Latest Articles Beyond Copenhagen

After Kyoto, a new economics?

Jeff Erikson — Wed, 09 May 2012 08:40:00 +0000

In the results of a survey out today, 800 sustainability experts from around the world have a clear message for governments: make greenhouse gases more expensive. Jeff Erikson explains.

At the end of this year, the first commitment period of the Kyoto Protocol will expire. That’s not because it has succeeded in tackling climate change – far from it. While the global treaty drawn up in 1997 has had many positive effects, getting carbon reductions down to a safe level has not been one of them.

The climate challenge looms larger than ever, and the governments of the world still have no clear plan to address it. Japan, Canada and Russia have refused to sign up to a second period of binding cuts, while the United States never ratified the global treaty. So what should be done as Kyoto part one breathes its final breaths? And what will it take to make real progress?

Earlier this year, SustainAbility and GlobeScan surveyed more than 800 sustainability experts and practitioners located in more than 70 countries, asking for their views on climate-change policy. We asked our respondents to rank the effectiveness of various mechanisms to address climate change. Notably, the tools garnering the most support – economic instruments, regulatory approaches and technology development – are those that will change the cost of emitting greenhouse-gas emissions and, consequently, change the economics of energy.

Fig 1. Most effective approaches in terms of likely ability to provide global solutions to climate change post-Kyoto. (Numbers are percentages of experts surveyed).

It seems that this group of experts recognises that better understanding of the impacts of global warming alone won’t change behaviours. The environmental community has been trying that for about two decades. Real, lasting and widespread transformation requires change to how carbon is priced – and that will occur most effectively through the use of economic instruments, regulatory approaches and technological progress.

Even corporate respondents, who unsurprisingly favour technological answers to climate change more than any other sector, also see comparative value in regulatory approaches and economic instruments. Among the latter, taxes on greenhouse-gas emissions are, by a wide margin, seen as the most likely to be effective in providing global solutions.

Fig 2. Rating of economic instruments in terms of likely effectiveness in reducing climate change after 2012, if implemented. (Numbers are percentages of experts surveyed).

Surprisingly, emissions-trading schemes are seen as the least effective economic instrument (this compared to its second place ranking in a similar 2006 survey). This result may be influenced by the evident shortcomings of the European Union’s Emissions Trading Scheme, which has so far resulted in neither the intended reductions in carbon-dioxide emissions, nor a stable and substantial price on carbon.

Europeans, however, tend still to have some faith in regulatory approaches and are less convinced by technology than respondents from other regions.

Fig 3. Most effective approaches in terms of likely ability to provide global solutions to climate change post-Kyoto, by region. (Numbers are percentages of experts surveyed).

But overall results show a strikingly low level of confidence that international agreements, such as a successor to the Kyoto Protocol, will result in adequate solutions. This is reflected in the relatively low expectations for the coming Rio +20 sustainable development conference in June, as well as the distinct lack of buzz around the annual UN-led climate-change conference in Durban last December.

So our experts are pretty clear on what must be done to address climate change in the post-Kyoto Protocol era: change the cost of greenhouse-gas emissions, change the economics of energy. Make it more expensive to emit more, and less expensive to emit less. That is what will really drive behaviour change, at the institutional and the individual level. We don’t need a complex scheme of capping and trading. Instead, governments should make use of taxes, tax credits and rebates, and support technology development.

Does this mean that companies and individuals should sit back and wait for governments to act? Certainly not. We know how great an influence business has in shaping public policy in many countries throughout the world. The voices opposing action on climate change are, at present, loud enough to stymie progress. What is required is for those companies who understand the implications of climate change – both to their business and to the broad economy – to make their voices more prominent.

It is not enough “not to oppose” policies and actions that move us toward a low-carbon economy. Policymakers need to know that business supports action on climate change because it is essential for long-term commercial success.

For the full results of our climate change survey, click here.

Jeff Erikson is senior vice president at SustainAbility

Homepage image by Onearth

Sizing the carbon bubble

James Leaton — Wed, 21 Mar 2012 10:05:00 +0000

Financial markets are in denial, backing both the winners and losers of climate change and stocking up more fossil fuels than they can burn, writes James Leaton.

How much “unburnable” carbon is there on the world’s stock exchanges? Last year, the Carbon Tracker Initiative (CTI) published an analysis asking this question. CTI compared the global “carbon budget” needed to stay below a rise of two degrees Celsius in average temperatures (above pre-industrial levels) with the emissions potential of the proven coal, oil and gas reserves owned by listed companies.

Our results showed that listed companies own more fossil fuels than can be burned between now and 2050 if we are to have an 80% chance of staying within the two-degree Celsius limit, the international climate-change goal agreed at UN-led talks in Copenhagen in 2009.

The International Energy Agency’s (IEA’s) “World Energy Outlook 2011” has since applied this thinking. It uses a more generous carbon budget, which only gives a 50% chance of staying below a two degrees Celsius rise, but still total fossil-fuel reserves exceed the budget. Moreover, these calculations only look at proven reserves, which have a 90% chance of being extracted economically. Beyond this, there are probable and potential reserves, as well as unconventional hydrocarbons, such as shale gas and tar sands, which do not yet fully appear on balance sheets.

The message is clear: even when you apply a generous carbon budget and a narrow scope of reserves, we can still only afford to burn a fraction of fossil-fuel reserves if we are serious about tackling global warming. This indicates that the financial system does not yet take climate-change targets seriously. If it did, then it wouldn’t sanction billions of dollars of capital investment in finding more reserves each year.

Climate-change policymakers need to use this as a barometer: if the capital hasn’t shifted from carbon intensive to low-carbon options, then the desired outcomes will not be delivered.

This is a different way of looking at climate change, which links together scientific analysis of the climate with companies’ and investors’ focus on reserves. These are the primary assets of extractive companies and there needs to be a market to burn them if they are to realise the expected revenue streams.

Looking at the stocks of carbon for this sector is much more informative than looking at last year’s direct operational flow of emissions. It also reflects the way global warming works: atmospheric concentrations of greenhouse gases are determined by cumulative emissions. For investors, it also provides a forward looking indicator of the level of emissions on which companies are basing their business models and strategies. With companies looking to increase the levels of unconventional gas and oil, the industry is re-carbonising at a time when policy discussion is focused on decarbonising.

A map of carbon reserves by the stock exchange on which they are listed, produced by CTI, makes clear the role of western capital in financing coal extraction around the world. Next time there is criticism of emerging economies for increasing carbon emissions, we would suggest people look at where the capital is coming from. While traditionally there is significant state ownership of assets in some countries, there is also a trend for partial listings as a way of sharing the risk and raising capital.

The state Mongolian coal company Erdenes Tavan Tolgoi is currently looking to conduct an Initial Public Offering (IPO), putting its shares on sale to the public for the first time. It has commissioned four investment banks to arrange the sale and is in discussions with the Mongolian, Hong Kong and London stock exchanges. The company has coal reserves of up to five billion tonnes and is expected to raise around US$3 billion (19 billion yuan) in order to start production for export to China.

This is a prime example of coal companies coming to London to raise capital for fossil-fuel ventures. In 2011, listed resources group Vallar bought a 75% stake in Indonesian coal company Bumi, putting another major supplier of Chinese coal on the London stock exchange through the formation of Bumi plc.. Glencore, the commodities trader, and Evraz, the Russian steel and coal producer, also came to list in London in 2011.

The fossil-fuel intensity of the London exchange keeps increasing, and as a result the carbon bubble issue has been raised with the Bank of England Committee, which reviews financial stability. The Bank has responded with the criteria it uses to assess financial stability risks and agreed to meet on the issue.

As a major global financial centre, many investors track the performance and composition of the FTSE indices with their funds. This means investors are following the herd towards re-carbonisation without even realising it. Many funds track an index passively to gain diversification in their portfolio. However, the rising concentration of coal, oil and gas companies in London eliminates diversification. The short-term approach applied by most analysts means they cannot factor in climate-change risk.

