<p>Drawing on his experience with the post-war Marshall Plan (for rebuilding the Europe after World War-II), he has argued that addressing global warming is a bargaining problem: if the world is able to reduce emissions, poor countries will receive most of the benefits but rich countries will bear most of the costs. <br /><br />As the world leaders are scheduled to meet in Copenhagen in December to thrash out another global emission reduction treaty, Prof Schelling spoke to <em>Deccan Herald’s</em> Kalyan Ray on his expectations from this conference, the role of USA, the world’s biggest polluter and other issues. Excerpts:<br /><br />Copenhagen Summit is only six months away. Do you expect a breakthrough?<br /><br />I am sceptical about the outcome of Copenhagen. Nations are not yet ready to take decisions with huge economic impact. Even though there is a lot of hope on Copenhagen such issues cannot be settled in few weeks. If successful negotiations were to go on now, one could arrive at some conclusions in Copenhagen. But I don’t see that happening. <br /><br />Also for the USA, to implement any promise made at Copenhagen, Congress has to legislate it. But there is no serious discussion in the USA on how it can help countries like India, China, Brazil to reduce emission. The USA is not prepared to commit to anything and the maximum, President Obama can do in Copenhagen is to announce some vague commitments by 2020 or 2030 or 2050, which are nothing but talks. </p>.<p>What role can the Obama administration play?<br /><br />It’s crucial for the USA to participate in the global negotiation process, which it did not in the last eight years. President Obama is serious about climate change. That’s in complete contrast to the Bush administration, which did not have any serious intention to address climate change. However, I am not sure if US Congress will do anything serious. </p>.<p>Why do you think so about the Congress? <br /><br />The Congress is likely to come up with schemes for reducing emission industry by industry, area by area. That’s not going to work. But we have to go through the experience of an unworkable system before trying something as simple as carbon tax. </p>.<p>Why do you think industry-wise emission cut will not work?<br /><br />Because every industry will lobby with the Congress for special treatment. It will be subject to all kinds of politics. We will not have a universal cap on carbon but special caps on different industries and for different regions. </p>.<p>While economists talks about long term investment in the carbon market, the politicians always look at short-term gains – isn’t it a perpetual mismatch?<br /><br />It’s difficult to have a carbon market that will work for 50 years. Science can not tell us yet, how much carbon dioxide would be in the atmosphere, 50 years from now. Every 10 years we are going to have new estimates. One way to deal with it is to introduce caps for every year in future. <br /><br />In the USA there is no acknowledgement (of climate change) so far because of the anticipated increase in the price of carbon fuel, which will increase the cost of electricity and gas. While running for the election, President Obama said industries are polluting, but did not say industries are polluting because people are consuming more. I don’t know if he (Obama) is ready yet to tell people that they have to pay more if climate change is to be curtailed. </p>.<p>If carbon price is raised, sharp objections will come from the developing countries...<br /><br /> The biggest victims of climate change will be the developing countries. They are the ones who have the most to lose. At the same time, the best defence against climate change is to be on the path of development. It is important not to impose restrictions on developing countries that will have an adverse effect on their development.<br /> <br />But that’s precisely what the industrialised nations are aiming at by putting pressure on India and China...<br /><br />Eventually the rich countries have to recognise that they have to transfer resources to India, China and other countries to make it possible for them to reduce the greenhouse gas emission. If Copenhagen recognises that India, China and other developing countries are willing to cooperate, but not at their own expense, then may be a dialogue between developed and developing world becomes fruitful. </p>.<p>You are referring to North-South cooperation. Let’s take the example of the Adaptation Fund under UNFCCC where contributions from industrialised nations is very poor. <br /><br />Eventually there may be a recognised need for an Adaptation Fund. There’s not a good understanding of what adaptation requires, e.g. adaptation to water shortage. In the USA, there is no understanding of adaptation and the costs involved. People who are concerned with climate change used to say, if you talk about adaptation, you are a defeater. The idea was to curtail the emission so that there is no need to adapt.</p>
