October 13, 2009
Climate Trumping Needs Of The Poor
Chris Berg, Institute of Public Affairs, September 29, 2009
At one of those weird, celebrity-laden events they have every few months in New York, Hugh Jackman announced last week "climate change and poverty are inextricably linked". World leaders furiously nodded their heads in stern agreement.
In a basic sense Jackman is right. Rich societies can cope with changes to climate. Poor ones cannot. Subsistence farmers will struggle more with any global warming than accountants in suburban Australia. But for all the talk of climate aid and sustainable self-sufficiency, the developing world needs to do just one thing to successfully adapt to climate changes: get on with developing.
But the political demands in developed nations for inspiring, grand, historic, operatic action on global warming are putting those stodgy old targets of economic growth in developing countries on the backburner.
Jackman inadvertently gave an illustration of why. Admitting his wolverine claws and mutant powers would be ineffective against climate change, he told of an Ethiopian coffee farmer converting methane from his cows into gas for electric lighting.
It's a great story. It's wonderful to hear of anyone using their resources more productively, particularly where those resources are at such a premium. But it misses the point. A greater thing to celebrate would be the coffee farmer being connected to the power grid, or wealthy enough to get decent medical care or education. Or when he is wealthy enough to pay others to generate electricity for him.
Industrialisation and economic growth in Africa and Asia no longer seem a universally agreed goal. Instead, some see it as a potential threat, if not carefully supervised by the West. If growth is to occur, aid agencies believe it must follow a strictly delineated path of sustainability and low emissions.
This new attitude has some dire consequences. According to a new study by World Growth, a non-government organisation, the share of aid directed to economic growth has fallen from 28 per cent 10 years ago to just 12 per cent today. Instead, aid is being focused on social and environmental aims.
The more priorities, the less likely anything will be done. It's not thrilling to hear the United Nations, the European Union and many national governments repackaging foreign aid as "climate aid". The EU plans to offer the developing world €15 billion ($25.4 billion) of climate aid as a sweetener to play ball at Copenhagen. This builds on the host of new programs and agencies distributing "climate-specific aid" such as the UN's Clean Development Mechanism and Global Environment Facility, or the World Bank's Carbon Finance Unit and Carbon Investment Funds.
With sufficient economic growth, the developing world can cope with the stresses of a changing climate and any number of the other stresses: chronic malnutrition, infant mortality, illiteracy and many diseases we believe to be "tropical" today, such as malaria, but are the consequences of extreme poverty. These problems could be exacerbated by climate changes, but they are problems right now. Only wealth can alleviate them.
From an environmental perspective, we should push for rapid economic growth in the developing world. Wealthy societies are cleaner; the technology to reduce pollution is as much a product of economic growth as the pollution is in the first place. First World factories are cleaner, more efficient, and healthier for their workers than Third World factories. Local industrial pollution in the developing world can be devastating.
Poverty is a dog of a problem. And foreign aid has always been an imperfect way to fixing it. Aid has congealed bureaucracies at the expense of the poor and funded the lavish lifestyles of oppressive dictators.
Nevertheless, a few years ago the theory and practice of overseas aid was getting somewhere. Encouraging development was not as simple as funnelling money from treasuries in the First World to treasuries in the Third World.
More important is allowing nations to build the institutions and legal frameworks that organically grow a productive economy. And we know trade liberalisation, deregulation and open markets are extraordinarily powerful drivers of growth.
Climate aid is just another illustration of what the economist William Easterly calls development paternalism: a belief well-paid international experts, equipped with enough power and resources, should take the third world's destiny under their benevolent wings.
When those experts shift their priorities from economic growth to sustainability, they make it less likely they will achieve either. Unfortunately, as the Copenhagen looms, it seems the "right to develop" is no longer absolute.
Chris Berg is a Research Fellow with the Institute of Public Affairs and Editor of the IPA Review. He also the head of the IPA's Media, Telecommunications and IT Unit, and Director of the IPA Nanny State Project. He is a regular columnist with the Sunday Age covering cultural, political and economic issues.
His monograph, The Growth of Australia's Regulatory State: Ideology, accountability and the mega-regulators, was published in 2008, and his co-edited book (with Andrew Kemp) 100 Great Books of Freedom: Australian liberals, conservatives and libertarians on individual liberty and prosperity will be published by Connor Court Press in 2009.
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."