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Finding an Economic, Environmental Win-Win in Davos

DAVOS, Switzerland — One of the topics that’s come to the fore at the World Economic Forum over the last decade of meetings is global climate change. A conference bringing thousands of people from across the planet to a little town in the Swiss Alps can’t be too self-righteous. At the same time it is making efforts to be green. Green-er, anyway.

More conference participants from the developing world are able to tell their developed country peers about the real costs and threats of a steadily warming planet. The Nobel Peace laureate Wangari Maathai was one such Davos truth-teller, given the floor to address the conference both on her award-winning efforts to halt deforestation and the steadily drier conditions facing millions of Kenyans and hundreds of millions of Africans

I sat down over a coffee with Richard Samans, Director General of the Global Green Growth Institute, headquartered in Seoul, South Korea. Samans maintains that the “top-down” approach of the United Nations climate conferences hasn’t done much to stop the emitting of more byproducts into the air from burning fossil fuels. He told me the Institute, just a baby in institutional terms, is trying to do something different even at a time “when we’re only a couple of years out of the worst of the financial crisis, companies are still recovering, and there’s still a fair amount of fragility.”

But even with the steady drumbeat of new metrics coming from places far and wide across the planet? Highest summertime temperatures, biggest ever Arctic ice melts, late season storms packing the kind of heat and moisture normally seen much earlier in the year? How come there’s so little urgency? “Politicians have as their most important barometer of success whether they’re elected, and whether they’re re-elected. You’ve got really strong economic and political constraints on providing strong leadership.”

Yet Samans, who comes to the issue not as a climate scientist but as an economist, believes the world can start preparing for the changes that look like they’re on the way. “I have believed for some years now that the way to go is very practical and bottom up as opposed to philosophical and top-down. The world for the last ten years has invested extensive political capital and energy into a top-down, more political approach.

“The United Nations conferences are essentially based on negotiating national compacts to do things. In and of themselves they wouldn’t really change things on the ground.”

The answer, Samans says, or at least part of the answer, is to have a complimentary bottom-up track that accompanies the grand international meetings, negotiations and joint statements before everybody gets on their jets and flies home. We need to look for sectors, industries and locations where making change “gets you the biggest bang for the buck, economically, in emissions and politically.”

I suggested to Samans that when it came to changing the urgency of the policy response and popular will, it was hard to imagine anything more bottom-up than Superstorm Sandy, or triple-digit temperatures earlier and earlier in the year across the southwestern United States. “The top-down response is ‘let’s get a grand international legal agreement where countries make promises.’ What I’m talking about as a bottom-up response is having specific sectors meet performance standards where it makes the most difference, like power plants. Or do things with land use that sucks carbon out of the atmosphere. Or make it easier for capital investment to go into energy efficiency to get people over the psychological hurdle of making an up-front investment.”

It’s easy to see the logic in the approach. Samans says you don’t have to get every country to agree to do every thing, which makes for unwieldy, lowest-common-denominator international deals. Go after the places and the sectors responsible for the lowest emissions first. It’s art of the possible environmentalism, and Samans says it has a better chance of working. “These measures will have a lower political cost, but an even larger emissions benefit, and in some cases you can even find economic-environmental win-win. That’s a different way of looking at the world than if you’re an economic or environment minister and you’re going to a grand international conference trying to get 200 delegations to agree on a document, when in fact, the preponderance of emissions come from just a handful of places.” Places like the United States where just 5 percent of the world’s population uses 25 percentof the energy.

Samans says an example of what he would like to avoid is a cap and trade regime that is put in place at huge political cost only to make marginal improvements and leave the political situation less open to policy innovation the next time around. “You’ve got a mismatch between political costs on the one hand and environmental gains on the other.” The more practical way to go and have a chance to succeed, he says, is to go bottom-up. If you create winners you also create enough economic benefit to compensate the losers that come as a consequence of transitioning the economy away from emission heavy fuels.

Following in this theme is the decision to put the headquarters for his organization not in the global-hq-dense places like Geneva and New York but instead in the developing world. In Seoul there is a concentration of heavy industry and innovation, daunting environmental challenge, and easy links to South Korea’s rapidly industrializing peers: Taiwan, China, Indonesia, and Malaysia.

The economic appeal is there; after all, burning less oil is burning less oil and you save money no matter why you’re doing it. The incentive is already well understood for finding new techniques and getting them to market. The national governments may still be sending delegations off to yet another international conference. The world is baking, and releasing all that energy in dangerous and unpredictable ways, and the poorest people on the planet are set to get the worst of it. If the world continues to dither in the face of the question, “What now?” Samans’ search for a steady stream of singles and doubles instead of grand slams and grand bargains may look very appealing.

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