Day 13 - The minor accord and the major plea

Dec 21, 2009 - Guy Turner- newenergyfinance.com

Essentially, the final day of COP15 in Copenhagen on Saturday did not bring anything new to what had been witnessed late into Friday night. The “Copenhagen Accord” having been hammered out by the US, China, India, Brazil and South Africa on Friday was put to the Plenary on Saturday for just an hour’s consideration. Unsurprisingly the Accord was neither rejected nor accepted by the Plenary, but merely “noted” by all of the 192 states represented at Copenhagen. Yet, even this was hard to come by, with the US, Australia and Britain reportedly having to step into the Chair position, ousting Prime Minister Rasmussen, to salvage a compromise against harsh criticism from developing countries. “It’s not democratic, it’s not inclusive” exclaimed Hugo Chavez, Venezuelan President, and apparently without a hint of irony, further adding that “international agreements cannot be imposed by a small exclusive group”.

So what does the Accord contain? Three pages, or 1,342 words, to be exact. Probably the most important aspect is that continuation of the Kyoto Protocol has been built into the accord, largely at the demand of China and India as it gives them comfort that “common and differentiated” responsibilities will be maintained. It also recognises the 2°C temperature threshold, though with no guarantee that developed country targets will provide comparable action; a pledge to provide developing countries with additional upfront financing of $30bn by 2012; a goal of $100bn in developed country financing to fund mitigation and adaptation by 2020, which falls short of the figure reportedly advocated by the UNFCCC; and a commitment to mobilise resources to control international deforestation. In fact agreement on forestry was the single issue to be considered in Copenhagen which was expected to be resolved and which has indeed been delivered on.

Overall Copenhagen has clearly been a failure. It has failed to deliver on the terms of the Bali Action Plan laid out in 2007, it has failed to reach agreement on quantified emission reduction targets by the relevant parties, it has failed to clarify the terms of the post 2012 carbon market and it has failed to propose a new deadline for a post 2012 agreement, which can obviously no longer be considered the 18 December 2009. Speaking of the terms of the accord Jose Manuel Barroso said “I will not hide my disappointment”. But most of all it was a failure in expectation. Developing countries and the US never went to Copenhagen to negotiate, merely to state their positions. And without one side’s ability to move in a negotiation the outcome will inevitably be static.

That said, one triumph of the process was the clarity brought by President Obama to effectively try and circumvent the UN process and deal with the half a dozen heads of state that really mattered. Hugo Chavez may find it undemocratic, but in reality this is the only way meaningful commitments of action are going to be reached. Trying to build in the concerns of 190 countries of all shapes and sizes in such a compressed time is not a recipe for success.

So who fares well from the Copenhagen Accord? Candidly, the two largest polluters China and the US. Speaking of the “deal” Xie Zhenhua, head of China’s delegation claimed that “after negotiations both sides have managed to preserve their bottom line”, demonstrating the dominance of economic concerns over those of addressing climate change. Obama has not committed the US to anything new, yet has been seen to “stand up” to China over issues of transparency and international monitoring and verification of emission reductions. Similarly, whilst Wen Jiabao can claim that he has committed China to curbing its emissions for the first time in its history, this commitment is very much in line with business as usual and there is no sanction for non-achievement. The US and China both left Copenhagen without having to commit to costly emission reductions, legally binding and not.

But as we noted in Friday’s blog, none of this should come as a surprise. Trading off economic growth for reductions in emissions for the developed world and donating billions of dollars in assistance to the developing world is an incredibly difficult step to take at the best of times, let alone in the current economic conditions. And to do this in a circus atmosphere with over 190 parties present in two days of serious talk with heads of state and with the world’s media watching was never going to happen. Such decisions need cool heads and detailed discussions, not frantic and snatched meetings.

So where to next? Attention now turns to Mexico in December 2010, where talks will resume on trying to achieve a legally binding agreement from the architecture of Copenhagen. Along the way we should see confirmation of Annex 1 parties’ emission reduction targets which are to be submitted by the 31 January 2010. The US position however poses some problems here. The US is unlikely to have climate legislation passed through the Senate at this point, and with no official mandate for action President Obama will again find it difficult to commit at the international level. From 2010 onwards, we then expect a firming up of a consensus which will be reflected in a “Pledge and Review” agreement which will allow the US to act at the international level within its somewhat complex and uncertain domestic framework. We would also expect to see border taxes come to the fore if developed countries are to move beyond their levels of voluntary commitments.