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Empire of Carbon (China)
Paul Krugman, New York Times
... China cannot continue along its current path because the planet can’t handle the strain.
The scientific consensus on prospects for global warming has become much more pessimistic over the last few years. Indeed, the latest projections from reputable climate scientists border on the apocalyptic. Why? Because the rate at which greenhouse gas emissions are rising is matching or exceeding the worst-case scenarios.
And the growth of emissions from China — already the world’s largest producer of carbon dioxide — is one main reason for this new pessimism.
China’s emissions, which come largely from its coal-burning electricity plants, doubled between 1996 and 2006. That was a much faster pace of growth than in the previous decade. And the trend seems set to continue: In January, China announced that it plans to continue its reliance on coal as its main energy source and that to feed its economic growth it will increase coal production 30 percent by 2015. That’s a decision that, all by itself, will swamp any emission reductions elsewhere.
So what is to be done about the China problem?
Nothing, say the Chinese. Each time I raised the issue during my visit, I was met with outraged declarations that it was unfair to expect China to limit its use of fossil fuels. After all, they declared, the West faced no similar constraints during its development; while China may be the world’s largest source of carbon-dioxide emissions, its per-capita emissions are still far below American levels; and anyway, the great bulk of the global warming that has already happened is due not to China but to the past carbon emissions of today’s wealthy nations.
And they’re right. It is unfair to expect China to live within constraints that we didn’t have to face when our own economy was on its way up. But that unfairness doesn’t change the fact that letting China match the West’s past profligacy would doom the Earth as we know it
(14 May 2009)
Saudi must rein in soaring power consumption
Reuters via Maktoob
Top oil exporter Saudi Arabia needs to rein in fast-growing power demand that threatens to eat into future exports, Saudi Oil Minister Ali al-Naimi said in remarks published late on Wednesday.
An economic boom fuelled by record oil revenues this decade and subsidised domestic prices have led to a rapid rise in electricity consumption in the kingdom.
Gas supplies were insufficient to meet all demand for power, so Saudi Arabia burns oil products and some crude to meet demand.
"If this trend in power consumption in the kingdom continues it will impact the size of exports and will affect the kingdom's income, which necessitates the implementation of a national programme to rationalise power consumption," Naimi said in remarks published by the official Saudi Press Agency.
(14 May 2009)
Thriving Norway Provides an Economics Lesson
Landon Thomas Jr., New York Times
OSLO — When capitalism seemed on the verge of collapse last fall, Kristin Halvorsen, Norway’s Socialist finance minister and a longtime free market skeptic, did more than crow.
As investors the world over sold in a panic, she bucked the tide, authorizing Norway’s $300 billion sovereign wealth fund to ramp up its stock buying program by $60 billion — or about 23 percent of Norway ’s economic output.
“The timing was not that bad,” Ms. Halvorsen said, smiling with satisfaction over the broad worldwide market rally that began in early March.
The global financial crisis has brought low the economies of just about every country on earth. But not Norway.
With a quirky contrariness as deeply etched in the national character as the fjords carved into its rugged landscape, Norway has thrived by going its own way. When others splurged, it saved. When others sought to limit the role of government, Norway strengthened its cradle-to-grave welfare state.
... Norway is a relatively small country with a largely homogeneous population of 4.6 million and the advantages of being a major oil exporter. It counted $68 billion in oil revenue last year as prices soared to record levels. Even though prices have sharply declined, the government is not particularly worried. That is because Norway avoided the usual trap that plagues many energy-rich countries.
Instead of spending its riches lavishly, it passed legislation ensuring that oil revenue went straight into its sovereign wealth fund, state money that is used to make investments around the world. Now its sovereign wealth fund is close to being the largest in the world, despite losing 23 percent last year because of investments that declined.
Norway’s relative frugality stands in stark contrast to Britain, which spent most of its North Sea oil revenue — and more — during the boom years.
(13 May 2009)
Australia Delays Carbon Trading Scheme Until 2011
Reuters, New York Times/
Australia's government announced a one-year delay to its carbon emissions trading scheme on Monday, promising more support to big industry but opening the door to a tougher 2020 target in a bid to win its approval.
In an effort to ease the strain on an economy now on the edge of recession, Prime Minister Kevin Rudd said the government would delay the start of the world's most sweeping cap and trade scheme outside of Europe until mid-2011, but still aimed to push the emissions trading laws through parliament this year.
While maintaining his interim 2020 emissions reduction target at 5 to 15 percent below 2000 levels, Rudd said the government could increase the cut to 25 percent if other rich nations agreed to similar reductions, a measure aimed at appeasing Green party legislators and environmentalists...
(4 May 2009)