Topic 5: Climate change and Economic development: Why and how does/would the Kyoto Protocol and
the consensus arrived at the United Nations Climate Change Conference in Durban, South Africa, affect
economic development in the Emerging Economies differently from that in the Advanced Industrial
Countries?
Focus on : Economic Growth vs. Economic Development
Kyoto Timeline
1997: negotiated in Kyoto, Japan
1998-99: signatures due
2005: Came into force
2006 Dec: 169 countries ratified (61.6% of emissions of Annex I countries; 68% of world population)
Refused to ratify: U.S. & Australia
Ratified: China & India (but exempt from emissions controls)
Ratified in 2007: Australia’s newly elected Labour Govt.
2008-2012: Copenhagen conference - reduce global emissions 5.2% below 1990 baseline
Six greenhouse gases (GHG)
Carbon Dioxide
Methane
Nitrous Oxide
Sulfur Hexafluoride
HFCs
PFCs (Perfluorocarbons
GHG emissions 1990 -2004
Change in GHG
Emissions (19902004)
EU Assigned
Objective
for 2012
Treaty Obligation
2008-2012
Germany
-17%
-21%
-8%
Canada
+27%
N/A
-6%
Spain
+49%
+15%
-8%
United
States
+16%
N/A
N/A
France
-0.8%
0%
-8%
Greece
+27%
+25%
-8%
Ireland
+23%
+13%
-8%
Japan
+6.5%
N/A
-6%
United
Kingdom
-14%
-12.5%
-8%
Portugal
+41%
+27%
-8%
EU-15
-0.8%
N/A
-8%
Country
http://en.wikipedia.org/wiki/Kyoto_Protocol#Status_of_the_agreement
Countries agree:
• Global emissions historical and current originated in AICs.
• Emissions per capita in LDCs now: Low
Durban Global Climate Change Negotiations : 2011
UN's annual climate change meetings : 17th Conference of the Parties (COP17) in Durban, South Africa,
New mechanism agreed upon by countries:
•
Options for reducing global greenhouse gas (GHG) levels
•
Clean Development Mechanism (CDM) and the Joint Implementation (JI) scheme
•
Certified emission reductions (CERs, also known as ‘carbon credits’).
The emergence of a carbon market whereby states could buy CERs to help them reach their domestic
emissions reduction commitments or sell credits
•
•
•
•
•
US did not ratify but is responsible for almost 20% of global GHG emissions
Japan, Russia and Canada had publicly declared that they would not be a part of any second
commitment phase
The EU did ultimately champion the Kyoto Protocol in Durban
The developed countries question why India and China and other emerging countries should be
given more time to implement the Kyoto protocol
• Canadian Minister of the Environment Peter Kent criticised the Platform on the grounds
that it ‘provides, at least until 2020, a continuing loophole for China to claim to be a
developing country without responsibilities’ (CCE, 2011).
Kyoto protocol is still not a binding‘legal instrument with a legal outcome’
Source: Alan S. Manne and Richard G. Richels, "Economic Impacts of Alternative Emission Reduction Scenarios"
(Washington, D.C.: American Council for Capital Formation Center for Policy Research, October 1998).
Global Carbon Emissions: Reference Case
http://www.accf.org/publications/testimonies/test-impactkyoto-march25-1999.html
World Energy Consumption by Country: BTU/GDP
BTU per 2000 US$ GDP, 1980-2004 PPP
http://en.wikipedia.org/wiki/Kyoto_Protocol#Status_of_the_agreement
http://en.wikipedia.org/wiki/Kyoto_Protocol#Status_of_the_agreement
Kyoto Protocol requires:
Developed countries:
•
•
Should pay cost of controlling pollutants (it amounts to billions $)
Should supply technology (to other countries) for climate studies
Top 20 CO2 FF Emitters & Per Capita Emissions 2010
1500000
1500
5
4
3
1000000
1000
2
500
500000
00
1
(tons C person y-1)
(tons x 1,000,000)
2000000
2000
6
Per Capita Emissions
Total Carbon Emissions
2500000
2500
0
Global Carbon Project 2011; Data: Boden, Marland, Andres-CDIAC 2011; Population World Bank 2011
Thesis:
WST argues that AICs, e.g., Canada, are differentially impacted than the LDCs by climate
change as AICs’ economic growth is related to their MNCs’ outsourcing to LDCs those processes that
create CO2. Through NDL, Canada uses GCC to extract both labor surplus from and surplus through
unequal trade with LDCs.
