On the Road Again – Wuppertal Institute Assessment of the Durban Conference

The Wuppertal Institute’s report on the Durban conference is now online.  The conference revolved around two key sets of issues: What will be the overarching long-term framework of international climate policy and what near-term action will be taken to combat climate change? Accordingly, the first part of the report is devoted to the negotiations and outcome on the legal form of the future climate regime while the second part discusses near-term action along the “building blocks” of the Bali Action Plan. Below are the report’s conclusions.

4. Assessment and Outlook

4.1 On Track Towards Legally Binding Commitments?

How to judge the Durban outcome depends on what yardstick one uses: what is possible in terms of Realpolitik or what is necessary to actually prevent dangerous climate change.

In terms of Realpolitik Durban probably achieved the maximum of what was possible. The conference decided to launch a new dedicated process to negotiate a comprehensive climate agreement, “a protocol, another legal instrument or an agreed outcome with legal force“. So progressive countries succeeded in getting a roadmap for a new treaty, despite the strong objection from in particular the USA, India and China. Indeed, there was a very real possibility that there would be no outcome at all and it is doubtful whether it would have been possible to put the process back on its feet after another such blow two years after Copenhagen.

The EU has thus re-established itself as a key player in the climate negotiations. After having been almost completely side-lined in the Copenhagen endgame, the EU came to Durban with a plan and managed to form a “green coalition” with the most vulnerable countries and two out of the four members of the BASIC group, Brazil and South Africa. In return, the EU agreed to continue the Kyoto Protocol, which many had already written off, in a second commitment period. Finally, the resolution of the issues around the roadmap and the Kyoto Protocol made it possible to go forward with the decisions on implementing the Cancún Agreements.

It is highly likely that the LCA pillar would have collapsed as well if the larger issues around the legal nature of the future regime had not been resolved. It is very easy to envisage a scenario were failure to agree to a roadmap would have stopped the EU from committing to a second Kyoto period, which in turn would have lead to developing countries blocking progress under the AWG-LCA. The Earth Negotiations Bulletin notes that “it is arguable that the EU drafted the script for the central plot in Durban by setting out their stall early in the process and offering to do the heavy lifting to save the Kyoto Protocol within the context of a roadmap that put up a challenge to other parties—developed and developing.”  Apparently the USA and others had expected that the EU would cave and in the end go ahead with a second Kyoto period without getting agreement on a new roadmap. But the EU did not and as a result the Durban conference probably produced the maximum of what anyone could have expected given the political framework conditions.

The new “Ad Hoc Working Group on the Durban Platform for Enhanced Action” is supposed to start work in 2012 and finish as early as possible but not later than 2015. However, the new agreement is supposed to come into effect and be implemented only from 2020. Until this new agreement takes effect all there is are the non-binding pledges from Copenhagen and Cancún and these are much too weak to achieve the 2°C target. The decision therefore stipulates that the new process shall raise the level of ambition and that there shall be workshops to that effect in 2012. However, there already were such workshops this year and they delivered rather few results. It is hence far from certain whether this process to raise the level of ambition is going to have any results.

A crucial lever to raise the level of ambition of developing countries is the strengthening of climate finance. However, the decisions on finance continue a set course: while structural decisions continue to get stronger, there is also an unfortunate continuation of low ambition to fill the institutions that are created by these decisions with reliable funds. Developed countries continue to set high expectations through non-binding pledges, but are often unwilling to back them up with binding commitments to dependably replenish the funding mechanisms under the Convention. Instead, bilateral channels and established multilateral channels such as the Development Banks are still the preferred method of funding, as donors retain a larger amount of control this way. Funding mechanism with direct access to finance, such as the new Green Climate Fund, are the opposite in that respect: they give a large amount of control to recipient countries, while donors retain only very little power over their disbursements, thus making earmarking of funds for special purposes impossible. Anyhow, without strong commitments to replenish the GCF with significant amounts or tapping innovative public sources of finance such as bunkers and having these flow to the GCF, it will remain a carefully crafted but empty shell.

In addition, while a lot of the reporting on Durban asserts that countries agreed to work out a deal that will force everyone in a legally binding manner to reduce emissions after 2020, that is unfortunately not true. The agreement is “to develop a protocol, another legal instrument or an agreed outcome with legal force under the United Nations Framework Convention on Climate Change applicable to all Parties“. However, apart from the question what “an agreed outcome with legal force “ is supposed to mean even a legally binding treaty must not necessarily contain legally binding commitments. The force of an agreement does not depend on what label it carries but on what content it has. The Framework Convention is a legally binding treaty that is applicable to all its Parties but it lacks legally binding emission reduction commitments. The Kyoto Protocol is a legally binding treaty applicable to all its Parties, which includes most of the world’s developing countries, but it only defines legally binding emission targets for industrialised countries.

