The CEO Interview: Anil Argawal

February 23, 2001

CEO: We were surprised by depth of the equity discussion at COP6, and it seemed to us that it had come some distance from 1990, when you and Sunita published Global Warming in an Unequal World. Do you agree, and if so, how would you characterize the changes

Well, I was surprised with, I won’t say the depth of the discussion, but I would definitely say the breadth of interest there was on equity at The Hague. This was very unusual because we have never seen that kind of a response before.

The United States in particular was saying that participation of developing counties was very important, though they’ve always left it very undefined as “meaningful participation.” The US seems to imply the wholehearted participation is what they really mean, but it does nevertheless raise a number of serious questions, it does focus attention on the question of the participation of the developing countries. And the automatic question is on what basis the developing countries will participate.

I have not yet seen anybody saying that the rules that have been set up for the participation of the industrialized countries on the basis of the Kyoto Protocol should be applied also to developing countries, and most people wouldn’t agree with that. Therefore the question is what the developing countries rules will be, and immediately the framework that we developed in 1991 becomes the framework to discuss.

In a sense the US has done us a favor, and brought this center stage. That’s my sense. I could be wrong, but in all our other campaigns as well we find that governments and people only respond when there’s a crisis.

CEO: Did the outcome of the COP lead to more of sense that there was a crisis, even in elite circles

Well, it definitely increased the sense of a crisis, in the sense of crisis as a need for action. I’m not sure that it really exacerbated the need for developing country participation outside the US, because I don’t think that developing country participation was ever a very important issue for the EU, and I don’t think that the Central European countries have ever raised it either. It’s basically the Umbrella Group led by the US that has been more at the forefront of that issue. And the collapse at The Hague as it is well known is basically because of the differences between the EU and the Umbrella group.

So in that sense I don’t think that it has heightened the equity issue. But because of the US insistence on the participation of developing countries it has definitely brought it to the forefront. This how I would put it.

CEO: Ok, another track. We’d like to see per capita rights come to be seen as an analytic reference against which all other equity proposals must be modeled and judged. And in fact this seems to be happening. The question we have, though, is that per capita rights don’t explicitly take account of historical emissions. So we were wondering if you could comment on why you thought per capita rights were more just than, say, the Brazilian proposal.

That’s a very good question, and I think that there’s a lot of historicity and practicality in the per capita approach as far as we are concerned. Historicity in the sense that, when we first raised the issue of per capita, we were really not thinking of this becoming a framework for North/South participation. At that time there was this argument that had been brought forward by the World Resources Institute in its 1990-1991 World Resources Report that India and China were as big polluters, were as responsible for the climate change problem as the industrialized countries were. And in all of the work that I have done in the environmental field for three decades now I have always found that it’s the rich that tend to be the polluters and not the poor, and then suddenly to be told that it’s the methane that’s being produced by the cattle that is kept by our farmers in this country, and you know all our farmers are really very poor, and the fact that they grow a little bit of rice is destroying a mega-ecological system like the atmosphere, well it just didn’t seem to gel.

And, basically, our Minister of the Environment at that time was somehow very impressed by this argument. She’d been to a meeting of the UN Environment program in Nairobi and she’d come back saying the Indians should stop growing rice and keeping cattle and all these kinds of things…

So we had to take her on. We could have easily just gone to the press and criticized her, but we said, “Let’s look at where this argument is coming from.” And we just looked at their model, by which they had attributed responsibility, and we looked at their own data, and we just changed one assumption, and that was in terms of the distribution of the sinks. The way that they had done it in their model — they never made it explicit — was that the sinks should be distributed according to GDP, or, rather, by level of pollution. And we said that that’s not the right way to distribute the sinks, which are a common heritage of human kind, and so you can’t give the polluter the biggest share.

So for us it was really saying “How do you allocate responsibility” And at that point people had already said, you know, that this approach doesn’t factor in the historical emissions. One of the first people who did this work, you know, who had actually done a huge publication, I think for the Dutch government, was Florentin Krause, who had worked as an economist/ advisor to the Green Party in Germany for many years.

