Sustainable socio-economic development is a triple conflation of the environmental, social and economic goals reflected in our policies, objectives and strategies with minimum trade-offs. Today the detrimental impact of global economic development that ignored the cost of environmental damage is climate change that threatens our very existence on the planet. CHOGM, 2009, has become a very important dress rehearsal (attested to by the non-Commonwealth attendees) for the delegates as they hone their positions on climate change in preparation for the upcoming meeting in Copenhagen.
Two major stumbling blocks exist. One is how to compare countries’ deleterious effects on the global climate; should it be by green house gas emissions per capita or absolute measures? The other is that developed countries have been the largest spoilers of the ’village green’ through their high fossil-based energy-consuming economies and a restriction now on carbon emissions for developing countries could be seen to be a severe blow to their (the latter’s) development, albeit along conventional lines. The largest growth in emissions today is from the developing countries, mainly from goods made for export to the developed world (e.g. T&T’s energy exports).
Minister Mariano Browne on a recent television programme told us that though T&T was among the top five polluters in the world as measured by green house gas emissions per capita, we cannot afford to damage our economic development (building smelters?) by restricting energy sector development in order to constrain emissions. The justification for his position, as PM Patrick Manning expressed years ago in Barbados, is that the absolute amount of green house gases that we produce is small if compared with the USA or China, and we live off fossil-based energy.
But China will use the converse argument, that its pollutant rate per capita is small given its population, hence comparative absolute rates are not equitable when taken over the activities of its whole population.
All countries accept that current fossil fuel-based economic development is seriously damaging the environment, and that non-polluting energy sources are at present expensive.
Much investment is needed in renewable energy research and development, and in restructuring our energy systems. However, the cost of damage to the environment, the cost from the production of greenhouse gases, has not directly entered into the cost equation of economic and social development. Most of the easy-to-get-at oil has been produced and to satisfy the expected demand for oil exploration and production costs have increased as has the risk. These additional costs are paid by those who consume the product.
The point is that damage to the environment has a cost which ought to be borne by those who damage the environment; the producers of fossil-energy based products, the drivers of motor cars fuelled by gasolene, those who heat or cool their houses with fossil fuel-based systems.
Hence, a solution includes a carbon ’damage added tax’ (DAT) on the polluter, with an agreed time table for a national emission reduction. The proceeds from this tax should fund research and development, and the reconstruction of societies and new economies that thrive in harmony with the physical environment, and support bio-diversity.
Immediately, the present subsidisation of energy in T&T is seen as contrary to this triple conflation even though its protagonists claim that we should benefit from our God-given natural resources and that our manufacturers derive a comparative export advantage. But, such subsidies make it difficult for the population to implement energy efficiency practices or use renewables in constructing a new economy.
The Minister also told us that diversifying our economy away from oil (now passed its peak) to gas has grown our economy at a substantial rate in the recent pre-recession times, a period the Government hopes would soon return. The major measure of our economic growth (not social well-being) is the improvement in GDP. What we do not account for is the impact of the depletion of irreplaceable petroleum on real-GDP. There is indeed a measure that takes this into account and it is GDP adjusted by the depletion and the degradation of the environment.
In my article ’T&TEC thwarted’ (Express, July 20) I demonstrated that some 48 per cent of the selling price of petroleum is the in-ground value of our petroleum resources. A more meaningful measure of our GDP, then, has to have at least this subtracted from its value. The fact is that depletion of the energy resources will impact negatively on the on-shore activity and the off-shore sector’s skills are not transferable on-shore.
Consensus on social and economic sustainability, with the identification of the attendant reconstruction funding and environment protection as key considerations should be our PM’s stellar objective at CHOGM.
