Ahluwalia Has It Right on Reducing Energy Usage

Let me just say upfront - I am a skeptic of global warming. Not global warming per se, but that humans are major contributing factor for the current global warming. I am skeptical that a few models could differentiate earth's warming and cooling cycles and could attribute current warming cycle to humans. But then I am also for clean environment - I worry about my car gas mileage, recycle paper/plastic, don't care for aerosol hair or cleaning products, and all for laws to remove pollution in water and air. And I am also firm a believer in free markets. Just like how a few climate modelers can't tell us anything about earth's warming and cooling cycles, a few socialist economists can't determine what the needs and wants of every family in a society are and use few simplistic models to tell us how much steel, for example, and how many cars and scooters to produce in the next few years. A free market is much better at determining that and allocating resources accordingly with the least possible market projection lag and over-run.

Coming back to why Montek Ahluwalia, Planning Commission Deputy Chairman, is right. There are increasing calls, from international groups, that to reduce global warming energy usage has to be curtailed. But energy is a fundamental factor of economy. An economy can't be strong, viable, and growing without constant and vast supply of energy. And, in addition, for poor developing countries, like India, cheap energy is key to keeping the economy growing and pull the vast humanity out of poverty and misery. So, even if one were to believe that humans cause global warming and reducing energy usage will somehow reverse global warming, the reduction has to be based on parity among all societies.

Just because rich countries have started using vast amounts of energy early on, poor countries shouldn't pay for it now. In fact, the reason why rich countries are rich is because of high energy usage. Poor countries will never be able to get out of poverty and have decently well off populations without the availability of vast amounts of cheap energy.

Also, India has about a billion people with vast majority of countries about 20th the size, in population terms. Any country-based energy usage restriction will be grossly unfair to the people of India (and China).

The only solution is energy usage on a per-capita basis and usage standard should be equitable among rich and not-so rich societies.

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Ahluwalia said there was an increasing acceptance of the argument that per capita emissions by a country was the right basis to fix responsibility of cutting greenhouse gas emissions. “Any reduction strategy based solely on total global emissions, and not differentiating on the basis of per capita emissions by countries, is fundamentally flawed and goes against the tenets of equality,” he said. India is the fourth largest carbon emitter in the world, releasing 1,342 metric tonnes of CO2 into the atmosphere in 2004. However, its per capita emission is just 1.2 tonnes of CO2, which is 17 times less than that of United States.[Montek objects to emission norms - IE]

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Even the leader of UN forum for Climate Change is dismayed at the unfairness of solutions proposed to curb the so-called greenhouse gases. (Human Development Report on climate change.)

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Chairman of the Inter-Governmental Panel on Climate Change (IPCC) R K Pachauri had also criticised the HDR on Monday saying certain sections of the report were “a bit questionable to say the least.”[Ibid]

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Update: Sebastian Mallaby, columnist at WaPo, summaries all the issues facing any so-called anti-global warming treaty from an American perspective.

Update 2 (Dec 3, 2007): Ahluwalia expands on his thinking on climate change on Shekhar Gupta's 24x7.