The Durban agreement stipulates a new legally binding agreement but it does not say anywhere that this agreement is supposed to include legally binding emission reduction commitments, so this question is still completely open. And it can be expected that the USA and others will continue to fight tooth and nail against having legally binding emission reduction commitments in the new agreement. Therefore, while Durban re-opened the door to a regime with enforceable reduction targets that seemed to have been closed in Copenhagen, the road to get there will be long and difficult.

It also bears pointing out that this is already the second roadmap that is supposed to lead to a comprehensive global agreement. The Bali roadmap agreed in 2007 was supposed to culminate in a new treaty at the Copenhagen conference in 2009, but the result was the non-binding Copenhagen Accord that was not even agreed to in plenary.

4.2 Crumbling Firewalls and Shifting Alliances

The significance of the Durban Platform is hence not so much that a new process has been launched. One may indeed wonder why launching a new process was even necessary. The Bali roadmap has not been completed yet. If the main desire was to agree that there should be a legally binding outcome, it would have sufficed to specify the mandate of the AWG-LCA accordingly. Instead, the LCA will be terminated in 2012 and a new process will be started.

And while the Bali roadmap contained a clear “firewall” between Annex I and non-Annex I, the Durban Platform does not. The new agreement is to be “applicable to all Parties” under the UNFCCC. While this does not necessarily mean that all will have the same kind of commitments – or indeed any kind of legally binding commitments as noted above –, this is clearly the intention of industrialised countries.

It is also notable that developing countries were not able to include any explicit reference to the Convention’s principles of equity and common but differentiated responsibilities (CBDR) in the text. Industrialised countries had insisted throughout the two weeks that this principle needed to be interpreted in a “dynamic manner” in line with “current economic realities”. Developing countries argued that such an interpretation would amount to amending the Convention. Nevertheless, in the endgame India had to trade away its insistence on including an explicit reference to CBDR in order to secure the weaker language on what legal outcome the new process is to have. Apparently, while the EU would have agreed to including CBDR in the text, this was non-negotiable for the USA who has for years insisted on legal parity between all major emitters. CBDR has not gone away as the new agreement will be negotiated in the framework of the Convention and hence all the principles of the Convention should also apply to the new agreement, but it is nevertheless telling that it was not possible to include an explicit reference to one of the Convention’s key principles in the text.

What is also significant is that the old alliances are increasingly becoming unstuck. Traditionally, developing countries used to negotiate as one block in the G-77. The positions of this block were often dominated by the larger countries and also frequently hijacked by Saudi Arabia and OPEC. In recent years, however, AOSIS and the LDCs have increasingly clashed with the larger G-77 countries on what should be the way forward. While AOSIS and the LDCs have demanded to negotiate a second protocol to work alongside the Kyoto Protocol, in particular China, India and Saudi Arabia have held that form should follow function. When India held up the primacy of development in Durban, Grenada retorted, “While they develop, we die in the process. Why should we accept this?”

Brazil, China, India and South Africa for their part have in recent years also developed a distinct identity in the BASIC block – but in Durban this block fractured as well. South Africa supported a roadmap from the beginning and Brazil also swung around. China, having been made the scapegoat for the failure in Copenhagen, was extremely careful to show flexibility and highlight their achievements. Chief negotiator Su Wei and Minister Xie both indicated that China would be willing to consider adopting legally binding commitments for the time after 2020. In addition, China for the first time had its own pavilion at the conference where it showcased its emission reduction efforts. Among the BASIC countries India was hence rather alone in its hard-line positioning.

4.3 Progress Is Local

While the climate train was put back on the tracks in Cancún and Durban has now charted a new way forward, success is far from assured given the persisting fundamental differences between the major emitters.

It is also clear that the outcomes of the international process are driven by national politics, not vice versa. No government is going to let itself be compelled by an international treaty to cut emissions faster than it wants to. International agreements are to a large extent reflections of national will, and cannot be used to force countries to do things that they are fundamentally opposed to – as evidenced by Canada’s decision to leave the Kyoto Protocol and the US decision to not ratify the Protocol in the first place. As Sergio Abranches notes in his assessment of the Durban conference, “Politics hardly moves ahead of the facts. It is not a proactive process. It is a responsive one. Politics responds to active interests in economy and society. It seldom reflects even the ‘inactive majority’ or the majority of ‘public opinion’. Political decisions respond to ‘active interest groups’, to economic constraints and inducements, and to the domestic correlation of power. Countries that show greater ambition of emissions reductions also have greater active political support from domestic economic and social forces to policies aiming at coping with climate change. Their domestic policies are usually more ambitious than their multilateral commitments.”

