World Leaders Need to Set Attainable Priorities

As this edition of E&MJ was heading to press, world leaders were starting to gather for a climate summit in Copenhagen. Aside from the sad state of the global economy, what will make this meeting different than previous ones is that it appears that the wheels are coming off the global climate change bandwagon. Carbon taxes are becoming increasingly unpopular with businesses and taxpayers. Governments are now viewing carbon taxes as more of a much-needed revenue stream than a method of improving the environment. Carbon credits might become the next derivative that speculators juice. Guess who pays the price? Last year, when most of the world saw 30% or more of its wealth evaporate, many business and families decided to hit the reset button and review their priorities realistically. World leaders should do the same.

In the latest climate-related scandal, commonly referred to Climategate, hacked E-mails from British scientists have exposed a huge ethics problem, if not something more sinister. In one E-mail, a prominent climatologist suggested that work of scientists with dissenting opinions should not be published. Other E-mails suggested that data had been manipulated in favor of anthropogenic climate warming. The institution under fire, the University of East Anglia in the U.K., said Phil Jones, head of the university’s climate research unit had decided to “step aside” from his director’s post. Little has been published about Climategate in the mainstream press. The blogosphere can take most of the credit for exposing this scandal. Ironically, the skeptics found a forum on the Internet.

The U.S. has postponed its cap and trade bill, but many still expect the Environmental Protection Agency to regulate carbon dioxide (CO2) under the Clean Air Act, which is probably the evil of two lessers. The proposed legislation has stalled in the U.S. Senate and it is growing more unpopular as people and businesses realize that it has become more of a revenue stream for the government, enforced by electric utilities, than a tool to improve the environment. Indiana Governor Mitch Daniels summed up the legislation as a carbon tax on productive U.S. states to pay for failed social programs in the Northeast and California. The proud people of Indiana make things and they want to continue doing so. Not wanting to experience a second failure in Copenhagen this year, however, the Obama Administration desperately wants to do something too to look like it’s getting tough on climate policy.

A similar situation has unfolded in Australia. A cap-and-trade bill is the centerpiece of Australian Prime Minister Kevin Rudd’s agenda. The Liberal Party recently sided with the Rudd and his tax scheme. Given the limited amount of emissions in Australia, this is another tax with little environmental benefit. The conservative wing of the Liberal Party recently showed its disapporoval and six MPs stepped down from the bench in protest. The party then ousted its leader Malcom Turnbull in favor of Tony Abbott, who recently referred to the bill as a slush fund for political handouts.

Is a carbon tax the right approach? Is the science behind the Intergovernmental Panel on Climate Change (IPCC) sound or not? Will prices for carbon credits push a fragile economy to the brink? All of these issues and more will cloud the debate in Copenhagen.

Conserving energy and recycling materials makes sense. Operating in a socio-economic and environmentally sensitive manner is now an accepted part of the business plan for any mining operation. This month E&MJ offers an 8-page report on how this practice has evolved in the last 50 years (See Sustainable Development, p. xx). These practices also come at a cost and that cost is built into the final selling price of the commodity. The primary directive for any business, however, is to turn a profit. If taxes or shady credit trading schemes place businesses in one region at an economic disadvantage over those in another, then nothing has been accomplished. The world needs a common sense approach.

What many environmental activists are finding is something the poor people in third world countries have known all along. Like it or not, being green is a luxury. It has a significant price tag. Who is going to foot the bill? In the end, it’s the consumer. Consider the arrogance of Americans converting corn into ethanol for a clean burning fuel when people in the third world are starving to death. Think about the millions who will get sick from not having access to clean drinking water while misinformed politicians debate whether or not CO2 is a pollutant in Copenhagen. More people will perish from unaffordable electricity than those that will drown from the oceans rising 50 cm in next 50 years. The world needs to reset its priorities and it won’t happen in Copenhagen.