In January 2012, we produced a map of where the coal listed on the London stock exchange is located geographically. A third of coal listed in the United Kingdom is actually in Australia, where the government has recently agreed to deliver a carbon tax and emissions-trading scheme. So “UK” investors are potentially exposed to climate change regulatory risk in Australia. However, Australia and Indonesia export around three-quarters of their coal production. So, in fact, around half of the coal owned by UK-listed companies is supplying developing economies in China, Russia, India and South Africa.

The IEA has warned of carbon-lock in, where coal plants now under construction commit us to high carbon emissions over the next decades due to the lifetime of these facilities. However, this ignores the reality that stranded assets (assets worth less on the market than on the balance sheet) are regularly created when they are no longer economic. This is already happening in the United States, where a coal plant in Minnesota has never been turned on because emissions regulation and alternative fuels have rendered it uncompetitive.

Bets are already being placed on solar achieving grid parity in India and China in the next couple of years. This provides a cleaner alternative to coal and energy security using a technology in which these countries are leading the world. A recent study by the Massachusetts Institute of Technology (MIT) calculated that air-quality problems in Chinese cities cost the Chinese economy US$112 billion (708 billion yuan) in 2005. India’s reliance on imported coal has exposed it to rising commodity prices, while floods and droughts have disrupted coal supplies and water availability.

If that wasn’t enough to think about, Nicholas Stern, who advised the UK government on the economics of climate change in a landmark review, has identified a major contradiction arising from this analysis. If the world does not manage to limit its carbon emissions, there will be a major impact on sectors vulnerable to climate change such as agriculture, property, infrastructure and insurance. If the world does decide to limit carbon emissions, then fossil-fuel companies cannot continue business as usual.

At present, the financial markets are in denial: backing all sectors, despite the fact that they can’t all win.

James Leaton is project director at the Carbon Tracker Initiative.

Homepage image from Greenpeace

In Europe’s best interests

Nick Mabey — Mon, 08 Aug 2011 12:48:00 +0000

Keeping Kyoto alive is fundamental to EU security, writes Nick Mabey. Now is not the time to dither – but to fight for the global climate treaty.

Editor’s note: In June, Europe’s approach to the future of the Kyoto Protocol – the first commitment period of which expires at the end of 2012 – came in for severe criticism in a chinadialogue article by Yang Fuqiang and Ang Li. They argued that the unfair demands of developed countries were thwarting the hopes of poor nations for a fair outcome from the coming Durban climate talks and, for all its claims of climate leadership, Europe “has failed to step up and take the lead in resolving the situation”. Here, Nick Mabey of UK-based environmental consultant E3G offers a European’s perspective and adds to the calls for greater leadership from the region.

By the next round of UN-led climate-change talks in Durban in December, the European Union needs to decide whether – and how – it will sign up to a second commitment period for the Kyoto Protocol, the international agreement on reducing carbon emissions drawn up in 1997. But Europe is characteristically dithering over the choices involved, and is therefore failing to shape the global political and policy environment around this decision.

A comprehensive binding regime that would deliver a two-degree Celsius future [keeping warming below two degrees above pre-industrial temperatures is the climate-change goal recognised by the Copenhagen Accord] is not on the table at Durban. There is currently no political space for such an outcome. Given that most major emitters will see leadership transitions in 2012, the soonest any real debate on higher ambition can happen is from 2013. The first Kyoto commitment period finishes in 2012, so Europe needs to make a decision on the future of Kyoto outside the context of an overarching “global deal”. Europe must move on from the strategic offers it defined in advance of the Copenhagen climate conference in 2009 to an approach that reflects today’s realities.

Signing up to a second commitment period requires Europe to do nothing more in terms of additional emission reductions. Europe has already committed to delivering domestic emissions cuts to 2020, well beyond the period of the second commitment. As emissions have grown more slowly and oil prices are much higher than expected before Copenhagen, the EU also has good economic reasons for increasing its domestic climate action unilaterally. This decision should be delinked from the international negotiations.

In this context, the main argument for not agreeing to a second commitment period is that Europe will look stupid if it commits without other developed countries such as Canada and Japan, despite the fact that Australia, New Zealand and perhaps even Russia are likely to follow Europe’s lead. If Europe does decide against a new Kyoto commitment it will show again that the politics of emotion have trumped a clear-eyed view of what it takes to deliver Europe’s long term political, economic and security interests.

Asking whether others will act is the wrong question. The real question is whether signing-up to some form of second Kyoto commitment period will support Europe’s fundamental interests.

Firstly the counterfactual: if Europe leaves the Kyoto Protocol, it will be destroying one of its major diplomatic achievements of the past two decades, a treaty which it backed by consensus in the face of the Bush administration’s withdrawal in 2000. A treaty it has spent at least €40 billion (US$57 billion) of European energy consumers’ money to support by purchasing international carbon credits. By leaving, the European Union will earn the opprobrium of the developing world for the final climate betrayal.

Meanwhile, US climate sceptics and those in the Organisation of Petroleum Exporting Countries (OPEC) will sit in quiet satisfaction at the irony of seeing Europe take the blame for destroying the only legally binding set of global climate rules.

But the real reason why Europe must stick with Kyoto is not because it will look weak if it does not, but because it is in its fundamental interest as a region. Europe needs Kyoto because it defines the type of climate regime that can actually deliver European security. Europe needs Kyoto because it provides the core around which we can build a coalition of countries to support an effective two-degree Celsius climate regime. Europe needs Kyoto because otherwise it walks naked into the negotiating chamber, having thrown away its best levers to bring the United States and China into line.

Kyoto contains the critical architecture needed for an effective global climate regime. Kyoto contains all the necessary elements for monitoring, compliance, finance, technical cooperation and economic efficiency. There is no magic institutional structure waiting to be discovered that isn’t already contained inside – or is compatible with – a reformed version of the Kyoto Protocol. The Kyoto architecture took years to negotiate, refine and ratify. There is no time left to start from scratch. Whatever the often shrill rhetoric from across the Atlantic, the problem many countries have with Kyoto comes not from its flaws, but the fact it holds them to account in delivering real greenhouse-gas emissions reductions.

The only way to constrain global temperatures to around two degrees Celsius is through the type of “top down” structure agreed at Kyoto, where governments negotiate against an overall ambition of emissions reductions and apportion effort to meet a global goal. The alternative – backed by the United States, Saudi Arabia and others – is a “bottom-up” agreement, where countries decide how much they want to reduce emissions individually, and we all have to live with the climate instability delivered by these uncoordinated decisions.

Copenhagen showed us the limits of bottom-up action. Even an optimistic reading of the Copenhagen pledges gives an even chance of exceeding 3.5 degrees Celsius to four degrees Celsius by the middle of the century. This is better than the six degrees to eight degrees Celsius that would have happened without Copenhagen, but is still catastrophic. At four degrees Celsius, Berlin has the current climate of Tunis. Southern Europe sees temperatures rise by up to seven degrees Celsius and rainfall drop by 40%. And a North African economy heavily based on agriculture and tourism implodes, potentially driving a level of political instability which would dwarf that of the Arab Spring.

With its extended borders facing a range of unstable and climatically vulnerable regions, Europe is the most insecure of all developed countries. We do not have the Atlantic and the Pacific Oceans to shield us from poor people whose livelihoods have been destroyed. Europe needs a solution to climate change that really delivers in limiting such unmanageable impacts. That requires Europe to have a credible strategy for delivering a top-down climate regime.

The majority of countries agree with the European Union’s approach. The most vulnerable countries in Africa, Asia, Latin America and the small-island states all back a top-down architecture covering all countries. Many of these self-styled “progressive countries” are already cooperating through the Cartagena Dialogue process. Emerging economies such as Korea, Brazil and South Africa also back a binding agreement. In fact only the United States, China, India, Venezuela and the OPEC countries are really holding out. And even China and India have said they would (eventually) join a binding regime if the US took stronger action.

Some argue that the European Union continuing with Kyoto lowers the pressure on countries like China to act because it excludes them from having binding emissions caps. However, this is not an accidental oversight but the core of the political bargain made at Kyoto in 1997. The developed world agreed to go first and show decarbonisation was possible, and developing countries would take binding caps afterwards. A process implicitly assumed to happen from around 2020 onwards. Kyoto was never designed as a closed regime splitting developed and developing countries in perpetuity, and there is nothing in the architecture that prevents developing countries making commitments.

