidence is stronger because there's a good mix of both theory,
detailed paleo climatology and current wide diversity of measures that all
suggest that this is a real phenomenon. That would be my summary of the
question. Is there global anthropogenic climate change including global
warming? I would say the weight of the evidence is yes. Contrary to what you
said. There are anomalies in the data but I don't regard, from an informed
amateur's point of view I think that the IPCC is right to say that the
weight of the evidence is in the other direction. Second thing I would say
is that you can't know because I don't think anybody knows the environmental
consequences of that which you dismiss blithely. Because we can get a lot of
eloquence about the incredible seriousness of this with quite high
probability from very distinguished biologists, psychologists and others who
can give, and I've heard it many times, I think very reasoned arguments
about not only the huge uncertainties but the huge known effects of even
small perturbations on climate to vast ecological areas. So I disagree with
you on that one also. Your assessment about what Angola should be worrying
about right now I couldn't agree more. It's not this. So I don't think that
that's contradictory to what is being said by any means. I think what the US
senate should be worrying about even less, though, is what Angola should be
worrying about on this. And so there are different layers of this argument.
But I don't believe it can be dismissed the way you're dismissing it. Maybe
those who are urging panic on the other side are also mistaken. But I don't
think that this is a small issue in that sense. But it's one that would be
better approach, could be much better approached than the way we're
approaching it right now.
ADRIAN: Adrian Fajardo-Christen, Peru. Mine is a very simple question. Maybe
it's only a clarification. I was looking at your original table and I was
wondering whether you have the proposition that middle income and low income
countries are located in the same geographical zone or latitude. If it's
that correct I would like some explanation.
SACHS: The most powerful geographical correlation that exists is that
temperate zones are wealthy and tropical zones are poor. And the rule of
thumb which I use is that if you're in the temperate zone you are either
rich or formerly socialist or deeply land locked. One of the three. And if
you're deeply land locked and formerly socialist you're really in trouble.
As a number of places like Mongolia and Kirgistan, Kazakstan, Afghanistan
and so forth were. So there are almost no poor tropical zones that are just
kind poor on their own, just through their own internal mismanagement.
Argentina is probably the closest we come to.
ADRIAN: Not tropical, temperate you mean.
SACHS: Temperate, I'm sorry. If you're in the tropics, and there are
different definitions of the tropics. There's the geographical lines at
23.45 degrees north and south latitude and then there's the ecological
tropics. But basically if you're in the tropics you're poor, with almost no
exception. The only rich countries, by the World Bank classification, that
are in the tropics are two countries. It's even one country and one economy.
One is Hong Kong with its six million people and the other is Singapore with
its 2.8 million people. And my interpretation of that is, there are many
interpretations but my view is that this correlation is not accidental. That
the tropics has different technologies, different ecology, different burdens
and so forth which at this point are much less supportive of high levels of
income than temperate zones. They have to do with health and agriculture.
And Hong Kong and Singapore don't have to worry about the agriculture. There
are no farmers there. And they don't really have to worry as much about the
health because islands in general have been able to do vector control, like
malaria control, much better than mainland areas. There's a lot more to be
said about it but you raise a good question. I think we should stop talking
about the divisions of north and south. I think we should be talking about
the divisions of the ends and the middle. We should three talking about the
tropical temperate divisions in the world right now. Because that reaches a
much deeper reality of what's happening in technology, in science, in how
people live and in how people die than the idea of north versus south.
MAN: I would like to make a proposition, if I may. And it seems to me to
address the following problem. Because I think I myself, and indeed perhaps
the audience at large, would be much more convinced of the reasoning behind
all this if there were two more groups of people here to explain their
theories also about what's happening to climate and why it's happening. What
you need beside is a bunch of astronomers who will go back in time and who
will explain their ideas that the movement of the earth around the sun, for
example, the fact that everything is perturbating and wobbling and
processing all the time, the position of the earth vis-a-vis the flow of
rays and the magnetic fields from the sun has a tremendous influence on the
earth's climate. And indeed there are studies which show that many of these
mini ice ages, many of these minor variations in temperature which have
occurred are due to solar activity and to the particular position of the
earth vis-a-vis the sun. These phenomena can be so massive at times they can
swamp out other things. It would be very interesting to see that they may
have to say about global warming because they may have an alternative
explanation. I don't know whether you remember but there was this
extraordinary event in Quebec about two years ago when the whole of northern
Canada was plunged into darkness because of a magnetic beam, a sort of solar
flare which came out which generated an immense magnetic field. It hit the
earth and it was on the wrong polarity and it caused an enormous electric
storm across northern Canada and shut everything down. So the forces that
can be released by these things are absolutely immense. And there was indeed
a theory, I think, that sunspot cycles influence the earth's climate quite
dramatically. There's that one and there's also another group of ecologists
and environmentalists who support this idea of the Gyer hypothesis. That is,
that the earth itself is a self correcting mechanism. That underneath of it,
when you can abstract from all the other phenomena, that if you allow the
earth to warm up slightly then various other events start to occur. For
example, as more water vapor, more clouds, more sunlight is reflected back
off the earth, the earth then, by generating more clouds, starts to correct
its own overheating and it also generates more vegetation. You remember the
daisy hypothesis. You remember where the daisy fields on the earth grow and
decline according to the way in which the earth warms up and goes down. So
there is, I think, these two alternative ways of explaining what is going
on. I think you really ought to [inaudible] have a conference in a year or
so's time where the economists, the climatologists, the astronomers, and the
Gyer hypothesis people all get together. Then we could have a really massive
sort of multidimensional debate.
