‘As night from day’

By Fiona Harvey - Financial Times

Published: January 1 2009 19:49 | Last updated: January 1 2009 19:49

Poznan, a grey industrial city in the west of Poland, was the appropriately bleak venue for United Nations talks last month that marked the halfway point in a two-year effort to forge a new global response to climate change. Delegates from the 180 nations represented were acutely aware that negotiations were stuck in a holding pattern.

Only one topic of conversation had the power to quicken people’s interest – Barack Obama. The US president-elect did not, of course, attend – that would have been an unthinkable breach of protocol. Yet his presence seemed pervasive. The change in the White House promises to be the single most important factor governing the world’s approach to tackling what many governments and scientists regard as the biggest problem of the century.


Ban Ki-moon, secretary-general of the UN, told delegates: “Yes, the economic crisis is serious. Yet when it comes to climate change, the stakes are even higher. The climate crisis affects our potential prosperity and our peoples’ lives, both now and far into the future.” With this year intended to bring a new global agreement to curb global warming, he added agitatedly: “We must keep climate change at the top of national agendas.”

For the past eight years, while evidence for humanity’s role in warming the earth has piled up and the consequences have started to become clear, negotiations on a global framework for cutting emissions have stalled. The US, historically the world’s biggest emitter, under President George W. Bush firmly opposed the Kyoto protocol – the world’s only treaty on emissions cuts – or any possible successor. Washington refused until late 2007 to enter into UN talks on a future agreement.

The current Kyoto provisions, binding developed nations to cut their emissions by an average of 5 per cent from 1990 levels, expire in 2012. The UN has warned that unless a successor treaty could be agreed by the end of 2009, there would be little chance of governments having time to ratify it before the 2012 deadline.




For delegates used to the glacial pace of climate negotiations – which have been going on since 1992 – the change in the White House offers the best hope yet of real movement. “It will be as different as night from day,” promised Senator John Kerry, the former Democratic presidential candidate and member of the Obama camp, who attended the talks in order to report back to the president-elect. “Obama has made clear he supports a mandatory target [on global emissions reduction]. This is a significant departure from where we have been to date.”

As well as pledging to negotiate an international deal, Mr Obama supports a cap-and-trade system to limit carbon dioxide emissions within the US. During his campaign, he advocated cuts that by 2020 would return the US to the emissions levels of 1990. He has also called for an overhaul of US industry to set it on a low-carbon path, which would require a $150bn (£104bn, €106bn) investment in renewable energy and create millions of jobs. This would form a central plank of his much-vaunted stimulus package to revive the national economy.

Indeed, while the Poznan powwow was under way, Mr Obama gave further proof of the seriousness of his intent by appointing a team of prominent climate change scientists and administrators who will carry out his environmental policies (see below). But although the change in the White House and the subsequent actions of the president-elect have proved everything that the European Union, the UN and other supporters of action on emissions could hope for, an agreement at the conference in Copenhagen scheduled for December is far from a foregone conclusion.

For an agreement to be struck, UN officials say, several components are essential: setting a mid-century goal on global emissions cuts; a goal for cuts by 2020, probably only for rich countries; separate commitments, falling short of absolute cuts in greenhouse gases, for poorer countries; and a means of transferring technological know-how and finance for low-carbon technologies to the developing world.

Of these, the most problematic is agreeing what actions developing countries must take. Until recently, rich nations were responsible for the lion’s share of greenhouse gas emissions. But in the past decade, emissions from poor countries have risen to outstrip those of the developed world. China is now the world’s biggest annual emitter and India rivals European Union countries, with Brazil, South Korea and Mexico following close behind.

Poor countries had no obligation to cut their emissions under Kyoto and many are reluctant to shoulder such responsibilities in any replacement agreement, arguing that their per capita emissions are still much lower than those of their richer counterparts.

A successful outcome this year depends on a settlement between the developed and developing world. Mr Kerry made this clear, saying: “We will not pass a treaty unless it is global. All countries need to be on notice.” But the Poznan meeting ended in discord, with a few developing countries accusing rich nations of selfishness and failing to take responsibility for global warming. Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change and the UN’s top climate change official, said: “Poznan achieved what it was supposed to but it ended on a rather grim note . . . It’s a worrying sign that people are taking up positions for a hard negotiation.”

Among developed countries, there is broad consensus that a halving of global emissions by 2050 will be needed, probably implying much bigger cuts – of about 80 per cent – from rich countries, and that substantial cuts in their emissions by 2020 will be necessary to meet such a goal.

