Written evidence submitted by Dr Ian Bailey,
Senior Lecturer, School of Geography, University of Plymouth
1. My academic background is in human geography,
specialising in climate policy and environmental politics. I have
published two books and 26 refereed journal articles on aspects
of environmental policy and my current research focuses on climate
policy in the UK, Germany, the EU and Australia. My latest edited
book (Turning down the heat: the politics of climate policy
in affluent democracies, with Hugh Compston, Palgrave Macmillan)
examines domestic climate politics in developed countries and
does not explicitly consider the situations in developing countries.
However, the international context clearly forms an important
component of national climate politics and policy.
2. In the following sections, I consider three
themes outlined by the Committee where I have sufficient expertise
to offer comment: potential adverse impacts for developing countries
of steps by developed countries to mitigate climate change; the
impact of choices about power generation and energy sources; and
opportunities for developing countries presented by "sustainable"
approaches such as carbon trading.
Potential adverse impacts for developing countries
of steps by developed countries to mitigate climate change, including
in the context of the "post-2012" negotiations, and
potential benefits for developing countries of related technology
transfers
3. The majority of the EU and UK's internal
policies to mitigate climate change do not appear to have major
adverse impacts for developing nations from what has been observed
so far, with the exception of choices about power generation and
energy sources. This is discussed in the subsequent section and
in this section I concentrate on international linkages created
by the Kyoto Protocol and the EU climate strategy that have potential
repercussions for developing countries.
4. One of the main potential adverse effects
for developing countries of developed countries' efforts to mitigate
climate change is how the post-2012 negotiations deals with the
issue of limits on international emissions trading and other flexibility
mechanisms. These instruments have the potential to increase financial
transfers to developing countries that may aid sustainable development.
However, the basic concern—discussed frequently in the literature—is
that some developed countries may seek to relax current constraints
on their use of flexibility mechanisms in order to reduce the
risk of defaulting against international commitments. This could
reduce the incentive for developed countries to reduce greenhouse
gas emissions domestically and may also reduce the overall mitigation
effort if flexibility mechanism credits are less robust than verified
national emissions reductions. This, in turn, may increase the
adaptation burden on developing countries. The UK government has
thus far sought to minimise its use of flexibility mechanisms
and this approach should be continued for the post-2012 negotiations
alongside attempts to persuade its developed-world negotiating
partners not to seek a major increase in the use of flexibility
credits. There is the further concern that funds will not be directed
towards countries in greatest need. This issue is discussed in
more detail below.
5. Another perennial question in international
climate negotiations is whether developing nations should accept
binding emissions targets. There seems little prospect of a blanket
agreement by developing countries forming part of the post-2012
deal, although the EU is pressing China and India to commit to
reducing emissions to 15-30% below "business as usual"
by 2050. Neither China nor India have given any ground on this
issue yet but the hope must be that they will take on a commitment
if: (i) Annex I nations commit to the stronger targets proposed
by the EU; and (ii) there is a significant increase in technology
and fiscal transfers to assist them to develop cleaner development
trajectories. Anthony Giddens suggest a three-track system in
his soon to be published book on the politics of climate change.
This involves developed countries have emissions reduction targets,
most developing countries agreeing targets based on carbon intensity
per unit of economic output rather than absolute emissions, ad
the world's poorest countries being given additional financial
assistance targeting only adaptation.
6. EU border tax adjustments (BTAs)
to penalise carbon-intensive imports from non-Annex I countries
have been debated in recent months, although the former EU Trade
Commissioner, Peter Mandelson, appeared to rule out BTAs as problematic
under WTO rules and almost impossible to implement. Although BTAs
appear to offer a way to dealing with carbon leakage caused by
the eastward shift of manufacturing emissions to supply western
markets, any move in this direction is likely to damage relations
with major developing-country negotiating partners and may indiscriminately
penalise poorer nations seeking to import goods to the UK. Strategies
based on positive rather than negative financial incentives are
more likely to enjoy success in the bridging the gap between developed
and developing nations on climate policy.
The impact of choices about power generation and
energy sources in both developed and developing countries and
the linkages between these
7. This is a complex issue, to which it
is difficult to give a straightforward answer. However, at the
core of this question are concerns about the UK's emerging energy
gap and the likelihood of increasing dependence on other countries
to meet the country's energy needs (as seen by recent gas imports
from the Middle East). Greater self-sufficiency through renewables
(and, for some, nuclear power) has to be the ultimate goal since
it addresses both energy security and climate change. It also
directly influences the amount of adaptation effort that will
be needed in developing countries if the UK substantially reduces
its greenhouse gas emissions through a major increase in renewables
capacity.
8. Strategies that increase energy linkages between
developed and developing countries are more problematic in relation
to meeting energy and climate priorities, first, because of the
potential for geopolitical tensions arising from increasing fuel
supplies from overseas sources and, second, because many of the
benefits of international trade in fuels go to oil multinationals
rather than developing countries themselves.
9. Some increase in energy imports is, nevertheless,
inevitable in the short to medium term and it seems unavoidable
that an increase in nuclear power will be needed unless major
advances in energy efficiency can be secured and intermittency
issues with some renewables can be addressed. However, this should
not detract from the longer-term strategy to achieve a step increase
in the UK's renewable energies capacity. The UK's record on renewable
energies has been weak compared with many of its European partners,
mainly as a result of governments' over-reliance on market mechanisms
to incentivise investment and failure to adopt a feed-in tariff
system similar to that of Germany. Mitchell, C., (2007) The Political
Economy of Sustainable Energy, Palgrave provides a clear and thoroughgoing
analysis of the UK's track record and policy options.