In contrast, climate change and ensuing environmental pollution cause serious devastation to the
LDCs. LDCs’ economic development is dependent on foreign investment, e.g. MNCs, that leads to
higher carbon dioxide emissions in these countries. For LDCs, the drastic consequences of climate change
are: higher infant mortality rates, elevated industrial water pollution levels, natural disasters, shortage of
fresh water, refugees leaving their land that has turned unproductive, release of water pollutants from
industrial materials, highly polluted water unleashed by MNCs’ food processing, textile production,
steelmaking, power generation, logging and deforestation.
Implementing Kyoto Protocol: Economic development vs. Economic growth
What is economic development as distinct from economic growth?
Economic Development
1. Fair wages for workers
2. Climate change reversal
3. Elimination of poverty
and hunger
4. Responsive government
5. Political and economic
stability
6. Improving
i.
ii.
Human condition of life
Global climate health
and environmental
protection
iii. Elimination of hunger
using fair practices and
local control over food
production
•
•
•
•
Economic growth
1. Exploitation cheap labour
2. GCC & surplus extraction
3. Commodification
4. Endless consumption
5. Newer consumer goods
6. High profit
7. Global corporate monopoly
8. Climate change
acceleration
9. Monopolistic control over
agriculture and food for
maximum profit
Economic development cannot occur without economic growth.
As countries’ economic growth results from current production/consumption rates, it accelerates
global climate change.
Climate change can be reversed only by reversing the trend of Core’s endless consumption.
If Core countries advance their economic growth toward improving the conditions of
peripheries’ (and Core’s) populations, it would switch Core’s economic growth by endless
consumption to one by sustainable production.
• Under finance capitalism, econ. growth has promoted endless consumption.
• If climate change is to be reversed endless consumption must be changed
Li,M (2008 ): US policy: Deregulation of commercial activities and of financial speculation – led to
market crash and recession in 2008
Result on climate:
•
Advanced capitalism did not lead to dematerialization, i.e., decrease of material and energy per
unit of output
• Increasing relocation of industrial capital from core to the peripheries
• Increasing production is increasing global fossil fuel consumption, including in such relocated
industries and in the industrializing peripheries
• Increasing peripheries’ global EF and resultant detrimental impact on climate
Li,M (2008 ): US policy: Deregulation of commercial activities and of financial speculation – led to
market crash and recession in 2008
Result on climate:
•
Advanced capitalism did not lead to dematerialization, i.e., decrease of material and energy per
unit of output
• Increasing relocation of industrial capital from core to the peripheries
• Increasing production is increasing global fossil fuel consumption, including in such relocated
industries and in the industrializing peripheries
• Increasing peripheries’ global EF and resultant detrimental impact on climate
Minqi Li (2008). Climate Change, Limits to Growth, and the Imperative for Socialism, Monthly
Review,
http://www.monthlyreview.org/080721li.php accessed July 31, 08
Impacts of Economic Crises on C Emissions
Peters et al. 2011, Nature CC
Smith, Heather A. (2008-09): (course kit)
• Hardnosed, national interest-driven negotiating tactics, rather than concern for environmental
integrity and wellbeing
• Climate change policy has routinely been trumped by energy policy
Hornsby, et al. (2007).
Hornsby, David J, et al. (2007). NAFTA’s Shadow Hangs Over Kyoto’s Implementation, Canadian
Public Policy – Analyse De Politiques, 33 ( 3) : 285-297.
1. Due to NAFTA, Canada cannot fulfill its obligation to initiate and implement regulations in order
to meet its promised greenhouse emissions target.
2. Agreed terms in NAFTA could prevent Canada from implementing reductions in greenhouse gas
emissions that would be challenged as discriminatory to the free trade between Canada and its
partners in NAFTA.
3. American investors successfully claim profits and rights of foreign investors (mixing and
distributing MMT & exporting PCB to US) over fostering environmental protection promised by
NAFTA. Two cases in which US corporations have been successful using NAFTA (Chapter
11). They did not treat this as a dispute to be settled to resolve investment issues while protecting
the environment.
York et al. (2009): (course kit)
• NL policy: open-up for foreign investment
• WST: Core’s production moved to peripheries –increased detrimental impact on climate
• Core’s per-capita consumption of resources now ( e.g.,US) is 6 times that of China or India – as
resource-use become efficient resource consumption increases (Jevons’s paradox)
•
•
•
Improvement in eco-efficiency has not and will not necessarily lead to lower EF (climate impact)
Ecological intensity of the economy declined (i.e., efficiency improved) from1961 to 2003, but
the total national (Ecological Footprint) EF increased substantially
Jevons paradox: Efficiency did not reduce resource consumption, but it escalates consumption
thereby increasing environmental decline.
