To What Extent Might the Current Approach to International Carbon Reduction be Described as Neo-liberal - Essay Example

?To what extent might the current approach to international carbon reduction be described as “neo-liberal”? Is there any alternative to the post-Kyoto approach? This essay evaluates current carbon reduction approaches and is divided into two sections. The first is an assessment of how these methods are related to idea of “neo-liberalism.” The other section is about strategies to combat carbon emission problems, as climate change has become one of the most challenging issues of recent decades. The situation is becoming increasingly precarious, and as a result, the approach of solving it has been one of major topics in recent international meetings and worldwide discussions. Through this discussion, a series of policies and agreements have been unveiled among all the developed countries. These agreements include the Montreal Protocol (1987), Rio Earth Summit & UN Framework Convention on Climate Change (1992), and Bali Conference (2007). Among all these climate talks, the Kyoto Protocol (1997) can be seen as the most important one and also has the most profound impact on carbon emissions. The Kyoto Protocol defines “allowable greenhouse gas emissions for each industrial country in terms of assigned amounts for the commitment period of 2008 to 2012” (Vrolijk, 1999, P115). There are 42 Annex I territories and countries that include Australia, U.S., United Kingdom, Japan, Canada, the European Union, and many more. However, even though the U.S. signed the treaty, they refused to ratify it. Australia did not ratify the treaty at first, but they agreed to do so in 2008 (Enzler, 2010). The Kyoto Protocol was set with a view to reducing overall emissions by 5 per cent under 1990 levels by the commitment period of 2008 to 2012 (Vrolijk, 1999, P116). The goal is to reduce carbon emissions for six greenhouse gases: carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, HFCs, and PFCs (Kyoto Protocol). The U.S. pledged to reduce carbon emissions by 7%. The EU as a whole aimed to have reductions of 8%. There were no constraints on developing countries (Enzler, 2010). Despite all of this, the impact of Kyoto Protocol had been limited. Overall, carbon emissions have increased by 4.2% for the period of 1990 to 2010. By 2006, global energy-related emissions had grown by 24%. The present carbon reduction approaches cannot be regarded as purely neo-liberalism since it mostly runs under market mechanisms, but is also impacted by political aspects. “Neo-liberal” is political-economic restructuring and often is called “structural adjustment programs” (Russ, 1999). Russ (1999) mentioned that “neo-liberalism has the features that include privatization, free-market, austerity, and comparative advantage.” Specific to carbon trading aspects, the features of a neo-liberal market should be as follows. First, the transaction of carbon and its related facilities, in addition to resources, should be owned by the private sector or multinational enterprises. Secondly, neo-liberalism means that the price of all factors that are related to carbon transactions should be set by the global market. These factors include market price, salaries of employments, shipping fees, etc. Last but not least, it includes the decreasing of public spending. This means that all services related to carbon trading shall be under market conditions and without government “interference.” The Kyoto Protocol was created for the purpose of carbon reduction emission obligations for industrial countries (Sander, 2010, P7). All the current methods are largely based on the Kyoto Protocol. Annex I countries have a goal to control carbon emissions by a certain amount at the end of the Kyoto Protocol. Thus, it gives these Annex I countries the opportunity to engage in the market of global carbon emissions. In this case, they are able to do transactions with flexible mechanisms through the Kyoto Protocol. These mechanisms include International Emissions Trading (IET), Clean Development Mechanism (CDM), and Joint Implementation (JL) (Sander, 2010, P9). These mechanisms are used to govern Annex I and non-Annex I countries through trading emission rights, getting credit for transferring carbon amounts, or participating in carbon reduction projects (Sander, 2010, P11). Trading among these countries is worth over $100 billion each year. The free market, private sectors, and international trading play essential roles in the global emissions trading scheme. The market of carbon trading effectively helps reduce carbon levels. However, carbon control still has many political factors involved. The limitations of the Kyoto Protocol are obvious. The U.S. and Australia did not ratify treaty and had too much flexibility in choosing whether or not to sign. The Bush Administration decided not to ratify the treaty in 2001, while the Australian Prime Minister at that time, John Howard, declined to ratify the agreement (Enzler, 2010). It wasn’t until the 3rd of December, 2007, that the then Australian Prime Minister, Kevin Rudd, ratified the Kyoto Protocol to take effect in Australia (Kyoto Protocol). Meanwhile, there were not any targets set for developing countries. Fast growing economies in the developing world, such as China, India, Thailand, Egypt, and Iran, have increased their need for emissions trading. Bjorn Lomborg (1998) mentioned in The Skeptical Environmentalist that global emissions trading cannot be a straightforward method