Michael Crichton appears to be unlike most thriller writers--he actually reads and writes science for enjoyment. Last month we had the pleasure of his company for a short while at AEI in Washington--I discovered that he is a man for the details. He wasn’t promoting his new book State of Fear, although I will: it’s a fun thriller and an informative read (and there are plenty of extra chuckles for policy wonks--and 50 pages of footnotes, other notes and bibliography). No, Crichton was at AEI to discuss the science of climate change. He has spent the past three years researching climate change and his conclusion about our impact on the planet is this: we still don’t know what’s up.
The mainstream community will no doubt say he’s a medic, the founder of ER, and a science fiction writer to boot. All true. Indeed, recent scientific reports have claimed that ‘all rational scientists believe that man is changing the climate.’ I understand that while this may be true, this latest proof is still awaiting publication, and even probably peer-review. One climate specialist I consulted even said, ‘this is press release science at its worst.’ I may not go that far, but while it’s claimed all rational scientists believe XYZ....I think it is rational that if you want policy change, it’s best to isolate your opponents by claiming they’re irrational. The problem for climate enthusiasts is that Crichton is engaging everyone and many are listening.
But I am not a climate scientist, and I am not going to contest the notion that man is affecting the climate. I will contest the scale since that dictates appropriate policy. But the science is pointless and largely irrelevant as far as policy for the next decade is concerned because the proof is weak and likely to stay that way. Rather than climate I’m going to focus on development policy--much in vogue at the moment with Tony Blair, Gordon Brown and this year’s G8 agenda. (Watch out for Blair’s Africa Commission report on Friday.)
While climate policy is something of a mess, development policy is even worse. After fifty years of failed aid we are still left with calls for yet more of the stuff (coupled with writing off previous failed loans--Gordon Brown’s latest initiative, and the Chirac/Tobin Forex/Airfuel tax). These calls often come from the most noble of motives--to genuinely help--but many come from those who benefit from the policies enacted. They want us to forget how they promised that this time (like all times past) loans would be paid back because development aid could, and would, work.
Many in the aid business obfuscate the reality that short run relief, as was seen in the tsunami zone, helps enormously. I was in Sri Lanka in January, and although there was waste, and bureaucratic mess, and the wrong interventions were followed to combat malaria (as I found to my personal cost), there is no doubt at all that the presence of aid agencies and NGOs helped. But short run alleviation of catastrophes is one thing, sustained aid another.
Chronic aid remains, even after devastating critiques by many economists--notably Lord Peter Bauer--and great books by aid insiders. (The Elusive Quest for Growth, by William Easterly, formerly of the World Bank, is my personal favorite; indeed Easterley’s book is so devastating he was forced to resign after he pointed out that most Bank funded projects failed to meet even their easiest objective). Regardless of devastating exposes like this, aid is back in fashion. You can blame many things for this, but two in particular stand out as the main culprits--9/11 and AIDS--both controversial issues and both have led to vast sums being either expended directly or indirectly.
AIDS is a terrible problem for millions of people, so that even aid skeptics accept that to stop the loss of much of a generation, to prevent the "lord of the flies" visiting upon places like Botswana, that the rich world must help.
I am certainly not qualified to discuss whether expenditure following 9/11 has been worthwhile, much has been wasted (my AEI colleague Veronique de Rugy’s paper on U.S. Homeland Security documents some very interesting waste), but that doesn’t mean that the majority has not been necessary. What I can say is that 9/11 may take aid in a dangerous direction--(USAID--established by President Kennedy to win the cold war by other means--has become even less transparent than before, acting much like an arm of the State Department. Transparency is urgently required).
That is why aid has resurfaced, but why did it survive to resurface?
A near universal refrain, much like we used to hear about socialism, is that ‘aid just wasn’t done quite right before, but it can be done better’--a refrain repeated by the UN Millennium Development commission. And of course, individual projects may work (for example, many AIDS projects do in fact provide benefit--relief for orphans, treatment for the sick, sex education that works). But the problems with aid are systemic . . . Those within the system do not really want the problem (lack of development, or failed health systems) to disappear entirely, since they will do themselves out of a job. 95% of malaria expenditure for USAID does not buy any practical intervention (only 5% buys nets, no insecticides and no drugs). 95% is spent on technical assistance. This is short for helping Africans ask for more money from other places.
When 75% of the aid never leaves the U.S. (And just in case you weren’t aware there isn’t much malaria in America) and when malaria rates are increasing in every major project area that USAID is involved with, there is little doubt that failures of aid are sustainable. One of the more worrying attributes of aid, hinted at in yesterday’s excellent article in the Times by Rosemary Righter, is that aid takes business in the wrong direction--on malaria it’s very upsetting.
