by Iain Murray
July 28, 2008

In the seventies and eighties it became trendy to talk about the global gap between "North" and "South," in the sense that the rich countries that are mostly in the North of the planet were exploiting the poor countries to their south. That was actually an exercise in blame deflection, with the poor countries blaming the North for problems that arose from their own poor choices, such as a predilection for socialism and corruption. Today, however, there is another North v South conflict developing. This time, the cause is global warming, and the complaints of the South deserve much more consideration.

Ever since the Rio Earth summit in 1992, it has been generally agreed at the international level that global warming is a problem, that greenhouse gas emissions are the cause, that something needs to be done about reducing them, but that different nations face different challenges in doing so. The result was the Kyoto Protocol of 1997, which committed developed nations - the North - to reducing emissions by 2012, while exempting less developed nations - the South. The reasoning was that economic growth and greenhouse gas emissions are very strongly linked. To insist on developing nations reducing their emissions would essentially be to insist on keeping them in poverty.

However, this was unacceptable to the United States. Even before the Kyoto Treaty was signed, the Senate voted 95-0 in favor a resolution that said, "The exemption for Developing Country Parties is inconsistent with the need for global action on climate change and is environmentally flawed." The resolution also said that, "the disparity of treatment between [developed nations] and Developing Countries and the level of required emission reductions, could result in serious harm to the United States economy, including significant job loss, trade disadvantages, increased energy and consumer costs, or any combination thereof."

This has been the Bush administration's position ever since, and slowly but surely, it has won the rest of the developed world round. That is why the G8 this week announced that, "This global challenge can only be met by a global response, in particular, by…contributions from all major economies." In other words, they expect the developing nations to do their bit. If the necessity of emissions reduction is taken as a given, the position successively adopted by the Senate, Bush Administration and now the G8 makes sense.

Indeed, it is essential that the developing world reduces emissions substantially if any sort of significant reduction target is to be met. China is now the world's largest emitter of greenhouse gases, ahead of the USA. Indonesia is third and India fourth. As time goes on, these countries' emissions will dwarf those of the developed world, even in aggregate going back to the Industrial Revolution. If emissions are indeed a problem, the developing world will have to reduce them.

However, this brings us back to the problematic link between emissions and growth. The developing world has put its cards on the table. In a counter to the G8 statement, the G5 - China, India, Mexico, Brazil and South Africa - said bluntly that it was not going to agree to emissions reductions and that it was up to the developed world to follow that course. They said the developed nations must "take the lead in achieving ambitious and absolute greenhouse gas emission reductions" and that they must take "into account historical responsibility and respective capacities as a fair and just approach."

And you know what? They have a point. It is surely unjust for the developed world to deny the developing world the chance to develop in the most cost-effective way possible, which requires fossil fuels. At the same time, developed nations cannot bear the whole cost of emissions reduction alone. Yet attempting to force the developing nations into emissions reductions by trade barriers or withdrawing aid would be eco-imperialism. The emissions circle simply cannot be squared with national sovereignty, economic development and poverty reduction.

So we are tied in a Gordian Knot. If global warming is indeed a risk to be managed, we shall have to use lateral thinking and cut through it. We should be thinking not so much about targets for emissions reduction, but under what circumstances such reductions would become attractive enough that they would be uncontroversial.

First, the developing world would need to be developed enough for its citizens to value environmental improvement (in the language of the economic literature, they will need to have passed through the "environmental transition.") This requires growth. Secondly, the developed world will need to have demonstrated that "clean energy" technology can be cost-effective. It has yet to do this in any meaningful sense.

Until these two conditions are met, emissions reduction targets are not a credible way of managing global warming risks, but a recipe for impasse. Instead, we should look to mitigating potential consequences, by investing more in adapting to a changing climate and by increasing the resiliency of the global economy, which, once again, requires growth.

Last time, the North v South debate allowed despots in the developing world to use an illusory moral high ground to get away, literally, with murder. Today, the modern version of the debate risks the developed world using an illusory moral high ground to force its will on poor nations. It is time to abandon the idea that all international negotiations on global warming have to be about emissions reduction targets. That approach has failed for sixteen years. North and South need to think again.

Iain Murray is Director of Projects and Analysis at the Competitive Enterprise Institute and author of The Really Inconvenient Truths, new from Regnery.