Crunch time on climate change

Celebrations are in order. Seven years after it was signed, and despite bleak and dispiriting moments along the way, the Kyoto Protocol came into force on 16 February. Always a flawed and modest step - rendered still more so by the withdrawal of the USA from the process - the Protocol is nevertheless a vital milestone in the effort to tackle the threat of climate change.

The enormity of that threat is becoming ever more apparent. A major scientific conference in Exeter has confirmed that the world is perilously close to several serious, and potentially irreversible, tipping points (see pp 17-21 ). Some threats - such as melting of the polar ice caps, significant rise in sea level, abrupt shutdown of the Gulf Stream, loss of the Amazon rainforest, widespread drought and loss of ecosystems - have long been recognised but are now seen as increasingly likely. Others have just started to appear on the radar - notably the acidification of the oceans by dissolved CO2, which has the potential to devastate the marine food web.

As the science becomes more compelling, so the arguments of the so-called "climate sceptics" are shifting to the economics (see p 35 ). OK, they argue, climate change may be happening, but is it really that bad? Can't many of the problems be met by adaptation policies? Isn't money better spent solving today's problems rather than tomorrow's? The most intellectually dishonest argument of all is that targets under Kyoto are too weak to make any significant difference to the climate - and so are not worth bothering with.

In the face of such arguments, policy-makers and progressive Governments need to keep a clear head. Of course, reducing greenhouse gas emissions will carry a significant economic cost - but this should be manageable. The Treasury has concluded that meeting the Government's target to cut CO2 emissions by 60% by 2050 will cause the UK to lose just six months' economic growth over the period.

Such top-down analysis obscures the fact the costs may be very considerable for some sectors. The unavoidable conclusion is that the most polluting industries, such as aviation and coal production, must deliver radical improvements in technology or face serious constraints on growth. The upside is that many other sectors of the economy could prosper.

In the near term, the main economic concern is one of competition between carbon-constrained economies and the rest of the world. This is why Prime Minister Tony Blair is so keen to use this year's G8 Presidency to draw China and India into a post-Kyoto framework - and, hopefully, wring some concessions from the Bush administration.

Mr Blair's analysis of the challenge is compelling, and his efforts on the global stage deserve support. Unfortunately, his pretensions to leadership are increasingly undermined by his failure to deliver any reduction in the UK's carbon emissions since he came to power. The Government argues that emissions have not fallen because of its success in stimulating economic growth - a defence which falls woefully short of acknowledging that very significant absolute emission reductions are needed.

The Prime Minister's timidity in the domestic arena was neatly encapsulated in February by his comments on the difficulty of tackling the explosion in cheap air travel (see p 35 ). But he has proven equally averse to challenging the mainstream business lobby.

As a result the Government has gone to war with the European Commission over its allocation under the emissions trading scheme (see pp 40-41 ). The showdown threatens to undermine the new carbon market, hurt London's emerging climate services industry and sour the UK's G8 and EU Presidencies. Yet the stakes involved are tiny. The disputed allocation is worth just €50 million per year at today's carbon prices. The power generators - who would bear the brunt of tighter allocation - already stand to make hefty windfall profits from the trading scheme.

Mr Blair should listen to Adair Turner, former director-general of the Confederation of British Industry, instead of his successor Sir Digby Jones. Sitting on an international taskforce on climate change, Mr Turner admitted that "the business lobby groups about the slowest ship in the convoy - not least because the fast ships won't threaten to leave the membership. Frankly, this does sometimes require a Government to be tough with business organisations."

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