2009= The Grand Climate Test of Homo Sapiens

“At high tide, the sea shore keeps reaching deeper inland”, Makereta Komai from the Fiji islands reports. “The fields are salinising and the farmers are being forced to move further uphill. This requires a different livelihood.” Mauritius and the Seychelles are convinced they will soon lose their coasts, their strongest touristic selling point and source of income. The small island states Tuvalu and the Maldives are already negotiating permanent migration. In many countries, climate change is no longer a theoretical debate, but a daily reality. It is they who can already experience what the rest of the world will in the future.

“When the Climate Convention was made in 1992, we possessed none of the scientific evidence which we have today”, Yvo De Boer, secretary-general of the UN-Climate Convention, explains. “Now we know that climate change is inevitable. It is now of primal importance to act quickly. So far, only small steps have been taken.” The Belgian climate scientist Jean-Pascal Van Ypersele is posing the matter more strongly: “If we want to keep the temperature rise from exceeding two degrees, the global production of greenhouse gases needs to go down as from 2015. As a consequence, we have seven years to meliorate the current course of action.”
On the other side of this story stands a global economy, which was growing rapidly up to the point of the recent financial crisis; an economy consisting of huge developing countries thirsting for growth. These developing countries opted for the same path which rich countries have been taking for the past 200 years. They get their energy from resources such as coal, oil and gas, whilst fully realising that their use alters the atmosphere for the benefit of climate change. Following this reality, development and ecology appear incompatible. Despite blasting promises, even many rich countries are not succeeding at reducing their emissions.

Spaceship Earth

The only instrument in the hands of humanity which can reconcile ecology and development is the Climate Convention, accompanied by the endless negotiation process on the implementation of the convention’s principles. The Climate Summit which took place in Polish Poznan in December, constituted yet another chapter in this process. Nine thousand participants from all corners of the world debated the way to go for a period of two weeks. NGO’s, corporate actors and governmental delegations, coming from the 192 countries which ratified the 1992 convention against climate change.
The problem case of our climate carries the potential to bring humanity together. It is our common space ship Earth that is about to become less people-friendly, and it is in everyone’s interest to counter that. The problem however, is that not all countries have equally contributed to the problem, and neither will each country suffer equally. The Climate Convention states clearly that the Annex I countries – the rich countries and former Soviet states- carry the largest responsibility: their industrial development has altered the atmosphere to the extent that the climate is changing. In jargon this is called “Common but Differentiated Responsibility”.
These countries have to take the lead in the battle against climate change by reducing their carbon emissions. Additionally, the rich countries (Annex II countries) should finance the efforts of the poor countries, the convention reads. This precise point potentially harbours huge tensions between rich and poor; especially so since it is precisely the poor countries that will experience the consequences of climate change at first hand.
Nonetheless, the stream of scientific data since 1992 has increasingly convinced governments of the need for real action. That is why it was decided at the Bali UN Summit in 2007, that the world should commit itself to a long-term goal of lower emissions – global reduction targets for 2020 and 2050–and should also specify the way to get there. It was determined that the rich countries must already set their quantitative reduction goals now. The developing countries are being limited to the obligation of taking quantifiable and controllable measures, for which they receive money and technological support in return.
 
The past year, all countries were given the chance to let loose their views on this specific co-operation. In Poznan a resolution was accepted which sums up all these ideas. By June, the chair of this working group will mould it into a negotiation paper which will possibly be approved in Copenhagen. However, the oppositions remain strong.

The Adaptation Fund

Not only long-term action is needed. Floods, droughts, rising sea levels, melting ice caps and ice fields are already causing a lot of trouble to people. The coming years are promising only more of this. The Climate Convention states that the rich countries (Annex II countries) “should offer assistance to countries for paying the adaptation costs”. For this purpose, the so-called Adaptation Fund was erected, knowing a real start only after Poznan.  As a matter of fact, heavy debate has taken place over this fund. The developing countries, being voiced by the Group of 77 (by now counting 130 developing countries) and China, argued over getting direct access to the fund. The rich countries wanted to make sure that the money will be well spent. Concepts such as good governance popped up during this debate, which in turn displaces some developing countries. Indeed these countries argue that the fund is not equal to development aid, to which an array of conditions can be tied, but rather something they are entitled to as the victims of a problem caused by the rich countries.
These tensions remained until the very last moment of the debate – “…as ever when it comes to money”, thus the head of the Belgian delegation Peter Wittoeck comments– but eventually the developing countries brought home the bacon. A point of interest constitutes the financing of the fund, which is plied by a tax on the Clean Development Mechanisms. Doing so, we are quickly emerged into the Kyoto Protocol.

