Can Kyoto really save the world?

The Kyoto deal has been hailed as proof that the world's nations can co-operate to confront climate change. It has also been derided as an empty exercise in political posturing. The truth is that it is both

After seven years, huge international debate and the freezing out of George Bush's United States from the international community, the Kyoto Protocol is formally ratified today.

After seven years, huge international debate and the freezing out of George Bush's United States from the international community, the Kyoto Protocol is formally ratified today.

The agreement, which seeks to limit the world's carbon emissions, was signed by 84 countries in Japan's former capital city in 1997. It bound the industrialised countries to cut emissions by 5 per cent from their 1990 level by 2012.

The treaty has been hailed as the key step forward in confronting the environmental challenges posed by climate change. But it remains controversial: is it a great leap forward in international co-operation or another example of empty political posturing? Or maybe, just maybe, something of both?

The case for cutting the global output of greenhouse gases is the link between such emissions and global warming - a link still unproven but for which there is strong circumstantial evidence. This is accepted by most industrialised nations.

But for the agreement to become international law two things had to happen. One was that 55 countries had to get it approved by their national legislatures. The other was that the countries approving it had include a sufficient number of industrial countries to account for 55 per cent of their global emissions in 1990.

The first target was relatively easily met, but the "early signers" were largely small countries that did not use a lot of energy. The second was tougher, particularly since in March 2001, the new US President, George Bush, said his country was not prepared to ratify the treaty. The US unsurprisingly is the world's largest user of energy (and hence accounts for 36 per cent of carbon emissions of the industrial countries) so the second hurdle became harder to surmount. But last November Russia, which had previously indicated it would not sign up, switched sides. Russia has been a huge (and inefficient) user of energy and accounted for more than 17 per cent of global emissions in 1990. Suddenly the 55 per cent barrier was breached and the protocol could become law.

For many people this is a time for rejoicing, an example of international co-operation for a common good. Like the Montreal Protocol of 1987, which banned the production of CFCs, it has demonstrated that countries were prepared to implement policies that might act against their short-term national self-interest in order to promote long-term global environmental aims. Countries that have refused to ratify Kyoto, most notably the US and Australia, are duly pilloried. President Bush has been particularly singled out as a bad global citizen.

For others, this has been an exercise that at best is wishful thinking and at worst hypocrisy. Unlike the Montreal Protocol, which had a clear objective and clear benefits - reducing the damage to the ozone layer - Kyoto is both badly constructed and uncertain in its impact. And the countries that matter most have not signed up.

How should the thoughtful non-specialist respond to these conflicting perspectives? What we really want to know is whether in 20 or 30 years' time it will be seen as an important first step towards keeping the world a habitable place, or as a failed experiment, setting the wrong priorities and actually making future international co-operation more difficult to sustain. Perhaps the best way forward is to look at the criticisms of Kyoto and then see whether, despite those criticisms, it is still a useful process.

Take first the argument that it is badly constructed and in particular that it excludes the country that is increasing its emissions fastest at the moment and which is now the second largest importer of oil: China. China is already the world's fifth or sixth-largest economy. It is growing at around 9 per cent a year and relies heavily on fossil fuels for powering this growth. Last year China installed as much new electricity generating capacity, mostly fossil fueled, as the entire electricity output of the UK.

And we have seen nothing yet. By the Kyoto target year of 2012 China will in all probability have become the world's third largest economy, behind only Japan and the US. Indeed were China not to have become the world's third-largest economy, everyone would be the worse for it as it would suggest some kind of political and economic collapse there, with all the misery that would entail.

The other great global giant, India, is also increasing its energy use. Its economy has been growing at almost as fast a pace, around 7-8 per cent a year. Its energy use at the moment is much lower, for it has not experienced such rapid industrialisation and its building boom has been more muted. But it has become almost as large a car market as China, has the world's largest road-building programme and the spread of air-conditioning will ensure that its energy use continues to soar.

So does the exclusion of these two giants - and much of the rest of the developing world - destroy the rationale of Kyoto? It certainly weakens it. Our perspectives of economic power have changed radically since 1997. Maybe we should have realised that the new industrial countries would determine the world's energy demands and hence its carbon emissions and sought to bring them into the tent. But the debate within both China and India in some ways supports the Kyoto ideal, even if neither country is bound by it. Anyone who has been to China recently will be aware of the problem of air pollution with which the country is wrestling. Shanghai is beset with power shortages. Within China there is a serious debate as to how it can continue to grow at its present pace without being held back by environmental pressures.

In India much the same debate is happening, too. It is clear that India cannot follow the Chinese growth model, for its population pressure is even greater and its natural resources scarcer. So it has to find a way of growing by using energy more efficiently. In lots of small ways - taxis, for example, run on natural gas - it is seeking to improve its environment standards.

