Friday, December 03, 2010

Cancun Climate Change Conference: Failure is not an option

A recent report issued by the WMO (World meteorology organization) , set a pessimistic tone to the ongoing discussion about climate change ,at the Cancun XVI Conference on Climate Change in Mexico. The report emphasize the fact that in this year, the emissions of dioxide of carbon has been the highest ever, even though the global economy was not working at its maximum . This fact confirm the trend , which indicates that while in 10000 years the level of emission was level off, in the last 250 year, it has increased by 38%. Therefore , human behaviour has a lot to say about it.-
Thus ,it looks like we are all headed toward an environment catastrophe , and only few seems to be aware of the risk involved in keeping the current pace no matter what might happens next. It is feasible to assume that climate change, will not be solved without some important cost some of them currently under way.
World community wonder whether such a cost is affordable .Perhaps it is , but if it is not , it is better to change the course toward more direct compromises to protect environment . Market solutions, will be slow to provide a long term solution because the main benefit of the trade mechanism no longer goes to those who reduce emissions, but to those who trade the green bonds . Sure, while the one who reduce emission get the actual market value of it, the one who engage in market transaction to make profit from it , get the present value, which is above the current one because it includes the expected gains form future reductions in emissions. Prices signals work in different direction , because there is no a single price to pay for those who contaminate. Environment like any common good has not a price, because nobody can claim property right on it.-
Protocols agreements work as long as governments wants them to do so. If not, Kyoto protocol is a good example of what some Government would like to do, but what they finally do when incentives are not clear enough.-
Therefore, It is not helpful to follow just the path of willingness to take action ,when the cost has already been somehow included in the current pace of growth. Massive flooding , pattern changes in weather temperatures ,rising sea levels, are the first hand cost of the climate change due to human intervention. These social cost must be reduced applying proper policies, which should include subsidies for new sources of energy, tax exemption for reduction on emissions, tax incentives to support clean technologies.-
The real problem is to get a reliable comparison between marginal benefits (Economic growth) with marginal cost (further contamination)of carbon dioxide emissions to make sure there is a net gain .This gain depends upon benefit going higher, faster than costs do. Sooner or later , we will need that technology develops new means to make possible to catch back emissions from atmosphere ,building plant specially designed to do so, such that to bringing down such cost further .
So, it is the time to move forward with a new approach on climate change, based on policy instruments capable of getting result to make the difference on environment protection .-