Climate summit all hot air and no action

Last week's meeting collapsed without decisive moves on climate change, but Pete Hodgson holds hope for success next year, BRIAN FALLOW writes.

When supposedly vital talks on global climate change broke up on Sunday without even a weak agreement, environmentalists reacted with predictably loud dismay.

Industrialists, on the other hand, greeted the demise of the talks with discreet relief.

Behind the meeting of environment ministers in The Hague in Holland was that now-familiar phrase global warming. Or in other words:

What's gone wrong with the weather?

The world's climate seems to be deteriorating. Extremes such as floods, drought and violent storms are more common. Temperatures and sea levels are rising.

New Zealand's climate has warmed 1.1 degrees Celsius since 1860, and most of that warming has taken place in the past 50 years. Our sea level has risen 15cm in the past century.

Seven of the world's 10 warmest years since modern record-keeping began have been since 1990.

Though some scientists remain sceptical, the mainstream view is that this is linked to the buildup of "greenhouse gases" in the atmosphere. They work like the glazing that traps the sun's warmth inside a glasshouse, and the most important is carbon dioxide (COinf2), produced by burning fossil fuels.

But New Zealand is clean and green, right?

New Zealand creates about one-fifth of 1 per cent of world greenhouse gas emissions.

The makeup of New Zealand's emissions is unusual. About 40 per cent is methane (an especially potent offender) from belching sheep and cattle. A further 16 per cent is nitrous oxide from farm soils. Electricity generation, a major source of COinf2 elsewhere, is less of a problem because three-quarters of our power is hydroelectric or geothermal.

On the other hand, we have the second-highest rate of vehicle ownership a head outside the United States. Those 2.4 million vehicles account for 15 per cent of New Zealand's greenhouse emissions and 42 per cent of the COinf2. This is also the fastest-growing area of emissions.

If global warming is a global problem, what is the world doing?

So far, not much. Three years ago at Kyoto, Japan, 39 developed countries, including 10 from the former Soviet bloc, set themselves targets for what their emissions should average between 2008 and 2012.

New Zealand's target is to get emissions back to 1990 levels.

Overall, the Kyoto targets, if achieved, would represent a 5 per cent cut in emissions from 1990 levels. But only from developed countries.

Developing countries - a category including China, South Korea and, implausibly, Singapore - are outside the Kyoto Protocol, as the agreement is called.

The prospect of a free ride for industrialising countries outside the protocol is one reason the United States Senate voted 95-0 against ratifying it.

The protocol will come into effect only if it is ratified by countries responsible for 55 per cent of COinf2 emissions by developed countries (taking 1990 as year zero).

So far none of the parties has ratified it. New Zealand, along with the members of the European Union and some other countries, has said it wants to ratify in mid-2002 - the 10th anniversary of the Rio Earth Summit, which launched the quest for a concerted approach to climate change.

But if the threshold of a 55 per cent sign-up is to be crossed, the United States will have to ratify. It produced 36 per cent of 1990 emissions.

While it is arithmetically possible to get to 55 per cent without the United States, it is unlikely other countries would be prepared to carry such a freeloader.

What were the talks in The Hague about?

Before the Kyoto Protocol can be ratified, it has to be agreed what its present broad-brush provisions would mean in practice.

The Hague negotiations were supposed to do that. In particular, rules need to be set for international mechanisms to ensure that the most cost-effective measures to cut greenhouse emissions are taken first, irrespective of where in the world that is.

For example, it makes more sense to close an old, inefficient coal-burning power station in eastern Germany than a modern, combined-cycle gas-fired one in New Zealand.

A crucial feature of the Kyoto Protocol is that it envisages cross-border mechanisms to ensure that the lowest-cost steps are taken first.

This is particularly important to New Zealand, which starts from a relatively clean base.

One idea is emissions trading. Countries which reduce their emissions by more than their Kyoto target would be able to sell the excess emission credits ("hot air") to countries which find it more difficult or expensive to reduce their own emissions.

It makes no difference to the climate where emissions are cut, only that they are.

Another source of credits would be "carbon sinks." The idea is that some changes in land use, such as planting a new forest, offset emissions by taking carbon dioxide from the air. That is important for New Zealand, where more than a third of the commercial forest estate was established since 1990.

So what went wrong with the meeting?

The Europeans wanted to restrict the extent to which such things as emissions trading can be used to discharge a country's Kyoto obligations to cut greenhouse gases.

In this they reflect environmentalist concern that these are a soft option which the Americans and the Japanese in particular would use to avoid hard decisions about cutting their own emissions.

New Zealand opposed restrictions on trading. Our minister responsible for climate change policy, Pete Hodgson, said that such restrictions would be just an economic impost on countries trying to comply. They could require countries to take higher-cost options than would otherwise be necessary.

But equally New Zealand would not go along with attempts by the Americans, supported by the Australians and Canadians among others, to have liberal or wide definitions of what constitutes a carbon sink.

In the end, despite movement on both sides, the gap between the Europeans and Americans could not be bridged and the talks failed.

But they came close enough, Mr Hodgson said, for him to be optimistic they will succeed when the parties have another go in May or June next year. Meanwhile, the Government will press on with its preparations for ratifying the Kyoto Protocol in mid-2002.

Among the policies under considerations are a carbon tax, negotiated greenhouse agreements with big industrial emitters, and a pilot emissions-trading scheme.

The Government has said a carbon charge, or tax on use of fossil fuels, can be considered only within the context of its broader review of the tax system.

It has also said that no significant new taxes will be imposed arising from that review this side of the next election.

There are doubts about how effective raising the cost of fuel (through a tax) is in reducing consumption.

Ministry of Transport deputy secretary Roger Toleman warns that, internationally, petrol taxes have made little difference to motorists' behaviour.

But car manufacturers are doing a lot of work on developing new propulsion systems - hybrid electric motors and, a little further down the track, fuel cells.

In the meantime, gains can be made by relieving road congestion and fostering the use of public transport.

Heavy industrial users of fuel want to be able to negotiate their own deals on greenhouse gases, rather than be caught by a one-size-fits-all carbon charge.

Mr Hodgson, at least, has been making sympathetic noises about that.

Meanwhile, designing a pilot (pre-2008) domestic emissions-trading scheme, which would have to connect to an international trading regime, has inevitably been set back by the failure in the The Hague.