The problem is hence not the setup of the international process as some are arguing but the lack of national will to tackle climate change seriously. Most governments are simply not willing to challenge vested interests whose business models rely on using fossil fuels. This will only change if a critical mass of voters and “green” businesses becomes vocal enough to constitute a counterweight to the incumbent industries.

It is hence encouraging that the shift to a green economy is increasingly picking up steam, even in those countries whose national governments are the greatest blockers of the international process. For instance, California, the largest US state, has this year decided to introduce an emission trading system, and other US states and Canadian provinces will probably follow suit. Another emission trading system is already in operation on the US East Coast. China is investing massively in energy efficiency and renewable energy. In 2010 it jumped to first place in terms of installed wind power capacity and will probably set another renewables record this year. It also just increased its 2015 target for solar power by 50%.  Globally, investments in renewables for the first time outstripped investments in fossil fuels in 2010. Over time these developments will unavoidably change the narrative at the political level as well. The more local, regional and national initiatives are implemented and the more pioneers become active at all levels, the more decision-makers will be encouraged or indeed pressured to embark on the necessary large-scale step-change.

In addition to the psychological momentum and the shifting of economic weight and the corresponding political power from old to new industries, ambitious action by frontrunners also induces technological learning which makes it easier for others to follow. For example, the renewables feed-in tariffs in Germany and other countries have induced massive cost reductions. The most striking case is solar PV where for each doubling of globally installed capacity the costs have dropped by 22%. While in 2004 the feed-in tariff for solar PV in Germany was USD 0.77 per kWh, it has now dropped to USD 0.23. And these trends are set to continue so that solar PV may even become cheaper than coal within this very decade – even without a carbon price.

The UN climate process is nevertheless indispensable in order to lock in progress that is made domestically, to provide global transparency and hopefully at some point legal bindingness and to set the overall narrative. It is also the only forum where the small and most vulnerable countries can make their voices heard. And as Durban has once again shown these voices are indispensable for aiming at a sufficiently strong level of ambition. It was the alliance between the EU, small island states, least developed countries and other progressive developing countries that forced the USA, China and India to agree to launching a new process towards a legally binding agreement. It is also undeniable that ultimately a global deal is needed to achieve sufficiently ambitious emission reductions and prevent emissions leakage.

And the process does yield results. While Copenhagen failed to deliver the anticipated climate treaty, the summit was not without successes if seen in a broader context. The deadline imposed by the Copenhagen conference injected a significant momentum into national discussions. One country after another elaborated domestic targets and actions, and presented them to the international audience. The run-up to Copenhagen hence resulted in a much better understanding of national mitigation potentials, available policy options and actions that countries are prepared to take. This momentum would hardly have materialised without the positive pressure exerted by the Copenhagen deadline. Indeed, who would have expected a mere three years ago that countries such as China and India would put forward mitigation targets?

4.4 Climate Policy of One or Multiple Speeds?

However, the question is what the best route to achieve a sufficiently ambitious global outcome could be. Over the last 20 years the approach has been to organise all the world’s countries into a global convoy. But in a convoy the speed is determined by the slowest unit. And unfortunately the UN climate convoy includes very many countries such as the USA, Canada and Russia who currently have nothing to bring to the table and countries such as Saudi Arabia and other oil-exporting countries whose sole intention is to block progress as much as possible. The amount of energy that is required just to keep Saudi Arabia in line is enormous.

Those countries who are actually serious about tackling climate change should therefore consider speeding ahead of the convoy in order to put pressure on the laggards to follow suit. One of the main reasons why progress is so slow is that many people are not convinced that it is actually possible to sharply reduce emissions without wrecking the economy. Pioneers showing that it is possible are hence critical. This could help creating a virtuous cycle where the international process serves to keep the climate issue on the agenda and at the same time catalyses bottom-up processes, which then in turn inject further momentum into the international process.

It might therefore be worthwhile if those countries who are actually serious about tackling climate change formed a high-profile climate leaders’ alliance to bring together all their efforts in a publicly visible manner and further deepen their collaboration, and to in this way inject the much-needed momentum into the UN climate process. Next year’s Rio+20 summit should be just the opportunity for such an undertaking.