Given this history – and its links to longstanding north-south politics – the one guaranteed way to reduce pressure on emerging economies is for developed countries to renege on the Kyoto bargain. This is illustrated by a simple thought experiment. Imagine that by 2013 China, Brazil and India were all completely convinced that limiting climate change to below two degrees Celsius was in their fundamental interests, but developed countries had all abandoned the Kyoto Protocol. How could the leaders of emerging economies explain to their domestic publics that they will take binding targets in a new regime after such an overt betrayal by developed countries? Even if their leaders wanted to act, they would be unlikely to risk the resulting backlash from public opinion.

However, there is still a deal to be made and unilateralism has its limits. Europe must make its recommitment to Kyoto conditional on participation by key developed countries such as Australia. Major developing countries must signal that they are committed to an evolving regime that eventually binds everyone. If Europe cannot get all of this at Durban, it should make its participation in a second commitment period conditional, for example, on a parallel comprehensive agreement being in place by 2015. This will put the pressure back on other high emitting countries – including the United States and China – to complete their negotiations by then.

In this way, Europe can make the Kyoto Protocol the nucleus around which it builds a winning coalition of countries who are committed to limiting climate change to below two degrees Celsius. The real way to put pressure on the largest emitters is to build an inclusive movement of the majority of the world’s countries; Europe cannot do this if it abandons Kyoto.

Recommitting to Kyoto supports Europe’s medium-term strategy on climate change, and also makes tactical sense in the short term. In the most optimistic scenario, countries will agree to higher ambition inside a comprehensive global agreement in the next three to four years. In this scenario, Europe gains negotiating strength by maintaining the Kyoto Protocol as the benchmark for the climate regime architecture. In the pessimistic case, where countries do not agree to negotiate a more effective global regime, it gives Europe a basis for changing its strategy. For example, if Europe then decides to levy border taxes on free-riding countries like the United States and Canada, it will have a much stronger basis in trade law from inside Kyoto.

The EU’s leadership on climate change has often been the subject of derision since Copenhagen, especially from within the union. But the fact remains that Europe’s actions have driven a global revolution in renewable-energy investment which now outstrips annual new fossil fuel powered investments. It is Europe’s energy regulations and standards that emerging economies are copying, and that underpin a global market worth US$3 trillion (19.3 trillion yuan). Without Europe’s lead, China would not have decided to implement a Five Year Plan based on the core assumption of rapidly expanding global markets in clean energy.

Europe’s climate diplomacy has shaped global economic reality. In comparison, the United States has better speeches, but no comparable achievements. European climate diplomacy should not be characterised as a failure just because it hasn’t achieved all its objectives.

There is no rule that says delivering your fundamental interests is easy or inevitable. But the historical custodians of European realpolitik would surely turn in their graves to see Europe shrink from pursuing its fundamental interests because it feared being considered silly. Perhaps it is time we started revisiting some of those old-time European values and were prepared stand up for our interests again.

Nick Mabey is founding director and chief executive of E3G.

Homepage image from Greenpeace shows Angela Merkel and Nicolas Sarkozy on the final day of the Copenhagen climate negotiations.

Deserted islands

Gregory Wannier — Mon, 11 Jul 2011 11:59:00 +0000

Rising seas threaten to force whole populations off atoll nations. But where will they go? And will their countries still exist? Gregory Wannier examines the legal implications.

In December 2008, a series of swells coinciding with seasonal high (“king”) tide engulfed the island atoll of Majuro, capital of the Republic of the Marshall Islands, in the middle of the Pacific Ocean. These waves washed out roads and low-lying houses, forced a state of emergency and caused over US$1.5 million (9.7 million yuan) in damages to an economy totalling US$161 million (1.04 billion yuan).

This was not the first such catastrophe: Majuro has grown used to battling a major tidal event every decade or so. However, as global carbon emissions continue to increase, sea levels rise and tropical weather events become more numerous and intense, these events will become ever more common. The Marshallese people can respond to such crises every few years, but they cannot respond every few months, and it is possible (indeed probable) that life as they know it will become untenable by the end of the century. This fact raises serious questions about the continued viability of these nations, as well as protections for individuals who may need to relocate.

In late May this year, legal and policy experts from around the world gathered at Columbia Law School to address these and other questions arising from the impacts of global climate change – particularly rising sea levels – on small-island nations.

Speaking at the event, panelist Mary Elena Carr, associate director of the Columbia Climate Center, highlighted the scientific consensus: that, without any remediating activity, the Marshall Islands and other low-lying island nations around the world could become uninhabitable in a matter of decades, a serious security risk which can no longer be ignored. Sea-level rise will be particularly acute in the Pacific and other island regions, where increased intensity and severity of weather patterns, including so-called “king tide” and “el niño” events, may overwhelm domestic infrastructure and water supplies, as well as local ecosystems.

To underscore the severity of this issue and the importance of adaptation generally, Carr warned that, even if everybody stopped emitting greenhouse gases now “we will still have warming for over 1000 years…[and] just from the warming of water, we will still have one metre of sea-level rise by 2100.”

This raises a fundamental question: what happens to the nations themselves if their islands become uninhabitable? On this point, Jenny Grote-Stoutenburg, visiting scholar at the University of California, Berkeley, argued that “the international law of statehood is characterised by a tension between the principle of effectiveness [asking whether a state has a territory, population, government and independence] and another competing principle, the principle of legality…[which holds that] the extinction of states must not violate some fundamental norms of international legal order, called jus cogens norms.”

In other words, it is highly possible that some traditional requirements for statehood – permanent territory and population – may no longer be met by some of these countries, but that other nations will continue to recognise them for equitable reasons (and in fact may be legally obligated to do so), meaning the indices of statehood can likely be preserved. This might most effectively happen via some ex-situ arrangement, as outlined by University of Hawaii academic Maxine Burkett, whereby country representatives would manage and distribute national resources to a scattered population.

The extent of these resources depends heavily on nations’ ability to continue to access marine territories, which provide critical fishing and mineral rights. As currently set by the Law of the Sea Convention (LOSC), Exclusive Economic Zones (EEZs) – waters over which a state has special rights for exploration and resource-use – extend 200 nautical miles (just over 370 kilometres) from a nation’s low-tide mark. However, the convention is not clear regarding permanent boundaries, and so traditionally EEZs would recede along with the coast if sea levels rose.

Of more concern to small-island nations, substantial marine territory – as much as 40,000 square nautical miles (137,000 square kilometres) – could be threatened by the abandonment of a single island, because the LOSC clearly disallows marine territory for uninhabitable rocks. In response to this, David Freestone of The George Washington University notes that precedent elsewhere would support artificially bulwarking islands to preserve existing claims – most (in)famously, Japan has bolstered Okinotorishma Island from a rock to a full base that serves as a basis for territorial expansion to the south. Although this has been repeatedly challenged by other nations, for equitable reasons they would be less likely to object to similar bulwarking by small-island nations.

If certain small-island nations become uninhabitable, their populations will have to move somewhere, but it remains unclear where they would go. Unfortunately, the patchwork of international protections for displaced peoples will not provide extensive guidance: refugee law as defined by the 1951 Convention on Refugees probably would not apply to climate migrants (although subsequent clarifying agreements applying to Africa and the Americas might); and there is no international obligation for any particular country to take in such migrants. Similarly, protections in the United States and Europe for victims of environmental disasters are temporary, and leave no path to full residency.

In response, as New York University law professor Katrina Wyman has discussed, the best option for individual nations may be to rely on existing agreements and relationships with potential destination countries that allow migration for other reasons or purposes. Domestic immigration laws in certain countries may also be used.

Options also exist in international institutions to provide more aid and support to climate-displaced peoples. Traditional institutions that could be integral to this effort include the International Organization for Migration and the United Nations High Commissioner for Refugees.

The United Nations Framework Convention on Climate Change (UNFCCC) may also be of potential use in organising resettlement activities. This is particularly true following last year’s climate negotiations in Cancún, which recognised the importance of “measures to enhance understanding, coordination and cooperation with regard to climate change induced displacement…at national, regional and international levels". As Australian lawyer Ilona Millar suggested, the UNFCCC could perhaps be used to harness private-sector funding and insurance protection for vulnerable parties.

