Overview

Whether the world ever ratifies the Kyoto Protocol is quickly becoming irrelevant. Few European nations that ratified the convention are reaching their targets. Meanwhile, developing countries are not required to comply with Kyoto--and say they will never participate in targets and timetables, since such restrictions would retard their economic growth. Because developing countries are likely to emit well over half of future greenhouse gases (GHGs), limiting emissions while fostering economic development would appear to be a more promising strategy.

Stabilizing or even reducing global concentrations of GHGs will require two closely related actions: research and development to create new technologies that are more energy-efficient than those now used in developed countries; and effective action to spread these technologies to developing nations. Until these new technologies are available, significant savings in energy use and carbon emissions could be achieved by transferring current Western technology to developing countries. These actions will not merely reduce global emissions, but will also improve living standards and hope for the future in developing countries.

However, significant barriers impede the transfer of existing and future technologies, and thus the improvement of overall economic conditions. One of the most important is lack of economic freedom--marked by restrictions on personal choice, voluntary exchange and open markets The prospect of simultaneously reducing poverty, increasing energy efficiency and cutting pollution makes a compelling argument for developed countries to take a new approach to forging partnerships with developing countries: one centered on improving economic freedom in a way that encourages smoother technology transfers and faster economic growth.

Developing countries know increased energy use is a prerequisite for the economic development needed to combat the major problems they face today, including poverty, disease, famine, unemployment and violent conflict. Can improved technologies help them reduce energy use per unit of economic output, and thus lower greenhouse gas emissions--to produce greater wealth, health and environmental quality? If so, what policy changes are necessary to encourage technology transfers and increasing partnerships with developed countries?

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Roger Bate is a visiting fellow at AEI. David Montgomery is vice president of Charles River Associates.