So it is very much in the self-interest of both China and India to expand their economies in the "greenest" way possible. But how? Both use technology developed in the rich world. If that technology becomes more efficient, cleaner, and less carbon-intensive, they will apply it. Insofar as the efforts to meet Kyoto standards drive western Europe and Japan to develop better technology, that will inevitably improve the environmental performance of China, India, and other fast-growing developing countries.

So Kyoto helps China and India become cleaner, even though they are not bound by it.

What of the next criticism, that Kyoto does not fully reflect different countries' starting points? Well to some extent it does, as countries have been set different targets within the 5 per cent overall cut, so Switzerland has to cut its carbon output by 8 per cent while Australia increases its by the same amount. In addition, countries that take measures to absorb carbon, for example through reforestation, are allowed to unleash more of it. But the fundamental point does stand - it is easier for some countries to meet their targets than others.

For example, it is relatively easy for Russia to cut its energy use because in 1990 it had large and inefficient heavy industries that have now been shut down. And from a base of huge inefficiency, the first steps in cutting emissions are relatively easy - all you need do is to apply good practice developed elsewhere. Rationally you can argue that the Kyoto accord is not in Russia's self-interest, as not only would it benefit from a slightly warmer - and therefore more prosperous - Siberia, but as an exporter of oil and gas it would gain from the continuing energy profligacy of its main customer, Western Europe.

And yet, signing up costs Russia nothing. Russian membership of the club will not significantly affect global carbon emissions, but brings political benefits. It can present itself as a virtuous friend of the EU and of the international community - unlike the US.

A further point is that the targets do not fully reflect differences of population growth or economic success. For example, they do not take into account a shrinking population in Germany and a rising one in the US, nor Germany's economic stagnation or America's boom. When Kyoto was negotiated it was thought the fall in Germany's population would not begin until well past 2012. As things have turned out, it started last year. Meanwhile, America's population growth has run ahead of forecasts. Similar differences in economic performance were not expected either - and it would be hard to defend Kyoto if it became a way of punishing economic success.

But it should not become that. You can acknowledge that it is crude, despite the tweaks to try to make it less so. You can acknowledge that the information on which the original deal was based was flawed. But you can still believe that it nudges countries in the right direction rather than the wrong one.

Energy prices look likely to remain high for a generation. Countries that can grow - both in population and in living standards - without stretching energy supplies will find it easier to make progress than those that can't, so the agreement pushes countries towards policies that are, in general, in their self-interest. A US that had a more efficient car fleet now would be richer, for it would be better able to withstand high oil prices. Living standards would be higher and the dollar would be higher, for it would be less dependent on oil imports. Strategically too, it would be more secure.

Beyond economics there is such a thing as politics. Democracies have to work with the grain of public opinion. A Russian president can force through legislation in the way a US one cannot. Criticism of the US has to be tempered with an acknowledgment of the will of its people. Arguably by immediately acknowledging that Kyoto would never be passed by Congress, the present President was at least being more honest than his predecessor, who sidelined political debate on the matter until he was out of office.

Yet here again, while acknowledging the separation of powers in the US, it is surely possible also to acknowledge the power of persuasion. There is a significant minority within the US that seeks to reduce environmental damage caused by high energy use. The fashionable car for Hollywood stars is the hybrid Toyota Prius, which does more than 50mpg. America can look to places such as Copenhagen, which has over 20 years sought to get people out of cars and on to bikes and public transport - and has created a much more livable city than similar US cities. So politics can lead as well as follow and environmentalism feels modern in a way that profligate energy use does not.

There is one final line of criticism of Kyoto that needs to be acknowledged: that it is not the highest priority. Other aims, such as the elimination of malaria or combating Aids in Africa, have greater claims on scarce resources. The Danish statistician Bjørn Lomborg has controversially argued that Kyoto slows the growth of emissions by an insignificant amount at a very high cost. While it is certainly desirable to do so, it would better to put resources into the development of alternative energy and tackling the effects of global warming.

These objections need to be taken seriously. Economic resources - just like fossil fuels - are finite and they need to be directed where they will be most effective. Money spent on wind farms is money not available for drugs in Africa. But the best response to this, surely, is to see Kyoto as an early and imperfect step along a long and difficult road.

Its huge benefit is to focus attention on a global problem - and a global problem that the market cannot fix. The costs of global climate change are very long term and most uncertian. The markets can match supply and demand today but their focus is inevitably short-term. They find it hard to look 30 years out. And there are external costs - felt beyond the countries that produce and consume energy - that are carried by the world as a whole. That is why the world, or much of it, signed up to Kyoto and it is why we should celebrate today.

What matters most, though, is what happens next. Somewhere out in the future is the next generation of technologies that will wean the world off fossil fuels and provide it with renewable power. But we cannot see those clearly so meanwhile we have to be careful with what we have got.

If Kyoto encourages the hunt for the new technologies - as it has - that is worth something. If it makes us think a little more about our own use of energy that is worth something too. If it is the start of a wider global process of co-operation in conservation, then it is worth a huge amount. A good day for the world