If people are forced to resettle, many have argued that they should be able to recover damages in court for harms received. However, the authority for such litigation remains unclear. Substantively, there are several possible bases for establishing a violation of international law, including breach of treaty claims under the UNFCCC, the human right of self-determination, the duty under the World Heritage Convention to “natural and cultural heritage” and theories in tort and certain other areas of the law. One particularly interesting possibility, as described by Dean Bialek, would to be to base a claim on ocean acidification, which could kill off tropical coral species, deplete fish reserves and potentially further undermine the physical stability of coral atolls.

A more difficult question is: which courts could hear such claims and enforce remedies, if such remedies are possible? The International Court of Justice is the principal judicial organ of the United Nations, but has only limited powers. Certain treaties, including the UNFCCC, offer similarly advisory commissions which could perhaps hear such cases. Access to domestic courts in key major emitters is also uncertain; the United States, especially in recent caselaw, famously makes it difficult for foreigners to gain access to US Courts under the Alien Tort Claims Act.

However, at least one lawsuit initiated by the Federated States of Micronesia has had success fighting carbon emissions in Czech Republic courts, by challenging an environmental-impact assessment for a proposed coal-fired power plant on the grounds it failed to adequately account for transboundary (read: climate) impacts. The success of this case was largely based on Czech provisions that allow foreigners access to domestic courts, but similar provisions are being scouted out elsewhere in Europe and around the world, and may provide further options for establishing jurisdiction.

If resettlement becomes unavoidable, then that process must be organised. As Brad Blitz from UK-based Kingston University has emphasised, preparations should be made far in advance of any actual movement, and should focus on preserving both physical and financial security, and cultural norms. Basic housing and life-supporting infrastructure must be planned.

Equally important, the political relationships between displaced nationals and host states would need to be resolved, addressing communities’ relationship with host nations as well as their involvement in the planning process. The experience of Alaskan villagers’ resettlement in Newtok, where community leaders have successfully led the relocation process, as contrasted with less successful relocations of island populations in Chagos and elsewhere, suggests that community involvement is critical for the success of any relocation activity. This involvement is important largely because new communities must do more than provide housing; they should be structured to promote livelihoods and preserve critical familial and community bonds; and community leaders are best placed to structure their resettlement process accordingly.

To get ready for this changing world, small-island governments need to update existing institutions to prepare administratively for sea-level rise and possible relocation. At May’s conference, Justin Rose gave a summary of programmes under way to prepare island communities, including adaptation projects (such as planting and building defenses against saltwater inundation), educational schemes and more direct sets of incentives for good long-term planning. More of this should be done. In addition to community development, states will need to address property systems to account for changing landscapes, develop new budget priorities, establish targeted insurance regimes to allow for individual recovery and, above all, educate their populations in preparation for possible future resettlement.

However, at heart this is a global problem, and the burden to resolve these issues falls squarely on the world’s largest emitters. Through no fault of their own, entire civilisations could soon be lost to the ocean. These civilisations must attempt to ease the pain of any transition through legal innovations and active planning – but they will need help. And it is our moral duty as a society to help them prepare for the world to come.

Gregory Wannier is deputy director of the Center for Climate Change Law at Columbia Law School.

Homepage image from Greenpeace shows the high waves of the "king tide" in the South Pacific island of Kiribati.

Kyoto coma

Li Ang — Fri, 24 Jun 2011 11:51:00 +0000

As we start the six-month countdown to climate-change talks in Durban, Yang Fuqiang and Ang Li ask if there is any hope left for the existing treaty to tackle global emissions.

On June 18, the second round of 2011’s UN climate-change negotiations ended in Germany. As the talks drew to a close, the atmosphere was familiarly grim: little had been achieved. There was scattered discussion of holding more, informal, meetings between Bonn and the negotiations in Durban at the end of the year, which will mark the start of the final year of the first commitment period of the Kyoto Protocol – the global treaty drawn up in 1997 to limit carbon emissions. But could more meetings make a difference to the outcome at Durban?

Japan, Russia and Canada have made clear that they will not be making any undertakings under Kyoto’s second commitment period – the mooted second phase of the global climate agreement, after the first expires in 2012. Developing nations insist this is a political step backwards for the climate-change negotiations process, a move that ignores the huge challenges ahead and shirks responsibilities. The European Union and Umbrella Group (a loose coalition of non-EU developed nations in the negotiations) have also expressed concern, saying this is a grave blow for the process.

Developing nations want to see a fair outcome from Durban – an agreement to go ahead with a second commitment period under the Kyoto Protocol, during which Annex 1 industrialised nations commit to emissions cuts. At this crucial juncture, the European Union has failed to step up and take the lead in resolving the situation, preferring to line up with other developed nations and propose a new agreement under the Kyoto framework, which all major “emitting nations” must sign up to.

Those major emitters include the United States, the BASIC group of nations – Brazil, South Africa, India and China – and other developing countries. And it is clear that they will not accept such a condition. The United States made plain at Bangkok this year that it will not agree to emission cuts imposed by international agreement, or regulations on consequences for failing to achieve emission targets. The BASIC group and other high-emitting developing nations will naturally stick to the “common but differentiated responsibilities” principle – the idea that rich nations bear a heavier burden than poor in the fight against climate change– and refuse to discuss such conditions. The stance of the United States and BASIC nations makes this route impassable.

At the same time, developed nations continue to push for agreement on rules for monitoring domestic emissions cuts (long a source of contention that led to a stand-off between China and the United States at negotiations in Tianjin last year). If developed countries fail to secure agreement on this issue, it is almost certain they will stick to their guns and refuse to participate in a second commitment period under Kyoto. And, undoubtedly, poor nations will reject these conditions. During negotiations, developing countries have consistently demanded a second commitment period, but their richer counterparts keep coming up with new and unacceptable conditions in a bid to bring the twin-track negotiating process to an end.

Disagreements over a second commitment period, far from improving, are actually steadily getting worse. There are only 18 months left until Kyoto’s first commitment period ends, on the last day of 2012. It will not be easy to patch up these deep differences in such a short period of time. As a result, a seamless transition between the two phases looks less and less likely, challenging both the legal procedures for implementation and the status of the protocol. Some developed nations are refusing to recognise the second period of the Kyoto Protocol, while others are striving to add conditions that cannot be met (while indicating they will not boycott an agreement). And so a question mark hovers over the second commitment period: what form will it take? Will it happen at all?

Developing nations are holding firm on their support for the twin-track negotiating process, the need for emission cut pledges from rich nations in the second commitment period and the steady implementation of the negotiations and the agreements that come out of them.

How, then, should we interpret the political fate of the Kyoto Protocol? The second commitment period is currently in a coma and, if there is no progress in negotiations, there is no real hope for its future. Rather than being declared dead, however, it will remain in a vegetative state. Legally speaking, the second commitment period would still exist in these circumstances but, in reality, it would be an empty shell. The Kyoto Protocol includes many effective tools, such as the Clean Development Mechanism. If these can continue to play a role, can we say the second commitment period still exists? If there are no targets as part of the second phase of Kyoto and negotiations remain deadlocked, can those mechanisms survive the challenge and continue to play a role in balancing the climate obligations of developed and developing nations?

What will the consequences of this “coma” be for Kyoto? What is the protocol’s future? What are the political risks? These are all questions we need to face up to. In climate-change negotiations, it is not just the will to address global warming that is tested, but also the world’s ability to come up with a farsighted negotiations strategy and make the correct policy decision.

Yang Fuqiang is senior climate change and energy consultant to the Natural Resources Defense Council (NRDC)

Ang Li is climate and energy projects officer in WWF’s Beijing office.

Homepage image by UN Climate Talks shows UNFCCC executive secretary Christiana Figueres at negotiations in Bonn.

Climate conspiracy: a flimsy fantasy

Jiliang Chen — Thu, 16 Jun 2011 14:49:00 +0000

Global warming is no plot, writes Chen Jiliang. Why would thousands of scientists risk their careers to fabricate a consensus?

