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Copenhagen: It's all about energy

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17 December 2009 08:39

Peter McCawley is a Visiting Fellow at the Indonesia Project, ANU, and former Dean of the ADB Institute, Tokyo.

One central issue needs to be borne in mind in attempting to follow the tortuous arguments and negotiations about climate change in Copenhagen – energy.

Stripping away a great deal of the fuss, much of the debate between rich countries and poor countries is about access to energy. And basically, the non-negotiable position of most of the poor nations is that they must be allowed access to vast amounts of the stuff.

The figures are stark: in 2006, rich countries across the world consumed close to 10,000 kWh of electricity per person. In contrast, poor countries used around 300 kWh per capita. (The figures vary from country to country.  Detailed data is available on the World Bank 'Quick Query' website.) Faced with this situation, most poor countries are just not interested in suggestions that they curb their energy use. If there is a problem, they say, it is caused by consumption in rich countries. And, they say, it is up to rich countries to find solutions.

There are various aspects of the negotiations in Copenhagen that poor countries are interested in, but the most important one is finance. Poor countries want to know how much money rich countries are ready to provide to help them tackle their energy needs. Coal, they note, is generally the cheapest way of producing electricity. If rich countries want poor countries to use alternative and more expensive technologies to produce clean energy, then rich countries must pay for it.

What sort of sums are we looking at? It is useful to bear in mind that total foreign aid flows from all western OECD countries at present amount to around $120 billion per annum. It is also useful to remember that the cost of responding to the recent global financial crisis in rich countries is variously put at somewhere between $2,000 to $4,000 billion.

The sums mentioned by reliable observers as appropriate transfers from rich to poor countries vary from around $100 billion per year up to $400 billion or more. In other words, it seems that assistance (or some other forms of financial transfers) from OECD countries to will have to at least double in order to satisfy developing countries – and quite possibly, will have to rise by yet another $100 billion or so again.

So these are the key issues – access to energy, and money. And both issues seem close to intractable. On one hand, in the absence of large changes in technologies, it seems hard to imagine any scenario where poor countries could gain access to the energy they want without total global carbon emissions continuing to rise. Of course, it might be possible to make room for large increases in energy consumption in poor countries if rich countries were prepared to cut back their own energy use sharply. But pigs will fly before this happens.

On the other hand, very large financial transfers will be required to induce poor countries to move away from current emission-intensive coal technology. And the chances that rich countries will be prepared to provide the additional needed transfers seem very slim.

Whatever the outcome of the Copenhagen conference in the next two days, the impact will be slight unless these two issues – access to energy, and money – are properly addressed. But it seems certain that poor countries will not give up their right to energy. And it seems unlikely that rich countries will be prepared to provide the additional $100 billion or $200 billion or so needed to finance new technologies in developing countries. For the time being at least, the outlook is not encouraging.

Photo by Flickr user thomas.merton, used under a Creative Commons license.

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