Policy Update #4

Is the Pessimism Justified?

Pessimism: an inclination to emphasize adverse aspects, conditions, and possibilities or to expect the worst possible outcome.” (Merriam-Webster Online Dictionary)

The past two months have seen a flurry of activity on climate change. Domestic events and announcements in many nations, high-level meetings of key groups of countries and discussions arranged by the United Nations have all been making news.

Yet in spite of such endeavors, the mood among many participants has become increasingly pessimistic. Some feel the prospects for success in Copenhagen are dimming.

What has caused such doubts? Is such pessimism justified? To answer these questions, it is necessary to review recent events at the national, bilateral and multilateral levels.

Securing an agreement in Copenhagen will require three separate strands to come together. First, key countries will need to decide domestically what policies they are willing to adopt. Secondly, particular groups of countries—such as those in the G8 and G20—will need to find common ground at the highest level on the broad political terms of an international agreement. And finally, at the multilateral level negotiators will need to turn a high-level political mandate into a detailed treaty.

This, at least, is the conventional wisdom on the prerequisites for developing a negotiated outcome. It also explains why some key players are increasingly gloomy about whether an agreement will be reached in Copenhagen. Recent events related to all three strands certainly give little cause for complacency.

DOMESTIC BLISS?

When it comes to key countries' domestic politics, the last few weeks have on balance provided more bad news than good.

On the positive side of the ledger, several governments have recently announced domestic mid-term emissions targets—a step widely regarded as critical to a future agreement. For instance, in late June Russia's President Dmitry Medvedev announced a target of reducing greenhouse gas emissions by 10-15% below 1990 levels by 2020. This declaration followed announcements of mid-term targets from Japan, Canada and Australia, with New Zealand also declaring a target “range” on 10 August.

On the downside, however, none of these commitments are at the level many scientists have said are required to contain the increase in global temperature to no more than two degrees Celsius. Developing countries have called for cuts of 40% or more from industrialized countries by 2020 compared with 1990 levels. Only the EU has so far indicated a willingness to take on goals that even come close to this level of ambition.

In the US, some progress has been reported on drafting new climate legislation, with the Waxman-Markey bill winning a crucial vote in the House of Representatives. However, it has a number of stages to navigate before it can become law, and the final outcome is not yet clear. Recent talk on Capitol Hill provides no guarantees that climate legislation will be passed before the Copenhagen conference. In recent weeks, the focus has been primarily on health care reform—a hugely complex and deeply politicized issue that has been claiming the lion's share of legislators' time and energy. While climate change is a priority for the new Administration, the prospects for a final agreement in Congress, including on a new cap-and-trade system, remain uncertain. The situation will probably become more transparent in September, when Barbara Boxer, a Democratic Senator from California, is expected to release draft legislation.

Even if the US Congress does adopt a new law, there is no guarantee that it will provide the level of commitment both environmental activists and developing country negotiators are demanding. For instance, the current draft of the Waxman-Markey bill includes a 2020 domestic target of 17% reductions. But this was set against a benchmark of emissions in 2005, which were considerably higher than in 1990. While such a target represents a dramatic shift in policy compared with the Bush Administration's approach, it still remains some distance away from the 25-40% reduction levels indicated by the scientific community, let alone the 40% or more demanded by developing country negotiators.

In fact, whether a domestic agreement is reached in time for Copenhagen or not, it seems unlikely that it will provide the level of mid-term emissions cuts that the Group of 77 and China is seeking from industrialized nations. US special envoy on climate change, Todd Stern, made this clear at a meeting in July, when he declared that “the 40 below 1990 (levels) is something which in our judgment is not necessary, and not feasible given where we're starting from, so it's not in the cards.”

These are not the only events at the national level that may have an impact on Copenhagen. The Republic of Korea's announcement in early August of possible domestic emissions targets for 2020 has also garnered some attention. As a fairly recent addition to the group of industrialized countries, this country was not required to take on firm targets under the Kyoto Protocol. While modest and not directly connected to the multilateral negotiations, the new goals set out by the Government in Seoul have raised the difficult question of whether other countries that are outside the traditional group of industrialized countries may also take on targets at some point.

Domestic politics may also affect Japan's role in Copenhagen, with reports suggesting the issue has become a point of contention between the ruling coalition and the opposition Democratic Party of Japan. National elections are scheduled for 30 August.

SEEKING A POLITICAL PACT: BILATERALS AND “KEY GROUP” MEETINGS

Looking beyond national politics, a number of recent events have taken place among countries at the bilateral and “key group” levels. The aim of such meetings is to build consensus among various countries at the highest political level. One such meeting was the “Greenland Dialogue.” An informal meeting of ministers and other high-level officials from 29 countries, the Dialogue has become an annual fixture on the climate calendar in recent years, with different countries playing host on each occasion. The latest meeting, which took place from 30 June to 3 July, ended in agreement on long-term targets. There was also some discussion on the need for credible mid-term targets, with participants noting the IPCC's range of 25-40% for developed countries, and the need for substantial deviation from business-as-usual for developing countries. There was no clear agreement on mid-term targets, however.

