Bridges Trade BioRes Review • Volume 3 • Number 1 • June 2009

Global negotiations on climate change: The greatest show on earth

by Ana Maria Kleymeyer

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As this article goes to press, the United Nations Framework Convention on Climate Change (UNFCCC) is forging through yet another round of discussions and negotiations that strive to secure our common future. While nations around the world are scrambling to find solutions to their avalanching economies, scientists and small island states announce anxiously - and ever more frequently - the escalating impacts of a changing climate on the world’s vulnerable communities and fragile ecosystems. It is, without a doubt, currently the greatest show about and on earth.

The challenge of solving the global climate crisis is monumental. In the abstract, the multilateral discussions on climate change mitigation are about tons of carbon dioxide and baseline years; in reality, they are about production, consumption, and myriad other aspects of human activity. Climate change cuts across nearly every sector and activity of society, posing complexities that surpass common environmental or economic challenges. In order to address the issue fully and effectively, the climate negotiations promise outcomes that will shape the future in terms of economic and development practices. At the heart of the matter, though, are fundamental concerns about how to address the climate crisis and who will bear the burdens - financial and otherwise - of any change. To many, this is a frightening prospect. Behind every unfurled flag lies the development interest of each and every country and a keen hunger for prosperity.

Throughout the negotiation discussions, compelling and complex issues such as ‘atmospheric space’ - the term increasingly used when evaluating the amount of greenhouse gases (GHGs) the world can continue to emit within the parameters of global safety - abound.[1] In a final solution to the problem, the limited quantity of future emissions must be budgeted carefully to avoid catastrophic results. Thus, any solution involves a careful and equitable allocation of the amount that countries may emit over the foreseen future and serious regulation of human behaviour and economic activities to do so. In terms of both national and global politics, this is a highly contentious proposition.

Counting down

The UNFCCC meetings held in Bonn, Germany from 1-12 June cover such a commotion of concurrent issues and discussions that they evoke the feel of a three-ringed circus. The Ad-hoc Working Group on the Kyoto Protocol (AWG-KP) worked towards concluding negotiations on a second commitment period, beginning in 2013, for developed country parties.[2] The Subsidiary Bodies for Implementation (SBI) and for Scientific and Technological Advice (SBSTA) continued to pursue their mandates under the Kyoto Protocol, addressing issues ranging from reduced emissions from deforestation and degradation to a financial mechanism to support implementation.[3]

In the centre ring at the Bonn meetings, is the Ad-hoc Working Group on Long-term Cooperative Action (AWG-LCA), the group tasked with negotiating the text of a new global deal to address climate by the time of the Copenhagen Conference of the Parties (CoP) in December 2009.[4] The AWG-LCA, looks specifically at a set of issues framed in a decision referred to as the ‘Bali Action Plan’, agreed to in Indonesia in 2008. Parties are taking their first stab at a newly compiled negotiation text of a deal to effectively implement the UNFCCC, a process that this year moved into ‘full negotiating mode’. The final text will encompass a wide range of climate change mitigation and adaptation activities and their associated financial and technological support mechanisms.[5]

Distilling the climate brou-ha-ha: environment or economics

One may wonder how these nebulous groups with quixotic titles hold the key to our future. Beyond the politician’s off the cuff answer that “they serve to address the challenge of climate change” - in essence, the UNFCCC negotiations are laying down the rules that dictate specifically how countries will change. On the one hand, this change can refer to their production, consumption, transportation, and forest preservation practices in order to reduce global emissions of greenhouse gases (GHGs), and on the other hand, changes to the business-as-usual approach to security, social and economic development in order to dampen the blow of climate change to their citizens, economies and ecologies through adaptation to the impacts of the changing climate are also under scrutiny. But there is more to these two hands than meets the eye, because of the added complexities of financing and technology. In other words, the real questions are: first, how to develop and deliver the best technologies for both goals into the hands of every and any country that needs them, and then who will pay the costs of these technologies and other measures necessary to ensure adequate mitigation and adaptation world-wide?

But don’t let the simplicity of a one-paragraph explanation fool you. The plot continues to thicken. In addition to defining approaches to “enhanced” mitigation, adaptation, technology development and transfer, and financing for climate change, the Parties to the Convention and its Protocol must grapple with the reality of a globalised world where international trade rules, millennium development goals, competition, multi-national companies, overseas development assistance, and one of the greatest financial catastrophes of the last century already are a cacophonous musical score with many of the stanzas already written. “Don’t mind those minor distractions, climate is at the top of the agenda,” you might say. But the negotiators do mind. Because back home, those number two, three, four issues are number one.

Many of the negotiation issues are intertwined and highly contentious, and it is difficult to identify areas of consensus. The dynamics between the groups of countries and even within those groups are complex, compounding the difficulty of agreeing on anything within the next six months. To complicate matters, we may see the fifty-three page text jump up to at least twice that as parties during this session address form and content.

