I’m bored to tears of global warming. Or, to be more precise, I’m bored to tears of the do-goodery surrounding global warming. Climate change itself is quite interesting, but the reaction to it just isn’t. I don’t know the answers to all the interesting questions (is global warming really happening; if it is, to what extent is it man-made and how far is it a natural phenomenon), which is probably why they are interesting.
But I do know that most of the UK’s solutions to it (the boring bit) are pretty pointless. Carbon offsetting is ridiculously useless as a targeted solution to reducing emissions: sending a tenner to the third world to plant a tree so you can fly to Rome with a clear conscience is on a par with sending a fiver to a cat charity to make up for kicking the dog.
Green taxes will let the rich keep on polluting, but hit the purchasing power of the poor, while – as yet another downside – raising more money for our Government to squander on postal propaganda and NHS consultants. And carbon trading, in some ways a stroke of genius (particularly in the minds of those who run the carbon funds we looked at last week), can’t be of any use in cutting global emissions if not everyone signs up to it in the first place. If the credit allowance system makes it too expensive to pollute Europe, big business will just go and pollute somewhere else (who knows, at this rate the Kyoto Protocol could end up having the unexpected effect of boosting US heavy industry, given the US is still not signed up to its restrictions).
I also know that however much carbon we in the UK manage to stop emitting by not letting our children have night lights and shutting down our computers before we leave the office, the effect will be utterly irrelevant in the face of emerging market development. China and India may be under pressure to grow cleanly and they may even want to, but the scale of their industrialisation means that global emissions can only go up.
In our cover story on page 26, we look at the related issue of the commodity debate – bubble or long-term bull market? As regular readers will know, I come down firmly on the side of the bulls. It’s easy to exaggerate China-related statistics simply because even the certifiable ones seem so extraordinary, but however you look at it there is massive growth to come. The bears worry about the slowdown in growth in the US hitting Chinese growth, and hence the overall demand for commodities. In the short term, that may well turn out to be a perfectly reasonable concern (GDP growth in the third quarter came out at an annualised rate of only 1.6% and, as the King Report points out, 0.7% of that came from “a statistical fluke” in the auto-production figures, which will soon be reversed).
However, the US consumer isn’t going to be the consumer of the last resort for ever. China has its own middle class now, as do India and Russia, and they are starting to spend with a vengeance. Today, a few of the emerging world’s super-rich think nothing of spending $1m on diamond-studded mobile phones, but the more important point for the global economy (and the environment) is that millions of them now think little of paying $40 for an ordinary one.