We are determined to go to the next conference in Bali to achieve a result.
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Eileen Claussen, President of the Pew Center on Global Climate Change
After years of struggle to mobilise an effective international response to climate change, 2007 may prove to be a critical turning point. From the G8 summit in Heilegendamm to the APEC summit in Sydney, from a high level UN gathering in New York to a meeting of major economies in Washington, climate change has suddenly vaulted to the top of the global agenda. This burst of climate diplomacy culminates in December in Indonesia, where the goal will be a Bali ‘road map’ pointing the way to a new global agreement. The questions to ask are whether this road map will set governments on a course towards binding multilateral commitments and will some form of commitment be given by all the world’s major economies?
INTRODUCTION
In 2007, the stream of summits, dialogues and ministerial huddles has produced plenty of ideas and, on occasion, points of concurrence. But a grand consensus has yet to emerge. Indeed, the newly energised debate has exposed fundamental rifts and sharply contrasting visions of the way forward. As governments head into the Bali conference, they face a fork in the road. Down one path lies a lasting solution; down the other, only false hope.
The critical issue in Bali is whether the new road map sets governments on a course towards establishing binding multilateral commitments. The Kyoto Protocol, while a step in that direction, is limited in both scope and duration. Without the United States and Australia, its targets (which expire in 2012) encompass only about a third of global emissions. The next
stage of the climate effort will be effective only if it entails some form of commitment by all the world’s major economies.
The alternative vision, championed by the Bush administration, eschews international commitments. Countries may agree on an ‘aspirational’ long term goal, defined perhaps as a limit on global temperature increase, a stabilisation level for greenhouse gas (GHG) concentrations, or a reduction in global emissions. But each country would decide independently what contribution it would make towards this collective goal. There would be no binding commitments. And for that reason, this path cannot produce an effort nearly sufficient to the task.
THE NEED FOR INTERNATIONAL AND BINDING COMMITMENTS
Why are international commitments essential? Because without them, countries cannot be confident that others are contributing their fair share to the global effort. And without that confidence, they will not be prepared to adopt the policies and make the investments needed to build low carbon economies. In the long term, the benefits of addressing climate change will far outweigh the costs. But in the short term, governments, business, and private citizens will be far more willing to bear those costs if they know their counterparts and competitors are bearing them as well.
PROVIDING FOR A RANGE OF COMMITMENTS
While binding commitments are needed from all the major economies, they need not take the same form. There are huge differences among the world’s major economies, a group that includes industrialised countries, developing countries, and economies in transition. As a consequence, the kinds of policies that effectively address climate change in ways consistent with other national priorities will vary from country to country. If it is to achieve broad participation, the post-2012 framework must accommodate different national circumstances and strategies and allow countries to take on different types of commitments.
Economy-wide emissions
The Kyoto approach, ie economy-wide emission targets coupled with emissions trading, should remain a core element of the climate framework. Emission targets provide some environmental certainty, while emissions trading harnesses market forces to deliver those reductions at the lowest possible cost. Kyoto and the EU’s Emissions Trading Scheme have spawned a multi-billion dollar carbon market, mobilising private capital for emission reduction and driving climate-friendly investment in developing countries. This market can be sustained and expanded only if industrialised countries commit to a new round of more ambitious targets.
But not all countries are prepared to take on economy-wide targets. China, India and other emerging economies fear binding targets that hold them to specific emission levels would unduly constrain their development. Economy-wide targets may also be infeasible for some countries. To accept a binding target, a country must be able to quantify its current emissions reliably and project its future emissions, which few if any developing countries currently have the capacity to do.
Policy-based commitments
Under this approach, a country would commit to a national policy or set of policies that moderate or reduce their emissions, without being bound to an economy-wide emissions limit. This would allow countries to put forward commitments tailored to their specific circumstances and consistent with their core economic or development objectives. A country such as China, for instance, could commit to implement fully its existing energy efficiency targets, renewable energy goals and auto fuel economy standards. Such commitments would need to be credible and binding, with mechanisms to ensure close monitoring and compliance. Developed countries may also need to provide incentives for developing countries to adopt and implement stronger policies. Such incentives could include policy-based emissions crediting, similar to the Kyoto Protocol’s Clean Development Mechanism, granting countries tradable emission credits for meeting or exceeding their policy commitments.
Sectoral agreements
Governments could also commit collectively to a set of targets, standards, or other measures to reduce emissions from a given sector. Such agreements could include both developed and developing countries, offering a practical alternative to economy-wide commitments. In sectors most vulnerable to a loss of competitiveness due to carbon constraints (such as energy-intensive industries where goods are traded globally), sectoral agreements can help ensure a more level playing field. Sectoral approaches are actively being explored by global industry groups in both the aluminium and cement sectors, and could be helpful in sectors, such as power and transportation, where competitiveness is less an issue but large scale emission reduction efforts are most urgent.
Other commitments
If stringent enough, any of the commitments discussed would help draw low carbon technologies into the marketplace. But the post-2012 framework could include additional commitments to drive technology more directly, such as those aimed at joint research and development of ‘breakthrough’ technologies with long investment horizons. Such agreements could build on the Asia Pacific Partnership and similar initiatives but go much further, committing governments to the levels of funding needed to accelerate critical technologies such as carbon capture and storage. On the deployment side, the framework also could help ensure broader access to existing and future technologies by addressing finance, international property rights and other issues impeding technology flows to developing countries.