The agreed outcome of the AWG-LCA will increase participation of developing countries in mitigation activities and seeks to bring the United States - who signed but never ratified the Kyoto Protocol - on board in a manner comparable to those required of other developed countries. In deciphering the US submission and statements in this forum, they steer away from a compliance-based (Kyoto-style) arrangement towards what they call an “Implementation Agreement,” where action is defined and regulated at the national level, which they promise will not create a congressional obstacle in their federal treaty process. They further call for significant carbon ‘offsets’ - activities that counteract continued emissions in one place by reducing, avoiding or sequestering carbon emissions elsewhere to compensate (i.e., reforestation projects or mitigation in developing countries) - as ways to reach eventual mitigation targets. These approaches surprise many countries and organisations who expected the US to take a rigorous tack since the change of administration. Large numbers of carbon offsets paired with the lack of a robust compliance scheme risk a business-as-usual scenario in the future. Furthermore, the enforceability of the outcome is key to ensuring the mitigation and adaptation results, and particularly key for converting the promises of technology transfer and financing into reality - promises that under the 1990 Convention have yet to see the light of day.

Trade in the mix

Trade issues filter into the negotiations through a number of diverse channels. This may explain why, starting in 2008 at a meeting parallel to (but conveniently miles away from) the Climate Conference of the Parties (CoP), the Government of Indonesia convened a meeting of Trade Ministers to discuss the question of climate change, followed by a similar meeting involving industry ministers at the CoP last year in Poland. Such meetings are now on the agenda of most Finance Ministers and heads of state meetings, including the G8.

Without wandering into an endless labyrinth of details, a quick glance into the negotiations reveals a number of levels at which the trade regime and its associated aspects intersect. The first group of issues, and most prominent in the global media, are those related to the AWG-LCA.

Trade issues also arise in relation to development concerns, both on the mitigation and adaptation sides, where the questions of economic security, development, and diversification are key. Then there is the question of the transfer of low-carbon and energy efficient technologies, which criss-crosses the trade world at bilateral, regional, and multilateral levels. Additionally, the question of subsidies, as countries strive to support their agriculture, transportation, energy, and building sectors (to name a few) to adapt and survive in a low-carbon universe. Also on the climate change docket, questions arise regarding how to enhance policies and measures that stimulate low carbon pathways (or dissuade high-carbon practices) and the many competitiveness concerns that emerge as a result of any or all of these approaches. Finally, the impact of climate policies to export markets is of particular concern to many countries in this forum, not only in relation to oil exporters but also energy or carbon intensive products such as steel, aluminium, and cement.

Trade and climate concerns cut both ways. The question of how trade measures might impact efforts to address climate change requires further attention. For example, further liberalisation of trade on goods and services could, if carefully tailored, support climate change objectives. Or, it could complicate matters if, for example, increased consumption of wood products increases deforestation, which in turn releases CO2 into the atmosphere and decreases the world’s precious ‘carbon sinks’ that absorb CO2 out of the atmosphere.

But while trade remains on the sidelines of the current round of meetings, parties are increasingly exploring the potential synergies as well as pitfalls of the trading system in order to better understand the implications of the decisions they make. Notably, increasing attention to these topics brings the overlapping issues into sharper focus. Certainly, the commonalities in terms of development objectives and global cooperation make these better allies than foes.

Agriculture: Growing in importance in mitigation and adaptation

Agriculture accounts for 14 percent of GHG emissions. The impacts of climate change to the agriculture sector are also predicted to be great. In a few cases, these impacts could be positive, but in most - as a result of increased floods, droughts, and even the expansion of biofuel production - global food security could be considerably threatened.

Countries and the global community are concerned. The UNFCCC recently convened a workshop and produced a report at the behest of the Parties with a view to strengthening the issue’s role in the Copenhagen deal.[6] Innumerable non-governmental and intergovernmental organisations are also studying the multiple climate dimensions of the issue and presenting on the sidelines of the negotiations.

It is worth underlining that this is an issue that in some respects unifies parties from both developed and developing countries interested in collaborative research on mitigation and adaptation, as well as research and development of technologies in the sector as related to climate. Areas that require further consideration include: scientific and technological advances on how to mitigate CO2 emissions from a sector which, for many countries is their leading source of carbon emissions, information on the potential impacts on global food security as food demand doubles approaching the year 2050, the trade implications of major shifts in agricultural production, and - perhaps most urgently - pressing solutions for rural areas where predominantly poor populations rely on agriculture for subsistence.