THEO: What I was going to say, the astronomers you mentioned first, they
have been consulted by IPCC and they have participated. They had their say
and the weight of the evidence still came to the result that there is some
anthropogenic influence on the climate. The Gyer hypothesis that you mention
is an interesting one. And indeed a lot of the mechanisms you mention exist
but the problem here is, A, we are not talking here about stopping climate
change. It's not optimal to stop climate change. Some climate change, some
warming will take place and there will be the response mechanisms, as you
mentioned, and so on. But what we are concerned is about the climate change
happening too fast, too fast for ecosystems to adjust, too fast for people
to adjust. Second, it's happening in a differential way. Because when we say
two degrees, two degrees is a mean temperature. It means some areas might
actually get cooler and some get warmer. Some areas, you may get a much
bigger increase in temperature than others. And the other significant fact
is that most of the damage will happen in the tropics. And why? One of the
reasons is that, as you know in the tropics, the temperature variation is
very slight between day and night, between the seasons. So even a small
increase in temperature in the tropics could have significant effect. In
fact, Professor Ashton would tell you that many tropical trees flower only
once every five years and only when one or two nights of that year happen
the temperature to go a little lower or something like this. So this could
have significant impacts on the tropics because they don't have much
variation in the temperature. So even a small variation because of global
warming will cause significant effects. But the other thing is that the
tropics, for the reasons that Jeff said, are so poor that they can ill
afford to defend themselves against some of these changes. We in the United
States and in Europe and so on, we can afford significant change. Not only
because the temperate climate changes a lot anyway between seasons and
between day and night but also because we are wealthier and we have the
money and infrastructure and the institutions to do that. While poor
countries, they don't have those institutions. So between the time that
things happen and the earth's system, if you like, heals itself a lot of
people could die and a lot of damage could happen. And that's the reason we
are so concerned. Not because we're trying to stop all climate change but to
slow it down and to regulate it so that the poorest of the poor cannot
receive the biggest of the impact.
PETER: One has to bear in mind that even if the Gyer hypothesis is correct,
if we were holding this meeting 15,000 years ago we would be holding it
under two miles of ice.
SACHS: I think that that's two quick points. Many things can be affecting
climate obviously, as you point out. And there's -- [TAPE CHANGE] --
long-term climate. These are not inconsistent hypotheses, and I think what
Theo said is that, is correct that a majority vote doesn't solve the
problem, but there is a, that meeting that you're talking about, they felt
they didn't need the economists to be there, but that is what the IPCC is,
really, in my opinion. It's over the last 15 years, trying to get the weight
of the evidence, and the weight of the evidence right now is that there is a
serious anthropogenic signal in all of this. Second, I'd be much, much less
enthusiastic about the gaea hypothesis as it refers to real human time as
opposed to geological time, and I just think it's a little bit of a red
herring in this, to just probably mix metaphors. But there are as many
short-run, positive as negative feedback mechanisms that have been
hypothesized, and the idea that it's all negative feedback mechanisms, I
don't think is very convincing. A lot of people feel that you warm the
taiga, and all of a sudden, you're going to release tremendous amounts of
methane, and that's going to give a huge boost to greenhouse gas emissions
and so forth. There are a dozen hypothesized positive feedback mechanisms
that could trip once you pass a threshold right now. The gaea hypothesis,
it's somewhere between a theory and a metaphor, anyway, but it's really
about geological time and the origin of life, not about human time over the
next hundred years.
PHYLLIS: Thank you. I'm Phyllis Forbes, the mission director in Haiti. I
think it's very easy to get panicked over these issues, and also easy to get
easily calmed when other people stand up and say there are other hypotheses.
But through it all, what rings true to me, at least, is this, that the rate
at which we are warming up our climate would best be held down rather than
accelerated, whatever you think the cause of it is. And that one of the
actions that could, quote, decelerate, if you would, or hold back that would
be looking for alternative energy sources that do not put CO2 into the air.
