E3G

The Future of Climate Policy

By Tom Burke

There is thus a considerable risk of a chicken and egg impasse. The first commitment period under the Kyoto Protocol expires at the end of 2012. Two years is the time typically needed to go from reaching such an agreement to its binding commitments coming into force. Delay beyond the end of this year therefore risks undermining the revenues flows needed to get agreement in the first place. 

While previous experience suggests that there is some margin to continue negotiating beyond the end of 2009 this margin is small. In any case, uncertainty as to whether or not the world remains on course to develop a global price for carbon lead to future carbon prices being discounted well before the negotiations conclude. This would in turn lead to pressure for a more direct, but less politically deliverable, sourcing of the capital flows to the developing world needed for agreement on the ‘global deal’ to be reached.

Balanced against this gloomy prognosis is the re-entry of the United States into the constructive development of the global climate regime. There is no doubt, both from president Obama’s campaign pledges, from the frequent inclusion of references to climate change in his speeches, and from the nature of his appointments to key posts that his administration will now play a full and leading part in addressing this issue globally.

However, this will not be an unmixed blessing and the re-engagement will need to be skilfully handled to avoid creating new problems as it solves those which are familiar. Politically, President Obama has pledged to reduce U.S.  domestic emissions to 1990 levels by 2020 and to aim for a reduction of 80% from present levels by 2050. This is an ambitious goal which converges on that of the EU albeit on a different trajectory.

The gap between rhetoric and action on climate change in even the most serious of nations is so wide as to justify much scepticism. Without clear signs of that gap closing, the political conditions for an ambitious enough policy agreement in Copenhagen and later will remain elusive.

To deliver it will require very tough federal legislation which a majority of commentators in the U.S. think is unlikely to pass this year. There is also a widespread view that the U.S. will not enter into binding international commitments until it has settled its domestic legislation. This would avoid the risk of repeating the Kyoto experience of negotiating an agreement in good faith only to be unable to achieve ratification by the Senate.

Should this prove to be the case, the US would not be in a position to join the other Annex 1 countries in agreeing to a second commitment period under the Kyoto Protocol in Copenhagen. This is another reason for anticipating that reaching a final agreement might spill over into 2010.

It is widely expected that a core condition for achieving agreement to a ‘global deal’ in Copenhagen by the major developing countries such as China, India and Brazil, will be a US agreement to binding targets. Thus a successful ‘deal’ might require a difficult to accomplish alignment of timetables of the UN treaty process and us domestic legislative process.

There are four broad outcomes to the negotiations in December. The first is the satisfactory achievement of the so-called ‘global deal’ along the lines I outlined a moment ago. I cannot say from my recent conversations that this is yet in sight. To achieve it will require rather heavier lifting than we have yet seen from Prime Ministers and Presidents.

At the other end of the spectrum there remains a possibility of complete breakdown. Issues such as the amount of credible new money available for adaptation or the failure to agree the exact legal form of the ‘deal’ are readily available breakdown points. The highly stressed atmosphere of the concluding stages of climate negotiations is such that breakdown by accident is quite possible.

Between these poles, two other outcomes are possible. A partial success could then lead, as it did at Kyoto, to later recovery. Or, a partial success could lead, in ways that are all too familiar from trade negotiations, to a prolonged loss of momentum.

Of all the outcomes, this latter is the one that is most dangerous. Political leaders will have got the headline and crossed the problem off the to-do list. But nothing will actually have happened and re-starting the momentum will take time we do not have and will quite likely require some kind of catastrophic event.