Do the Climate Negotiations Need New Types of Targets?

Since its inception, the international climate regime has been based on emission targets. Industrialised countries first adopted an aspirational target under the climate convention, followed by legally binding emission targets under the Kyoto Protocol. And now the more advanced developing countries are expected to do the same.

One may call this a rather “scientific” approach. Climate change is caused by the rising concentration of greenhouse gases in the atmosphere. So the conclusion on what we should do was to put a cap on greenhouse gas emissions. And ideally use this cap as a basis for an emission trading system, which will put a price on emissions and thus drive investments and innovation into low-emission alternatives.

This approach arguably has some weaknesses, though.

First, focussing exclusively on emission reductions is a purely “negative” perspective: To get out of something. And it is totally abstract and intangible. It does not contain a positive vision of the direction society wants to travel in. And as a result you can hardly mobilise people around it. And especially not around emissions trading, an instrument that is so complex that only experts understand it. And the basic premise of which, to turn a public bad into a commodity, is totally counter-intuitive to most people.

Second, emission caps do not only mandate a minimum emission reduction, they at the same time also mandate the maximum emission reduction. If a country or company overachieves its target, that’s no benefit to the atmosphere whatsoever. Instead, the overachievement yields a surplus of emission allowances, which others can buy to offset their above-target emissions. Which is in fact the stated point of the system, as it gives those who can easily reduce their emissions an incentive to do so while reducing the costs for those who are not able to easily reduce their emissions. But this becomes a problem when emission reductions turn out to be more easy than expected (as the history of environmental regulations has shown to usually be the case) or when a recession comes along and causes emissions to be drastically lower than expected, such as the recession that wrecked the EU emission trading system.

And while in theory this problem could easily be solved by making the caps more stringent, in practice this has turned out to be rather difficult exactly because emissions have been given an economic value. As seen in the EU ETS but also internationally. One of the most untracktable problems of the current negotiations is how to deal with the enormous surplus of emission allowances that has accumulated during the first Kyoto period. Which none of the surplus countries is willing to give up. Instead, what their negotiators are saying is, “we want our money.”

The theoretical advantage of cap-setting, that it provides certainty on the environmental outcome, therefore loses much of its luster as in practice it has turned out to be near-impossible to set caps at the level where they would need to be set.

Which brings me to the third and probably most important problem, which is that GHG emissions continue to be seen by many as inextricably linked with economic well-being. Reducing emissions is therefore seen as economic sacrifice. Industrialised countries fear that taking the lead will lead to deindustrialisation and developing countries see being able to emit CO2 without constraint as much-needed “development space”. While the EU has tried to stop talking about “burden sharing” and instead talk about “effort sharing”, “burden sharing” is what everyone has on their minds. Moomaw and Papa have collected some illustrative statements from Northern and Southern representatives:

  • “We will not cut our development potential.”
  • (Our) “lifestyle is not up for negotiation.”
  • (It) “would cost us jobs and damage our industry.”
  • (It) “would have a negative impact on the living standards (. . .) and for the competitiveness and for our businesses.”
  • “A more ambitious target would constrict (our) development space.”

The international effort sharing discussions are hence characterised by everyone picking those criteria which would give their own country the most lenient targets. Developing countries point to industrialised countries’ historical emissions while industrialised countries point to developing countries’ rapidly rising current emissions.

The Wuppertal Institute in its proposal for Copenhagen, as well as others like Claudia Kemfert and Eicke Weber (in German) or William Moomaw and Mihaela Papa, have therefore argued that emission targets should be complemented (or maybe even be replaced, as argued by Kemfert/Weber and Moomaw/Papa) by other, more “positive” targets, such as renewable energy and energy efficiency targets. Such targets are concrete, tangible and dovetail with governments’ and citizens’ evident interest in promoting clean energy. In Germany, more than 500 renewable energy cooperatives have been created over the last years and there are now 120 “100% renewable energy regions”.

In addition, the share of renewables and energy efficiency improvements can be directly influenced by government action whereas emissions cannot. Besides energy use, emissions are strongly influenced by factors such as economic and population growth, which governments can at best influence indirectly, if at all. The fear of not being able to control the emissions of their rapidly growing economies is in fact one crucial factor why developing countries are loath to accept binding emission targets.

