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. Last Updated: 07/27/2016

A Policy Paved With Good Intentions

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At least one good thing has come out of the absurdly warm weather so far this winter. Even though the high temperatures cannot be attributed to global warming, politicians and many in the business community are paying more attention to this issue. The European Commission, for example, has announced an ambitious plan to cut European Union greenhouse gas emissions by 20 percent by 2020, and by 30 percent if the United States and other leading polluters sign on to the program.

But these reductions still fall short of what ecologists consider the minimum steps necessary to halt the global warming process. Even with this limitation, the move might still have been welcome had it not been coupled with a determined effort to follow the same old political approach to averting climatic catastrophe.

The bureaucrats in Brussels maintain that the best way to save the environment is to encourage market competition in the energy sector. We should note here that neither China nor India are being called on to reduce emissions. As developing countries, they apparently retain the right to destroy the global environment along with their own particular part of it.

By calling on energy-consuming companies to install rapidly new clean technologies, the requirements from the European Commission represent a threat to their commercial viability. If simultaneously, as it also claims, it intends to create more competitive industries, then the pressure on businesses is only greater. This appears to leave corporate executives with just two options: They can operate at a loss or ignore the environmental regulations.

There is, however, a third option: Corporations can attempt to transfer the additional costs to taxpayers by demanding that governments subsidize their ecology-related expenditures. The problem is that it is hard to draw a line between real expenses and costs that are the result of poor management. Even more absurdly, governments end up following subsidization policies and stressing liberalization and privatization at the same time. Bureaucratic structures become the primary market agents under such conditions, and the most effective competitive strategy becomes the time-honored tradition of paying bribes.

In the cases of China and India, development implies the introduction of progressive rather than outdated technologies. But corporations will still have their choice of countries with lower ecological standards to which they can move their production facilities. Greenhouse gases will be produced at a different address, but the overall level of emissions will increase, even if the European Commission's new targets are met.

Western Europe may today be willing to finance its post-industrial revolution unilaterally and make no demands on developing nations to follow suit. Political and economic considerations rule out moves to bring financial pressure to bear on poor polluting countries in the near future. But U.S. companies are already starting to voice concerns that they could be targeted by trade tariffs if they don't move quickly enough to clean up their act, and when countries start to impose tariffs like these, it is always the developing nations that end up suffering the most.

The only solution is to give developing countries ecologically friendly technologies at no cost. But this would be diametrically opposed to the market policies espoused by the European Commission. So the main obstacle to fighting global warming is not the cost. It is that the only way to address this ecological threat runs counter to the most basic practices of modern capitalism.

This is a question of politics, not ecology.

Boris Kagarlitsky is the director of the Institute of Globalization Studies.