News and Analysis • Volume 13 • Number 2 • June 2009

25 - Major Emitters Narrow Some Gaps

Meeting in Paris in late May, major greenhouse emitting countries made progress on financing climate change action, but could not agree new carbon reduction targets.

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The gathering got off to an inauspicious start with participants wrangling over who should move first and by how much in cutting greenhouse gas emissions. China said that developed countries should commit to a 40-percent reduction from their 1990 levels by 2020 before asking developing countries to take on binding targets under the successor treaty to the Kyoto Protocol. Only Germany currently has a national target that high. The EU as a whole has committed to a 20-percent reduction (rising to 30 if others follow suit). At the other end of the scale, US legislation under consideration in Congress would result in a 3 to 5 percent cut from 1990 levels (see page 21).

Signs of Flexibility Emerge

At the end of the meeting, France’s environment minister Jean-Louis Borloo suggested that developed nations could collectively agree to cut their overall emissions by 25 to 40 percent below 1990 levels by 2020, with “some acting faster and others doing more later.” Those unable to reach such targets, could contribute in other ways, for instance by taking on a greater share of financing, he said.

After bilateral talks with the US in Beijing, Gao Guangsheng of China’s National Coordination Committee for Climate Change also showed flexibility. Admitting that it would be difficult to reach an ‘agreement that satisfies everyone’, Mr Gao said that the specific level of a developed country target could be set aside in Copenhagen so long as the US commits to quantified emissions cuts. He added that Copenhagen “may not be the final negotiation; it may set policy intentions so that we can keep negotiating.”

Green Fund Idea Gains Ground

Participants reported tentative progress on financing, which, together with future targets, will be one of the two key issues of the Copenhagen summit. In particular, ministers expressed interest in a Mexican proposal to set up a fund financed through a system of quotas, similar to those of the International Monetary Fund. The quota of a country would be based on its past and current greenhouse gas emissions, gross domestic product and population.

Governments could use the money for mitigation and adaptation activities ranging from reforestation and improving energy efficiency to the promotion of renewable energy, as well as investment in flood controls or the development of drought-resistant crops.

The details regarding quota criteria, size and allocation, as well as the range of activities to be funded would still need to be negotiated. Nevertheless, minister Jean-Louis Borloo said he felt a ‘real consensus’ starting to form around the financial architecture of a post-Kyoto agreement. US envoy Stern called the green fund proposal ‘a highly constructive contribution’, but cautioned that countries still needed to “go through the details of it and look at it carefully.”

It remains to be seen whether the mechanism could raise the US$100 billion a year that the secretariat of the Climate Convention has estimated will be necessary to cover developing countries’ adaptation and mitigation needs.

About the Process

The Major Economies Forum on Energy and Climate builds on an earlier initiative spearheaded by the Bush administration. It involves the same 17 economies responsible for 80 percent of global greenhouse gas emissions, but unlike its predecessor, the focus is on seeking common ground that would contribute to the UN process instead of offering an alternative to multilateral action. Participants include Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, South Africa and the US, as well as the European Union. The group will meet again in Mexico on 22-23 June.