And investing in those alternative energy sources, whether it's ones that we
know now or ones that really haven't been tested, the whole issue of the
change in hot and cold water in the ocean that supposedly can be harnessed
to produce energy, fusion, whatever. It would seem to me that maybe the
better tack to take is to say, the part of the chart that we know, the table
that we know that is correct, is the contribution that we are making to CO2.
We may not know what the effects are, but we know that our contribution is
greater than the developing world. And if we can then at least try to
account for that greater contribution by perhaps making a greater
contribution into the study of alternative energy sources, that would then
have an impact in our world in terms of reducing environmental degradation
caused by the current use of, current source of energy, then we could at
least feel, without anybody arguing, I think, that we're helping just a
little bit, and maybe having a good effect on the world's climate while
we're definitely having an important and significant effect on the economy
as well as the climate in the countries where most of us are working. Thank
you.
PETER: Thank you. I think I saw a hand did I? No? Yes.
MAN: I'd be interested in your thoughts about how you actually craft a
constituency for a global response to this issue in terms of what the
research agenda might be and how you mobilize public opinion, particularly
in the developed countries, and especially in light of what seems to be a
deep, deep reaction in this country against globalization and its positive
impacts and an increasing tendency towards isolation.
THEO: I wanted to make one little comment on that. You have seen, for
example, the picture, the case of China. And this raised the point that
Jonathan also made before. You don't need to tell China about global
warming, that they ought to do anything about global warming. Only if China
does enough about reducing the damage to its own people from air pollution
and water pollution, and to the productivity and health of its own people,
then that would be plenty for China to do for climate change as well.
Because the local polluters and the global polluters are very highly
correlated. So, the way you are trying to convince the Chinese, I'm in the
happy position of preparing two memos for the President of China for the
China council meeting on the 20th of October, is one of environmental
damage. What is the damage that China is suffering annually from respiratory
diseases, from cancer, from all kinds of mortality and morbidity, and all
kinds of damages to crops from acid rain and so on and so on, and flooding.
And because the Chinese government is thinking of taking action, not because
of the climate change, but because of these issues which are becoming very
highly politically charged these days in China. And if they do that, and
that's the way you can motivate them to do something, not talking to them
about climate change. On the other hand, in the case of a country like
India, you can use this argument, but also, if India's expected to suffer,
and all the models I have seen bring the India and the whole subcontinent,
including the rest of South Asia, that they are going to be really the
center of the impact, the epicenter of any climate damage, I think that
India should be much more active in climate change negotiation, not leave
the initiative to China or to other countries, but India and Africa should
be in the forefront of the negotiations, not to refuse their own initials
but to get and develop countries to be more forthcoming in the way that the
lady from the Haiti mission said, investing more in alternative development
models with less intense in fossil fuels.
PETER: Do we have any other questions? Yes, we do.
ROBERT: Robert Owen, University of Nantes of France. In France, not only are
the taxes much higher on energy products, but there's also a belief in
public investment in transportation, so there are some other policy options.
Given that, visibly, within the developed world, there are very divergent
policies towards energy issues and the associated impact on the environment,
what makes you so optimistic that there would be this convergence to a
global solution, since playing Nash seems to be the optimal policy, given
local constituencies?
SACHS: I think that, by far, the biggest obstacle in all of this is not
self-interest, but the biggest obstacle is scientific ignorance so far. We
don't know enough about this to make any strong policy actions. And my guess
is that if we took all of our baseline assumptions here, if we knew them
with certainty, we'd be having a very different kind of discussion, and the
mobilization of public attention would be much less difficult. It seems to
me that the real difficulty comes from the highly speculative nature of the
hypothesis, the lack of any so far deep quantification of this. But, I also,
since I am maintaining the hypothesis that this is probably right at some
important level, I think we're going to learn over time, there's a lot of
science going into this now, a lot of scientists working on this that
weren't five or 10 years ago. There's a lot of effort, which is good. That
is the right first world social approach. Let's study this more deeply
before we commit to any major, high-cost ventures. And I think in that
sense, the scientific process is working pretty well. Every issue of Nature
magazine, there are now, I'd say on average, four or five articles about
global climate change, or letters, or something, so there's a lot of
scientific research going on. As I read it, again, as a rank amateur in
this, these are mostly saying, there really seems to be signals here all
consistent with this process. I believe that as we, if it continues that way
and we get more and more certain of these effects, we will find a much
stronger response in this country. That's the basic, that's my basic
message. I mean, my basic reason for optimism. Because I don't think that
we're just in a political game right now. I think we're in a big fog, not
just of carbon, but of science.
