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Do we pay to reverse climate change?

By Andrew P. Morriss

CHAMPAIGN, Ill. – China wants wealthier nations to pay a fixed percentage of their gross domestic product to help developing countries reduce greenhouse gas emissions, with a suggested contribution of a mere 1 percent for a total of$300 billion a year. China also wants to create an international mechanism to transfer technology to developing nations to reduce emissions. Both are bad ideas.

China’s proposals put the cart before the horse. Getting poor people to stop emitting greenhouse gases means getting them to stop being poor.

Studies consistently show that interest in protecting the environment rises as people get richer – making the single most important step to improve the environment helping developing countries stop being poor.

For example, the largest source of air pollution in sub-Saharan Africa is the indoor burning of dung and other organic fuels for cooking and heat. Household biogas digesters can free people from the acute indoor air pollution caused by the open fires and reduce greenhouse gas emissions for as little as $50 per family.

Solving pollution problems in developing countries means we must first free local entrepreneurs from the choking band of corruption, bureaucracy and mercantilist economic regulations that keep them poor.

Transferring $300 billion to developing countries would have the opposite effect because government-based foreign aid harms those countries that receive it.

Kenyan economist James Shikwati has shown how such aid fuels corrupt governments, hollows out the local economy, and weakens local markets.

Journalist John Stossel showed graphic examples of the same problem on ABC’s; "20/20" and New York University economist William Easterly has comprehensively detailed the flaws in the top-down aid model.

Moreover, a $300 billion transfer to developing countries would put money in the pockets of the likes of Sudan’s Omar al-Bashir, Venezuela’s Hugo Chavez, and Uzbekistan’s Islom Karimov.

These thugs, whose regimes daily commit human rights violations on a vast scale, would share in the bonanza. Not only is providing any money to these tyrants immoral, but the idea that hey would actually spend the money on reducing pollution is ludicrous.

It is true that Europe, Japan and the United States industrialized at a time when people didn’t know about the ill-effects of pollution.

Today’s developed countries did pump out a lot of pollution, including greenhouse gases. However, once the developed world became rich and discovered the scope of the pollution problem we cleaned up our industries’ emissions.

China’s argument sounds fair, since it looks like we were able to emit all we wanted while poorer countries will be stuck with abatement costs. But this argument rests on the assumption that developing countries can only afford 1920s-style power plants or trucks unless they get the $300 billion.

Power plants and heavy duty trucks do cost more to build today than 50 or 100 years ago, but they cost more because modern ones are better, not just cleaner. Indeed, modern technology produces fewer greenhouse gases than older technology mostly because it is more efficient.

As a result, while developing countries are going to have to build more expensive power plants, factories, and trucks than did the United States or European countries during our industrialization, those new ones will be more efficient than the ones we built as well as cleaner.

If we are serious about addressing global pollution issues, we need to first get serious about removing obstacles to economic development that will create demand for a clean environment in the developing world. Turning $300 billion over to despots and bureaucrats would take us in exactly wrong direction.

Andrew P.Morriss is H. Ross& Helen Workman professor of law and business and professor at the Institute of Government and Public Affairs, University of Illinois at Urbana-Champaign. He is a senior fellow at the Property and Environment Reseach Center in Bozeman, Montana.

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