A difficult first step

That Kyoto Protocol (1997) cemented the ‘common but differentiated responsibility’ into concrete agreements. It states that the countries that have already emitted a lot of greenhouse gases (Annex I countries), should bring down their emissions to five percent under their 1990 level in the period of 2008-2012. The poor countries are allowed to continue their growth. Formally speaking the Annex I countries have achieved their targets. Already in 2006, their common emissions were 4.7 percent below the 1990 level. However, this result is due to a forty percent decrease in the former Soviet States, whose economies collapsed after the Berlin Wall did. There are exceptions to that: Germany (-18 percent), United Kingdom (-15 percent), Sweden (-8 percent) and Belgium (-5 percent) are among the better students. These results are voided by Spain (+50 percent), Portugal (+40 percent), Australia (+28 percent) and the US (+14 percent).

Kyoto withal allows rich countries to reduce its emissions across its own borders and economy: they can make use of the flexible mechanisms (see frame) by means of investing in a reduction of emissions elsewhere. Hence whoever is rich enough can ‘buy’ emission rights for their own economy. One criticism on the EU climate plan charges that the efforts for reductions can be bought elsewhere for up to 65 percent.
The Kyoto Protocol also determined that a tax on the Clean Development Mechanisms (CDM) would be used to ply the Adaptation Fund. When Belgium realises a reduction in emissions of 100 metric ton CO² as part of a CDM-project – and thus acquires 100 Certified Emission Rights (CERs) – it can only register 98 percent of that in its inventory of country efforts. The other two CERs go to the Adaptation Fund. The result now is that the fund is packed with CERs, which the fund can sell on the market.

In Poznan the developing countries were striving for a fund that could also tax other flexible mechanisms. They did not succeed. Do remember from this complicated story that the ‘magic’ of the emission rights, and its concurrent market, generates money for the UN Climate Convention, for which the limits have not yet been met.

New commitments are crucial 

The Kyoto Protocol expires in 2012. By then, the rich countries will have had to come up with new targets concerning a decrease in emissions. The EU has promised to reduce its emissions by twenty percent (less than the 1990 level) by 2020 – which will increase to thirty percent in case an international agreement is met. It was hoped that countries such as Australia and Canada would arrive to Poznan with more quantified targets, but they disappointed.
Neither did one observe the readiness to explicitly mention the 25-40 percent reduction, to which a footnote in Bali referred, and which science is stating as a necessary percentage. There is hope that the new American president Barack Obama will change this neglect. His promises during his election rounds however, never exceeded a zero percent by 2020. The necessary global reduction of 25 percent will only be reached in case the EU stretches her ambitions much further. Hence it will be enormously difficult to reach the point which scientists are demanding.
Targets for the Annex I countries are still crucial. Without them, the developing countries will not move, and a convention regarding a long-term co-operation and the reconstruction towards a green world economy will not emerge. Targets additionally deliver the basis for financing such a reconstruction – read: for the efforts in the developing countries. They are the starting engine of the money machine that the Climate Convention could potentially be.
The less emission rights the Climate Convention grants to the rich countries, the higher the demand in relation to the supply, the higher their price. Every charge on or selling of emissions will hence generate more money. That is why the EU disappointed a lot of observers when it decided to hand out free emission rights to large parts of its industry. Indeed parts of the income generated by these rights would be used to keep developing countries close to their efforts.
The participants in Poznan agreed that the Financial crisis should not be an excuse, but rather is seen as an opportunity. On the one hand we see governments getting more economically involved during the crisis, which renders them more capable of investing that money into projects which are good for the climate. Indeed they seem to do so. Likewise trade unions, which seem increasingly convinced of the green story. “Whereas the unions were opposing the Kyoto Protocol in 1997, they are now believers of the Green New Deal (in analogy to the programme which former US-president Franklin Roosevelt used to pull the US out of the Great Depression. jvd/adw) for it can generate jobs”, Guy Ryder from the International Trade Union Confederation stated.