After the Copenhagen climate talks of 2009, public concern about climate change reached higher levels than ever, but scepticism and suspicion also soared. In the west, so-called “climategate” – where hacked emails of scientists at a British university prompted allegations of scientific fraud – was swiftly followed by “glaciergate”, the furore around a mistake discovered in the latest report of the Intergovernmental Panel on Climate Change(IPCC) concerning the rate at which Himalayan glaciers are melting.

These events, combined with an unusually cold winter, ignited a debate over the certainty of climate-change science in the western media, and gave voice to those who question the role of humans in warming the planet. Meanwhile in China, scepticism has rapidly evolved into a world of conspiracy theories, epitomised by publications like Low Carbon Plot, a 2010 book by Gou Hongyang that argues climate change is a western conspiracy against China.

The question these theories raise is this: is it scientific fact that greenhouse gases released by human activity are increasing global temperatures, or a confidence trick perpetrated by a small number of researchers and environmental groups?

There are many ways to approach this but I would like to concentrate on two points. First, the costs and risks associated with scientific fraud in the west and, second, the contrast between the interests and resources of high-carbon industries and those of environmental groups.

Scientific fraud in the west faces a major obstacle: the peer-review system. A long-standing norm for the scientific community, peer review does not require that all expert reviewers agree with the author’s views. It simply aims to ensure that third parties check the method of analysis is accurate, the experimental design is sound, there are no biases in the author’s logic and so on. In other words, the text is interrogated by experts.

Documents that have not gone through peer review are referred to as “grey literature”. The mistakes in the so-called “Glaciergate” and “Amazongate” (another row over a purported mistake in the IPCC report) episodes happened because the IPCC quoted grey literature from NGOs. Following these events, a group of 20 scientific institutions evaluated the IPCC’s 4^th Assessment Report and its working methods, a process that included a meeting in China. Their conclusion was that grey literature needs to be more clearly defined. Not all NGO material needs to be classed as such, but the IPCC must carefully identify what is and isn’t grey literature, and what the panel can and cannot use grey literature for. However, the review still found that the IPCC’s conclusions were accurate.

A researcher’s data must also be replicable, meaning that other scientists using the same methods should get the same results. If they do not, then there is a problem. And so before publication, scientists will check their results many times.

Any scientist who takes a chance by faking results risks being punished for academic misconduct. In the United States, if you are found guilty of such wrongdoing, depending on the circumstances, you may be expelled from your academic post or even face criminal proceedings. You may also be excluded for one year from any government-funded project (and from receiving federal funding for between 18 months and 10 years) and banned from working on US Public Health Service advisory and evaluation committees, and your details listed on the website of the Office of Research Integrity.

It is those systemic guarantees that have allowed western scientific research to advance so rapidly – and it would be no easy task to persuade thousands of scientists from all over the world to risk their careers by challenging that system.

The second important point to consider is the difference in power between the two main interest groups involved in this debate. One, made up of green industries and environmental NGOs, is just getting started. The other is the world of high-carbon industries, including the oil business. Which one has the greater ability to buy off scientists? (Merchants of Doubt, the 2010 book by science historians Naomi Oreskes and Erik Conway shows how effective scientists backed by political and business interests can be when it comes to swaying public opinion on environmental and public-health issues.)

Another common Chinese conspiracy theory is that “climate politics” are a developed-nation plot to keep the developing world down. But, when probed even a little, this argument also falls apart.

The relevant question here is, if all of humanity starts cutting emissions to meet global carbon quotas, and developed nations also provide their developing counterparts with technological and financial assistance for cuts and adaptation, what will the costs and benefits be?

The first to suffer will, of course, be high-carbon industries, represented by the energy sector and heavy industries. Benefitting will be the low-carbon sector – the services industry, energy-efficient firms and those involved in renewable-energy production.

In terms of standards of living, in theory low-carbon development has a “complementary effect”: as carbon emissions decline, other forms of pollution fall too, and the environment overall improves. Moreover, the areas currently worst affected by pollution benefit the most.

However, preferential policies for low-carbon industries will for a time increase the cost of living, particularly in developed nations, where public funds will be transferred to pay for mitigation and adaptation in the developing world. Those in developed nations will bear a greater share of the costs of responding to climate change. There are also costs involved in shifting from high- to low-carbon economies and, again, these will be higher in rich nations, where the shift is more dramatic.

At a national level, the costs and benefits – for both developed and developing nations – will be influenced by the proportion of high- and low-carbon industries, education and health levels and the uncertainty of climate change. There is no clear line of demarcation between the developing and developed worlds. This is not the Cold War: it is not a “them and us” situation.

Globally, the benefits of an early response to climate change outweigh the costs, otherwise governments would not continue to sit down together at UN meetings and struggle to find international solutions. However, as explained above, the current consensus is that developed nations will bear more of the financial burden than their developing counterparts. When it is going to cost them so much to tackle climate change, why would rich nations conspire to invent the problem?

Bringing together the enormous number of people required to implement a conspiracy on the imagined scale is simply unfeasible, especially in the context of wider international relations. Nations may have similar stances on climate change and belong to the same camp in climate negotiations, while still harbouring mutual mistrust thanks to historical disputes: look at the alliance between China and India in the climate negotiations, or the United States and Russia. A conspiracy is unimaginable.

Chen Jiliang is project officer at the Heinrich Böll Foundation, based in Beijing.

Homepage image by Armin Rose

Changed climate in Japan

Wei Tang, Jin Li — Fri, 06 May 2011 14:43:00 +0000

Struggling with the aftermath of both earthquake and nuclear disaster, Japan is likely to weaken its contribution to global climate-change efforts, write Tang Wei and Li Jin.

Editor’s note: At UN-led climate-change talks in Bangkok in April, Japan did not discuss its climate-change actions, or its 25% emissions-reduction target – instead saying that, with the Fukushima nuclear crisis still unfolding, it is too early to talk about changes in energy supply and demand and the impact of those changes on climate-change negotiations. Tang Wei, of the Shanghai Academy of Social Sciences, and Li Jin, of the Shanghai Environment and Energy Exchange, argue that a post-earthquake Japan may shift its climate policy.

On March 11, a massive, 9.0-magnitude earthquake in Japan’s north-eastern region of Tōhoku crippled the country. The resulting tsunami and the radiation leak that it, in turn, triggered at the Fukushima nuclear-power plant have profoundly impacted Japan’s political economy and national psyche and affected international relations and even global security.

The earthquake, nuclear power and the global response to climate change are closely linked. Japan is the world’s third largest economy and a key member of the Umbrella Group (a loose coalition of non-EU developed nations in climate negotiations). How will this trauma affect the nation’s climate policy? And what impact will there be on the geopolitics of climate change?

Climate change is the only truly global issue and is closely linked to both lifestyles and production. Tackling it involves saving energy, cutting emissions, developing new energy sources, adjusting industrial structure and making lifestyle changes. The global community must limit emissions while taking into account economic growth, intergenerational justice and people’s basic needs – and this has led to a struggle between environmental capacity and space for development.

Japan is a key member of the Umbrella Group and, since the 1990s, its climate policy has wavered between falling in line with the United States and independence. On one hand, it has attempted to use climate diplomacy to win markets for its green industries and become a political power; on the other, it has failed to come close to meeting its emissions-reduction commitments under the Kyoto Protocol.

As an island nation, Japan is vulnerable to changes in sea level. The Climate Change Vulnerability Index (CCVI) produced by risk consultancy Maplecroft lists Japan as a “high risk” country – only slightly better off than Bangladesh and small-island nations, which are classed as “extreme risk”. It is also poor in natural resources and is classed as an Annex 1 industrialised nation under the United Nations Framework Convention on Climate Change – giving it an unavoidable moral responsibility to participate in joint action to combat climate change.

In fact, since the 1960s, Japan has been proactive in developing and using energy-efficient and green technologies and fostering awareness of energy-saving needs, with the result that, between 1973 and 2007, energy intensity dropped from 146 tonnes of oil equivalent per US$1 milllion to 105 tonnes of oil equivalent per US$1 million – a 30% fall that made Japan one of the most energy efficient nations in the world. In response to oil crises and the rising cost of oil, Japan made nuclear-power development a national strategy. Prior to this year’s earthquake, 30% of Japan’s electricity was nuclear-generated.