Western oil companies, not normally shy to controversy, simply buy bed nets for malaria control--they do not buy insecticides or other interventions. Its not that they have been cowed into such behavior, but where it’s not central to business output, on the whole business will not fight stupid policy.
Ironically it’s the dirty businesses that are not as susceptible to western media attacks (African mining companies), that have instigated the best malaria control programs. KCM in Zambian copperbelt--75% reductions in disease for hundreds of thousands. Meanwhile all the good aid talkers are overseeing a rise in disease.
But I digress, given the failure of aid, it is important to remind ourselves what makes development.
What makes development
Hernando De Soto has more than anyone else in the past two decades solidified and articulated the main reason for growth--in short why titling and enforcement of private property rights was vital to our development. And it’s the same for those in currently poor countries. Although this is well known in the think tank world, it has been slow to permeate most governments’ policies. But PPR titling and enforcement (the rule of law as it affects property) is the single most important institution of a free society--more so than press freedom, limited government expenditure, limited police powers. Even those advocates of PPR, rarely stress this enough--but it’s true, and as if to reinforce this point the reverse of what is desirable has been happening in Zimbabwe for the past four years.
Zimbabwe is imploding
While press freedoms have been virtually extinguished, government expenditure and inflation have skyrocketed, over 75% of those looking for jobs cannot find one, the place really didn’t begin to collapse until the erosion of private property rights in 2000. This was the trigger for a lack of confidence--without property rights (initially just over 4,000 farms, providing less than 15% of the economic value) there was no confidence in contracts, loans and everything imploded from then. The devastation wrought is awful to behold (I was there in November, on which an AFM report will be published on Friday, and can be pulled from our web site).
So while it’s the institutions of a free society (especially PPR) that developing countries need to worry about, they are often side-tracked with aid; their elite are bribed to be concerned with western issues--pesticide pollution and genetically modified food issues come to mind--and of course climate change.
Kyoto--former capital of Japan and not much more
The Kyoto Protocol has a lot of power in emotional/image terms. Its costs may well be real running into billions of dollars, its benefits miniscule (slowing emissions by a tiny fraction between now and the end of the century), but then starting small (even if expensive) is, in the real world of policy, probably the only way to begin an international energy restriction policy.
But where are we today?--Sweden and UK will probably comply with their target (the German numbers I am told are all over the place), the rest well all are failing, some by over 50%. Can all this failure really be just that America isn’t doing its part? I doubt it. In the real world of real sovereignty, without overwhelming evidence of harm, action just isn’t warranted.
America and Australia are not going to put themselves at any kind of disadvantage. And internationally, U.S. policymakers are serious about engaging the developing countries in moves to alleviate any perceived man-made problem. China’s energy use is rapidly increasing, as is India’s, Brazil’s, and other aspiring nations’.
When Kyoto’s lifespan ends in 2012 we may well see better compliance from European nations than now (will the target be hit? I doubt it), the U.S. may be 50% above Kyoto target, but by then China will be emitting almost as much as America and will not be held back.
Russia may have ratified Kyoto but it remains to be seen whether they are serious about doing anything else other than selling carbon credits. Vladimir Putin seems to be re-nationalising Russia’s oil industry--to make Mother Russia, or its officials at least, powerful once again. From all accounts Mikhail Khodokovsky at Yukos was the best of the bunch of Russian oil barrons. His arrest and the collapse of the rule of law in Russia is even more worrying for international community support for democracy than what is happening in Zimbabwe. I must be even blunter than normal--trusting the Putin administration to be doing something for the planet by signing up to Kyoto is as laughable as it is insane.
Kyoto is Dead
My coauthored chapter in the Liberal Utopia book really deals with a non-climate topic, it addresses freedom and why it counts for environmental performance almost as much as it does for economic growth (I’ve already discussed the key institutions of freedom). What the chapter essentially argues (backed-up by some boring statistical analysis) is that freer countries use less energy and emit fewer emissions per unit of growth than more repressed nations. This holds for comparison of U.S./EU/Japan with Russia, China, India, South Africa and Indonesia (and Brazil can be added, not in the chapter).
In other words, for the same levels of wealth a free country will emit less than a more repressed one (of course the rub comes since richer countries have much more growth and emit more in total).
