Friday, 8 January 2010

After Copenhagen

The debacle of the Copenhagen conference is only the beginning of a protracted period of international negotiations which, at least at the moment, look likely to come to grief on the rocks of at least three separate problems. Another conference is promised for 2010 in Mexico but if no solutions are found soon then there will be little progress there.

One key issue is the refusal of many in the developed world to accept the reality of climate change and its link to human activity. This is particularly stark in the USA where, according to results released in October last year by the Pew Research Center, considerably fewer Americans now believe the Earth is warming (the decline has been from 71 percent to 57 percent over the space of a year and a half). As for agreement with scientists about the cause of global warming—human activities, human emissions—that too has sloped downwards, to just 36 percent today. In Britain, almost a third of the population is reported to doubt the truth of global warming. One reason for this situation is a well-funded and well-connected campaign of ‘climate-denial’. In Britain, The Times, the Daily Telegraph, the Daily Express and The Spectator magazine are examples of journals which have given prominence to climate-change denial without bothering to consider either the validity of the claims made or the expert status of those making the claims. Even the BBC commonly ‘balances’ the views of 99% of world scientists with one of the few scientific dissenters. The fact is that it remains difficult to convince people of the need to acknowledge that their comparative prosperity is linked to unsustainable energy use and that some change is needed to their lifestyle. Politicians are aware of this resistance and most take the easy option of either sidelining the issue or, when it is thrust upon them, to try and find an easy way out.

People living in poorer countries have less choice for they are increasingly confronted with the reality of climate change. The human misery in Darfur is, in part, a consequence of increasing aridity throughout central Africa, which is believed to derive from climate change as are the increasing number of unusual and often devastating weather-related disturbances. The scale of the latter was illustrated in the Human Development Report 2007/08 from the U.N. This estimated that, annually, in developing countries between 1980-84, about 80 million people were “impacted” by some kind of meteorological disaster, a figure which had risen by 2000-04 to 262 million, about 1 in 19 people. This has almost certainly increased still more in the last five years as, for example, drought was followed by exceptional floods in southern Africa. That climate change will hurt the poor most of all is demonstrated by the same report’s estimate that only 1 person in 1500 is similarly affected in wealthy countries. ‘Impacted’ is a euphemism for the death and homelessness inflicted on those who suffer these extreme conditions.

The chief negotiator for the G77 group of 130 developing countries represented at Copenhagen and Sudanese ambassador to the UN, Lumumba Stanislaus Di-Aping was reported to have ruffled a few sensitive feathers amongst ministers of the G8 group in Copenhagen when he said “[This] is asking Africa to sign a suicide pact, an incineration pact in order to maintain the economic dependence of a few countries. It’s a solution based on the values that funneled six million in Europe into furnaces”. Insensitive? Well, that is a matter for individual moral perception but the fact is that the thousands currently dying annually right now from climate change will rise into hundreds of thousands within twenty years if nothing is done. It is possible that the impact of extreme weather in Europe and America, for example the fact that unusual flooding has now occurred for three years in a row in different parts of Britain, will change their people’s attitudes. But the money financing the climate-denial campaigns is unlikely to diminish.

The second big issue is easy to summarise: the problem of the USA. President Obama arrived in Copenhagen with just one offer on the table: to reduce US emissions by 17% by 2020. This was a good headline move but it contained a major defect─that the cuts should be from a baseline of 2005. This should be compared with the cuts proposed by all other Annex 1 countries which are all based upon 1990 emissions. When adjusted to this baseline, the proposed US cuts amounted to just 5%. EU countries have been bound under Kyoto to this scale of cuts by now and were offering targets of up to 30% over 1990 by 2020. This was not just a failure by America to propose any significant cut, it was also a signal to a wider issue, that the USA was not prepared to adhere to the Kyoto Treaty but wanted a new agreement.