Furthermore, if clean energy targets are overachieved, that’s a 100% benefit to the atmosphere rather than getting used to offset emissions elsewhere. And practice shows that clean energy targets get ratcheted up all the time when it becomes apparent that they are going to be overachieved. Germany has constantly achieved its renewable energy targets ahead of schedule, which has so far each time lead to a strengthening of ambition, and China has by now quadrupled the solar energy target it initially set for 2015.

By contrast, even though the EU has basically already achieved its 2020 emission target, it seems to be unable to strengthen it. And as noted above, nor are the countries with surpluses from the first Kyoto period inclined to give them up. Instead, countries such as Russia and the Ukraine have proposed targets for 2020 that are far above their current emissions.

The conclusions seems clear: While ratcheting up clean energy as quickly as possible is seen to be in the national interest by many countries, ratcheting down emissions is not. Overachieving clean energy targets is often seen as a prompt for doing more, while overachieving emission targets is seen as an invitation to give each other a slap on the back and rest on one’s laurels. And crucially, as Moomaw and Papa point out,

Because free riding is possible and there is no effective public authority at the international level to enforce international environmental agreements, parties’ commitments and implementation depend on their perception that they are acting in their own national interest and gaining from cooperation.

What the current climate regime is trying to do is to get countries to do something they do not perceive to be in their own national interest, see the quotes above. Moomaw and Papa therefore diagnose that climate change shouldn’t be framed as a pollution problem, it should be framed as a development problem.

The discussions about nationally appropriate mitigation actions are very instructive in this regard, as everyone who works directly with developing country representatives comes back with the clear message that what they care about is development benefits while GHG mitigation is in their view the “co-benefit”. Or as a developing country expert once told me, “Developing countries are very interested in energy efficiency and renewable energy, especially in this age of rising oil prices. Just don’t put it into a climate change context.”

A complementary approach coupling emission targets with other targets has in fact already been taken by the EU through its 20-20-20 target: to by 2020 achieve a renewable energy supply of 20%, efficiency improvements of 20% compared to baseline and emission reductions of at least 20% compared to 1990.

And the funny thing is, achieving 20% renewables and a 20% efficiency improvement would actually reduce emissions by more than 20%. Back in 2007 my energy colleagues at Wuppertal already calculated that achievement of the renewables and efficiency targets would lead to an emission reduction of about 23%. In the meantime we have had a recession which has made reducing emissions even easier. In its low-carbon roadmap, the European Commission concludes that, “If the EU delivers on its current policies, including its commitment to reach 20% renewables, and achieve 20% energy efficiency by 2020, this would enable the EU to outperform the current 20% emission reduction target and achieve a 25% reduction by 2020.”

(And as a side note, the renewables and efficiency targets are positively coupled: As the renewables target is expressed as share of energy supply, this means that the more successful efficiency improvements are, the less renewable energy installations are needed to achieve the target. Quite cleverly done, given that renewables will never get to 100% quickly enough if energy consumption continues on its current trajectory.)

China offers a similar example. It has submitted a three-fold pledge under the Copenhagen Accord and Cancún Agreements: to lower its CO2 emissions per unit of GDP by 40–45% by 2020 compared with the 2005 level, to increase the share of non-fossil fuels in primary energy consumption to around 15% by 2020 and to increase forest coverage by 40 million ha and forest stock volume by 1.3 billion m3 by 2020 compared with the 2005 levels. And according to the Climate Action Tracker, the 15% non-fossil energy target is more ambitious than the energy intensity target.

The climate agreement that is supposed to be negotiated by 2015 is arguably the last chance to get anywhere close to the 2°C target. And the above considerations raise the question whether it is wise to try to shoehorn everyone into legally binding emission targets. Tackling economic inputs seems to be a much more promising approach to actually get things done than tackling economic outputs.

Or as a colleague of mine once put it drastically, nobody has ever lost weight by putting a plug into their rectum.

And crucially, clean energy targets eliminate the link between emissions and development people currently have on their minds. What people need is energy-related services (light, heat, transport, etc.), not emissions, and energy-related services can be delivered without use of fossil fuels. And by making full use of the most efficient solutions, services can also be delivered with much less energy consumption than is currently the case.

