Comment: The international community, recognising that climate change is a serious global environmental concern, is currently meeting in Montreal. These negotiations will shape climate change policies for the next two decades or more. The main point of discussion, of course, will be to consider a successor to the Kyoto Protocol, which expires in 2012.
The main criticism from business of the Kyoto Protocol was that it was not global. Greenhouse gas emissions will ultimately distribute themselves uniformly throughout the atmosphere, no matter what their point of origin. However, the US and Australia, both major emitters of greenhouse gases, did not ratify the protocol.
Developing nations such as China, Brazil and India, did not have targets, yet emissions from developing countries are rising rapidly and, by 2050, will account for over 50 per cent of all such emissions.
The EU, which will negotiate on behalf of Ireland, has consistently taken a lead in addressing climate change. EU states accounted for 14 per cent of world emissions in 2000 and are forecast to fall to 8 per cent by 2050, while Ireland's share is significantly less than 0.1 per cent. While leadership is commendable, a unilateral approach is increasingly ineffectual in the face of growing industrialisation in non-Kyoto economies.
It is clear that, with a small and ever-reducing share of global emissions, the EU alone cannot solve the problem. Thus, even if the EU were to cut its emissions by 50 per cent by 2050, atmospheric concentrations would not be significantly affected, unless other major emitters also made substantial emission cuts.
Every emitting country has an undeniable impact on the international community and, consequently, a truly successful treaty must eventually include each of these emitting countries. What is required is a solution that is global, comprehensive, equitable, inclusive, sustainable, provides certainty, fosters innovation and is both environmentally and economically efficient.
Kyoto is one of the most important lessons in the field of environmental development that the world has seen. On the plus side, it demonstrated that the world agreed there actually was a valid concern about climate change, and that this problem must be addressed. It confirmed that emissions could, in fact, be reduced in an international, multilateral framework.
In addition, Kyoto offered a small welcome element of certainty, at least in the short term, to European business. Certainty will assist companies to develop investment programmes and direct research and development (R&D) where it is required. On the negative side, the protocol proved that no single trading bloc can solve the problem on its own. There are significant costs associated with emissions reduction like R&D, and the need to absorb these costs has made it difficult for Kyoto-compliant economies to compete with those that do not.
In short, an international co-operation regime that applies to only a limited number of countries imposes a substantial penalty on companies in those countries under Kyoto, harming their competitiveness and hence their capacity to contribute to social and environmental progress. Business is concerned that Kyoto has placed more than 12,000 EU installations, including more than 100 from Ireland, at a clear competitive disadvantage. In addition, Kyoto has also brought into focus the lack of clarity in environmental matters post-2012.
If Montreal fails to achieve a global and equitable treaty, the problem of rising emissions will remain, and the framework necessary for innovation will not develop. Many countries will be forced to relocate industries and employment to countries not included in the treaty, often with lower environmental standards, resulting in a loss of competitiveness, employment and a negative impact on the environment.
This is unfortunate, because there is a dynamic trading environment waiting to happen. There are exciting opportunities for the development of creative and innovative technologies to reduce emissions, without compromising the need for better living standards in both developing and developed countries.
Realistic incentives are needed to promote research to deliver efficiencies, alternative fuels and renewable energies. Substantial investment will be required to adapt and renew basic infrastructures, which can only be undertaken in a context of sustained economic growth. It is essential to establish frameworks to promote the transfer of technology between developed and developing countries.
Climate change is an issue of genuine concern. It deserves a global and sophisticated response that will meet environmental needs in a way that encourages participation, protects existing industry, while encouraging those who can provide solutions. It must be seen in the context of other urgent priorities: energy supply, economic development, quality of life, job creation, both in the near and longer terms. Any future strategy must marry environmental, social and economic realities and must include support for the most vulnerable countries and people, as well as measures for adaptation to climate change and for underpinning development.
This is a tall order, but Montreal will give the first indications if this can be achieved. If not, we face a much less certain economic and environmental future.
Brendan Butler is director of enterprise with the business and employers organization, Ibec.
