The following is an extract from a Reuters news agency report of a Greenpeace business conference. ‘Michael Langman of accountancy firm KPMG’s economic research unit in the Netherlands, which wrote a Greenpeace-commissioned report on solar power. . . , said energy from the sun was economically feasible but could not yet compete on cost.’

I do sympathise, and I hope that they have since managed to harmonise economics and costs better than I have.

Disuse can be wicked waste

None may actually say so, but some of our latter-day nature worshippers come close to declaring every ‘unsustainable’ life-style to be morally wrong. Surely humanity should (not forgetting ecocosts) seize any major net benefits that it can, even if their natural origins are finite. And yes, even if humanity ultimately fails to attain a renewably energised civilisation that is as rich as the exhaustibly energised one enjoyed today.

I agree that sustainability should be striven for but I also believe that it would be morally wrong not to draw on sources of net benefit solely because they cannot last ‘for ever’. However, I, as you know from the admirable illuminations of our cartoonist, am just a horny-handed (keyboard-hardened) son of toil.

There must be a better bargain

Following the Kyoto Conference of 1997 many political headmen seem to be sold on emissions trading as a counter to climate change by combustion-product CO2. The European Union, which must be one of the major players, ranks emissions trading high in its list of proposals for reducing greenhouse gas emissions by eight per cent in the current decade. There has been talk of getting some Union-wide CO2 trading in motion by 2005, to acquire experience before a broader international emissions market starts in about 2008.

Essentially, the idea is that emission-reduction targets or emission ‘caps’ will be set for, say, companies (I shall mention countries later). If they are well within their targets or below their caps they will be entitled to sell the ‘unused’ parts of their permits to other companies that miss their targets or burst their caps. This is a market solution to the problem faced by each country or bloc that is committed to reduce its overall emissions by a prescribed amount.

Enthusiasts for market solutions maintain that emissions trading is absolutely the best answer to that problem because of the certainty with which it offers an environmental outcome and because the market mechanism minimises the economic cost of that outcome. Less passionate advocates concede that the environment can actually be improved only by appropriate behaviour and technology, and that trading merely helps find the cheapest opportunities for improvement, in effect shifting emissions about geographically to meet overall goals.

A cogent critic of all this is John Lanchbery, a policy buff in the fields of energy, transport and climate change – you may savour the thought that he ploughs them all as an officer of the UK’s Royal Society for the Protection of Birds. Lanchbery argues that a cap-and-trade system is worth while environmentally and economically only if large numbers of companies or countries find their set limits difficult and therefore need to trade with companies or countries that cope easily. ‘There is no need to trade’, he says, ‘if the cap is not challenging’, for then the company or country can meet its target ‘at home’.

Maybe there is something to be said for reliance on market forces to redistribute emissions (somewhat reduced in aggregate) within the borders of a country or a bloc, but climatic change is no respecter of political frontiers. To counter such change, emission caps would have to be imposed and compliance would have to be enforced around a planet covered with disparate and often ill-disposed political entities. Voluntary agreements might be made, but how many nations or groups of nations would eschew the easy options and satisfy Lanchbery’s challenge criterion? Despite the much vaunted globalisation of trade, and the might of the global market, an efficient and effective world market in emissions permits looks unlikely to save the earth.

What a pity that the market solution experts have come up with a trading system that tends to shift aggregate-reduced emissions about, rather than one that spreads the most powerful emission-reducing technologies and the incentives to use them.