From Copenhagen to Mexico City The Future of Climate Change Negotiations

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1 From Copenhagen to Mexico City Shyam Saran Prime Minister s Special Envoy for Climate Change and Former Foreign Secretary, Government of India. Prologue The Author who has been in the forefront of negotiations for climate change has given a first hand account of the negotiations at Copenhagen and what needs to be done now. He vividly brings out the thought process and the stands taken by various countries also highlighting the outcome of the accord which was reached at Copenhagen at the very last moment. Essentially, it is a document of political intent which could serve as a reference point and input for the road to CoP-16 (Mexico City). It was amazing that the Major global powers could save the world from last year s financial crisis but the same urgency has not been shown (at Copenhagen) in trying to save the globe from a potentially much larger catastrophe from global warming. The Article makes for a must read for all environmentally aware citizens. - Editor The 15 th Conference of Parties (CoP-15) to the United Nations Framework Convention on Climate Change (UNFCCC), concluded in Copenhagen on December 19, 2009 after two weeks of often bitter, contentious and largely unproductive negotiations. On the last scheduled day of the Conference, that is December 18, we even had the unusual and unprecedented spectacle of over 20 heads of state and governments, sitting together in an informal meeting chaired by the Danish Prime Minister, trying their hand at negotiating positions and drafting language, a task that is normally left to their more professional negotiators. Despite the efforts of these friends of the Chair, the results were meager and belied the expectations of the 192 governments represented at Copenhagen as well as the international community, RITES Journal 5.1 January 2010

2 5.2 From Copenhagen to Mexico City including the vast network of global NGOs, civil society groups, business and industry and academics. Copenhagen saw the largest gathering of world leaders ever, with more than a hundred heads of state and government participating in the High Level Segment of CoP-15. The Conference premises, the Bella Centre, was designed to accommodate 15,000 official delegates and accredited civil society representatives. More than 40,000 turned up and the Centre was stretched to capacity, having to accommodate, on a daily basis, 25,000 people. Never before has an International Conference been invested with so much involvement and active participation from across the globe. No wonder that the level of disappointment at the relative lack of results, has been so acute. What did CoP-15 achieve? It was already clear months before Copenhagen that the two years of multilateral negotiations under the UNFCCC, would not achieve the Agreed Outcome envisaged at CoP-13 at Bali. Before we examine the reasons for these diminished expectations, let us consider the mandate for the negotiations. The UNFCCC negotiations took place in the two year period ( ) on two parallel tracks: 1. The Ad Hoc Working Group on Long Term Cooperative Action (AWG- LCA) was charged with the elaboration of the Bali Action Plan (BAP) adopted by consensus at CoP-13 at Bali. The BAP called for the enhanced implementation of the UNFCCC, in accordance with its principles and provisions, and specifically in regard to four building blocks. These are: (a) mitigation, or the reduction in greenhouse gas (GHG) emissions; (b) adaptation, or enhancing the capability, especially of developing countries to adjust to the inevitable consequences of continuing climate change; (c) finance, or mobilizing the financial resources required to enable developing countries to undertake climate change action, in particular, mitigation and adaptation; and (d) technology or ensuring technology transfer and deployment in developing countries, including through capacity building. The BAP also required the elaboration of a long-term vision for cooperative action on climate change.

3 Shyam Saran 5.3 (2) The Ad Hoc Working Group on Kyoto Protocol (AWG-KP) was charged with continuing negotiations which had begun a year earlier in 2006, to fix the numerical targets for absolute reductions in the GHG emissions of developed countries (the so-called Annex. I countries), both individually and in the aggregate for the Protocol s second commitment period, commencing in The Protocol s first commitment period ( ) had envisaged about 6% reduction in GHG emissions of developed countries, with 1990 as the base year (as accepted in the UNFCCC), but this was unlikely to be achieved. For this reason, enhanced implementation of the UNFCCC, in terms of its Kyoto Protocol, would imply a much higher level of commitment in the second commitment period. It may be noted here that for the first two commitment periods, that is upto 2020 (generally accepted as the terminal year for the second commitment period), developing countries party to the Protocol, are not expected to take on legally binding quantitative emission reduction obligations. This is in recognition of the fact that developed countries have the historical responsibility for the accumulated GHG emissions in the atmosphere, since the dawn of the industrial age. Furthermore, they have much larger capabilities, both in financial and technological resources, transitioning from a carbon-based economy to one based on renewables and clean energy sources. In the UNFCCC, this is enshrined as the principle of common but differentiated responsibilities and respective capabilities. The United States of America is a party to the UNFCCC, but while it signed the Kyoto Protocol, it did not ratify it. Therefore, in the BAP, it was agreed that those developed countries which were outside the Protocol, will take on mitigation commitments comparable to those inside the Protocol. From the above background it is clear that the negotiations were not about concluding a new climate treaty or superceding the Kyoto Protocol, but rather to enhance the implementation of the existing climate treaty i.e. the UNFCCC and deliver on the commitments enshrined in the Kyoto Protocol. From the above background, it will be seen that the success of the negotiations would depend upon delivery on three critical elements of the mandate: (1) Would the developed, industrialized countries deliver on their emission reduction targets, inscribed in the Kyoto Protocol for the first commitment period, and would they be willing to assume significantly higher targets for the second commitment period? The level of ambition required for the

