RUTHFULLY YOURS

Under the Paris pact, most developed countries (including Australia) have agreed to reduce their emissions by 26-28% under Intended National Determined Contributions (INDC), ostensibly to limit global temperature increases to 2°C.  Most developing countries have only nominal emission-reduction requirements, though even these have proven too great to achieve for at least one of them, the Philippines[1], where President Duterte has rejected the soft targets agreed to by his predecessor.

The US and China have ratified the Paris agreement, the Obama Administration having bi-passed Congress to do so — a path made available because US negotiators stipulated that the language of the accord be couched so that, technically, it is not a treaty imposing binding obligations[2].  While ratification as far as China is concerned represents little more than agreeing to business as usual, at least until 2030, the US is a very serious supporter of emission reductions. Its taxpayers are very generous donors and supporters of the renewables lobby, having spent $176 billion on wind, solar and other green schemes [3].  The Obama Administration also has done what it can to inhibit shale developments and other innovative gas/oil extraction methods, simultaneously threatening new coal-power developments with prohibitive regulatory costs.

For each country’s INDC to come into force under the Paris Climate agreement, 55 signatories must ratify it — and those  need to represent 55% or more of all emissions.  As things stand,  60 countries, accounting for 48% of global emissions (China and the US representing almost all of this), have ratified.  Additional countries (including Japan, Australia and Canada) are expected to do likewise this calendar year, lifting the emission levels above the 55% trigger[4]. The race is on because, although presidential contender Hillary Clinton would retain the Obama policy, Donald Trump thinks global warming is overstated at best and, as he has also described it, “a hoax”. Whatever his precise view, Trump has indicated his intention to dismantle the machinery Obama has put in place to reduce US emissions[5].

The EU is not expected to get its act together to ratify this year. The matter did not even figure in the recent Bratislava Declaration following the meeting of the 27 heads of government[6].

However, British PM Teresa May says the UK (which represents 2% of global emissions) will ratify this year[7]. Doubtless the UK will have received some comfort from Obama/Clinton regarding a free-trade treaty in return for this and, by Number Ten’s reckoning, ratification will not prejudice Britain’s case if Trump emerges victorious from the first Tuesday in November.  The UK, still being technically part of the EU, may well not lodge a separate ratification by December. The goal of global emission reductions, irrespective of the need for them, is totally unachievable without the near unanimity of all nations — and  developing countries will not undertake abatement policies.

Arm-twisting by Obama and Brussels aside, why are politicians so disposed to back policies that impose higher energy costs on consumers and, especially in the case of countries like Australia, seriously downgrade their most competitive industries?

Among the reasons is that CO2 emissions have risen and all the dominant theories underwriting warmist orthodoxy insist that this brings global warming — a stance that, while being being steadily undermined by empirical observations of little or no change, remains the party line.

Many of these theories are based on the self-interest of scientists who, for the first time since the Manhattan Project, have been elevated into key areas of political decision making, with all the funding and frills this brings. There is also the self-interest of the renewable sector.  Like the promoters of tariff protection in days gone by, green rent-seekers offer the quid pro quo of financial support to politicians who secure their funding. The jobs lost as a consequence of high energy prices, plus the imposition of higher overheads, are far more difficult to discern than the smiles of bought-and-paid-for political hacks cutting ribbons at the latest wind farm or solar installation.

Moreover, politicians tend to be both highly economical and selective in the information they absorb.  So, when quack economists tell them their models demonstrate that the overall economic effects of carbon impositions will be negligible, they find it palatable to agree, especially since so many of the loudest political voices need no further convincing. Add to this the propaganda of those who swear “dinosaur energy sources” — think coal and nuclear — will be overtaken by renewables  tirelessly presented as inevitable.

All things considered, it is hard to see how the momentum to impose emission-reduction policies can be halted.  Teresa May’s statements indicate the change will not come from the UK, while the Chinese and Indians will do no more than pursue their business-as-usual policies. So that leaves Trump as the only disruptive political force with the potential to derail the green-power gravy train.

Alan Moran runs the website Regulation Economics (www.regulationeconomics.com).