Institute for Environmental Studies IVM 1

1
Globalisation, environment and sustainable
development and the Developing Countries
Joyeeta Gupta
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Structure

• Geopolitics key features
• Environment and development the dilemmas
• Sustainability dilemmas of countries
• Globalisation and impacts
• Distribution of environmental space and the
  climate change regime
• Towards constructive cooperative relationships

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Geopolitics - 1 The world

• 196 countries
• 35 very rich countries
• The rest from very poor to high middle income
  countries

The South
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Geopolitics - 2 Negotiating blocs

• G-77
• OECD
• Rest of the world

OECD
ROW
G-77
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Geopolitics - 3 Relations

• Environment
• Development
• Peace
• Finance and debt
• Trade

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The key goals

• How to achieve sustainable development?
• Theory says -- by leap-frogging and learning from
  past mistakes! (Mistake optimism argument
  problem defined in terms of technology, easy to
  correct incrementally, gives direction,
  confidence in Norths leadership, reconfirms
  possibility of unchanged lifestyles for rich)

N
Environmental pollution
S
Development
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Environment and development

• However
• the inverted U curve does not yet hold for global
  problems,
• delinking may be followed by linking,
• imitating production and consumption patterns of
  the North might not solve the problem
• avoiding mistakes is costly

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Southern Sustainability Dilemmas

• Development modernising without westernising?
• Poverty- I surviving without squandering?
• Poverty-II begging without mortgaging?
• Privatisation-empowering private sector to solve
  public problems
• Ecospace equity without responsibility
• Economic short-term gain without long-term loss?
• Negotiation-I negotiate pragmatically without
  being corrupted?
• Negotiation-II empowering G-77 without being
  weakened

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Northern Sustainability Dilemmas

• Development further development without
  sacrificing?
• Wealth - 1 spending without squandering?
• Wealth - 2 assisting without compensating?
• Wealth - 3 polluting without paying?
• Privatization empowering private sector to solve
  public problems
• Ecospace property rights or human rights
• Economic short-term gain without long-term loss?
• Negotiation-I negotiate pragmatically without
  being committed?

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Globalisation

• Media coverage
• Explosion of foreign direct investment trade
• World wide web
• Integrated Financial markets
• Changing labour migration
• Common governance system
• Greater wealth for all

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But, globalisation can also lead to
Gaps, cleavage, exclusion

• Closed markets
• Disempowerment
• Debt
• Unequal treaties
• Marginalisation
• Dependence

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The polluter pays principle

• The polluter pays
• The money is used to compensate and/or clean up
  the pollution
• Adopted by the OECD
• Not adopted at international level

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Ecospace environmental utilisation space

• There is a limit to how much resource extraction
  and resource pollution can take place
  globally.The environmental utilisation space is
  limited.
• The question How should this limited space be
  divided among countries and peoples?

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The key issue in the climate change regime is
thus

• How does one allocate emission rights?

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The Climate Regime

• Key dates 1992, 1995, 1997, 2001!
• Key aim
• stabilise GHG conc.
• divide responsibilities
• set up cooperative mechanisms like TOT, GEF, AIJ,
  JI, CDM, ET

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Kyoto Protocol
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Possible Instruments in the Climate Change
Negotiations

• Emissions Trading
• Joint Implementation
• Carbon Taxes
• The EU bubble

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Emission Trading theory

• Fix total emissions divide it among parties and
  allow them to trade.
• Effective because the total emissions are not
  exceeded
• Efficient because countries can sell their
  excess and buy when they have shortage.

• The main problem is how to allocate among
  parties
• On a per capita basis
• On grandfathering basis
• On something in between
• The other problem is how feasible is it?

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Joint Implementation Theory

• Definition Allow a foreign investor to invest in
  another country. The GHG emissions reduced as a
  result are then attributed to the foreign
  investor. This allows the foreign investor to
  seek the cheapest way to reduce emissions.

• Problems
• Base lines
• How to share the credits
• Is it additional?
• Is it neo-colonialist?

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Carbon Taxes

• A tax is added on to the product. This increases
  the price of the product and thus encourages
  efficiency.

• The problem is that each country has different
  fiscal systems and adopting a uniform carbon tax
  is not very easy.

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The European Union Bubble

• The EU has adopted a common target which is then
  divided among member countries. At present the
  division has been influenced by the tryptich
  method and bargaining.

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Current situation in the climate change regime.

• Joint Implementation among developed countries
• Clean Development Mechanism between developed and
  developing countries
• Emission Trading between developed countries
• The Bubble within the EU

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So

• What do you think is the most elegant, efficient
  and environmentally effective method to reduce
  the emissions of greenhouse gas emissions ?
• If the total amount of greenhouse gas emissions
  is seen as 200 units and there are 200 countries
  of which 35 are developed and the rest
  developing, how should the emissions be divided
  among countries?

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Globalisation

• Positive side
• one world
• everyone richer
• global communication
• one system of trade

• Negative side
• two worlds --a rich and a very poor
• one included, one excluded
• privileges for some

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Shifting paradigms
JUSSCANNZ
The EU
waiting for
waiting for
the key DCs
JUSSCANNZ
N
The South
waiting for
S
the North to
act
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EU and its contribution

• Plus
• emissions below 1990 levels
• potential space from some new EU countries
• Lots of policies in place, including with
  stakeholders
• ET internally

• Minus
• what happens if coal lobby in Germany is strong
  and anti-nuclear lobby in France is strong?
• What about new entrants without targets and the
  right to grow of less developed EU countries?
• Policies in general implemented weakly.

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India Is it making any contribution?

• Since 1990
• Liberalisation in 1991
• Unbundling of electricity boards
• Establishment of pricing Commissions
• Renewable energy programmes
• Liberalisation of cement, aluminium, iron and
  steel sectors

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China Is it making any contribution?

• Has decoupled its energy use from GDP
• Is undergoing major transformations
• Is closing down small, inefficient power plants
  and end-use plants
• ..

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China and India Afraid to make commitments

• Data base very weak
• In a state of structural transformation
  difficult to predict future
• Some parts advanced, others not

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Conclusion Towards constructive solutions

• Law Working towards rule of law globally
• Politics By developing democratic principles
  globally
• Society By investing in human health and
  education world-wide
• Economics By internalising environmental costs
• Technology By investing in new technologies