No pain, no gain – Kyoto a standing joke

Western economies won’t inflict pain on consumers for the climate’s sake, writes Mark Lawson.

DESPITE THE slim results from the Doha conference, climate activists still hope that a binding, enforceable international agreement will eventually emerge.

But as is evident from the list of defections from the Kyoto protocol extended at the meeting, and from the results of the handful of emissions’ trading schemes operating around the world, developed countries are extremely reluctant to inflict any pain on consumers and their industrial bases.

With economies everywhere still struggling in the wake of the global financial crisis, and often also gripped by the European debt crisis, this problem has become particularly acute. Not only has climate change been pushed well down the policy agenda, the costs of adjustment have dropped off the agenda entirely. This was certainly the reason for Canada declaring earlier this year that it would not be involved with the extension to Kyoto, followed by Japan and Russia. The United States has never ratified Kyoto.

Many of the nations that remain in it will not face major costs in meeting the protocol’s requirements. Switzerland and Norway, for example, use hydro power. France is a substantial user of nuclear power.

There are exceptions, notably Britain, which is subjecting its citizens to increasing pain in order to reduce emissions, but Britain’s resolve is unusual in Europe.

The carbon price on the European Union emissions trading scheme has been beset with problems from the beginning, with a frequent cause being governments issuing free certificates to industry groups.

EU reports indicate that this problem is being addressed, but one immediate result has been a low, unstable carbon price. On Friday, the price closed at 6.78, or about one-third of Australia’s carbon tax.

The same problem can be seen in the Western Climate Initiative, a scheme involving the US state of California and, potentially, sections of Canada. Last week, the carbon price for the scheme, which started this year, was US$12.35, again well under the Australian carbon tax.

As well as agreeing to the Kyoto extension, the two weeks of negotiations at Doha resulted in a framework by which an agreement might be produced, perhaps by 2015. The agreement might then take effect by 2020.

Activists now hope that more international meetings might produce this elusive international agreement, but a key ingredient is missing – the willingness of nations to inflict pain on their voters.