This was a crucial sticking point for many countries in particular the G77 group. Kyoto had divided the world into Annex 1 countries for which formal and legally binding emission cuts from a 1990 baseline were agreed and the remainder which agreed to try and limit carbon emissions but for which no legal limits were set. The USA had signed the Kyoto Treaty but, under a sceptical Bush administration, had by a unanimous Senate vote refused to ratify it. Other Annex 1 countries had delayed ratification, sometimes by years, but by 2009, the USA was alone in its stubborn refusal with Australia, its last companion, ratifying in December, 2007. By setting a proposed baseline of 2005, Obama was in effect announcing the USA’s continuing refusal to abide by its Kyoto obligation. Instead it wanted to push the developing world into making similar binding agreements over future emissions cuts. It wanted to dump Kyoto, a treaty which only became legally binding in terms of emissions cuts in 2009 and is set to run until 2012.

The much-heralded statement by Hillary Clinton that the USA would be prepared to contribute to an international fund must be seen in this context. Her actual words were “In the context of a strong accord in which all major economies stand behind meaningful mitigation actions and provide full transparency as to their implementation, the US is prepared to work with other countries towards a goal of jointly mobilising $100 billion a year by 2020 to address the climate change needs of developing countries” In other words, dump Kyoto and the US would pay some money, some time, from unknown sources though she also made clear that it would be a mixture of both public and private sources, the latter coming in part from money found by carbon trading schemes. I will come back to these but it is worth looking at the conditionality of the finance─a context of “full transparency” about “meaningful mitigation actions”. This is interesting as the refusal to accept this context was used after the failure of the conference to lay blame for the debacle on what has usually been called ‘a small group of countries’ of which China has been singled out but which also seems to include India, Brazil, Russia and South Africa. (‘Seems to’ because in the way of this kind of backstairs briefing nothing is ever quite spelled out or attributable).

Interesting in part because transparent and open international inspection is the one thing that the USA has always refused to accept, specifically about carbon emissions but more generally about almost anything. It has also, of course, failed to undertake any “meaningful mitigation actions” with the result that since 1990, its carbon emissions have steadily increased.
Of course neither China nor any other member of the ‘small group of countries’ were particularly forthcoming in the negotiations faced by US intransigence. The Chinese offer to reduce its emissions by 40% over a ‘business as usual’ path did constitute a significant concession but it could have been made a good deal more quantitative. However, William Gumede’s comment in the British Guardian newspaper effectively summarised Copenhagen. “The final "deal", signed by 28 countries, kicked aside a UN-brokered deal that was more inclusive, financially more generous and more sensitive to the needs of African and developing countries – and which was backed by Africans. In Copenhagen, industrial nations have again successfully managed to divide African and developing countries, by co-opting the bigger developing countries, such as China, India, Brazil and South Africa, in private deals.

Such co-opting often starts with the demonising of these countries: those who insist on a fair deal are being mercilessly portrayed as stubborn obstacles in the march for a greener future, or as much to blame for global problems as industrial nations, and therefore should make the same compromises – and pay for it also.” He added, “Of course, the big developing countries – China, India, Brazil and South Africa – are not blameless when it comes to polluting the earth.” ‘Cooption’ is too strong a word for what actually occurred but ‘demonising’ is not.

The final issue raised by the Copenhagen failure is much wider than the specific problems of the final accord or lack of it; the obsession with market mechanisms shown by the major developed countries.

The first is the reliance by almost all the developed world countries on various kinds of carbon trading as a major mechanism in achieving national carbon emission cuts. There is little room here to explain why the generalised use of trading mechanisms is a poor route to global cuts in carbon emissions. (A report from UK Friends of the Earth (FOE) goes into detail ). Historically, it started with the use inside a major oil company of a process of allocating target emission levels (originally of sulphur dioxide) to all operating units within the firm. If any unit exceeded its target cuts then it was able to ‘sell’ the surplus to other units which found it harder to comply at whatever price they could negotiate. This internal quasi-financial exchange would be contained in the accounts of each internal profit centre in the company. This was an efficient and effective procedure inside a large multi-national corporation but was taken up by proponents of the free market as a route to introducing market mechanisms into national environmental control, an area dominated up to the 1980s by simple regulatory control by a government agency. It was adopted after some years by the USA as a procedure for limiting the sulphur emissions responsible for acid rain. It can be contrasted with the simple regulatory caps on sulphur emissions adopted by the EU. Although much lauded by proponents of market mechanisms there is no evidence that the US mechanism was more ‘efficient’ or cost effective than the EU route. What is certain is that reductions in acid rain and the consequent damage were delayed by some years in the USA because of the complex bureaucratic process of setting up the market. As the FOE report notes “the US scheme was much less successful at reducing SO2 pollution than equivalent regulations elsewhere: “SO2 emissions in the US had been reduced by 43.1 per cent by the end of 2007, but over the same period 25 members of the European Union saw a decrease in emissions of 71 per cent. These reductions were achieved through regulation, rather than a cap-and-trade scheme.