<p>Drawing on his experience with the post-war Marshall Plan (for rebuilding the Europe after World War-II), he has argued that addressing global warming is a bargaining problem: if the world is able to reduce emissions, poor countries will receive most of the benefits but rich countries will bear most of the costs. <br /><br />As the world leaders are scheduled to meet in Copenhagen in December to thrash out another global emission reduction treaty, Prof Schelling spoke to <em>Deccan Herald’s</em> Kalyan Ray on his expectations from this conference, the role of USA, the world’s biggest polluter and other issues. Excerpts:<br /><br />Copenhagen Summit is only six months away. Do you expect a breakthrough?<br /><br />I am sceptical about the outcome of Copenhagen. Nations are not yet ready to take decisions with huge economic impact. Even though there is a lot of hope on Copenhagen such issues cannot be settled in few weeks. If successful negotiations were to go on now, one could arrive at some conclusions in Copenhagen. But I don’t see that happening. <br /><br />Also for the USA, to implement any promise made at Copenhagen, Congress has to legislate it. But there is no serious discussion in the USA on how it can help countries like India, China, Brazil to reduce emission. The USA is not prepared to commit to anything and the maximum, President Obama can do in Copenhagen is to announce some vague commitments by 2020 or 2030 or 2050, which are nothing but talks. </p>.<p>What role can the Obama administration play?<br /><br />It’s crucial for the USA to participate in the global negotiation process, which it did not in the last eight years. President Obama is serious about climate change. That’s in complete contrast to the Bush administration, which did not have any serious intention to address climate change. However, I am not sure if US Congress will do anything serious. </p>.<p>Why do you think so about the Congress? <br /><br />The Congress is likely to come up with schemes for reducing emission industry by industry, area by area. That’s not going to work. But we have to go through the experience of an unworkable system before trying something as simple as carbon tax. </p>.<p>Why do you think industry-wise emission cut will not work?<br /><br />Because every industry will lobby with the Congress for special treatment. It will be subject to all kinds of politics. We will not have a universal cap on carbon but special caps on different industries and for different regions. </p>.<p>While economists talks about long term investment in the carbon market, the politicians always look at short-term gains – isn’t it a perpetual mismatch?<br /><br />It’s difficult to have a carbon market that will work for 50 years. Science can not tell us yet, how much carbon dioxide would be in the atmosphere, 50 years from now. Every 10 years we are going to have new estimates. One way to deal with it is to introduce caps for every year in future. <br /><br />In the USA there is no acknowledgement (of climate change) so far because of the anticipated increase in the price of carbon fuel, which will increase the cost of electricity and gas. While running for the election, President Obama said industries are polluting, but did not say industries are polluting because people are consuming more. I don’t know if he (Obama) is ready yet to tell people that they have to pay more if climate change is to be curtailed. </p>.<p>If carbon price is raised, sharp objections will come from the developing countries...<br /><br /> The biggest victims of climate change will be the developing countries. They are the ones who have the most to lose. At the same time, the best defence against climate change is to be on the path of development. It is important not to impose restrictions on developing countries that will have an adverse effect on their development.<br /> <br />But that’s precisely what the industrialised nations are aiming at by putting pressure on India and China...<br /><br />Eventually the rich countries have to recognise that they have to transfer resources to India, China and other countries to make it possible for them to reduce the greenhouse gas emission. If Copenhagen recognises that India, China and other developing countries are willing to cooperate, but not at their own expense, then may be a dialogue between developed and developing world becomes fruitful. </p>.<p>You are referring to North-South cooperation. Let’s take the example of the Adaptation Fund under UNFCCC where contributions from industrialised nations is very poor. <br /><br />Eventually there may be a recognised need for an Adaptation Fund. There’s not a good understanding of what adaptation requires, e.g. adaptation to water shortage. In the USA, there is no understanding of adaptation and the costs involved. People who are concerned with climate change used to say, if you talk about adaptation, you are a defeater. The idea was to curtail the emission so that there is no need to adapt.</p>
