The differentiated impacts of climate change

by Mridula Ramesh

European lead is a positive step but Indian consequences still dire

We have often looked at the differing impacts that climate change had on various countries and framed the discussion through the lens of a prisoner's dilemma: two prisoners in separate cells; if they cooperate they're free if they don't they both go to jail.

This time we ask: "What do the prisoners do in this dilemma, and where does that leave the world?" The US "prisoner" has muddled incentives - parts of him lose heavily in the changing climate, parts are unaffected while some powerful parts of him stand to lose if status quo is altered. The payoff of the Chinese "prisoner" is uniformly negative if status quo persists - so he

would prefer to see cooperative action on climate change. What of the two other "prisoners" - the EU and India?

European countries look like the poster children of action on climate change. Emissions of greenhouse gases (the causative agents of global warming) are down since 1990 and; a further binding 40% reduction in greenhouse gases (from 1990 levels) is targeted by 2030.

Europe achieved its targets for three reasons: the 2009 financial crisis and the 2011 Euro crisis caused the European economy to falter (and lowered the amount of energy it used), the outsourcing of production of a substantial fraction of the "stuff" consumed by European customers (and the emissions associated with producing the stuff) and the pursuit of renewable power. How they perform in future will depend on what their "payoff" is.

Air pollution (some of which exacerbates global warming) causes half a million deaths in Europe annually; Glacier melting and the flooding of rivers and rising sea levels threaten low lying countries like the Netherlands (where up to an eighth of the country lies below sea level).

Intense water scarcity and increasing summer temperatures hurt agriculture and tourism income of Southern Europe. Many northern European countries benefit with lower heating costs, higher agricultural productivity and longer tourist seasons. There are winners and losers within Europe, but because Europe is developed, the losers can manage the changes.

Given the manageable negative payoff from climate change, why is Europe acting? Part of it maybe a desire to gain prominence in the world stage, a stage increasingly being dominated by the US and China. They can get leadership credibility only if they lead by example.

Second, a higher sense of social equity in European countries may be driving action through a social justice angle. Third, European companies stand to gain from action on climate change. Some of the world's leading wind energy manufacturers and LED lighting companies are European. 92% of responding Euro 300 companies report that climate regulation presents an opportunity to their business.

- The Hindu