On the other hand the crisis appears to withhold governments from imposing too many norms on corporations. Also, the sharp decrease in oil prices renders alternative energy relatively expensive. The question hence remains to whether the talk of this Green New Deal will result in real action.

A Green New Deal

In order to keep the earth’s warming controllable, this Green New Deal should not only occur in the rich countries, but also in poorer ones. Indeed it is there that the economy will grow the fastest. Any growth is also more polluting there due to the use of older technologies. The Climate Convention states that developing countries should also reduce their emissions, and it was in Bali that it was first agreed that this should happen in a measurable way.

Costa Rica wants to be CO² neutral by 2021. So do China, India, Brazil and South-Africa; they have launched a climate plan in the past year. Just like a number of other developing countries, they are prepared to switch. In return they demand money, and the Climate Convention agrees. Considering that investments in the production of energy occur on the long term (thirty years), as many as possible sustainable investment plans should be decided upon now. Considering also that investing in renewable energy is more costly than investing in oil or coal, money is needed.
Access to new technology and financing constitute key elements of the ‘great grean switch’. An example is India, facing an explosion of its energy needs and wanting to avoid dependence on import, will look at cheap coal as an energy supply, which is very bad for the climate. In Poznan, Indian researchers proposed a plan, which wants India to gain half of its energy supply from renewable sources by 2030. This scenario is technically feasible, but it also demands an external support around twenty billion dollars a year, for a period of ten years.

Money machine at the heart of the UN

In their most recent calculation, the UN estimated that we need an annual 646 to 1700 billion dollar investment for energy if we want to halve emissions by 2050. A considerable part of that will be public money, for technology needs public support in the first stages of its development, demonstration and distribution; at least, if we want the process to go fast enough. Andrew Higham from the Energy Research Centre of the Netherlands estimates a necessary 100 billion dollar of annual government support. The question here: where should all this money come from?
The developing countries put proposals on the table; The G77 and China the most far-reaching one. They demand that the rich countries contribute another half to one percent of their GNP on top of their traditional development aid. This means between 200 and 400 billion dollar a year. Norway wants the contribution to be independent of GNP: the UN would sell a part of the rich countries’ emission rights, and use the profit to finance the switch. Switzerland utteres a tax of two dollars for every ton of CO² taking into account 1.5 ton of CO² per person free of charge. The Least Developed Countries (LCDs) are proposing a tax on kerosene.
Many proposals have in common that the largest polluters (now and in the past) should contribute more, according to the Climate Convention’s principle “the polluter pays”. The right to development is being accounted for by everyone’s right to a minimal consumption without it being counted as pollution. Of crucial importance is that the process of financing remains predictable, and thus preferably independent of national budgets. The question remains whether this framework is a sufficient means to implement the first international tax system known in history.

The G77 and China also want a fund for climate technology stimulates research, development, transfer and distribution of new technology. An action plan should map out the needs as well as propose concrete steps on how the word should best fulfil these. However, Poznan resulted in very little reaction to their first shot. “The fact that the rich countries did not respond to their proposals is leading to frustration”, Srivanam of Greenpeace India says. Whatever way one puts it, 2009 needs a deal regarding the efforts on the part of the developing countries, and the extent to which the rich countries will finance this process. This will not be easy.

Changing attitudes…again

The positions in the world are changing. The developing countries are weighing heavily on the current negotiations in the World Trade Organisation. The G7 recognises that it can no longer determine what happens in the world, and seems to be heading towards allowing some big developing countries into its club.

The Climate Summit on its part, is an UN process in which exists a tradition of contradictions between rich and poor countries. Despite their increasing diversity, the G77 and China are increasingly putting forces together for the cause of common goals. The Climate Convention is no different here. Especially large developing countries are throwing their weight around. The small countries lag behind.

Kasulu Seya Makongo, head of the Congolese delegation in Poznan, openly wondered if a different categorisation of countries would work better: the rich, the middle income countries, the emerging countries and the LCDs. Small development states often experience difficulty in following the negotiations. For instance, Swaziland only had two delegates to send to Poznan and keep up track with tens of working groups.

The new thing is that through this Convention, the UN again have some real influence over an economic issue. The past decennia, mostly the International Monetary Fund and the World Trade Organisation had a real say over the economy – institutions where rich countries hold most of the power. The UN function more democratically, which results in developing countries gaining influence over the way to combine the greening of the world economy with their need for development.