But despite these major technological and policy successes, the fact remains that fossil fuels are still Japan’s main source of energy. Development figures from the World Bank show that, in 2007, coal, oil and natural gas accounted for 83.2% of Japan’s energy use. As a result, Japan’s carbon emissions in 2008 (not including those arising from changes in land use) were 1.28 billion tonnes of carbon-dioxide equivalent – almost 10% higher than in 1990, making it impossible for the country to achieve the 6% emissions cut below 1990 levels by 2012 required of it under the Kyoto Protocol. It may also help to explain the country’s position at UN-led climate talks in Copenhagen and Cancún, where it repeatedly demanded that major developing nations also undertake binding emission-reduction commitments.

The devastating earthquake and tsunami paralysed much of Japan’s road, rail and power infrastructure, and many factories and businesses have been forced to shut down. Inevitably there will be a resulting slump in energy demand and carbon emissions, similar to that caused by the 2008 financial crisis. But given the scale of Japan’s industry and its technological capability, the demand for fossil fuels will surely rise rapidly as production recovers and reconstruction starts.

Meanwhile, the Fukushima crisis has, at least in the short term, created an atmosphere of mistrust around Japan’s nuclear sector, much as attitudes to the oil sector were affected by BP’s spill in the Gulf of Mexico. This creates social and political risks for nuclear development, in addition to economic and safety concerns. Investors believe that global nuclear investment has already been affected by the crisis in Japan and that many projects will be delayed.

An analyst at emissions-trading firm Orbeo has suggested that, if Japan replaces nuclear energy with fossil fuels, it will emit an additional 74 million tonnes of carbon dioxide equivalent – and the country’s political will on climate-change action may weaken further.

The earthquake also caused international carbon credit prices to rise. The reduction in nuclear power, combined with post-disaster reconstruction needs, led to expectations that Japanese demand for oil, coal and natural gas would increase. Those expectations affected the futures market, thus pushing up global energy costs.

Meanwhile, expectations of increased fossil-fuel demand led the market to assume the demand for emissions permits would also increase, inevitably pushing up carbon prices. After the nuclear incident in Japan, the cost of carbon in the European Union rose from €15.80 (US$23) per tonne to €16.10 (US$23.5) per tonne, and when German premier Angela Merkel announced a halt to plans to extend the life of nuclear power stations, EU emissions allowances rose again to €16.65 (US424.18) per tonne.

The higher cost of carbon credits makes participation in carbon trading more expensive for Japan, while the financial constraints caused by post-disaster spending and the manufacturing halt mean both government and business lack liquidity. It will be hard, in the short term, for the country to spend extra funds on carbon credits and, the 2011 earthquake may reverse Japan’s full participation in carbon markets.

While it is too early to know what the full impact of the natural disaster will be on Japan’s climate policies, we believe Japan may cite “an act of God” – or force majeure – in future climate-change negotiations in order to reduce its responsibilities under the Copenhagen and Cancún climate agreements, or it may request special treatment during the second commitment period of the Kyoto Protocol, after 2012.

Tang Wei is assistant researcher at the Shanghai Academy of Social Sciences’ Ecological Economics and Sustainable Development Institute. Li Jin is deputy director of the research and development department at Shanghai Environment and Energy Exchange.

Homepage image from Save the Children

Non-profit power

Jiliang Chen — Tue, 15 Feb 2011 10:32:00 +0000

The role of civil society in global climate policy is mysterious to many in China, writes Chen Jiliang. But public campaigning is crucial work that must persist, even in the face of disappointing results.

Civil society has always been a significant force in global climate-change politics. But in China, the long absent NGO sector has only recently started to emerge. Chinese people, perhaps hazy on concepts such as “non-profit” and “non-governmental”, can find it hard to understand what role NGOs play in driving global-warming policy – and whether they are actually doing any good.

Looking at the current state of climate-change negotiations, you might forgive the public for wondering what NGOs achieve that justifies the carbon footprint of their long-haul flights to international summits. The emissions cuts required by the Kyoto Protocol are minimal; several major emitters of greenhouse gases refuse to take on binding commitments to cut their emissions; negotiations drag on year after year at a snail’s pace; the core differences between nations seem to be expanding rather than shrinking. The list goes on.

What, then, is the point of NGO participation?

The principles of NGO engagement in global environmental politics appear to be the same as those underlying public participation in domestic environmental affairs. When, in the second week of the 2009 Copenhagen talks, the majority of NGOs were shut out of the main conference centre, one banner protested: “How can you make decisions about us, without us?”

Civil-society participation is founded on the belief that the ideal solution to a problem can only be found through involvement of, and discussion with, all interested parties. This belief was the basis for involvement of Chinese NGOs in protection of the Nu River in south-west China and, more broadly, in campaigns on issues such as waste management.

When it comes to discussing environmental issues, there are two interested parties that can never be in attendance: future generations and soon to be extinct species. The idea of sustainable development includes both intra-generational and inter-generational equity. The NGOs active in negotiations at the World Trade Organization tend to promote intra-generational equity – equity between people of the same generation – while NGOs in the climate-change field, while defending a bottom line on intra-generational equity, also promote the rights of future generations. Broadly then, NGOs aim to speak for those who cannot speak for themselves (as in Proverbs 31:8-9: "plead the cause of the poor and needy"). But, at climate-change talks, what does this mean in practice?

First, as observers, NGOs of course observe. Their workers spread themselves among all open meetings to listen intently and let fingers fly over Blackberries, iPads and laptops, with up-to-the-minute information – and gossip – whizzing out to email groups and Twitter. Although some meetings may be closed to observers, NGOs have contacts in government delegations, even if, in public, they have to pretend they don’t know each other.

Second, they demonstrate. Protest events organised by large environmental organisations such as WWF or Greenpeace, or by alliances of organisations such as the Climate Action Network (CAN) or Global Climate Change Alliance (GCCA), attract media attention and get NGO messages out.

Third, NGOs release brief evaluations of climate-change negotiations and hold press conferences, providing rapid feedback on how talks are going for the media to quote. Large organisations have dedicated media officers, spokespeople and official blogs feeding material to the media. The media then influences public opinion and that, in turn, puts pressure on governments (at least it does in countries where politicians care about public opinion).

Fourth, non-profit think-tanks often publish their own research findings at side events. The topics are often the hot issues of the moment and the think-tanks well-known. Add in a few renowned speakers and it is possible to prompt excellent media coverage. Although it might not directly affect the negotiations, it is a platform for discussion and dissemination of ideas.

Fifth, these organisations lobby. More established NGOs and think-tanks have a long history of lobbying their own governments and have established trust and cooperation with those in power. Besides using their own reports to persuade politicians round to their point of view, they meet directly with government delegations to discuss climate-change negotiations. I very much hope to see Chinese NGOs one day doing the same.

Sixth, they engage in civil diplomacy. NGOs from different nations meet each other at the talks and gain an excellent opportunity to build trust and understanding and promote cooperation. A lack of trust between nations is one of the main reasons that negotiations have been slow to progress, and strengthening ties between NGOs is an important method for improving trust between governments.

Larger NGOs can fight on different fronts simultaneously, while smaller groups may choose to join larger networks and cooperate with other organisations. Besides CAN and GCCA, there is the Climate Justice Now (CJN) network, the Youth NGO Constituency and others. But while they are all NGOs, their values and viewpoints are not identical. CAN emphasises the effectiveness of treaties on environmental protection – perhaps as it was formed by environmental NGOs – while CJN is more concerned with fairness in negotiations, perhaps because more of its members are groups working on development and equity. Some groups are members of two networks, while some maintain partnerships with all networks despite being a member of none.

Different NGOs also adopt different views of their impact on negotiations. Some believe that the high level of NGO activity leading up to Copenhagen put too much pressure on the talks, particularly on the role of the United States government, and that the result was tension and confrontation at the negotiating table. At the Cancún talks last year, there was less public pressure – and more room for negotiators to get to work.

