Andrew Pendleton, from Christian Aid, on the UK's hidden carbon dioxide emissions
22nd February, 2007
Christian Aid this week released a report showing that, if account is taken of the UK's overseas investments, the country is responsible for as much as 15 per cent of global emissions of CO2. We asked Andrew Pendleton, the lead author of the research, where we go now.
Ecologist: The '2-per cent' myth - that the UK is responsible for only 2 per cent of global emissions - is pretty deeply entrenched, both in the public consciousness and in government policy. How easy will it be to dispel it?
Andrew: The solution to climate change has to reflect the world in which we live. So while we are not challenging the fact that the UK's domestic economy is responsible for 2.13 per cent of the global total of emissions of CO2, we are saying that this does not properly reflect the economic impact the UK has on the rest of the world.
The UK's integration into the global economy means that money raised in the UK - which comes from our pension funds, insurance companies and banks - is lent and spent all over the world, much of it without any questions asked as to whether or not it is contributing to the proliferation of greenhouse gases. Similarly, UK-based companies have goods for the UK market made in many different countries.
And of course so-called 'British' companies also have offices and other operations in many different countries.
The UK benefits from all this in economic terms, so it's only fair that we should pick up our share of the real environmental costs of doing global business. If we and other developed countries intend to argue that China and India should put their development on the line to tackle climate change, then we must accept our part in their increasing emissions. If we do not, it's hard to see how the emerging economies will be persuaded to accept taking the necessary action to curb their dangerously multiplying emissions.
Ecologist: Will carbon trading systems, such as the revised European Emissions Trading System (EU-ETS), tackle these emissions by forcing companies to purchase 'pollution permits'?
Andrew: There is a tendency in the climate change debate to accept carbon trading as a fait accompli. But there are other means of pricing CO2 emissions - taxation, for instance.
The European Emissions Trading Scheme has not functioned well hitherto because the emissions limit or 'cap' under which those installations included in the scheme operate is by no means tight enough. Furthermore, all rights to emit are given away for free when they really ought to be sold as a further disincentive.
A taxation on emissions would mean the polluter would have to pay for the privilege of emitting, but has the drawback of being indiscriminate and some kind of cap on emissions would still be required because price alone would be unlikely to have the necessary impact.
Stern calls climate change the biggest ever market failure so simply setting up another market will not, on its own, address that failure. Plus for rich countries to address both their current globalised
emissions and their historical responsibility for cumulative emissions, they probably ought to have negative allocations in any just or effective carbon market.
Ecologist: One of your suggestions is to cut off the supply of money to big coal and oil projects, and to encourage mainstream investment in clean energy. But the energy projects which the government repeatedly green-lights - nuclear and coal with carbon capture - are by their nature large scale. Will they perpetuate the problem?
Andrew: Christian Aid is first and foremost an organisation that is concerned with meeting the needs of poor people, two billion of whom have no electricity. It is unlikely that nuclear or carbon capture will meet their energy needs and yet, if they are to enjoy a better quality of life, these needs must be met.
The enormous sums of money required to build nuclear power stations and develop carbon capture would, we think, be better spent on pursuing energy efficiency for those that already have it and new, renewable forms of decentralised generation for those that don't. We strongly feel this would have the added benefit of - quite literally - empowering people at a local level.
There is a real opportunity, if money does shift away from fossil fuels, to invest in systems in poorer countries that are built from the bottom up, with returns coming from smaller-scale enterprise that is generated by people with an almost insatiable desire to enter into commerce suddenly having access to the power with which to achieve this.
The alternative is repeating the top down model that pervades in rich countries, which is wasteful and inefficient as well as far less likely to meet the needs of small-scale, pro-poor private enterprise.
Ecologist: At the moment declaration of corporate emissions is voluntary. If a compulsory system were to be brought in, do you think we would see a new 'Enron-style' scenario emerge, whereby companies and their accountants scamble to create 'off-shore' subsidiaries to fudge their carbon figures?
Andrew: Disclosing CO2 emissions is not a big deal. Most companies could quite easily calculate and report their direct and indirect emissions across their global operations without any major costs being incurred.
More complicated is the business of estimating the life cycle emissions of products or banks requiring borrowers to estimate what the emissions of a project being submitted for financing are likely to be. But it is reassuring that the leaders in most sectors are already producing estimates.
The more difficult part of the equation is how, once disclosed, these emissions are then priced as an incentive to reduce them. But currently, in lieu of a global agreement governing emissions and any international restrictions outside of Europe, all Christian Aid is suggesting is that we get ourselves into shape by standardising reporting and disclosure.
Ecologist: The 'hidden emissions' which you reveal in this report are huge - over seven times the current estimates. How do we go about tackling such a large amount?
Andrew: We need to know the extent of those emissions first. Christian Aid has produced some estimates - and we are not alone in this - but these are only useful currently in that they offer a vague view of the scale of the problem of the UK's globalised emissions.
If companies were required to report their emissions, including estimates of supply chain and investment-related emissions, to an agreed standard, then the true extent of the UK economy's global exposure to CO2 would be more sharply focussed.
The next step then is to suggest how an international agreement might carve up the allocation of emissions and price them in a way that follows the money. This is something Christian Aid is currently
examining and we hope to publish some suggestions in the spring.
To read the full report, click here.
This article first appeared in the Ecologist February 2007
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