Obama’s Climate Change Diversion

Irwin M Stelzer

President Obama will tolerate a lot for an opportunity to push his climate-change agenda. At this weekend’s G20 summit meeting of the world’s developed (aka “rich”) nations, which account for 85 percent of the world’s economy, his Chinese hosts really poured on the humiliation.

Unlike every other national leader, Obama was not given an opportunity to descend directly from his airplane on to a red carpet. The face-conscious Chinese denied him a staircase, forcing him to descend from the belly of Air Force One, a snub fully reported overseas in the Guardianbut touched on only lightly in our newspaper of record, the New York Times. When Obama raised the issue of China’s militarization of the islands it has constructed in the South China Sea, President Xi Jinping told him China would “unswervingly safeguard” its claims in the area. When the American president raised the issue of human rights, Xi told him not to interfere in China’s internal affairs. Perhaps the unkindest cut of all came when Xi praised the Paris agreement to limit carbon emissions, the issue on which Obama had come to take a victory lap, “It was under Chinese leadership that much of this progress was made.”

Xi was wrong on both of these counts: the Paris accord will not limit emissions, and China was a reluctant signatory to the agreement forged in Paris, largely by Obama, and whereas America agreed to drastic cuts in emissions, China made no such promise. All it agreed to do, at some date in the distant future-perhaps 2030 if that proves convenient-is to begin slowing the rate of increase of its emissions relative to the growth in the country’s GDP. Not a word about ending China’s financing coal plants in other countries-92 in 27 countries is the current count of the San Francisco-based Climate Policy Initiative, enough new coal-fired capacity to offset all the plant closures and emissions reductions planned in the United States for the next decade. No surprise that Xie Zhenhua, China’s senior climate change negotiator in Paris, says the deal struck there is “fair and just, comprehensive and balanced.”

Still, Obama had come for a victory lap. Undeterred by the demeaning greeting, Xi’s intransigence on other issues, and his effort to take credit for the Paris accord, he swallowed hard-he has lots of practice in performing that maneuver-and went ahead with the meeting and the obligatory photo op. Obama claimed that the Paris deal “will ultimately prove to be a turning point for our planet. The moment we finally decided to save our planet.” That was reminiscent of the moment after he wrested his party’s nomination from Hillary Clinton and modestly proclaimed it “the moment when the rise of the oceans began to slow and our planet began to heal.” No political figure had claimed such control over risen waters since Moses, and Moses had help. “History”, continued the president, would see the finalizing of the Paris accord at last weekend’s meeting, “as pivotal.”

There are two ways to view the results of the G20 summit. One is as a glass one-quarter full, the other as an empty glass. If you believe we do have a planet-threatening climate-change problem, last weekend marked progress on the rocky road to effective international cooperation to control the offending emissions. Some eight years after he first noticed that his arrival on the political scene was causing the waters to subside, Obama can claim a modest victory. He succeeded in persuading 196 nations (the Palestinians were the 196th “state”, as they called themselves, to sign; ISIS was not heard from) to share his vision of the apocalyptic nature of climate change, that only international cooperation could avert disaster, and to lay out individual, nation-specific plans for reducing emissions at the Conference of the Parties 21 (COP21).

To his supporters, this is no small achievement, one that can be built on to heal the planet. But even many of his supporters, and most of his detractors, call this a rhetorical victory, devoid of substance. For one thing, the Paris accord does not carry the force of a treaty, since the Senate would not ratify it. So it is a, well, deal, its existence dependent on the wishes of his successor. And America’s chosen method of meeting our obligations is a complex regulatory regime of doubtful legality, to be enforced by a regulatory agency, the EPA, that refuses to share with congress the “scientific” data on which it bases its regulations, has polluted the rivers of Colorado, and failed to meet its responsibilities to regulate the quality of drinking water in more than one of our cities.
Unless you agree to the one-quarter-full analysis, this agreement is worse than a failure-it is a diversion, something that might lull those who really believe we need to do something to prevent climate change into declaring “mission accomplished”, or almost so. First, even if each of the signatory nations actually implements its plan, the effect will be to reduce the growth of emissions only about half as much as the 2 degrees Celsius (3.6 degrees Fahrenheit) scientists claim is necessary to avoid floods, drought and other catastrophes. Second, the Coalition of the Least Developed Nations agreed to go along only because the rich nations agreed to transfer to them at least $100 billion even though the donors stuck that pledge in the preamble rather than accede to poorer nations’ demands that it be placed in the body of the Paris agreement-and so far have not raised the money from government and private sources. Third, increased concern by all nations at the slow pace of economic growth is likely to tilt the perceived growth vs. emissions-reduction trade-off (Obama denies this exists) in favor of faster growth.

Perhaps more important, there is no enforcement mechanism other than “naming and shaming”, which has not proven to be an effective way of affecting the behavior of Vladimir Putin’s Russia, new landlord of Crimea; the Supreme Leader’s Iran, their missiles still flying; Assad’s Syria, which knows the full force of Obama’s red lines; or Xi’s China, which soon after it signed on in Paris was found to be underreporting its emissions. These and other countries will be free riders on the emission-reduction programs of countries that do attempt to cut back. With China and India in the midst of massive expansions of their coal-burning capacity-“a coal plant a day keeps the competition at bay” seems to be Xi’s motto-America would find itself at a competitive disadvantage relative to its trading partners if it alone switches from lower-cost fossil fuels to higher-cost renewables that require, among other things, massive investment in transmission facilities.

There is a way out of these problems, one that would more effectively reduce emissions (a plus for the believers in climate change), protect America’s competitive position (a plus for believers and the uncertain skeptics), and replace the heavy hand of the regulator with the less visible hand of the market (a plus for what true believers choose to call “climate-change deniers”, a formulation previous reserved for those who believe the Holocaust never really happened).

First, ditch the administration’s Clean Power Plan. Second, use the tax reform discussions that will inevitably take place after the new president is inaugurated to impose a tax on carbon emissions-“price carbon” if moving your lips to say “tax carbon” creates an insurmountable difficulty. Conservatives who do not believe the globe is warming, that it is a hoax developed to support still another expansion of government, but who recognize that if they are wrong their error will produce irreparable harm, can console themselves with the thought that using the revenue from a carbon tax to lower income taxes on lower- and middle-income workers will be replacing a tax on work with a tax on consumption. The emissions reduction would be a mere byproduct of an improvement in the tax code, objections to the global-warming theory remaining intact. Third, add a so-called border tax on goods coming from abroad that were produced with emissions-producing fuels so that American manufacturers are not put at a competitive disadvantage. Fourth, challenge the greens to act on their sotto voce promises to back a repeal of the no-longer-needed regulations and subsidies when a carbon tax is substituted for them.

Do all of that and we might have an energy/environmental program that is both pro-environment and, by shifting the tax burden from work to consumption, pro-growth. None of the pieces of this bargain is beyond the capacity of man to develop; implementation would be automatic, imposed by consumers choosing among products the prices of which include any social costs of carbon emissions. Enforcement would also be automatic, as the border tax would remove any competitive edge non-complying nations’ exports would have in the vast U.S. market, and force those wishing continued access to reduce their own emissions. As Xi’s assertion of China’s power at the cost of American “face” makes clear, this will not suddenly become the best of all possible worlds. But we will at least have sorted out one of our problems.