Yet, even among the coalition of the fairly willing, there are stark differences. After some wrangling, the EU in December agreed cuts of 20 per cent, compared with 1990 levels, by 2020, and offered to raise this to 30 per cent if other countries joined in on an agreement – even if those others fell short of such stringent targets. But countries such as Japan and Canada, the traditional allies of the EU on Kyoto, have failed to come up with similar targets. Australia, a more recent convert, has set itself a target reduction of only 15 per cent from 1990 levels by 2020.

The US has yet to come up with a medium-term emissions goal. Mr Kerry set out an ambitious possible goal in Poznan when he quoted scientific advice that cuts of 25-40 per cent by 2020 were necessary. “Europe can be a very important partner in helping us to achieve that,” he said. Such a target is far above what Mr Obama promised on the campaign trail but is in line with the advice of the Intergovernmental Panel on Climate Change.

It may be possible for Mr Obama to agree such a target, based on the advice of his scientists, but to pass into law it will have to be ratified domestically. Some lawmakers from heavily industrial or coalmining states are reluctant to agree to targets they fear will penalise their industries.




Then there are the countries that environmentalists regard as troublemakers. “We must not forget Saudi Arabia,” said Angela Anderson, director of international global warming at the Pew environment group in the US. The oil-producing country has a history of disrupting UN climate negotiations, though recently it has taken steps to invest in renewable energy. The Saudis “will continue to pose some real challenges in the negotiations”.

Russia is another potential dealbreaker. Moscow played a vital role when, in 2004, it provided the final ratification needed for the Kyoto protocol to come into effect, in exchange for EU support for its membership of the World Trade Organisation. But, rich in fossil fuels, it may perceive its interests lie elsewhere this year.

With so much still unresolved, is the deadline of December for the conclusion of talks realistic? Some think there is still too much to do. As the UN’s Mr de Boer put it at Poznan: “I don’t think that where we are now it’s going to be foreseeable to produce a fully elaborated and comprehensive agreement in Copenhagen.”

A further factor clouding the talks is the financial crisis. Mr Obama has become the foremost proponent of the argument, also espoused by the EU, that restructuring the economy along low-carbon lines – such as by improving energy efficiency, investing in renewable energy sources and electric vehicles and using new methods of building construction – both offers a way out of the current economic quagmire and lays a sound foundation for growth in the coming decades.

Critics say such a strategy also provides the best hope of regenerating developed-country economies in a form less vulnerable to competition from rapidly industrialising countries such as China, which are markedly higher in carbon per unit of output. Others argue that tackling climate change should be delayed while the economy recovers, by which time counter-carbon measures will have become cheaper.

But as the clock ticks on hopes for an agreement, and the effects of the financial crisis grow more pronounced, forging a deal that aligns economic solace with environmental imperatives becomes harder. Mr Obama acknowledged as much when he made global warming one of the first concerns of his presidency.

Mr de Boer is insistent that agreement on a target for emissions cuts still needs to come this year, even if the talks spill into 2010. “What we need to achieve in Copenhagen is clarity on key political issues so that everything after that is filling in the details.”

If, some might ask, taking delegates to Poznan, one of Europe’s more polluted cities, failed to concentrate minds, what hope of even an outline accord being struck in the clean Danish capital? The answer will depend to a big extent on the way the political wind blows in Washington during Mr Obama’s first year.



OBAMA’S GREEN APPOINTMENTS: ‘THEY WILL TELL THE PRESIDENT AND THE AMERICAN PEOPLE THE TRUTH’

Two key appointments by President-elect Barack Obama show how differently climate change will be treated under the new US administration.

Steven Chu, a Nobel prize-winning physicist, was named head of the Department of Energy. Mr Chu, director of the Lawrence Berkeley national energy laboratory in California, has warned of imminent catastrophe if the world does not drastically and urgently reduce its greenhouse gas emissions.


Barack Obama with Steven Chu, appointed to be energy secretary

He is a member of the Copenhagen Climate Council, a group of scientists and business leaders pressing for a worldwide agreement to replace the Kyoto protocol.

John Holdren, a Harvard professor of environmental policy, is to be chief adviser to the president on science. He formerly advised President Bill Clinton and has long studied how to develop a scientific understanding of the causes and consequences of climate change into specific policies to tackle the problem.

Under President George W. Bush, scientists including James Hansen, head of Nasa’s Goddard Institute, complained that their work on climate change was suppressed or censored by the administration. One White House political adviser caused a scandal by appearing to water down scientific advice on the severity of climate change in a leaked document.

