Some good news... at last

Per EUObserver, EU leaders last Friday, have failed to provide any specific commitments on funds for third world CO2 reductions. Instead, the summit, designed to formulate some sort of a unified EU-wide position on the issue ahead of the Copenhagen climate change summit in December, has concluded that the EU "will take on its fair share of financing such actions in developing countries.”

This is the good news because it postpones the absurd and economically illiterate introduction of the direct subsidies to the developing countries from the advanced economies aiming to reduce the developing nations' output of CO2. Here is how absurd the whole debate is. Quoting EUObserver, "if the EU and US stump up significant chunks of cash for cutting emissions and climate adaptation, developing countries may in return commit to considerable CO2 reductions, even though it is the industrialised north that is responsible for most of the emissions that caused the problem.”

Well, not that simple, folks.

First, even if the EU and the US commit actual funding, there is absolutely no compulsion principle to assure that the developing countries actually do anything about their emissions.

Second, there is no ceiling on what constitutes 'sufficient' subsidies. The argument in favour of the subsidies rests on the assumption that absent a pay-off, the developing nations will continue pursuing economic growth - in an attempt to catch up with the developed world in standards of living for their growing population - and thus will continue increasing CO2 emissions. But in order to cut-off the growth in CO2 emissions in the third world, the West will have to offer subsidies that replace that part of growth which can (at least theoretically) be lost to curbed CO2 emissions. So how much of growth will we, Western taxpayers, have to replace? Oh, well, that is an open question. In other words, until there is a final price tag placed, any commitment to buy the third world out of its CO2 emissions will be an open one, and unenforceable to boot.

Third, even if we do provide so massive of a subsidy as to deliver the third world to parity in income with the OECD countries, there is absolutely no guarantee that the third world leadership will actually adhere to its end of the bargain.

Fourth, given that the third world has over 4 times more population than the OECD countries, an idea that we can effectively replace their lost income is an absurd one. Only the lunatic fringe of environmental movement can argue that hoisting the welfare of 4 third world country citizens on each working OECD adult is sustainable development.

Now, Poland was backed by Italy, Lithuania, Latvia, Bulgaria and Hungary alongside UK, Spain and Sweden in opposing the idea of fixed financing commitment and the use of ETS revenue to 'buy-off' the thrid world countries. Overall, only the Netherlands, Slovenia and Belgium backed the deal, implying that 24 out of 27 EU states were not exactly enthused about the proposal. Here you have it - some good news out of the recession...