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Climate change and the tragedy of the commons (April)

  MINT, Delhi, Tuesday 22nd April 2014 Scientists have for long warned of the costs that a warmer planet would impose on the living standards of many, or even the survival of some. Last week witnessed another such warning, this time from the Intergovernmental Panel on Climate Change (IPCC) that released the last of a series of working group reports assessing the impact of carbon emissions on the earth’s climate.

 

Following the previous report that observed that “the effects of climate change are already occurring on all continents”, the current one has focused mainly on the prospect of mitigating the effects of climate change already underway. The scientists behind the latest report believe that the world can safely limit global warming to within the famous threshold of two degrees Celsius (or 3.6 degrees Fahrenheit) from pre-industrial levels “only through major institutional and technological change”. Given the grave predictions of potential harm that awaits the lives of billions around the world, concrete action from the community of nations to deal with the problem would be in order. However, this has eluded the world for long.

 

In late 2012, when the first stage of the Kyoto Protocol—adopted after years of lazy negotiations between governments—came to an end, greenhouse emissions had increased by about 60% from 1990 levels as against the target of reducing emissions by 5%. Today, countries remain far from reaching the level of emission cuts required to stay within the two degree threshold. IPCC has called for rich countries to reduce their emissions to half of their 2010 levels by 2030, and developing countries to maintain emissions at their 2010 levels to achieve the target. Given the growth ambitions of the developing world, and the energy supplies required to maintain current living standards in the West, the severe cuts demanded by scientists clearly look unlikely. In fact, the rate of increase in emissions has increased over the past decade compared with the previous three decades. At this juncture, the relevant question to ask is why the world today remains complacent in the face of an imminent threat of catastrophic destruction. In a famous 1968 paper The Tragedy of the Commons, Garrett James Hardin, an American ecologist, explained that common resources open to exploitation by large populations tend to be poorly managed. In the absence of private incentives—available only under a system of individual ownership—users of common resources lack the economic motive to engage in sustainable exploitation of common resources.

 

Today, climate provides perhaps the best example of a resource under common ownership exploited for private benefits, but with absolutely no regard to the unsustainable proposition that such a setup offers. But more importantly, climate change also exemplifies the “Coasean” problem of social costs inherent in the absence of property rights—whereby the absence of clear and enforceable liability rules allows polluters to unload the costs of their action onto third parties. For years now, many developing nations have maintained that imposing emission controls on them would be unfair since rich countries have been the major polluters for long now.

 

With countries such as Maldives and Bangladesh predicted to bear the major part of the cost of rising sea levels, the developing world has a point. But while rich countries such as the US have historically been the major contributors to world pollution, it should also be clear that countries with rapidly growing economies—such as China and India—are fast catching up with them. While it may appear fair to ask India and China to do their bit—after all they also live in this world—it is the unwillingness of developed countries to adhere to a formal mechanism to curb emissions that is at the root of the problem. To say that developing world emitters are holding up international efforts is to blame the victims. In per capita terms countries such as India and Bangladesh emit far less than the US.

 

In the absence of international coordination among governments, owing mainly to the lack of “private” incentives to seriously address the problem, the world will continue down the path of ignoring the threat of climate change. Unfortunately, like most commons that are indivisible, the atmosphere too is consigned to over-exploitation and, ultimately, exhaustion. There is ground for pessimism in the short-run as countries pursue their narrow interests. But in the medium term, a solution is likely only through international cooperation and coordination.

 

MINT, Delhi, Tuesday 22nd April 2014