From Heiligendamm to Bali

New thinking to include the world’s poor in carbon control is needed to bring countries like the US, China and India together over climate change.

So what has been achieved at Heiligendamm? The aim was to corral the US into participation in the UNFCCC discussions over the follow-up to Kyoto and, at the same time, get the US to make definite commitments. The former was achieved but the latter was not and, far from this being a partial step forward, it may yet turn out to be worst of all worlds. The wrecking tactics of the US negotiators as they worked on the draft communiqué before the Heiligendamm summit may be what we see in Bali this December.

We already know what the US negotiating position will be. It will not agree to any binding targets until developing countries like India and China do - in the full knowledge that, at the moment, China, India and other developing countries will reject this idea.

While the G8 were meeting so too were the leaders of China, India, Brazil, Mexico and South Africa. Their position is also already clear. According to Chinese President Hu Jintao "Considering both historical responsibility and current capability, developed countries should take the lead in reducing carbon emission and help developing countries ease and adapt to climate change. For developing countries, achieving economic growth and improving the lives of our people are top priorities."

Put these two negotiating positions together and one can see the obvious danger. The last thing Bush wants is for the world to agree that - based on concerns for economic and social justice - the developed countries owe a greater commitment to lowering carbon emissions than the developing world.

It is not that nothing will emerge from Bali. Just as our G8 leaders presented their failure as a triumph of diplomacy and a great step forward, so too a formula will be found to cover a disaster in Bali – probably around arrangements for technology transfer. There is money to be made out of climate change. In a speech Bush made before Heiligendamm he called for countries "to eliminate tariffs on clean energy technologies". That means giving US companies favorable trade deals to sell "clean coal" and nuclear technology to developing countries. This is something Bush's corporate backers have long wanted and climate change is a way to sell it.

If left to the world's leaders the outcome will be a process without real or adequate commitments but plenty of arrangements for technology transfers that make money.

It doesn't have to be like this. Among many educated people the world over there is a deepening knowledge and serious concern about climate change and a growing appreciation of the need to act. That is true in India and China too.

"Most Chinese and Indian people agree developed countries have the right to demand that emerging countries cut their carbon emissions”, according to a survey by Global Market Insite in May 2007. Sixty-two percent of Chinese respondents and 63 percent of Indians said they agreed "It would be appropriate for developed countries to demand restrictions on carbon dioxide emissions from developing countries, such as China and India, despite their own governments rejecting mandatory caps."

This shows real concern - perhaps related to the very unhealthy levels of urban pollution. Whether this survey, which was actually mainly of university educated urban professionals, can really be said to represent what "most Chinese and Indian" people feel might be questioned. In India and China there is a big gulf between the urban elite who are participating in a high consumption lifestyle and the rural poor.

For example, in China urban incomes average about $1,000 a year compared to $300 a year in rural areas. This urban-rural disparity, together with the regional inequalities, has created serious divisions and unrest which have not been helped by the subsidies to urban citizens who receive low cost housing, pensions and health insurance not available to people in the countryside.

There are similar disparities in India where a large part of the population, living in rural areas, have not entered the carbon economy at all. Energy use for cooking and lighting is still largely based on biomass.

To impose a world arrangement which cuts these people off from any future development hardly seems a political option for the elite of the developing countries - especially if the developed countries are not prepared to dramatically cut back on their use of carbon.

This means that whatever arrangements are set up should not only recognise that the developed countries must bear the greater part of the burden - because of their greater responsibility and capacity - but must also offer something to the poor majority of the world's population.

The widely recognised principle of equal per capita rights to the use of the earth's atmosphere should be more than the basis for deals and negotiations between governments. It should ideally be a principle that extends right down to the population of the world in the arrangements for carbon trading and control. This would give the poor majority an immediate stake in the climate stabilisation process.

The political support of the poor can be bought directly through the operation of the carbon stabilisation arrangements. This should be based on the recognition that the right to use the earth's atmosphere as a greenhouse gas sink belongs to us all – and since the world's poor makes up the majority of the world's population – the bulk of it belongs to them.

Cap and share is an approach that would reflect these principles. Under cap and share arrangements there would be an annual distribution of the emission entitlements direct to individuals. For the rural poor this would be rather like having a new revenue raising crop every year. Individuals would take the entitlements to banks or post offices and sell them for the going price of CO2 on the day of sale. The banks and post offices would, in turn, sell them onto fossil fuel producers who would need to have these permits to cover the greenhouse gas content of their fuels.

An equal distribution is not necessarily a fair distribution. People in the rich countries have benefited from emitting CO2 for decades while the poor countries who have not caused the problem now need energy to develop out of poverty.

Ideas like 'contraction and convergence' start with the developed countries still being given around 80% of the emission permits. There is a danger that by the time countries converge on an equal per capita basis in 20 years time or so, the contracted “carbon emissions budget” will be too small to allow poor countries to develop.

For that reason, the cap and share approach holds back a proportion of the permits for the first 20 years and makes them available to the governments of poor countries to develop their economies. The greater proportion of emission entitlements still goes to individuals reflecting the importance of involving people the world over in combating climate change. In many countries this will raise challenging issues for states to ensure that the poor really do get their rights against corrupt local administrations.

If the US is to find common ground with countries such as China and India through the UN in Bali, new thinking like this will be needed on carbon trading and a global framework that includes the world’s poor. If that seems far fetched at present, it nevertheless expresses the nature of the challenge facing the global political system – the climate crisis is a global justice crisis