4 5.4 From Copenhagen to Mexico City latter was set at 25-40% reduction by 2020, with 1990 as the base year, in the 4 th Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) which was announced just prior to the Bali Conference. (2) Would the United States of America, take on commitments comparable to those assumed by developed countries within the Kyoto Protocol, both in terms of the scope of emission reduction, and also in terms of their internationally legally binding character and subject to international enforcement of compliance? (3) Would the developed world be ready to mobilize significantly scaled up financial resources to enable developing countries to undertake both adaptation as well as voluntary mitigation actions? Transfer of financial resources is also implicit in technology transfer since the latter can hardly take place in the absence of the former. It is on these three most important counts that Copenhagen fell well short of expectations. Let us now examine the reasons behind this. (1) The global economic and financial crisis which hit the advanced economies of the world in , cast a dark shadow on climate change negotiations. There is no doubt that sharp reductions in GHG emissions, would involve very significant financial resources. Raising the cost of carbon-based energy, which is implicit in any plan to reduce GHG emissions, would hit the advanced economies precisely at a time of a severe resource crunch. There was a further anxiety that signing on to deep emission cuts at a time when some major emerging economies such as China and India, were still growing at a fast clip, would worsen the former s competitive strength, especially if the latter were exempt from making such emission cuts themselves. This is why both the U.S. as well as the European Union, Japan, Australia and Canada, began to insist that the major emerging economies should also take on emission reduction obligations, with exemptions only for the least developed countries (LDCs) and small island developing states (SIDS). This was vigorously resisted by the major developing economies, in particular, by Brazil, South Africa, China and India (the BASIC group) who rightly saw this as a major departure from the principles and provisions of the UNFCCC and the Kyoto Protocol. (2) There was a further complication because of the position adopted by the new Obama Administration in the U.S. While President Obama put

5 Shyam Saran 5.5 climate change back on the U.S. national agenda, the U.S. negotiating position made an already complex process of negotiation even more difficult. Firstly, the U.S. conveyed that it would be unable to commit itself to any specific emission reduction targets until the U.S. Congress passed the Climate Change legislation currently before it. This meant that other developed economies adopted a wait and watch approach and became reluctant to sign on to emission reduction targets that might not be comparable to U.S. targets. Secondly, in June 2009, at Bangkok, the U.S. declared that it would not commit itself to internationally, legally binding emission reduction targets, such as those assumed by Kyoto Protocol parties. Nor would it accept any internationally prescribed enforcement or penalty for non-compliance. Instead, it proposed that its domestically legislated commitments could be subjected to international review and verification. This would be, they said, a pledge and review system. The European Union and other developed countries, party to the Kyoto Protocol were, therefore, faced with an acute dilemma. They did not want to lock themselves into a higher level of legal commitment, and subject themselves to strict international enforcement, as prescribed in the Kyoto Protocol, when the largest economy in the world and its second largest emitter of GHG, was setting such a low bar for itself. This is the reason why, also at Bangkok, the E.U. proposed that the Kyoto Protocol be replaced by a single legal instrument which would include all countries, but in particular, the United States, subject to the same form of legal commitment, even though the substance of the commitment could be different for developed and developing countries. Thirdly, the European Union and other developed countries were reluctant to sign on to significant emission reduction targets once the U.S. made it clear that it would be able to set a target of only 4% reduction for 2020 with 1990 as the base year, or 17% reduction with 2005 as the base year. The U.S. basically wanted a pass for its increased emissions in the period from 1990 to For the other advanced countries, this would imply a higher burden on them compared to the U.S. and, therefore, a further diminishing of their economic competitiveness. The sum total of these factors meant that all advanced countries began to seek ways and means to race down to the bar set by the U.S. at a