CEO: So this work had already been done in the 80s.

Well, you know it was 1989 or 1990. Florentin had basically done the same thing. He had factored in historical emissions, and taken a budget approach over a period of time, say to 2100. We owe a great debt to Florentin, who we had met in Nairobi. He had sent me a copy of his book, but I had put aside the book because I wasn’t interested in climate change. Later, when I did become interested, it was one of first books I looked at.

He had taken this per capita approach, but he had basically taken two approaches, you know, taking 1990 emissions to 2100 and then when you divide them equitably, or, you can do it from 1950, if you only want to take the most recent and justifiable historical emissions. And he basically showed that there was no more emissions space left for the industrializing countries.

At that point in time we didn’t consider all of this because we were just trying to refute the WRI. For us the important thing was to take their own model and their own data and to just show that if you made the assumptions explicit rather than implicit, and then changed one key assumption, that you would get a dramatic difference. So we were basically saying that science can be intensely political.

CEO: Well that’s certainly true

We wanted to come up with something practical. We can’t simply say that if you factor in historical emissions then the industrialized countries can’t emit any more CO2 or anything of that kind, or even talk about extremely low amounts of emissions from them. Because we will need a transition phase. The industrialized countries are expected to take a lead in all this, but we will need a transition phase. They also need a certain amount of space-you can’t expect them to do anything overnight.

So I don’t think that historical emissions are really practical. Factoring in historical emissions is a negotiable sort of thing.

CEO: Although under a system of tradable permits, the question would be different. Under historical emissions the question for the US would not, obviously, be that they’d have to reduce their emissions to zero, but simply that they’d have to pay for all their emissions at some market price. Which they still wouldn’t like…

That’s a separate issue! The point is that the Kyoto Protocol, in a sense, brings in historical emissions, and gives that advantage to the industrialized countries!

CEO: Anil, where you went with the question of historical emissions was, finally, an argument in terms of practicality and realism. And I wonder if you’ve ever explicitly considered the interplay between ethical and realist arguments. We’re finding that there really are two different ways of talking about per capita. Sometimes when we bring it up, we’re engaged as if we’re making an abstract philosophical argument, and other times we’re engaged in entirely realpolitical terms. We’re coming to terms with this and trying to articulate two different sets of arguments for per capita, and two different sets of responses to critics. This might be an idle question, but I was wondering if you had thought about the realpolitical function of ethical arguments, or the ethical function of realpolitical arguments, or anything along these lines.

I’m never seen that kind of function between sort of realism and ethics. People have come to me and said, “Why are you talking about equity We’re talking about climate change, not equity, and there’s so much inequity in the world what can we do about it” And first of all my argument is that we’re not talking about equity in terms of per capita incomes in the world or access to technology or military power. We’re talking about equity in terms of climate change and greenhouse gas emissions and so forth. So you see sometimes this argument tends to get overblown.

But I see that equity and per capita entitlements are extremely important as an issue of realism. You know, this is a message that has not penetrated most people’s minds, but if developing countries were to accept per capita entitlements, if this was actually to happen, then you would be getting an extraordinary commitment from developing countries, a commitment that not even the industrialized countries have had the courage to make. Because it means that the developing countries would be agreeing to live within a limit! And even the industrialized countries have made no commitment of that kind, so it’s an extraordinary commitment from developing countries that they’re willing to make. And I believe that if you add trading to those entitlements, and yes we have to take hot air and all those problems into account, and the developing countries also have to have access to technology and finances to be able to make the kind of transition that is needed, which otherwise they would not have access to, I see per capita as a tremendous realism, and as a tremendous commitment.