Some studies show that higher GDP relates to lower CD emission:
• Nations exceeding $10,000 in per capita GDP experience a decline in carbon dioxide emissions
resulting from the countries’ level of affluence
• the decline is the result of a shift to a service-based economy and investment in more efficient
technology.
• high technology in the core allows polluting industries to shift to the periphery
But evidence shows otherwise as there are other critical factors:
Current research identifies the variables that relate to climate change
• Deforestation, greenhouse gases, carbon dioxide emissions
• Impact of a nation’s ecological footprint
• Dependence on foreign aid
• Production & consumption strategies that aggravate the production of industrial carbon dioxide
foreign capital penetration is positively related with growth in carbon dioxide emissions
Current research identifies the variables that relate to climate change (cont’d)
• Impact of foreign investment dependence
• World-Economy Centrality (WEC) is a better predictor of carbon dioxide emissions than GDP
per capita.
• Higher World-System position is positively related with environmental degradation
• Increased capital accumulation in the core allows for (actually necessitates) increasing
environmental degradation as a result of increasing demand for the commodities produced using
cost-efficient practices
Population: more people a nation has, the greater the environmental impact
Reasons for higher CO2 emissions:
•
•
Foreign investment is more concentrated in those industries that require more energy.
MNCs relocate highly polluting industries to countries with fewer environmental
controls.
FDI inflows are "most likely" to add to pollution and resource use even as they increase employment.
Panayotou T (2000). Globalization and Environment. CID Working Paper No. 53, Environment and
Development Paper No.1.
Reasons (Cont’d.):
• Movement of inputs and outputs resulting from the global dispersion of production over
the past 30 years is likely to be more energy-expensive in countries with poorer
infrastructure. Energy production creates CO2.
•
Power generation in the countries receiving foreign investment is considerably less
efficient than in Core countries
Fossil Fuel & Cement CO2 Emissions
Growth rate
2010
5.9% yr
Growth rate
2000-2010
3.1% per year
Growth rate
2009
-1.3% per year
Growth rate
1990-1999
1% per year
-
Uncertainty (6-10%)
+
Peters et al. 2011, Nature CC; Data: Boden, Marland, Andres-CDIAC 2011; Marland et al. 2009
Fossil Fuel CO2 Emissions (Production and Consumption)
Carbon in Trade (2004):
Emissions embodied in products
Net exporting countries (blues) to net importing countries (reds)
Davis et al. 2011, PNAS; See also http://supplychainCO2.stanford.edu/
Canada:
Impact on Canadian Households:
•
Major sources of emissions: residential
• Transportation produces 30% emissions.
• Buy energy efficient appliances
• Turn down the heat
• Use public transportation.
• http://www.canadiansolution.com/backgrounders.asp
Canada:
Pain without Gain (2000-2001): Annual Report by Canadian
Manufacturers & Exporters (CME)
http://www.cme-mec.ca/kyoto/documents/kyoto_release.pdf
Pain without Gain (2000-01): Annual Report by Canadian Manufacturers &
Exporters (CME) http://www.cme-mec.ca/kyoto/documents/kyoto_release.pdf
Trade: Canada
•
Has to compete with DW which are exempted from targets ( First Commitment Period of
Kyoto), e.g.: Brazil, Mexico, China and India – they can competitively take over what Canada
exports now.
Disadvantaged as a NAFTA partner:
• U.S. : did not ratify Kyoto
Mexico: no emission targets
Wider Costs - An estimate (2002)
Business costs: new technologies and environmental regulations.
•
Government estimates (2002): 1.9% GDP/year loss
•
Total loss: $30 billion dollars by 2010.
•
Increased Governments spending ( > $500 million/year) on environmental codes, infrastructure,
and subsidy to businesses and the unemployed.
By 2010-2012: total loss to economy: $40 billion
• shrinking economy
• smaller workforce
• higher taxes
• rising government deficits.
Pain without Gain (n.d.): Report by Canadian Manufacturers & Exporters (CME) http://www.cmemec.ca/kyoto/documents/kyoto_release.pdf
Let’s look at two critical variables that relate to climate change :
• Impact of foreign investment dependence is related to higher carbon dioxide emissions
• World-Economy Centrality (WEC) is related to higher carbon dioxide emissions than GDP per
capita does.