Technology development, transfer, and other magic acts

Apart from agricultural considerations, trade implications also arise in a number of discussions on technology development and transfer where market access and intellectual property rights pose potential obstacles to the access countries have to leading technologies for mitigation or adaptation. Increasing information on the availability of technologies continues to emerge, yet little happens in terms of actual development or transfer under the UNFCCC. Developed countries agreed under the Convention to finance the costs of technology transfer in developing countries to address climate change; however, advances to date remain at the level of studies and discussions with no mechanism or program in place - other than the limited Clean Development Mechanism - to increase access.[7]

Needless to say, the issue touches upon propriety and profits, compounding the difficulty for governments vis a vis the private sector. And although global economic meetings, such as Davos, get front page coverage as top CEOs discuss the role of business in resolving climate change, more involvement is required and consistently referred to by government delegations, especially for sources of financing to foot the bill for the climate crisis. Some private sector groups now attend climate change negotiations as observers; many are concerned about the costs of carbon caps to their business and wary of what governments will do under mounting public pressure. Although they may be invisible players within the negotiations, implementation will inevitably fall in their hands, and their cooperative engagement is crucial.

Looking forward to Copenhagen - The Final Act

Before the end of the year, negotiators will meet four more times to work on the text of the protocol, the last of which is the Copenhagen CoP. Yet the Bonn talks in June mark a critical moment for the Convention process. Only six months remain until Copenhagen, with a tremendous amount of work yet to cover. At the political level, leaders insist they are prepared to do whatever is necessary to solve the problem, but true colours are seen on the negotiation field, where Parties must put into clearer terms precisely what they are willing to do. The many contentious issues could mean a breaking down of the discussions; or, Parties may be able to work through the complexities creatively, employing the tools and experiences from other international forums, such as the General Agreement on Tariffs and Trade and the World Intellectual Property Organization, to construct a lasting and effective solution.

When confronted with questions about which will take priority, the climate or economic crisis, political leaders vow that the financial challenges will not deter their commitment to addressing climate change. Some countries have even included climate change measures, such as support for renewable energy and policy changes, as integral parts of their economic stimulus packages. The hard question will be in terms of numbers. The renowned climate economist, Nicholas Stern, underlines that “at $40 per tonne CO2e a total world allocation of rights [to emit] would be worth 1.2 trillion per annum”.[8] Will leaders be able to access the same levels of funding required for climate as they did for their bail-outs?

Ana Maria Kleymeyer is ICTSD’s Senior Advisor on Climate Change Negotiations.

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Additional Information / References:

ICTSD Global Platform on Climate Change, http://ictsd.net/programmes/energy/publications/

Stilwell, M., Improving Institutional Coherence: Managing Interplay Between Trade And Climate Regimes (Oxford 2007).

[1] The Stern Review on the Economics of Climate Change explains that `The risks of the worst impacts of climate change can be substantially reduced if greenhouse gas levels in the atmosphere can be stabilized between 450 and 550 ppm CO2 equivalent. Stabilization in this range requires emissions to be at least 25% below current levels by 2050, and perhaps much more. Ultimately, stabilisation-at whatever level-requires that annual emissions be brought down to more than 80% below current levels.’ NASA’s leading climate scientist, James Hansen, argues that a target of 350 ppm CO2 may be required to avoid triggering abrupt and irreversible climate change. See Hansen, Makiko Sato, Reto Ruedy, Ken Lo, David W. Lea, and Martin Medina-Elizade, “Global Temperature Change,” Proceedings of the National Academy of Sciences (2006).

[2] The AWG-KP focused on two documents. The first addresses possible amendments to the Protocol, while the second looks at ‘other’ topics, including land use, land use change and forestry, the flexibility mechanisms developed to enable developed countries to achieve their commitments (the Clean Development Mechanism, Joint Implementation, and Emissions Trading Systems), and a number of emissions measurement issues (metrics, sector and source categories, etc.).

[3] The SBI, which discusses issues that are ahead on the path to implementation, addresses technology transfer, capacity building, national communications and the financial mechanism of the Convention. SBI’s slower and more cautious sibling, the SBSTA, considers the Nairobi Work Programme on impacts, vulnerability and adaptation to climate change, reducing emissions from deforestation in developing countries (REDD), technology transfer, and various methodological issues under both the Convention and the Kyoto Protocol.

[4] Ad Hoc Working Group On Long-Term Cooperative Action Under The Convention Chair’s Negotiating Text FCCC/AWGLA/2009/8.

[5] In broad brush strokes, the elements of the text include: a Shared Vision (as of yet to be defined, but essentially guiding principles and a “Global Goal” for emissions reduction), Adaptation, Mitigation, Technology Development and Transfer, and Financing. The current state of the text is a piecemeal patchwork of the comments and submissions made by Member States over the course of last year’s discussions, but it does not yet reflect any kind of consensus.

[6] AWG-LCA Report on the workshop on opportunities and challenges for mitigation in the agricultural

sector on 4 April 2009 (http://unfccc.int/resource/docs/2009/awglca5/eng/crp02.pdf.

[7] United Nations Framework Convention on Climate Change, Arts. 4.3 and 4.1 on financing and technology development and transfer, respectively (1992, entry into force 1994).

[8] Nicholas Stern, in The Global Deal (2009).