The basis for a similar mechanism in the reduction of carbon emissions was laid by the Kyoto Protocols which allowed countries to meet their emission targets not just by trading between controlled installations inside a country but also by trading between countries, those covered by Annex 1 but also between these and all other nations, the so-called Clean Development Mechanism (CDM). Under the CDM, projects which would not otherwise have been undertaken commercially in these countries could be financed externally and the carbon emission reductions claimed to be obtained could be traded internationally. Thousands of projects have now passed through the CDM procedure and have resulted in an international trading market, mainly under the European Emission Trading Scheme (ETS) worth billions of euros.

The ETS is regarded as having failed almost totally in its objectives with companies being given lax targets for emissions and actually making large profits out of the sale of carbon credits. It is quite astonishing that “A study of five EU countries commissioned by WWF from Point Carbon in 2008 estimated that investors and other holders of permits under the EU ETS were likely to make between €23 billion and €63 billion over the course of Phase II of the scheme (covering 2008-2012) on the basis that the price of carbon would be between €21 and €32.73 Amongst the businesses likely to reap significant profits is the world’s largest steel company ArcelorMittal, already estimated to have made approximately €2 billion in profits from the EU ETS between 2005 and 2008.”
The CDM process has come under particular criticism with many well-documented cases of outright fraud as well as the almost universal complaint as to just what is required to show that a project would not otherwise have been undertaken. Hundreds of hydro-electric schemes in China, for example, have been awarded credits under the CDM despite the fact that encouragement of such schemes is a fundamental component of Chinese energy policy.
However, despite such criticism, carbon trading and, in particular, the offsetting of increases in national emissions by the purchase of carbon credits remains a corner-stone of policy for all EU countries as well as any putative scheme put in the USA. The EU expects that to achieve its target reductions by 2020 up to fifty per cent of target will be met by offsetting actual increases by purchase of credits from outside the EU. The result of these ambitions is that just as they are attempting to lock the poorest countries of the world into binding carbon emission targets, the developed world will, in effect, be removing sources of achieving these targets (which will include reforestation) by claiming them for themselves.

In a sense, this obsession with use of market mechanisms, particularly odd at a time when confidence in the free-market has plummeted elsewhere, can be traced back to the first problem noted here; that acceptance of the reality of climate change is, at best, precarious in many developed countries. National politicians in these countries are loath to undertake the necessary measures to limit carbon emissions in their own back-yard and, instead, seek an easy way out by ‘borrowing’ them from other countries, usually the poorest.
A blanket pessimism, though appropriate to the failure of Copenhagen, not entirely warranted however. There are some signs that action will be forced upon the developed world. Some cities are taking a lead in ‘de-carbonising’ themselves by introducing tough controls on car-use and radical energy-efficiency measures in dwellings. Even in the recalcitrant USA, to take one example, Chicago has adopted the ambitious target of making 50% of its dwellings carbon-neutral by 2015. It is possible that the city level is better suited to getting democratic backing for such measures than the national. It is also clear that there is a strong environmental movement which is prepared for a long and tough struggle to achieve an appropriate response by western governments, a movement which contains many of the youth of these countries. It seems to be the young who see most clearly that the issue of climate change really is a matter of life-and-death. Perhaps they realise that it will be their old-age that will be blighted unless some radical measures are taken now. Perhaps they just have better eye-sight.