6 5.6 From Copenhagen to Mexico City very low level of ambition. Hence the least common denominator result at Copenhagen. If the indicated targets of developed countries are aggregated, they fall within a range of 12%-17% cut in their GHG emissions by 2020 with 1990 as the base year. Given the unlikely prospect of the developed countries meeting their target of 6% reduction in their emissions by 2012, with 1990 as the base year, the level of ambition for 2020 is remarkably modest. (3) The position is equally bleak when we look at the financial resources offered by the developed countries for climate change action in developing countries. A Fast Start Fund approaching U.S. $ 10 billion per year between , was promised, to support climate action mainly in least developed countries, Africa and in small island developing states. No break up of contributions was indicated. It was also indicated that by the year 2020, a sum of US$ 100 billion could be mobilized but from multiple sources, including private and market flows (for which you do not need a treaty)! The sums are grossly inadequate and it is obvious that only limited funds will be available from public sources in developed countries. This disappointing picture is again the consequence of the ongoing global economic and financial crisis, which has made it politically difficult for Western governments to justify large scale financial transfers to developing countries. There is also an unwillingness to consider such transfers as entitlements of developing countries, based on the principle of historical responsibility (the polluter pays principle), rather than as overseas aid, which comes with a host of conditionalities. In Copenhagen, the industrialized countries made a determined attempt to reflect the changed political reality in the Copenhagen Accord. They had partial success in juxtaposing the emission reduction obligations of developed countries with some form of reflection of the voluntary mitigation actions of developing countries. The financial obligations enshrined in the UNFCCC have been diluted, with the reference to multiple sources including private and multilateral finance. There is very little in the Accord in regard to support for adaptation in developing countries or the obligation to transfer climate-friendly technologies to them. Does this mean that the UNFCCC has been rendered irrelevant and the Kyoto Protocol is on its death-bed, as has been argued by several commentators? The Copenhagen Accord is in the nature of a document of political intent. It is not a legal instrument. Since it was not adopted as a valid CoP-15 decision, it does not possess any operational character. Nevertheless, as a document which

7 Shyam Saran 5.7 represents a broad consensus, it can serve as a valuable input and a point of reference in the post-copenhagen negotiating process. What is particularly significant, from the point of view of developing countries, is the adoption of two consensus decisions by CoP-15, which will be the basis for the post-copenhagen negotiations. These are: (i) (ii) A decision to set up a new Ad Hoc Working Group on Long-Term Cooperative Action (AWG-LCA), to carry forward the work of the previous AWG-LCA, with the same mandate as before i.e. the negotiation of an Agreed Outcome based on the elaboration of the BAP. A decision on continuing the work of the Ad Hoc Working Group on the Kyoto Protocol, again with the same mandate as before. These consensus decisions mean that the UNFCC continues to be the legally valid Climate Change treaty and that our negotiations will be to enhance its implementation. Similarly, the Kyoto Protocol also remains valid, with the obligation, on the part of the developed country parties, to inscribe their emission reduction targets for the second commitment period, in the Protocol. Therefore, the multilateral process will continue on the same basis as mandated by the Bali CoP. In this respect, developing countries have carried the day. All the factors mentioned earlier which have been responsible for disappointed expectations at Copenhagen will continue to remain relevant, and perhaps acquire even greater force, on the road to Mexico City. Therefore, our negotiating tasks will remain difficult and complex. We will need to evolve a well-crafted and effective strategy to ensure that the interests of India and of the developing world, in general, are safeguarded. The bottom line for us is that our development prospects must not become constricted in any global climate change regime. As Prime Minister Singh has said, climate change action cannot be pursued on the basis of perpetuating poverty. In this context, the emergence of the BASIC group as an influential and cohesive group at Copenhagen, was an encouraging development. The four countries were able to hold their own in the difficult negotiations with the developed countries and the final Copenhagen Accord reflected their red lines unambiguously. In the post-copenhagen negotiations, this group of emerging economies will play a critical role. A meeting of the 4 states is likely to take place shortly to work out a joint strategy. There will also be close consultations with important G-77 plus China countries. There is every reason to believe that at Mexico City we would be able to remain united

8 5.8 From Copenhagen to Mexico City and contribute positively to an Agreed Outcome which represents a truly collaborative response to an urgent global challenge and which meets the expectations of the international community. We will, as India, safeguard our interests. But we will, as responsible global citizens, also do our part to contribute to the global effort to combat climate change. India s National Action Plan on Climate Change with its 8 priority National Missions, covering both mitigation and adaptation, represents an ambitious plan for sustainable development, promoting both energy security and combating climate change. Irrespective of what happens in international negotiations, this is where India s future will be forged. *****