The impact of foreign investment dependence (of 66 LDCs) on carbon dioxide emissions in 1980-1996
•
1980-1996: foreign capital penetration in 1980 has a significant effect on growth of CO2
emissions (analysis of 66 LDCs)
•
Domestic investment has no systematic effect.
journal of world-systems research, ix, 2, summer 2003, 261–275, Special Issue: Globalization and the
Environment,http://jwsr.ucr.edu/
issn 1076–156x © 2003 Peter Grimes & Jeff rey Kentor
World-Economy Centrality (WEC) is related to higher carbon dioxide emissions than GDP per capita
does.
WEC is a measure of the countries’ position in the world trade network. GDP per capita (PPP) measures
the average economic output per person in a nation.
• WEC is associated with core processes and energy intensive processes such as carbon dioxide
emissions.
• GDP per capita deals more with extensive processes that incorporate more of nature into
production and consumption rather than specifically intensifying production processes as in
WEC.
Paul Prew (2010). World-Economy Centrality and Carbon Dioxide Emissions: A New Look At the
Position in the Capitalist World-System And Environmental Pollution, Journal Of World-systems
Research , Volume XVI, Number 2, Pages 162-191
World-Economy Centrality (WEC) is related to higher carbon dioxide emissions than GDP per capita
does (Cont’d).
• Carbon dioxide emissions vary monotonically with position in the world trade network, WEC,
because the largest and most core economies fall in a consistent hierarchy in the WEC variable.
• The Jevons’ paradox: there are no efficiency gains with more efficient technology associated with
core processes. Those nations pursuing expanded accumulation, especially using core processes,
continue to be those that produce the most carbon dioxide emissions
Paul Prew (2010). World-Economy Centrality and Carbon Dioxide Emissions: A New Look At the
Position in the Capitalist World-System And Environmental Pollution, Journal Of World-systems
Research , Volume XVI, Number 2, Pages 162-191
Paul Prew (2010). World-Economy Centrality and Carbon Dioxide Emissions: A New Look At the Position in the Capitalist
World-System And Environmental Pollution, Journal Of World-systems Research , Volume XVI, Number 2, Pages 162-191
Impact of Transnational firms (outsourcing to LDCs) :
• Higher infant mortality rates in LDCs to elevated industrial water pollution levels, net of other
relevant factors (Jorgenson 2009).
• Poor people’s loss of arable land: ‘Environmental refugees’
• Climate change and natural disasters
• Use of outdated and inexpensive machinery and materials-industrial organic water pollutants highly toxic and capable of remaining in the environment for extended periods of time processing of industrial chemicals, pulp and paper manufacturing, food processing, textile
production, and steelmaking- power generation - logging operations - Mining activities - carbon
dioxide emissions, industrial organic water pollution, and deforestation. water shortages, highly
polluted water.
Dick C. & Jorgenson A. K. (2011). Capital Movements And Environmental Harms, Journal Of Worldsystems Research , Volume XVII, Number 2, Pages 482-497
Impact:
Developing World vs. AICs
• Water resources
• Agriculture
• Industrialization
• Poverty and poorer people
• Diseases
Global weather and disasters
Jorgenson, A.K. (2009). Industrial pollution and human Health, International Sociology, 24:1
Jorgenson’s (2009) findings :
1. Intensity of industrial organic water pollution in LDCs is a result of their (Peripheries’ ) economic
integration with the Core:
Peripheries’ integration through their:
•
Dependence on Foreign investment
•
Export Intensity
2. Industrial Organic Water Pollution is clearly detrimental to the health of infants and infant mortality
rate
3. The presence of Environmental INGOs deters industrial organic water pollution
Periphery:
Effects of climate change in China:
•
19th C on : average temperature increase 0.6-0.8 degree Celsius
•
Past 50 yrs: Sea levels rose 1-2.5 mm/year.
•
Drought, flooding, tropical cyclones, sand storms, heat waves.
•
Increase the amount of land for farming but reduced agricultural yield (10%) 2004 drought and
floods: loss of > 37 million hectares of arable crops
•
Rise in sea levels: damaging to the economically dynamic and prosperous Zhujiang and Yangtze
deltas.
DW & Global warming:
•
2080: Agricultural production decline, but it increases in wealthy countries
•
Net decline in global production of 100 -160 megatons (2% to 4% decline in total production in
the absence of warming)
•
Downturns in economic growth - inhibit investments in agriculture & slower technological
change
•
Less voluntary trade of food supplies likely
to create a future food crisis
Global warming & Malaria:
• Numbers at risk: 0.26 - 0.32 billion (2080s)
(2.9% - 3.7% of pop.).
Water:
Increase of 4% of people in water stress, in countries that experience the stress (countries using > 20% of
their available water resources).