CEO: Let’s take that thread, since this is really in a sense the most important question. If you had North to South capita flows that were not “aid” — this a point that we need to repeat over and over again, particularly in the United States — that were associated with per capita commitments or a transition to per capita commitments, the hope is that this would lead to carbon-free energy development in the South. This is what it’s all about. Now one of the things that we’re going to have to engage is attacks from people in the North who say that there have to be green conditionalities on this money, to ensure that’s it’s not spent in some other way. So could you just go on a bit more about how, within the context of a per capita regime, we could work towards a clean energy transition in the South

Absolutely. I see this equity issue within the context of climate change, not within the context of the much larger inequities in economics or ecology or in any other sphere in the world. I’d be very happy to talk about this larger context, and we’ve written a great deal about it in our book Green Politics but to focus on climate, well, any trade that takes place should in fact be pegged to the use of money for only renewable, non-carbon energy systems. Because my understanding of the CDM as it is framed today is that if it’s left to the free market they will just look for least cost projects, and these are all in the fossil fuel sector. So they will not therefore be going into the zero-carbon but they’ll be going into the carbon sector and they’ll just be improving the efficiency a little bit. But the issue is not improving energy intensity in the fossil fuel sector, but bringing in zero-carbon systems so that they can begin to compete with fossil fuels, to create a large market for them so that economies of scale will help them compete and a large market will promote innovation.

And therefore since developing countries have a great advantage in the sense that large numbers of people are outside the carbon economy today, there is a certain niche in which renewable energy will be more competitive even today, and, you know, CDM should be pegged only to that. In any case, I also believe that this is going to happen whether or not you have CDM or any climate change activities or not. It has to.

In my own city, we have gotten the Supreme Court to order that all busses in Delhi must convert to natural gas. Because we are dying of pollution out here! And you can see the way China, and Korea, and large numbers of countries now — which are highly polluted — are moving towards more environment-friendly fuels, and also which have benefits for climate change as well.

This is going to happen a lot as the developing countries industrialize. There will be more and more pollution, and these transformations will come because of local pressure. So if CDM can actually aid that process then it’ll be great, but if CDM just says a little better diesel or a little better coal, so that some amount of fuel will get saved, and in the process some amount of sulfur dioxide will get saved, well I don’t think that’s the answer.

CEO: But what if we get beyond CDM and actually have a per capita regime in which countries are selling excess permits for cash. Do you think those permits can or should be tied to a particular kind of development, or should they just be seen as pure income to the country selling the permits to do whatever it wants with

No. As I said earlier, I don’t feel that way. I was once asked if, say, you set a per capita emissions entitlement target of 1 tonne of carbon, and India today is .25, then doesn’t it give India the right to sell .75 as of today And wouldn’t that lead to a lot of hot air because India is not actually going to reach 1 tonne anytime soon And my answer would be that, you know, every country has plans for the production of future electricity, especially in our part of the world where we’re going to be making most of the world’s-including the industrialized world!-energy investments in the next two or three decades. We know that over the next 3 or 5 years these are the kinds of investments that we will be making in the energy sector, and therefore that this is the kind of CO2 that we will be producing.

Now equivalent to that, as long as we are within the entitlement, even with the growth of CO2, then we can sell all of that CO2, but nothing more. Per capita doesn’t mean hot air. It just means that what we don’t use up, during the next commitment period, we can sell and use that money — with the understanding that we are going to be moving over to zero carbon systems. And that kind of a commitment can be made. I don’t see any reason why not.

Look, there are major economic advantages of it. If you look at it this way the job opportunities in the renewable sector — solar, wind, biomass — is incredibly high in developing countries, because these are small modular systems, large numbers of people can be involved, who will never be involved in the large megawatt-scale stations or huge gas turbines or what have you, so there are job opportunities and these are areas in which developing countries can think of industrializing themselves. And countries like India or China can actually produce solar cells, even if they have to do it in collaboration with American companies or whatever else.

CEO: So your answer to the question of why a per capita regime would push the developing countries to go more directly to a renewable transition as opposed to taking the “least cost” path — “clean-coal” for example — is that per capita would be another driver to go towards a renewable transition, in and of itself, and that you would have no objection to formalizing the link to renewables.

