Analysis: King Canute At The G8

Commentary, Climate, Frontier Centre

When King Canute of lore wanted to teach his citizens a lesson, he set his throne by the seashore and commanded the tides to roll out. Canute’s spirit was back in business this week at the G-8 summit in Italy, where the assembled leaders declared that the world’s temperature shall not rise: “We recognize the scientific view that the increase in global average temperature above pre-industrial levels ought not to exceed 2 degrees [Celsius],” or 3.6 degrees Fahrenheit, said the summit declaration.

So let it be written, so let it be done.

As for how they will achieve this climate-defying feat, well, the leaders were somewhat less definitive: “we will work . . . to identify a global goal for substantially reducing global emissions by 2050.”

Translation: Since the heads of the world’s leading economies couldn’t agree on an actual policy on climate change, they opted instead to command the clouds, the seas and all of the Earth to cool. Or maybe they were finally admitting that this whole climate business is getting too expensive, so let’s just throw out a goal that everyone knows is beyond the reach of kings, much less democratic leaders.

The politics of climate change have always been long on apocalyptic rhetoric but short on policy realism. But a global economic crisis does have a way of shearing away illusions about the price people and their leaders, elected or otherwise, are willing to pay in higher taxes, higher prices and economic competitiveness to perhaps make a fractional dent on the temperature.

Concerns about high costs and lost jobs have already threatened or killed carbon-emissions control schemes in enviro-conscious Australia and New Zealand. German Chancellor Angela Merkel, another sunshine environmentalist, insisted on exemptions for German industry, including cement and steel, from last year’s EU climate deal, which pledged to reduce carbon emissions by 20% from 1990 levels by 2020. Italy engineered its own escape clause, requiring the EU to renegotiate its climate policy after a U.N. climate change summit in Copenhagen later this year. That probably kills the European deal, since China (the world’s largest emitter of greenhouse gases), India and other developing countries showed this week that they are unlikely to agree to any draconian emissions cuts.

European politicians have been wondrously adept at signing on to climate pacts, like the 1997 Kyoto Protocol, which they have no real intention of honoring even as they enjoy taking the political credit. But really binding agreements are becoming harder to reach this time around, thanks to mounting opposition from businesses and labor unions.

Philippe Varin, chief executive of Corus, Europe’s second-largest steel producer, told the London Independent in December that the cost of carbon credits and new technologies needed to reduce emissions would destroy European steel production, forcing manufacturers overseas. Poland’s Jaroslaw Grzesik of the Solidarity trade union estimated last month that the EU’s climate policy would cost 800,000 European jobs. The London-based Open Europe think tank has estimated the climate package would cost European economies over a trillion dollars in the coming decade.

Meanwhile, the supposed economic benefits of “green technologies” are evaporating. In Germany, government subsidies for installing solar panels — and, it was presumed, thereby creating domestic manufacturing jobs — backfired when it turned out that it was cheaper to make solar panels in China. A recent paper from Spanish economist Gabriel Calzada Álvarez noted that since Spain started investing in a “green jobs” policy nine years ago, the country has lost 110,500 jobs in other parts of the economy. That amounts to 2.2 jobs lost for every green job created.

European leaders still do pray to the climate gods, and they would love to see the U.S. burden its own industries with the kind of cap-and-tax bill just approved by the House. But even Senate Democrats are getting wise to the political risks they run for tying the economy down with regulatory schemes that America’s competitors in Europe and Asia will either flout or ignore.

In the legend of Canute, the king, after failing to stop the rising tide, told the assembled crowd: “Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth and sea obey by eternal laws.” If a medieval monarch could draw the right conclusion, how hard can it be for his sophisticated 21st-century successors?