Assisting developing countries
The post-2012 framework must also do more to help vulnerable countries adapt to the impacts of climate change. Within the climate regime, there are two priorities: helping countries develop comprehensive national strategies to integrate adaptation across the full range of development activities; and providing reliable assistance to the poorest and most vulnerable countries for their most urgent implementation needs. One way to integrate adaptation into development planning is to perform routine climate risk assessments on projects up for bilateral and multilateral development assistance, and funding only those that score well on vulnerability criteria.
TOWARDS A COMMON FRAMEWORK
While the post-2012 climate effort must allow for a diversity of approaches and commitments, it is critical that all are integrated in a common framework. If the only point of agreement is an aspirational long term goal, the aggregate effort is likely to be modest at best. By linking actions and negotiating them as a package, nations are likely to undertake a higher level of effort than they would if acting on their own. Such a negotiation could take the form of sequential bargaining, with countries proposing what they are prepared to do under one or more different tracks, and then adjusting their proposals until agreement is reached on an overall package. To help ensure a balanced and stronger outcome, it may be necessary to agree that certain countries will negotiate particular types of commitments most appropriate to their circumstances at the outset. The objective must be an integrated agreement that is flexible enough to accommodate different types of commitments, and reciprocal enough to achieve a strong, sustained level of effort.
THE BALI ROAD MAP
What kind of map might lead from Bali to this goal? On its own, the Kyoto Protocol track launched in Montreal in 2005 to establish new commitments for the post-2012 period leads to a dead end. These negotiations contemplate commitments only for those countries with existing targets under Kyoto: Europe, Japan, Canada, Russia, and a handful of smaller countries. While the EU has unilaterally pledged to reduce emissions 20 per cent below 1990 levels by 2020, others are holding back. The political reality is that few if any of those with Kyoto targets will be prepared to assume binding post-2012 commitments without some form of commitment from the US and the major emerging economies.
What is needed in Bali is a decision to launch negotiations under the 1992 UN Framework Convention on Climate Change, Kyoto’s parent agreement, which includes all the Kyoto parties plus the United States, Australia and others. These talks should run in parallel with, or encompass those under Kyoto, with the goal of a package deal setting new commitments under both the convention and the protocol. The Bali road map should then lay out a process and timeline for establishing new incentives and commitments under the convention that, in concert with new commitments under the protocol, form a comprehensive post-2012 framework.
The prospects for such a road map emerging from Bali hinge, first and foremost, on the willingness of the US to enter talks on commitments. Only then will China, India and other emerging economies entertain the idea of commitments. The Bush administration says the aim of its major economies initiative is to forge a consensus by the end of 2008 contributing to a new global agreement under the Framework Convention in 2009. But the administration’s vision of this global agreement does not entail binding international commitments and, barring a sudden change of heart, it is unlikely the administration will agree to a road map. Still, the United States is unlikely to be in a position to block a new process altogether. Perhaps the best plausible outcome is a new Convention process that, while not a negotiation per se, has the potential to become a de facto negotiation once the politics allow.
BEYOND BALI
Looking beyond Bali, and beyond the Bush administration, prospects are considerably brighter. There is growing political momentum in the US for mandatory GHG limits. California, New York and other states, many led by Republican governors, have enacted mandatory controls. The US Climate Action Partnership (USCAP), a broad coalition of major companies and nonprofit organisations, including the Pew Center, is calling for a national cap and trade system and other mandatory policies to reduce emissions 60 to 80 per cent by 2050. In Congress, serious efforts are underway in both the House and the Senate to draw up mandatory cap and trade legislation. There is a chance such legislation could be sent to the White House with President Bush still in office, but it is more likely to happen with a new administration in place. The odds are good that mandatory controls will be enacted by 2010.
Once the US resolves what it will do at home, it will know far better what it is prepared to commit to abroad. To ensure that other major economies contribute their fair share to the global effort, the US will have a strong incentive to help build an inclusive and effective post-2012 framework. The global politics of climate change will be thoroughly transformed, and a new set of multilateral commitments may then be in reach.
Standing today at a fork in the road, some governments may not yet be prepared to head down the path of commitments. But they must resist the illusion that the alternative path of no commitments can lead to an ambitious and sustained global effort. For now, it is better to remain at the crossroads than choose the wrong path.
Author
Eileen Claussen is the President of the Pew Center on Global Climate Change and Strategies for the Global Environment. Ms Claussen is the former Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs. Ms Claussen has also served as a Special Assistant to the President and Senior Director for Global Environmental Affairs at the National Security Council; as Chairman of the United Nations Multilateral Montreal Protocol Fund; and as Director of Atmospheric Programs at the US Environmental Protection Agency, where she was responsible for activities related to the depletion of the ozone layer; Title IV of the Clean Air Act; and the EPA’s energy efficiency programmes.
Organisation
The Pew Center on Global Climate Change is an independent, nonprofit, nonpartisan organisation dedicated to promoting practical and effective climate change policies in the US and internationally. The Pew Center produces expert analysis of climate science, economics, solutions and policy issues; facilitates dialogue among policymakers, stakeholders, and experts; and contributes directly to the policymaking process.
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Picture credits: Children gathering firewood: Ugonna Emerole - UNEP/Still Pictures