Why not The only countries that will be selling under the per capita regime will only be developing countries. The industrialized countries will just benefit by buying them. And they’ll find that buying them is slightly cheaper than doing it back home, and they’ll have that advantage, which is what the US is talking about in trading emissions and all that. Except that the US is looking for such high advantages, in terms of extremely low costs of emissions, that it is actually still locking us further into the fossil fuels and climate change. But if we’re looking for least-cost options only in the zero carbon sector, well that’s the ultimate answer to climate change. There is no other answer. However much America might improve its efficiency of coal energy, it still doesn’t solve the climate change problem.

Renewable energy is something that we have to seize in any case. I don’t see how India can have as many cars, on a per capita basis, as the US, without killing itself. I’m not even talking about climate change. If India wants to talk about having as many vehicles as the US, it’ll have think in terms of fuel cell scooters or cars. I don’t see how else it can survive. You know Nor can China do it. Nor can Korea do it. It’s just not possible.

CEO: Right.

It’s not just per capita. But per capita gives you a realistic and ethical tool to deal with this problem. And then to work out the fine details and get on with working towards a transition. Because, ultimately, the answer to climate change is very simple. You have to create economic conditions within which zero-carbon systems can compete with fossil fuels. The problem is then solved, and the markets will take over and you can phase out the fossil fuels. And the earlier you do it the better!

But you know, you’re not countering any of my questions!

CEO: Well, this is a difficult area, and I’m still trying to wrap my brain around the idea that there might be some zero carbon conditionalities tied to the capita flows that emerge from the permit trade. It had never occurred to me that the Centre for Science and the Environment would be willing to accept such conditionalities.

You know it’s very interesting. I talk about this from two different points of view. As an environmentalist it is not just equity that is my objective, but it is equally that we have to prevent climate change. And from the point of view of a citizen of a poor country, well, we also know that if climate change is serious, we’re the ones that are going to suffer the most. Not just in terms of you having more storms or us having more storms, but the fact that you may have as many storms as we have, but that you will be able to deal with your storms much better than we will ever be able to.

So I’m very serious about climate change, and I think that it must be prevented even more for the poor countries than for the rich countries. But you must recognize that we’re still very poor, that we don’t have the kinds of resources that are needed to make, within our own country, the transition that we all need on a global basis — which is moving towards zero-carbon systems. And per capita is something that gives us confidence in any kind of global enterprise, which is what preventing climate change is all about, and it’s equitable, it’s something in which everybody gets a fair share, and its also a framework that can be used as an instrument to achieve the change.

I have not seen, if I may say, per capita emissions, or per capita rights, as sacred kinds of property rights — the way Americans talk about their guns — I’m not saying that. It is a fundamental right; the atmosphere is a common-property resource of the whole world and should be equitably shared, but at the same time it is also an instrumental right. It’s a right that helps me to achieve my objective. It’s the kind of right we say that you have to give to local communities to manage their water resources. It’s a fundamental right, but its also right to improve water management, it’s an instrumental right as well.

CEO: Would you say that in the battle between renewables and more efficient carbon technologies that are initially cheaper, that per capita can only help the people in the renewable camp to make their arguments more effectively

Oh yes. If you did not have the restriction to zero carbon systems, then I suppose you would get slightly clearer power stations, and the air would get a little cleaner, but it would not help to solve the climate change problem.

Remember that there is also a damages side to equity. Recognizing this, we not only have a right not to get damaged, but also a responsibility to create conditions in which we avoid the damages as much as possible. Which is why many developing countries, once they are helped to understand this – and please don’t think that even most developing country leaders understand this — they like it.