But others argue that the reduction in public participation at Cancún was not a good thing and were unhappy with the set-up in Mexico, where the venue was split into three sections and NGO events separated from the main negotiations. This was obviously good for the negotiators – and may have been the Mexican government’s actual motive.

I have asked contacts working for green NGOs in several countries what they consider to be the main challenge for non-profit groups and they all, more or less, gave the same answer: the main task remains mobilising the masses at home. Only when public engagement reaches the point that it affects political careers will politicians dare to take more active measures to tackle climate change. Only changes in domestic politics can give rise to changes in global diplomacy.

Public campaigning is dirty and tiring work that requires great endurance, resilience and effort. But the more of this work that is done, the greater the impact NGOs will have at climate-change negotiations – and the more significant the results that they achieve.

Chen Jiliang is project officer with the Heinrich Boell Foundation’s Beijing office.

Homepage image from Oxfam International shows a demonstration at the Cancún climate summit.

If money grew on trees

Fiona Harvey — Wed, 02 Feb 2011 14:10:00 +0000

Saving the world’s rain forests would be the cheapest way to stave off climate change. But, argues Fiona Harvey, without a business model that works, it is just a hopeless dream.

Walking into the Amazon rain forest, the overwhelming impression is of the sheer abundance of its life. A savoury, soupy smell covers everything, as if nature were in the kitchen – the smell of vegetation sweltering in hot dampness. The noises bewilder, as you swivel to catch a monkey – or was it a bird? – crying as it flits away. Once, straying into a clearing where men had been illegally logging a Brazil nut tree, I was beset by a flurry of what I took to be small insects, fluttering about and landing on my jacket. On closer inspection, they turned out to be hundreds of tiny frogs, each about the size of a fingernail, exquisitely formed.

That we need to preserve such extraordinary places is self-evident – and not just for the glorious abundance of their life. We in the rich west need them for our own sakes, too. Forests represent some of the biggest stores of carbon on earth, and as trees are cut down they release their greenhouse gases into the atmosphere. Saving the world’s last remaining forests would be by far the cheapest way to stave off climate change.

Governments have been locked in negotiations over how to save the world’s forests for more than 20 years. The key concern is rewarding forested nations for maintaining these extraordinary assets, which raises the question of how to compensate the people who live there for the lost opportunity of exploiting their forests for logging or farming.

In theory, it should not be a difficult task. Yet in all those years, the negotiators have managed to save scarcely a single tree.

In late November and early December 2010, ministers from around the world converged on Cancún in Mexico to discuss a global pact on tackling greenhouse-gas emissions. At 2009’s Copenhagen summit, leaders from developed and developing countries agreed for the first time to curb their emissions. But since then the fragile accord has disintegrated into a war of words, chiefly between the United States and China. The White House is also now hamstrung in what it can negotiate because of the hostility of congressional Republicans.

Consequently, Cancún was unlikely to result in much progress on a comprehensive global deal. So what many participants hoped was that by concentrating on one issue – preserving tropical forests – they could salvage something. A chorus of non-governmental organisations expressed confidence that the thorny issue of forestry was to being solved. Even hard-bitten negotiators were caught up in the excitement. “At least we will sort out forests this year,” one told me, hopefully.

I hadn’t the heart to reply that I had been told the same thing at each of the last six such meetings. Still less could I tell him my gloomy prediction – that the 2010 meeting would be the biggest failure yet, because although the world was closer than ever to agreeing a legal and practical framework on how forests should be preserved, we are further than ever from mustering the cash that is the pre-requisite for success.

Edouardo, who I meet at his home near a tiny settlement on the banks of the Amazon river, in Brazil’s Pará province, is typical of the small subsistence farmers of the area. He tells me how as a young father he brought his family here from a village some miles away. He found a convenient spot and made a small clearing to grow the crops his family survives on. Years later, a road was built and more people came to settle in the area. This made it easier for him to sell any surplus crops.

Edouardo is typical of the subsistence farmers who live in forests around the world, eking out a living on a small piece of land. Living so close to the forest, he regards himself as a part of its rich but fragile ecosystem. He laments the deforestation, and the incursions of cattle farmers.

Vital though it is to preserve the world’s forests, it would be wrong to blame small farmers like Edouardo, who are simply trying to feed their families in the only way they can. Any global climate deal must allow these farmers to make a living from their land, or offer them alternatives.

Worse by far are the cattle ranches. By flying over the Amazon, the scale of ranching in the region is quickly apparent. It is now the biggest cause of deforestation in the Amazon, according to Greenpeace, which alleges that many of the Amazon’s products – beef and leather – find their way into luxury goods and western supermarkets.

Reducing Emissions from Deforestation and Forest Degradation (REDD), the subject of a large chunk of the Cancún talks, is supposed to stop all this. It consists of a series of rules, developed over several years, which should provide a formula to gauge the worth of forests – and a mechanism to finance their preservation.

REDD is now nearly complete. It may seem astonishing that this has taken so long, but finally most of the details have been sorted out. We now know, for instance, the correct definition of a tree, how much carbon can be locked up in different areas of land, and how the rights of indigenous people can be safeguarded.

“A lot of progress has been made on REDD – it’s seen as being one of the most positive things in the negotiations,” says Elizabeth Zelljadt, senior analyst at Point Carbon, a carbon market analyst division of Thomson Reuters. “The prospects are good.”

Only one problem remains. Where is the money? REDD cannot succeed unless it generates income for the forested countries to ensure that trees are not illegally cut down, and looks after the needs of indigenous people within these forests. Cash must also be poured into providing the people of these countries with other opportunities for economic growth, such as developing new industries so that people like Edouardo do not have to encroach on the forest to feed their families. At a conservative estimate, the cash required is many tens of billions of dollars a year.

Where will these funds come from? For years, rich and poor nations were locked in a fruitless struggle over whether it should be found in “government to government transfers” – that is, developed country taxpayers’ funds being diverted to poor country governments. Rich countries were reluctant to agree to this, preferring to rely on the private sector to generate funding.

Poor countries should have recognised the reality sooner. The lesson from overseas aid is that relying on the generosity of western taxpayers is a mug’s game. Take the funding agreed for REDD so far, which amounts to US$5 billion to $6 billion – in total, not per year – from governments including Germany and the United Kingdom, and chiefly Norway, which has taken a strong interest in this issue. This money is useful, but comes nowhere near the sums that will be needed.

To the question of how to bring in private-sector cash, we already have an answer – one worked out long ago, in the first seven years of these long-running talks. Carbon trading provides a system through which developed countries require their industries to reduce their emissions by a certain amount. Rather than only cutting their own emissions, businesses can offset the greenhouse gases they produce by buying carbon credits from developing countries. Those credits are awarded to projects that reduce emissions – wind farms, for example, or solar power plants. Or, in the case of REDD, projects that protect existing trees, or regrow trees on damaged land.

Over the past five years, since the European Union set up its carbon trading system, and since the United Nations began awarding credits – though not to forestry projects, as that had to wait for REDD to be drawn up – the global carbon trading system has grown to a value of US$144 billion, according to the World Bank. This has been achieved even though some of the world’s biggest economies – the United States and Japan, for instance – have been standing on the sidelines. With other big economies involved, carbon trading could easily generate the funding necessary to save the world’s forests.

Carbon trading has many opponents. Certain vociferous green campaigners compare it to medieval indulgences, by which sinners could carry on sinning if they paid the church. They complain that it does not reduce emissions – though in fact the system clearly does result in reductions if the targets are correctly set. More nuanced criticism comes from observers who say companies in the largest existing carbon trading scheme, within the European Union, have managed to game the system. But this can be stopped, with small revisions to the rules.

Currently, the real problem for carbon trading is that the United States seems extremely unlikely to take part. President Barack Obama promised a “cap-and-trade” system, but his political difficulties have put paid to that. Unless he wins a second presidential term -- in 2012 -- with a thumping majority in the House and Senate, there will be no carbon trading in the United States, and therefore no global system.

Without a global carbon trading system, where will the money for REDD come from? Zelljadt points to the private sector: companies may choose to offset their emissions by investing in REDD projects to burnish their reputation or fulfil their corporate social responsibility goals.

