Nothing Useful Will Happen in the Climate Summit in Cancun, Alas

From November 29 to December 10 Cancun, Quintana Roo is the site for the United Nations Framework Convention on Climate Change. Unfortunately, there is no reason to expect any sort of significant agreement outlining specific steps to be taken to slow or reverse human-caused climate change. The incentives to do so don't exist. Global pollution is a problem that national governments are not well-suited to address.

Consider a very simple example. There is a factory that emits soot that negatively affects a community. What options do the citizens of the community have? Although the Coase Theorem shows that there are conditions (rather strict ones) under which the private parties can reach an agreement to resolve the problem, generally the only practical option is to seek redress from the local government. The government could adopt a law limiting the pollution or impose a tax on the pollution. A correctly specified tax would reduce the pollution to the socially efficient level. Now suppose that the community is on the frontier and the factory is across the border in another country. Why should the government of the jurisdiction in which the factory is located seek to reduce pollution if it has little effect on its own citizens? Almost certainly it will do nothing because restricting the pollution would harm its own citizens by reducing production, hence employment, in the factory.

On a much bigger scale, climate change presents the same sort of problem. Presently, the only (obviously) affected nations are a few small island countries in danger of disappearing due to rising sea levels. The apparent negative consequences for the biggest emitters of global warming gases; the United States, China, and Russia; are small thus these countries (and others) have little incentive to reduce the emission of such gases. Until the (expected) costs of climate change rise sufficiently to affect these countries as well, nothing will happen.

According to the NY Times (As Glaciers Melt, Science Seeks Data on Rising Seas, November 22, 2010) many scientists expect sea levels to rise three feet by 2100. If so, nobody will have any meetings in Cancun at the next turn of the century because the hotel zone-convention area will be underwater.