The story of how I was able, in India, to get a reasonable amount of acceptance for this sort of thing in an interesting and illustrative one. Because if America comes and gives us a little bit cleaner kind of coal-based power station, well all right but that’s something that we also possibly get through trade of some kind. But if the energy-related technology transfer here is restricted to renewable power systems we will have greater access to frontier technologies like solar cells and fuel cells and that sort of thing. It’s very interesting how even people from the coal ministries and other such ministries have come to accept per capita because it would bring access to really frontier technologies, which are really the technologies of the long-term future. And why not It’s a great way of doing it.

CEO: More generally, and more difficultly, can you help us to understand how this issue of per capita commitments and allocations is likely to play itself out in the negotiations in the next five to ten years There are, on the one hand, people who say that the G77 and China and India are genuinely interesting in taking the per capita line in the negotiations and that, finally, the South will only agree to per capita negotiations. But there are others who say the Southern negotiators see equity as a bargaining position, and that once push comes to shove, which it will, and especially if the North puts a little more money into the CDM, that Southern politicians will basically sell out equity and that post-hoc it will only have turned out to be little more than a clever negotiating position. Obviously, we don’t know how this is going to turn out, but do you think that per capita has legs, as they say in Hollywood Do you think that we can reasonably expect that in the next five to ten years Indian and Chinese and Brazilian politicians will hold the line on equity

Well, there are two or three dimensions to any future scenario. One is that in the immediate scenario, since developing countries don’t have any commitments themselves, and if you’re restricted entirely to the Kyoto Protocol and CDM, it is quite possible that many countries like China and even to some extent India will say, well, why not What’s the problem” After all, we’re getting some money and we’ll get some better coal-based power stations if nothing else. Because if India starts saying that you can trade in CDM with us but only in wind energy or in solar then the cost options would be much higher and China may just want to do it only in coal and will just grab all the CDM. Most of the studies that have been done within global economic models show that most of CDM in any case will end up in China. Because it has huge investments in coal and is still pretty inefficient and therefore it will provide most of the least cost options and even a country like India will get very little, and African countries could get almost nothing. And for that reason the argument for equity that has been made by Africa is not in terms of per capita emissions but in terms of regional equity in CDM. That there must be allocations for different regions, so that Africa will get something! Whereas my argument has been that if you have per capita emissions then automatically every country, depending on the current level of development and therefore C02 emissions, will automatically get a share, so that no one can take away Kenya’s share. Whereas in an open market CDM regime Kenya really has no share and China may just walk away with everything.

So in that sense China may well say, or even India may well say, well why not, at least we’re getting something But in the medium term, when the issue really does become developing countries participation, well I think that in the second commitment period – unless American politics changes in a really dramatic way – that there will be a lot of pressure for developing countries to take on commitments.

CEO: So the question is what then will the South do under that pressure

And then I think the equity issue will be very important. I don’t think you’re going to get away from it. I think that the selling out will be only to the extent that there’s an open-ended CDM with no real commitments required of the developing countries before they can participate in the CDM. But once you start talking about caps on emissions or restrictions on emissions then I think the equity issue will become very central.

CEO: So your reading then is that Southern politicians — and I’m not insulting the South here; I’m really insulting politicians — that they really do understand what’s at stake here.

No, I don’t think so. I don’t think they understand it very much at all. But the point is that they haven’t given much thought to it, and I would go back to the example of how this has developed in India. What we’ve seen is that since we raised this issue every single Minister of Environment who has negotiated climate change, and I mean every single one of them, would argue for per capita entitlements. And every one of them has done do, despite some very major changes in government.

At the moment all that the Indian government is saying, and that the G77 is saying, is that we’re not saying that per capita entitlements has to become the principle for trading as of today, but that, if you read the negotiating text, all that is says is that per capita has to accepted as a principle for the participation of developing countries in the future. That’s all it says.

CEO: So they’re looking forward to the second commitment period debate

Whenever the commitment period comes. Our politicians would probably like to see it in 2080 or something! But the point is that whenever it happens, they would like these principles to be accepted. It’s there in the FCCC, but they want a reiteration of it. That’s basically all there is to it.