The Greenland Dialogue was followed by a series of major events. From 8-10 July, leaders of the G8 gathered for their annual meeting in L'Aquila, Italy. They were joined at some sessions by the leaders of the “Group of 5” major developing countries (Brazil, China, India, Mexico and South Africa). During these gatherings, a meeting of the “Major Economies Forum on Energy and Climate” was also held. This was considered to be an important gathering, since it included leaders from the G8 countries plus Australia, Brazil, China, India, Indonesia, the Republic of Korea, Mexico and South Africa. The Major Economies Forum also approved some long-term aims, including limiting the global average temperature increase to no more than two degrees Celsius. In addition, the Forum agreed to “further consider proposals for the establishment of international funding arrangements, including the proposal by Mexico for a Green Fund,” and indicated that it will continue to meet in the lead up to Copenhagen. There was also language on individual countries leading “efforts among interested countries to advance actions on technologies,” with lead countries reporting back with recommendations by 15 November 2009, just a few weeks before Copenhagen. However, there was no clear signal on the all-important question of mid-term targets and actions—something that will be critical to success in Copenhagen.�

In an effort to build on the achievements in L'Aquila (and perhaps fill some of the gaps), a subsequent informal meeting of EU energy and environment ministers in Sweden on 24 July noted the need for the EU to take the lead in speeding up progress in multilateral negotiations. In particular, ministers highlighted the “significant short-term need to help developing countries with strategies for development with reduced emissions, and measures for adaptation to a changing climate”—which some interpreted as an olive branch to their partners in the South.

Also in late July, senior Chinese and US officials met for their first meeting of a new “US-China Strategic and Economic Dialogue,” which included bilateral talks on climate change and energy. The discussions resulted in a memorandum of understanding that many billed as a “confidence building” measure for broader Sino-American relations. The meeting reinforced the widely-held view that a grand political bargain on climate change will ultimately come from a small group of key countries. However, skeptics have already argued that such initiatives from the US executive branch may be undermined if the US legislature includes trade sanctions in its cap-and-trade legislation. “US diplomats and US lawmakers will ultimately need to be on the exact same page,” suggested one observer.

MULTILATERAL DISCUSSIONS: THE NEWS FROM BONN

Meanwhile, discussions at the multilateral level continue. The last round of talks under the UN Framework Convention on Climate Change (UNFCCC) took place in Bonn in June, and another session is taking place this week, at the same venue.

In a recent interview, UNFCCC Executive Secretary Yvo de Boer presented his interpretation of the latest talks:

“At the June meeting, the negotiating texts were enriched, expanded and clarified with many useful proposals and additions. In August, options can be narrowed down, texts can be simplified and shortened. Negotiators can now identify with confidence the key issues that need to be resolved to reach a Copenhagen agreement that will satisfy the political consensus that has emerged.”

De Boer's explanation fits the prevailing view that the UNFCCC meetings in the lead-up to Copenhagen will be focused on technical drafting and details. The political decisions will not come during the August Bonn talks—or even at subsequent UNFCCC talks in Bangkok and Barcelona. The challenge in Bonn and beyond will be to narrow differences and reduce the length of the existing negotiating texts, which are essentially giant “wish lists” of what every country would like to see included in a final deal.

However, cutting the text back to a manageable size will not be easy. Few countries will be willing to sacrifice their particular passages at this stage. And in spite of the recent political guidance that emerged in L'Aquila and elsewhere, there is no consensus yet on mid-term targets or specific actions, or a common understanding of how actions will be financed, technology will be shared, or which activities and methodologies will be included. Even the legal form of a final agreement has not yet been agreed (there are currently half-a-dozen different options on the table).

HOW PESSIMISTIC SHOULD WE BE?

Given recent events, it is easy to understand the growing pessimism among many observers. Time is already running short to secure a high-level political bargain that could be finalized and presented for approval in Copenhagen. While meetings of the G8, the Major Economies Forum and other gatherings have been of value, they have yet to produce a political consensus. If such an agreement is not to come from within the UNFCCC process, the remaining opportunities to promote such a deal before Copenhagen are limited. In late September, the UN High-level Event on Climate Change in New York and G-20 Summit of World Leaders in Pittsburgh stand out as two fora that could serve a useful purpose in this regard.

If a meaningful political bargain is to be secured before, during or even after Copenhagen, one thing is clear: at some point, key governments will need to compromise.

Some would argue that the agreement in L'Aquila on long-term action was a positive step. At this point, however, it is actions and targets for the mid-term, 2020, that appear to be the major sticking point. The EU's longstanding offer to cut emissions 30% by 2020 compared with 1990 levels if other industrialized countries undertake similar efforts was a first step to break the deadlock. However, it will clearly take more from key countries to secure an agreement that brings meaningful action on emissions levels by 2020. While there is still enough time left to forge a strong outcome, recent events suggest that there are also some valid reasons behind the rise of pessimism at what Copenhagen might achieve.