Wednesday, December 21, 2011

Parallel tracks--Global warming and the Eurozone

What could AGW and the Euro possibly have in common?  A lot, it turns out, all of which are driven by the immutable laws of economics.  Steven Hayward at RealClearMarkets blogs about just how similar the two ill-conceived and ill-fated concepts are:

What do the endlessly repeating cycle of futile Eurozone rescue talks and the endlessly repeating cycle of futile annual UN climate summits have in common? Put more plainly, what accounts for the unreality of both efforts, such that "breakthrough" agreements are soon recognized to be ineffective, if not fraudulent?
It is probably not a coincidence that the Euro currency was launched at about the same moment as the Kyoto Protocol in the late 1990s, and that both are hitting the rocks at about the same time, and for the same reason: both flew in the face of economic reality. But as the inexorable economics of a common currency used across uncommon economies, and fossil fuel suppression in an energy-hungry world, have become more evident, the European and UN diplomatic corps (often the same people) have simply doubled down, holding bigger meetings, giving longer speeches, and crafting more paper agreements to find a process to develop a framework to come up with commitments to adopt meaningful measures and policies that will . . . do something. In the future. The proverbial can has been dented so hard and kicked so far down the road that it's no longer fit for the recycling bin.
It is tempting to chalk up the farcical solutions to simple ignorance of economics. In the case of the Eurozone crisis, the constituent nations of the European Union are resisting the implications the debt crisis poses, namely, the unsustainability of the lavish welfare states built increasingly on borrowed money and the asymmetries between northern and southern European economies. The hope is that another declaration of "we're-all-in-this-together" along with a new fillip of a bailout package that is a tiny fraction of the unpayable debt of the Euro's laggard nations will soothe the markets and extend the illusion that the political class has got things in hand. It worked the first few times, but the financial markets have stopped buying the inevitable sequels.  In the case of the climate change circus, the unreality of steep near-term emission cuts and the asymmetry between rich and "developing" nations like China and India turned the entire scheme of climate change diplomacy into the biggest farce since the Kellogg-Briand Pact promised to eliminate war in 1928. And so in recent years we've gone from the Bali Roadmap to the Copenhagen Accord to the most recent "Durban Platform," all of which promise to craft a legally binding treaty for real emissions cuts by everyone . . . a decade from now. In future years I expect we can look forward to the Frankfurt Farce, the Rio Reneg, the Tokyo Two-Step, the Melbourne Mumble, and the Marrakesh One-Two.

There is more.  And it is a good read.  I will try to summarize the way that my simple mind can understand it: Both are stupid ideas that are dead men walking and were since their inception.  I must also give Hayward credit for concluding his piece by quoting the Iron Lady, Margaret Thatcher (who presciently predicted that a single European currency was bound to fail): "During my lifetime most of the problems the world has faced have come, in one fashion or other, from mainland Europe, and the solutions from outside it."


Dave H said...

There were solutions? Darn, I must have missed them.

2cents said...

Let them crash and burn, baby.