HARRY: Harry Kamberis, Solidarity Center, AFL/CIO. This issue, for many of
us, is seen by important constituents of ours that it's viewed in terms of a
job loss at the front end of this debate. And I think that in order to move
the domestic political agenda, it would be useful for researchers to do more
research on the number and types of jobs that would be lost, both sectorally
and geographically, and then, what offsetting public policies and programs
would be needed to address the job losses? Because as you mentioned, there's
a lot of fog right now for the researchers who are doing research on this
issue and the effects of climatic change. However, for workers, it's not a
fog; it's a job loss. And so it's immediate concern for them. And that has
so much clogged the political debate in Congress, so I think you need to
spend a little bit more time focussing on what the job losses are and what
public policies are needed to offset those job losses in the event of a
treaty or an agreement, international agreement, on controlling these
emissions.
SACHS: Let me just hazard another guess, which is that if all this were
real, and the right response, quote, unquote, was 50 cent a gallon gasoline
tax, not just a one cent, maybe 20 cents a gallon, and you studied the
effects of that over, you phase that in, because even the theory of optimal
response says it should be phased in, not just landed right at the front.
You phased it in over a 50-year horizon, and then you ask the question,
which you're asking, how much of job loss in the US would be due to this
versus other factors? Let me hazard the guess. I haven't quite done the
calculations. That this would be a tiny effect, even with what sounds like a
significant amount of significant tax. The reason is that our economy and
any successful capitalist economy, as you know very well, is built on
tremendous flux of occupational categories and of industry. We're
unrecognizable compared to where we were 30 years ago. So is the AFL/CIO, as
a consequence, which is not, you know, a judgment, just a fact, that we went
from an industrial to a post-industrial society in a period of 30 years, and
we had the most remarkable transformation. Mark and I worked a long time in
countries that decided we'll never change a job, or no one will ever lose a
job, because that really was the Soviet model, interestingly. It wasn't just
rhetoric. No one lost a job if they didn't want to lose a job for 40 years,
and what ended up is when you went in, in 1992. God, it sure looked a lot
like 1950. You know, it looked like Gary, Indiana in 1950, because they
really hadn't done anything different except tried to keep that going. This
is only to say in the most general terms, the notion that you could target
relief for a particular intervention I don't think fits our kind of society.
We have, generation by generation, our economy is unrecognizable to the
previous generation. And the number of, we lost 15 million jobs in the last
eight years, and we gained 30 million jobs, so we have a net gain of,
actually, it's more than that. It's probably 35 or 40 million jobs. We have
a net gain of probably 20 million jobs now since the Clinton Administration
came in. But completely different from what people were doing 10 years ago.
So, my guess is, and it's just to answer because it's a good question you
raise, but I'm just giving you the merest guess, that if we actually studied
this problem over a time horizon of 40 or 50 years, this would be so small
an effect that it would be hard to recognize, compared to all the other
thousands of things that go on in a modern economy.
PETER: Do we have any more questions? Time is getting on now, so. Three more
minutes. Your last chance for something revolutionary. We've had enough
revolutionary discussion this afternoon. Yes. Good.
MAN: It's only one concern. Why, in the figures you show, it doesn't appear
Latin America? It's because are we not going to be affected, or we are going
to disappear?
THEO: No, no, no. Let me answer that question.
SACHS: Now for the bad news.
[LAUGHTER]
THEO: We knew that we had a lot of participants from Latin America, so we
left it out. No. Actually, Latin America is there. It's there as some
countries like Mexico, Brazil, Argentina, and Chile are among what we call,
and Venezuela, I believe. Are among the so-called middle-income countries.
And then there are, the other ones are among the group called low-income
countries.
SACHS: We just took the way that Professor Nordhouse made the world
classification, is the answer.
THEO: Right. Actually, I think that Venezuela and possibly Mexico and
Ecuador are in the oil producing countries, because there's also an oil
producing countries. So, they are there, but they aren't identified as a
region. In fact, the only countries identified as these regions is only
India and China, because of their size and their potential effect.
SACHS: Eastern Europe.
THEO: Well, Eastern --
PETER: And Africa.
THEO: No. Africa isn't. Yeah, that's right. But countries, individual
countries, only those two large ones.
PETER: Right. I think we should wrap it up there. It's been a very exciting
discussion. Thank you all for your excellent questions and challenges, and
of course, thank our two speakers for a superb presentation.
[APPLAUSE]
THEO: And as they say, keep cool about global warming.
PETER: I cracked that one already!
THEO: Oh, you did?
PETER: Yeah. Something similar.
THEO: I was outside when you said that [LAUGHTER].
SACHS: Why don't we take a two minute stretch.
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