Within the negotiations there already is coalition of like-minded countries, the so-called “Cartagena Dialogue”, which includes countries from almost all negotiation groups. However, the aim of the Cartagena Dialogue is to move forward the UNFCCC process, not to push forward practical action, and it is hardly known outside the circles of climate experts.

Instead, a climate leaders’ alliance might conceptually steal a leaf from the US playbook of power politics. In 2005, the USA and Australia – who at that time had a Conservative government and not yet ratified the Kyoto Protocol – launched the “Asia-Pacific Partnership on Clean Development and Climate” as a supposedly superior alternative to Kyoto which also included India, Japan, China, South Korea and at a later stage also Canada. The Asia-Pacific framing notably shut out the EU, Kyoto’s greatest champion. The Asia-Pacific Partnership was launched with loud fanfare by President Bush and Australian Prime Minister Howard, a high-profile meeting at ministerial level, and included a charter, a communiqué and a work plan. The Partnership was thus able to create quite a significant amount of public attention (despite being rather empty of actual content).

The lessons for a global climate leaders’ alliance would be: shut out those who are opposed to your intentions and have a high-profile setup – but this time with actual commitment and the intention to strengthen the UNFCCC process rather than undermining it.

There are many fronts where countries that are serious about tackling climate change could proceed, so a climate leaders’ alliance could be composed of different work streams. At its core it might for example consist of an ambition alliance, a sustainable energy alliance and an emission trading alliance.

Ambition alliance

The current pledges will at best deliver only about half of what is needed to shift to a 2° trajectory and therefore need to be strengthened urgently. Denmark has led the way this year by increasing its target from 30% to 40%. The EU as a whole should follow by increasing its target to at least 30%.

In addition, targets should be underwritten by the adoption of credible low-carbon development strategies to assure that the targets will actually be met. One model is provided by the UK Climate Change Act, which sets legally binding emission targets through 2050.

Sustainable energy alliance

UN Secretary-General Ban Ki-Moon in September launched the “Sustainable Energy for All” initiative. The initiative calls for private sector and national commitments to reach three objectives by 2030: Ensuring universal access to modern energy services, doubling the rate of improvement in energy efficiency and doubling the share of renewable energy in the global energy mix. This initiative is the Secretary-General’s central initiative for the Rio summit and takes place in the context of the UN General Assembly having declared 2012 to be the “International Year of Sustainable Energy for All”.

Obviously, this initiative will only succeed if countries put their weight behind it. Industrialised countries should offer developing countries comprehensive decarbonisation partnerships that should go much beyond current cooperation models. In essence, if a developing country is ready to embark on an ambitious transformation of its energy system, industrialised countries should stand ready to provide large-scale support. One model could be the emerging South African Renewables Initiative (SARI). In particular, Germany and other frontrunner countries that have pioneered this instrument should aggressively promote the further spread of renewables feed-in tariffs. The existing International Feed-In Cooperation (IFIC) should be further strengthened financially and personally and a mechanism should be developed to co-finance feed-in tariffs in developing countries. Such a mechanism could for example be anchored in the Green Climate Fund.

Emission trading alliance

While during the last decade emissions trading was mostly spearheaded by the European countries, the development of domestic emission trading systems (ETS) now seems to be picking up speed. Australia recently passed emission trading legislation, and China is developing pilot systems in several provinces and cities with a view to having a national system by 2015. The examples from the US have been mentioned already and South Korea is also planning to introduce a national ETS by 2015. Furthermore, Brazil’s second richest state Rio de Janeiro also recently announced its intention to launch an ETS by 2015 and Rio is also in consultation with other Brazilian states.

Incidentally, 2015 has just been set to be the end date of the new negotiation process launched in Durban. The endgame of the Durban Platform might hence play out in the context of a very substantial share of global emissions being covered by domestic emission trading systems, which should constitute a rather favourable environment for agreeing to a global framework. Every possible effort should be expended to make this scenario a reality. In addition, a high-level dialogue should be established to promote compatible designs of these new systems in order to develop a globally linked emission trading system. ETS need to be carefully designed and the lessons from the early EU ETS phases should be taken into account, e.g. when setting adequate caps or when considering the role of offsetting. While dialogue initiatives on emission trading do already exist, such as the International Climate Action Partnership, these are so far rather low-level and not embedded in a high-level framework of driving for change.

Wiser heads would certainly be able to come up with even more arenas where increased international cooperation would be highly beneficial, for example in the area of adaptation. Importantly, after having launched, all of the above initiatives could easily be brought back to the UNFCCC process – be it as notification of strengthened pledges or by being registered as supported NAMAs. Such a move would eventually complete the virtuous circle.

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