Jonathan Lash, president of the World Resources Institute, a Washington think-tank, describes Mr Chu and Prof Holdren as “outstanding scientists of enormous integrity”, adding: “They will tell the president and the American people the truth about the scientific findings on our most important challenges. Each of them has shown a deep understanding of the risks created by human pressure on our environment and each has experience and skill in helping policymakers understand and base their decisions on science.”

Environmental groups are jubilant at the two appointments and a sprinkling of others including that of Carol Browner, who is to co-ordinate energy and environmental policy from the White House.

As head of the Environmental Protection Agency under Mr Clinton, she fought many battles with a Republican-run Congress for greater powers to curb pollution.



BONES OF CONTENTION: THE KEY QUESTIONS THAT NEED TO BE ANSWERED IN ANY POST-2012 FRAMEWORK




TARGETS:

How far must the world cut its greenhouse gas emissions in order to avoid the worst effects of climate change?

Countries are expected to agree a mid-term goal (for emissions cuts by 2020) and a long-term goal (cuts by 2050).

Scientific advice in 2007 suggested at least a halving of global emissions by 2050 would be necessary to avoid warming of more than 2 degrees, regarded as the limit of safety. But since then, some scientists have argued cuts of 80 per cent or more would be needed.

As for a mid-term goal, the IPCC says cuts of between 25 per cent and 40 per cent by 2020 from developed countries are necessary to avoid dangerous climate change.

The bulk of the cuts are expected to come from developed countries, which have far bigger emissions per capita than the developing world, and are responsible for a greater share of historical emissions.

The EU has agreed to cut its emissions by 20 per cent by 2020, and by 30 per cent if other countries participate in an agreement. Some countries, such as the UK, have set their own long-term targets – in the UK’s case, an 80 per cent cut by 2050. But others have set less ambitious goals: Australia’s is for reductions of 15 per cent by 2020, compared with 2000 levels.

Those yet to come up with clear targets include the US, Japan and Russia.

BURDEN SHARING:

What undertakings will developing countries sign up to?

Developing countries are not expected to sign up to absolute cuts in their emissions in the medium term. Instead, they will be required to make commitments to curb the expected growth in their emissions as they industrialise – in the UN jargon, to “deviate from business as usual”. The effects of their actions must be “measurable, reportable and verifiable” – in other words, they will be monitored to ensure they live up to their goals.

Little has yet been agreed on the nature of such commitments, how they will be measured and against what benchmarks. Some countries, such as India and Brazil, have argued vociferously that poor nations must be placed under no obligations that could harm their economic growth, and have accused rich governments of selfishness.

But without strong commitments from China and other rapidly industrialising countries, the US and others are unlikely to agree to a deal.

MECHANISMS:

How can emissions be reduced?

Under the Kyoto protocol, a system of emissions trading was set up to help rich countries to meet their targets by financing emissions cuts in poor nations. This has mobilised tens of billions of dollars in finance for poor countries, and encouraged other countries to set up cap-and-trade systems.

But critics say a stronger global cap-and-trade system will be needed, which does not rely, as the current one does, on small emissions-cutting projects gaining approval individually from the UN. Others worry about the potential for fraud, and some argue that a carbon tax or simple overseas aid from rich to poor countries offer a less complex alternative.

WILD CARDS:

Forestry: How can deforestation be avoided?

Deforestation is responsible for about a fifth of greenhouse gas emissions. Not cutting down forests is one of the cheapest ways of avoiding climate change, and brings other benefits such as preserving eco-systems.

But there is no clear agreement at present on how poor countries, which contain most of the world’s remaining rainforests, should be compensated for not exploiting them. Countries such as Brazil and Indonesia will use their forests as a bargaining chip.

Sectoral agreements: How can governments ensure businesses are not placed at a competitive disadvantage?

One idea for a level playing field is for “sectoral agreements” by which the biggest companies in a given sector would sign worldwide or countrywide agreements binding them all to cut emissions relative to a benchmark. This would avoid the problem of “carbon leakage” whereby companies relocate from areas of stringent environmental regulation to more lax regimes.

This will be discussed in 2009, but whether it is included in a final agreement is difficult to predict.

Russia: Will Russia try to impede progress on a deal?

This is a distinct possibility, given Moscow’s tepid response to climate fears and its vast resources of fossil fuels. Russia has taken little part in negotiations to date, and is not obliged to reduce emissions under the Kyoto protocol, but will react if its interests appear threatened.

Copyright The Financial Times Limited 2009