10. In terms of how this impacts on energy
linkages, the development of a more coherent UK strategy, responding
to the EU's Second Strategic Energy Review and renewable energy
directive, would provide new opportunities for both technology
and policy transfer to developing countries. The latter, as well
as facilitating policy change in developing countries, could be
utilised to promote policy spillover, a process in which one step
towards the integration of climate considerations into other policy
areas increases functional or political pressure for further policy
integration and more ambitious mitigation strategies. This form
of policy spillover is becoming evident in the EU and UK climate
strategies (eg the EU climate change and renewable energy package),
and its application through policy-transfer partnerships may assist
developing countries to develop economic strategies that involve
significantly below "business-as-usual" emissions increases.
11. A further question concerns the extent
to which the EU and UK should encourage biofuels and biofuel imports
from countries like Brazil. This may produce economic benefits
for some developing countries, although there are many questions
marks about the environmental and economic impacts of biofuels
once deforestation/ biodiversity loss and control of biofuels
operations are taken into consideration. Too strong an emphasis
on biofuels by European countries may also tempt more developing
countries to move into biofuels production as a means of increasing
export earnings, leading to unsustainable patterns of development
and a further shift towards western nations importing sustainability
from the developing world. Stronger controls and improved monitoring
(possibly through internationally recognised and verifiable certification)
will be needed if biofuels are to form a major part of future
energy strategies.
Opportunities for developing countries presented
by sustainable approaches, such as carbon trading, direct fiscal
transfers and addressing the needs of increasingly environmentally-sensitive
consumers
12. The collective labelling of the approaches
named above as "sustainable" is misleading and the sustainability
merits of each should be examined separately.
13. Carbon trading and other Kyoto flexibility
mechanisms are inherently problematic in relation to promoting
sustainable development in developing countries because they suffer
from conflicting objectives and interests. On the one hand, they
facilitate low-cost compliance with international commitments
by developed countries; on the other, they have been touted as
promoting sustainable development through the channelling of funds
to developing countries. It is questionable whether these objectives
can be compatible on a consistent, long-term basis because the
incentive for funders (of both credit- and project-based mechanisms)
is to seek out financially attractive investments rather than
those in areas with greatest sustainable development or climate-change
resilience needs. Several studies have identified the concentration
of CDM funding towards a small number of developing nations (especially
India, China and Brazil) and the lack of funding going to Africa
as a weakness. The development opportunities from carbon trading
and other flexibility mechanisms are, therefore, likely to be
felt unevenly between countries and are poorly oriented towards
sustainable development. Similarly, instability in carbon markets
combined with the periodicity of compliance deadlines provides
an uncertain framework for stable and sustained investment and
benefits.
14. It is also uncertain whether demand
from environmentally-conscious consumers in developed countries
can be an effective, long-term mechanism for promoting sustainable
development in developing countries. Factors like the global economic
downturn can shift consumer preferences rapidly from environmental
to financial concerns and information on consumer choices can
be confusing and contradictory. Clearer guidelines for consumers
and codes of conduct for businesses may help to support existing
"fair trade" and similar labelling in improving the
sustainability credentials of products imported from developing
countries.
15. Direct fiscal transfers theoretically
offer a more controllable way of encouraging sustainable development
in developing countries, although questions often surround where
funds are directed (climate and development priorities are not
always well-balanced) and how funds are spent once received. Such
approaches also tend to be regarded as inefficient compared with
market-based instruments, although some of this is due to the
fact that fiscal transfers do not target lowest-cost/highest-return
development opportunities to the same extent as market instruments
but, rather, if properly managed, focus more directly on sustainability
priorities. Evaluations of market-based instruments and direct
fiscal transfers often seem to equate cost-effectiveness with
effectiveness in achieving desired policy outcomes, in this case
promoting sustainable development, such that cost-effectiveness
becomes the default objective. Cost effectiveness is clearly important
in determining spending priorities but not to the neglect of overall
priorities.
16. Ensuring that a clear focus is maintained
on sustainable development objectives—including adaptation/resilience
building to climate change—requires appropriate institutional
arrangements to oversee fiscal transfers. Please refer to the
supplementary paper by Richard Sandbrook, which some committee
members may be familiar with. The types and scale of institutional
arrangements proposed in the paper would require significant international
cooperation, but could conceivably be adapted to enable government
departments to perform "light-handed" oversight of direct
fiscal transfers.
17. Of the three instruments, direct fiscal
transfers appear to provide the clearest framework for achieving
consistent, long-term funds to assist developing countries adapt/build
their resilience to climate change while promoting economic development.
All the mechanisms discussed have their drawbacks, however, and
increasing direct fiscal transfers is clearly more difficult in
the current economic downturn as government borrowing increases.
The European Commission's proposals to increase allowance auctioning
in the EU emissions trading scheme may provide additional revenue,
although there will be competing demands on this. Greater earmarking
of other energy-related fiscal revenues (eg fuel duties or domestic
emissions trading schemes such as the Carbon Reduction Commitment)
and/or long-term funding commitments to assist climate change
adaptation/sustainable development in developing countries may
therefore be required to supplement market-based measures.
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