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Down the rabbit hole go US eco, economic brains

By David Dodwell (China Daily)
Updated: 2009-06-04 08:09

Last week, US Congressional leader Nancy Pelosi led a group of Congressmen to get China to cut its carbon dioxide CO2 emissions, and pave the way for the Washington and Beijing, the world's largest CO2 emitters, to strike a deal before the climate conference in Copenhagen in December.

This week Timothy Geithner gave assurances about the US Treasury bonds' bankability, talking about trade imbalances, and China's allegedly unnatural addiction to saving.

Both events showed some staggering "Alice in Wonderland" reinventions of economic and environmental cause and effect, reinventions that perhaps happen when the laws of political necessity come into conflict with the laws of economics.

After all, no US Congressman worth his vote is going to admit global warming is the result of decades of hyper-consumption in a small number of Western economies led by the US when he can instead blame it on 1.3 billion Chinese who, too, have had the temerity to strive for affluence. Nor is a US politician going to accept blame for the global economic recession when 1.3 billion Chinese can be blamed for saving too much and consuming too little.

It sticks in the craw to be lectured by a Pelosi staffer on how China simply has to accept responsibility for fighting global warming because it has 1.3 billion people, and because the factories that once polluted American skies to supply American consumers with their consumer wants have now relocated to China.

On emissions, I am willing to forget the volume of CO2 that Americans have already pushed into the atmosphere over decades as they consumed their way through the planet's resources. But here's a suggestion: Let's all simply agree that Americans and others in the wealthy West reduce their carbon footprint to that of an average Chinese, and then let's work together from there to build consumption patterns that can be sustainable without baking us all into extermination.

At present, US consumers emit an average of just over 20 tonnes of CO2 every year, while the Chinese are approaching 5 tonnes per capita. American politicians will undoubtedly tell us that this is an Alice in Wonderland proposal, and protest that it would be practically impossible and tantamount to committing political suicide to ask Americans to cut their per capita emissions to 25 percent of current levels.

But China's political leaders can reply with perfect logic, too, that it is politically unrealistic to put the brakes on the consumer aspirations of Chinese people who have suffered such severe poverty that no American can imagine.

Here's another suggestion. Let's get a top-level group of US and Chinese academics and policymakers together to decide what a Chinese consumer can reasonably aspire to consume. Let's accept that it is not realistic for Chinese consumers to think they can reach the levels of their US counterparts (that really would be Alice in Wonderland thinking). To make the process more palatable for America's politicians, let's get the Chinese members to invite their US counterparts to draw up a reasonable consumption list (RCL) for China.

Let them calculate how many cars per capita Chinese people can reasonably own. Let them also determine the number of air conditioners, washing machines, microwaves, refrigerators, computers, and even pairs of shoes and trousers they can own. Perhaps they can even decide how big an average home of a Chinese should be. Then let's multiply this RCL by 1.3 billion, discover the consequences for global resources and global warming, and work together to make sure they get there without boiling the planet.

None will ever take up the two suggestions. So let's get real for a moment. China's leaders know full well the challenge they face. On principle, they are absolutely right not to bow to US or other Western countries' demands of making formal commitments linked to those being sought from rich economies at the Copenhagen climate conference. But that does not mean they should not meet - and surpass - tougher domestic targets than most Western governments are willing to impose. Watch my words, China will continue to under-promise but overachieve on all environmental and anti-global warming measures.

Beijing's principle of under-promising is right because its premise that it is Western consumer habits over the past century that have brought us to the verge of a climate calamity is right. It has become clear with the unfolding of the global economic crisis that ours is a world economy that can only sustain the luxurious lifestyles of the rich in developed economies so long as the rest of the world lives in poverty. Bring consumer affluence to developing nations - in particular populous ones like China or India - and the model explodes. Prices of natural resources explode. And the planet boils.

That is why Geithner reeks of economic ignorance by joining other economists demanding that China solve the global recession by boosting domestic consumption and cutting savings.

First and foremost, we must deal with the challenge of weaning US consumers off their addiction to hyper-consuming. So far, the huge US bailout package is working like a gigantic methadone clinic dispensing to a population of heroin addicts. By artificial stimulus of the economy, the US administration has dulled the withdrawal symptoms - but the challenge of weaning the population off its heroin addiction still lies ahead. And even the US does not have the resources to continue dispensing methadone indefinitely.

China's leaders face their own massive challenges. Instead of lecturing them that it is their duty to help Western consumers cope with their heroin addiction, US leaders should be looking to solve their very real problems at home. It is profound political cowardice to fail to take full responsibility for a failure that sits at heart with policies that unsustainably inflates US consumption. That has jeopardized the global economy and our planet both, and it is Alice in Wonderland politicians and economists who argue otherwise.

The author is chief executive officer of Strategic Access Ltd, Hong Kong.

(China Daily 06/04/2009 page9)