The paradox of global petroleum demand and supply

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: The G8 summits evolved as a response to rising oil prices in mid seventies. It was not until 2000 that environment issues was included in the agenda. Serious discussion around it started only in 2005 when climate change was identified as one of the priorities of the summit in Scotland albeit the outcome came quite short of expectation. At a climate change conference in Bali last December, all G8 countries except the US pledged to cut emissions by 25 to 40% from the 1990 levels by 2020.

On 8 July, the G8 leaders agreed on a Document on Environment and Climate Change. The leaders of the G8 agreed to share with the members of the UNFCCC the vision of achieving a goal of at least 50% reduction of global emissions by 2050. The G8 stated that achieving the ultimate objective of the UNFCCC will only be possible through common determination of all major economies. It was acknowledged that participation from China, India, Brazil, Mexico and South Africa is critical to a climate deal that would take effect when the first phase of Kyoto Protocol expires in 2012.

China and India flatly refused to the goals citing reasons that energy security and economic growth are equally important for developing countries and no climate change goals can be formulated in isolation. Their argument was the G8 countries are responsible for much of the emission that has pushed the world into major environmental catastrophe and they should more to rectify the damage. Over 80% of the emissions in the atmosphere today have been caused by the G8. Although the G8 is house to only 13% of global population, it emits more than 40% of global carbon dioxide. The US comprises around 5% of world population, constitutes 26% of world GDP and consumes 29% of global energy supply.

The increase in oil prices clearly affected this year’s discussion. It played a critical factor in G8’s adoption of a Climate declaration, which the environmentalists have condemned, as too lax and vague. The agreement reflected a consensus that any pronouncement on climate change has to take into consideration the state of global economy and energy security concerns of developing nations.