On current showing, however, this market is also unlikely to be much of a money-spinner. In 2009, companies and individuals spent about US$338 million to offset their emissions, according to Point Carbon. For 2010, it is likely to be less owing to the recession. Five years ago, analysts were projecting that these voluntary efforts on offsetting would amount to several billion a year by now. They overestimated the desire of companies to spend money when they don’t have to.

Without a sturdy fundraising mechanism, REDD is worthless. It is a beautiful vehicle, lovingly crafted down to the last elegant detail, but without an engine; so it is doomed to failure. The engine that could have generated the cash is no longer there. Carbon trading is languishing. It could be revived, with a mighty effort of political will.

Fiona Harvey is the FT’s environment correspondent

http://www.ft.com/home/uk

© Copyright The Financial Times Ltd 2011

Homepage image from Greenpeace

Talking tactics

Angel Hsu, Yupu Zhao — Thu, 27 Jan 2011 14:01:00 +0000

China’s performance in Cancún points to a new, more conciliatory climate diplomacy from a country that knows the sharp end of the blame game, write Angel Hsu and Zhao Yupu.

Last month’s UN-led climate talks in Cancún, Mexico, were largely touted as a success, as countries reached near consensus on critical issues such as technology transfer and the creation of a new Green Climate Fund to help developing countries adapt to global warming. The standing ovation for the Mexican hosts that erupted in the summit’s final plenary session came in stark contrast to the conclusion of last year’s Copenhagen talks, which ended behind doors, closed to civil-society observers.

Another marked change in Cancún was China’s tone and communication strategy, following heavy criticism at, and after, Copenhagen.

Whether the finger-pointing was valid or not, Copenhagen was a watershed event for China. In the run-up to the summit, Beijing put forth a voluntary commitment to reduce carbon intensity by 40% to 45% by 2020, compared to 2005 levels, breaking with precedent of avoiding specific emission targets. By making this pledge, as well as by recognising that it would not be first in line to receive financial assistance from developed countries for adaptation and mitigation measures, China stepped into a leadership role. Despite these efforts, the country’s relative lack of experience in climate diplomacy meant it still walked away as Copenhagen’s scapegoat.

“China was surprised by the emphasis on MRV [measurement, reporting, and verification of emissions reductions] in Copenhagen and the negative media attention it received, since it felt like it had brought a lot to the table by agreeing to reduce its carbon intensity and taking significant steps to improve energy efficiency and renewables,” said Alvin Lin, China climate and energy policy director at US environmental group the Natural Resources Defense Council.

Transparency of emissions data has been a key sticking point for the United States in climate negotiations. In Copenhagen, US delegates, including secretary of state Hillary Clinton and senator John Kerry, insisted that major emerging economies like China and India must be transparent about their emissions information before the United States would enact climate legislation and provide climate aid. Backed into a corner, China reluctantly agreed to international consultation and analysis (ICA) of its climate pledges – a less stringent version of MRV required of developed countries.

And so one lesson China took from Copenhagen was that it needed to improve its climate diplomacy and revamp its image, if it was to avoid shouldering further blame – particularly if the Cancún talks “failed”. The government started by releasing domestic media accounts that portrayed China’s role in Copenhagen as positive and constructive. Then, in October, China hosted its first UN Framework Convention on Climate Change (UNFCCC) conference in Tianjin. The intersessional meeting in the lead-up to Cancún was a prime opportunity for China to showcase itself and reaffirm commitment to the UNFCCC process. But, while Tianjin provided Chinese media and NGOs with ample training ground, eyes were really turned to Cancún, waiting to see how China would respond after the previous year’s public-relations fiasco.

How did China’s strategy change in Mexico? First, it stepped out of the limelight, assuming a much lower profile than it had in Copenhagen. In Denmark, China joined other countries in setting up a pavilion in the Bella Convention Centre, where experts gave lectures and senior members of the negotiation team held daily press conferences. But amongst Cancún’s pavilions – including stands from not just the United States and the European Union, but also first-timers like India and Qatar – China’s was notably absent.

Second, the Chinese negotiation team made concerted efforts to speak in much softer tones in Cancún. A New York Times article pointed out that Chinese negotiators avoided mention of the United States by name, instead “obliquely” referring to it as an “Annex I country that is not a party to the Kyoto Protocol”: a far cry from the Sino-US blame game that erupted in Tianjin. The language was so soft that major media organisations started prematurely reporting that the United States and China were close to brokering a deal on MRV, before the two delegations had actually met.

China also took a new approach to communicating its negotiation stance on key issues, particularly on transparency. In Copenhagen, Chinese officials had appeared elusive when they opposed MRV on grounds of violating the country’s national sovereignty. But in the lead-up to Cancún, Chinese officials decided to be forthcoming. An article in chinadialogue quoted Xie Zhenhua, vice minister of China’s National Development and Reform Commission (NDRC) and the head of the Chinese delegation, as saying in strong, clear terms that “China will be transparent.”

Chinese civil-society organisations also contributed to efforts to refashion the country’s image in Cancún. A coalition of China-based NGOs was active in organising side events and distributing materials that showcased China’s climate success stories. Student-led initiatives between US and Chinese youth emphasised the need to build trust based on dialogue and mutual understanding. And Chinese and US-based NGOs, taking their cue from the youth collaborators, met and formalised a long-term action plan for cooperative action. Meanwhile, the private Chinese company Broad Air Conditioning demonstrated its sustainable building technologies at an off-site “Chinese pavilion” that was marked on shuttle-bus maps – and even confused by some for an official Chinese government pavilion.

Chinese media organisations also worked hard to portray China positively in Cancún, helped by the negotiation team’s efforts to make themselves available for interviews in the build-up to the conference. The China Daily, for instance, produced two 16-page glossy specials that were distributed during the first and second weeks of the summit, covering various aspects of China’s actions on climate change, such as efforts to promote low-carbon growth in cities, and including commentaries by foreign experts on international collaboration on clean energy.

Li Xing, assistant to the China Daily’s editor in chief, said Cancún was the first time the newspaper had published special climate conference reports: “I was in Copenhagen covering the climate talks last year. During that conference, quite a few papers, including the Financial Times and Japan Times, published special reports.

“In contrast, there was very little coming from China, except fliers at the China booth. That is why we thought of making China more understandable to the outside world here at Cancún. It is largely China Daily’s own initiative, but it does fit in with the wider government initiative to make China better understood in the world.”

The process to revamp China’s climate-communication strategy has, however, suffered inevitable growing pains. Several news articles during Cancún’s first week suggested China was still being misunderstood. A Reuters piece created a lot of excitement when it misreported that China had announced willingness to submit its voluntary emission-reduction targets to an internationally binding process – a “game-changing move”, according to many observers. But senior Chinese officials were quick to refute the claims and clarify that China’s position had not changed.

Huang Huikang, special representative for climate change at China’s Ministry of Foreign Affairs, who was quoted in the media reports, recognised the gaffe and told a group of young people from China and the United States that there were still translation issues when it came to speaking to foreign media. He pointed to the dual-edged nature of the press: while contributing to transparency and trust-building, it can also sensationalise and report inaccuracies.

China’s nascent climate diplomacy will only prove more critical for China in the build up to the next major climate meeting in Durban, South Africa, a period during which the international climate regime could significantly change for China. As Cancún failed to determine the legal form of the new climate agreements or to resolve what to do when the first commitment period of the Kyoto Protocol expires in 2012 – two key questions for China and other major developing countries – China will be faced with a particularly difficult conundrum: to be more conciliatory as in Cancún or to hold ground as in Copenhagen. Then in Durban, the new climate diplomacy of the world’s largest greenhouse-gas emitter may be tested once more.

Angel Hsu is a PhD candidate at the Yale School of Forestry and Environmental Studies and represented the Yale Climate and Energy Institute as a COP-16 Fellow in Cancun. Zhao Yupu is a Master of Environmental Science candidate, also at the Yale School of Forestry and Environmental Studies.

Homepage image from IISD shows the opening ceremony of the Tianjin climate summit.