to achieving Kyoto targets because these developing countries are not included in the plan. Although, he pointed out that the inclusion of all these countries into the current trading system would result in difficulties for the initial allocation of permits. These problems would arise because of the unbalanced requirements for developed and developing countries and also the inequality gap between them. Political influence and government interference has become an unavoidable aspect of the market. Most often, the market cannot be called a pure, free market. After the U.S. withdrew from the Kyoto Protocol in 2001 and the recession started in 2007, the demand for emission permits changed (Enzler, 2010). All these factors impacted the market enough to allow a re-allocation of resources. Thus, if we describe neo-liberalism in terms of the emissions trading market, it can be seen as an imperfect definition. Furthermore, it is greatly influenced by outside circumstances. However, the emissions trading scheme is not the only way to solve carbon reduction problems. There are some alternative ways to the Kyoto Protocol. For the purpose of meeting their target, governments use other methods besides carbon trading. Some of these methods include taxation, regulation, encouraging low-carbon life, etc. Taxation is the most effective method other than carbon trading. Factories, cars, and airlines are paying extra for their carbon emissions. Let’s look at the U.K. aviation industry as an example. The carbon emissions of the aviation industry to worldwide gas emissions are small, but it is increasing quickly according to the Conservatives’ (Mayora and Richard, 2007, P509) Greener Skies: A Consultation on the Environmental Taxation of Aviation. Aviation gas emissions now take up a very small proportion of the UK’s carbon dioxide emissions (around 6%). However, the emissions from the aviation industry have increased by over 90% in the last few decades. It is predicted with industrial growth, carbon emissions will increase continuously. Just recently, 1st November 2010, aviation taxes were increased; passengers need to pay up to 55 percent more tax on flights (Poulter, 2010). When the government strengthens carbon control and raises taxes for carbon emissions, they also require and enforce the private sector to improve their energy use. Energy conservation and efficiency has been increasingly gaining attention. Regulations have been put in place in categories such as building, cars’ energy, and the use of new energy. The regulators are balancing the price and standard of service to try and keep low environmental impact (Green, 2010, P5). One solution is to focus on pollution control facilities, which will effectively control environmental impacts; however, it will also raise prices. Hence, new energy use became increasingly popular among the private sector in obeying the rules and control fees. Therefore, increasing the efficiency of new energy will be a critical factor throughout later development (Green, 2010, P9). Governments are giving extra subsidies and grants for low-carbon behavior. This is to encourage companies to lower carbon emissions. For example, the government give subsidies to public transportation, and building and infrastructure construction. Also, they encourage people to change their lifestyle. The most noticeable culprits compared with other transport moods are private vehicles. These types of vehicles comprise a considerable proportion of the urban traffic system. With growing infrastructure improvement, people should pay greater attention to balancing their lifestyle in a low-carbon way. Meanwhile, a new idea of personal carbon trading is growing appeal. This would put the government in control of personal carbon levels. However, there are still a lot of uncertainties such as management difficulties and the risk of inequality, and as a result, this idea cannot be imposed in reality. In conclusion, current global carbon emission methods cannot be purely described as neo-liberalism. This is because the efficiency of the international carbon trading market runs under business mechanisms and is limited. Although the Kyoto Protocol’s carbon trading emission scheme created a market for carbon emissions, it can be traded as products for the purpose of controlling emissions. Political influence plays a very important role in this market and its surroundings can change very quickly. Meanwhile, this also gives the private sector the chance to participate in this market. This, in turn, stimulates the inefficiency of carbon reduction. Although, it makes negative impacts on some developing market structures. With the increasing awareness of changing carbon values’ importance, the reduction of carbon emissions will become more efficient for the foreseeable future. Alternative approaches other than economic ones can make an effort. Low carbon societies will have more sustainable development. People’s living conditions and lifestyle changes will significantly change, while the government takes the initiative in reducing carbon emissions through obeying world treaties and agreements with global organizations or other countries’ pressure. References Kyoto Protocol. (undated). Australian Government. Department of Climate Change and Energy Efficiency. Available from: http://www.climatechange.gov.au/government/initiatives/kyoto.aspx [Accessed 17 June 2011] Kyoto Protocol – Toward Climate Stability. (undated). Available from: http://www.kyotoprotocol.com/ [Accessed 17 June 2011] Read More