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Hot air and high ground at Gleneagles

By Nicholas Gruen - posted Thursday, 21 July 2005

Doing good takes more than good intentions. You need to be tough-minded. That’s the idea embodied in the economists’ synthesis: “Hard heads; soft hearts”.

It’s such a powerful idea that if it’s forgotten we’re often forced to relearn it - often through the agency of the painful and uncertain political contest between Left and Right.

At Gleneagles this synthesis worked on foreign aid.


Because program failures undermine its support, a left-of-centre “cartel of good intentions” has covered up the many failures of foreign aid. So we’ve been slow to discover and learn from what works and what doesn’t. We’ve even seen aid disappear into the Swiss bank accounts of third-world kleptocrats.

It’s taken the political Right to impose some hard-headedness. George Bush has sharply increased foreign aid while imposing much stronger conditions - for instance, on cleaning up corruption - and Gleneagles extended this approach. That’s hard-headed soft-heartedness in action.

But on the environment, Gleneagles gushed greenhouse gobbledygook.

Leaders committed to “act with resolve and urgency” - about as firmly as St Augustine prayed for virtue. “Lord make me chaste - but not yet”. Lord make me reduce my emissions - but not yet.

We’re at a pretty pass. No one is sure that the world will continue to warm or that our emissions of greenhouse gases are causing it. But scientists who deny it are now a rump consisting increasingly, though not entirely, of cranks.

There’s plenty of uncertainty about the costs of global warming too - and that’s not counting the subjective value of unique eco-systems we could lose. But the costs of global warming could vastly outweigh the modest cost of even quite vigorous action.


The Kyoto Protocol caps global emissions, but with two huge exceptions. First, the US has refused to ratify. (And thus emboldened, we’ve joined the US in our own exclusive duo - the coalition of the unwilling).

Second, Kyoto exempts the developing countries - which produce nearly 40 per cent of global emissions now and will overtake the West within two decades. What are we doing about it? Next to nothing.

International greenhouse politics remains mired in a swamp of soft-hearted soft-headedness. Being poorer, the developing countries are supposed to be the good guys. They’re also a majority of the UN and its progeny, the Kyoto Protocol. Thus the bizarre spectacle of a small group of rich countries taking on difficult commitments within an agreement formally controlled by those doing next to nothing. The majority remain serenely intransigent about taking on serious commitments while berating the minority for the paltriness of their sacrifice. They even call for compensation.

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First published in The Courier-Mail as “Heat softens resolve" on July 13, 2005.

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About the Author

Dr Nicholas Gruen is CEO of Lateral Economics and Chairman of Peach Refund Mortgage Broker. He is working on a book entitled Reimagining Economic Reform.

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