But I sincerely believe that all countries will develop, even in Africa. Our oppressive trading policies, and their debilitating trade structures and myriad policy failures already do too much to harm their development, we should not try and curtail their use of energy. And at the various environmental UN meetings and WTO meetings I’ve sat in at, the poorer countries will not agree to any targets and timetables. And remember the U.S. Senate voted 95-0 to not act without the developing world.
However, we can encourage them to move in a better direction for development--and accelerating this process can come through freedom and adoption of new technologies. This will happen not so much via direct wealth transfers, say from U.S./EU Government to the Russian Government, but by partnerships of Exxon/Shell with Lukoil, American Airlines/Lufthansa with Aeroflot. International and domestic public policy experts should be pushing for the opening up of energy sector (lowering domestic protection such as removing subsidies from dirty coal production), as well as opening up partnerships in the heavy industries, so that the more efficient management and technology of the U.S./EU firms will lower emissions (and emissions of noxious pollutants such as Sox and Nox, and not just CO2, which I refuse to call a pollutant since it’s the key chemical input to photosynthesis). And while higher energy prices (through sustained taxation) have a similar effect in improving technical efficiency, they often harm overall economic efficiency.
Reform of the ownership structures of businesses is probably the most important step in changing the PPR structures. In addition, openness to currency movements, removal of non-tariff entry barriers, and removal of inefficient pricing would help too.
I think the data support this as we tried to explain in the chapter.
But it’s also important to acknowledge why we are even entertaining the idea of doing anything about climate change. You may be worried that the planet will overheat so badly all life will be extinguished, but I think most people’s perceptions are that it’s just going to get hotter and our environment will be more damaged, with more flooding or more droughts, or more shortages or more disease. And that the worst affected will be the poor.
Well it’s true the poor are always the most badly affected by any disaster (Haiti death vs. Floridian death last Hurricane season), and if climate change leads to more floods or disease then perhaps we should do something to protect the people of countries like Bangladesh. But as Bjorn Lomborg’s Copenhagen consensus has neatly demonstrated, even if you care about the poor, acknowledge they will suffer from man-made climate-enhanced events, climate change policy action is still a low priority. When it came to policy interventions, serious action on restricting energy use fell behind AIDS/malaria/malnutrition/water and trade policy. In fact climate change policies ranked last.
The reason is that the poor are already affected by disasters and most of them are natural and tragic. Their governments, and ours, are already failing to alleviate their suffering for many reasons (most importantly that aid is often counter-productive, or just fails, or where it works we don’t spend enough). But regardless of the veracity of their claim--Lomborg’s consensus group was attacked for placing such a low weighting on energy restriction at a time when defenses for climate policies were already becoming so tangential anyway.
With increasing desperation to appear relevant, the IPCC has included infectious disease estimates into climate change costs. I cannot really comment on the other aspects of the figures (oh well, one I will--summer 2003 was very hot, lots of French elderly folk died from over-heating, but perhaps, rather than the WHO blaming man-made climate change, the French authorities had used more energy, put AC units in some of the hospitals, they might have saved more lives).
Anyway, the alleged climate change induced increases in malaria are an interesting phenomenon. The WHO and RBM like to blame the climate for some of the 12% increase in malaria since 1998. Why? Because their priorities and policies are so ridiculous and failing. (I can go into this ad nauseum if anyone likes).
The individuals at WHO and other agencies do the best they can, at any one moment in time. But ultimately they epitomize the job maintenance scheme of so many agencies--failure ensures their longevity. After all, what happens to malaria control officers when the disease is eradicated? And, of course, while an intelligent individual is likely to be flexible enough to move to another job, few can truly rely on an agency putting itself out of business.
The point of all this is to say that the IPCC and climate proponents are using any story they can to claim we need to control emissions. They are co-opting any agency that likes this message. To me this is a sure sign of an agency in panic.
But while I disagree with Lomborg that the policies promoted by his consensus approach will work, I think his method of prioritization is about as good as one can get.
Climate change should not be a high priority for Western nations who want to help developing nations. And it’s certainly not worth it to even think about action by the poorest nations. Freeing up economies around the world will make them more efficient, and sooner or later they will develop--and we should welcome that for our sake as well as their own.
Man’s impact on the climate may one day become dangerous. Given the real costs of energy restrictions and the uncertainty over harm, serious energy restriction policies are unlikely to take place anytime soon. Unlike energy restriction, freeing up economies will have almost no downsides, and should be a higher priority (as CC implicitly suggests with its third ranking of trade liberalization) than energy restriction.
Freedom is really the best no-regrets policy for poor countries.
Roger Bate is a resident fellow at AEI.