Framing commitments in terms of decarbonising economic inputs might also let the air out of the competitiveness debate. Which is vastly overblown as it concerns only a marginal share of emissions. The energy supply, transport, buildings, waste, agriculture and forestry sectors are rather unlikely to be off-shored to other countries if we take ambitious action and they don’t, and most industry sectors don’t really have a problem either. And still the spectre of deindustrialisation gets pulled out of the cupboard every time someone suggests strengthening climate ambition. Instead of hitting the entire economy with emission targets or uniform carbon prices, a more differentiated approach would allow to duly take account of competitiveness concerns where they actually exist.

GHG emissions and concentrations can of course not be neglected as they are what constitutes the hard environmental barrier we are running up against. But as the above examples show clean energy targets can be translated into emission outcomes, so that it would still be possible to track what contributions countries are proposing to make in combating climate change. Countries could also be invited to submit indicative emission targets in addition to binding clean energy targets. But in particular developing countries should not be forced into a format that would lead them to make less ambitious contributions than they otherwise might.

Some argue that emission caps are indispensable because of the “green paradox”: If fossil fuel use is reduced drastically, fossil fuels will become cheaper and hence more competitive. But if I can imagine that we might get a legally binding global emission cap, I can just as easily imagine getting a legally binding global 100% renewable energy target. Which would shut down fossil fuel use even more effectively than a global emissions cap.

And actually, I personally can imagine the second scenario much more easily because 100% clean energy is something that evidently many countries deem to be in their own national interest, it is something that can fire up people’s imagination, it is something people can take into their own hands, in their own home and in their own city, and it is something people might be motivated to take to the streets for in sufficient numbers to counterbalance the political influence of those whose business models rely on fossil fuel use.

On the other hand, as the EU example shows emission targets and clean energy targets are not mutually exclusive. One could also envision a system where countries start with clean energy targets and transition to emission caps in the mid-term, once governments have convinced themselves that reducing emissions is actually possible without wrecking the economy. But the question really is what kind of commitments can mobilise more action in the short term.

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2 Comments

  1. Dear Wolfgang,

    I agree that only talking about the “bad thing” – stop carbon emissions – is not enough to create political and investment dynamic. Politics always also need to talk about the “good thing”: entering the age of renewable energies. This is actually being done in the tech-transfer and climate finance negotiating tracks under UNFCCC.

    However I think it would be very dangerous to skip talk about exiting the bad stuff. If politics only focusses on how to increase renewables, investments into emissions-intensive energy carriers will continue at the same time. As we see in China, which is front runner both on coal and on renewable investments. What’s more, investments into renewables will create all sorts of rebound effects – after all since they are far from being “carbon neutral”. An “renewables-only” approach also lacks to consider existing power relations: the coal, gas and oil reserves privately owned by large energy corporations around the world are about five times what the atmosphere can absorb to remain below 2 degrees warming; and these corporations certainly want to achieve some return on their investments!

    I agree though with your quote that “nobody has ever lost weight by putting a plug into their rectum”. Theoretically it could make sense to change the narrative and get politics consider inputs rather than emission outputs. For instance, negotiating a coal moratorium / phase out of coal; or setting up more of the Yasuni-ITT-type-of-projects that aim to leave oil in the ground – to name but a few. Unfortunately – fortunately? – we will not be there until negotiating a new UNFCCC framework. So let’s keep our energies on the QUELRO-path – and find a way to negotiate them without the ever-reluctant US!

    Reply
    • Dear Tilman,

      Thank you very much for the feedback! Which I partly agree with but partly not ;o) As for entering the age of renewable energies being talked about in the tech-transfer and climate finance negotiating tracks, that is rather different from what I am proposing. Which is to make clean energy targets central to countries’ commitments. And I’m not advocating renewables-only, energy efficiency absolutely needs to be in there as well.

      I think China is a very special case, in most other countries a rapid scale-up of renewables would probably be at the expense of fossil fuels, especially if coupled with ambitious efficiency improvements. And as noted in the post, China’s renewables target may actually lead to more emission reductions than its emission target, same as the renewables+efficiency target of the EU. And the proof of the pudding is in the eating. If an input-based approach is proving to achieve more emission reductions than an output-based approach, should we not switch horses?

      But ultimately I am not advocating an either-or. My question is, what can get us going as quickly as possible? Because I am convinced that renewables will start outcompeting fossil fuels on their own merits in the very near future. So once the ball gets rolling there will be no stopping it. And once the viability to get rid off fossil fuels has been demonstrated countries will be much more agreeable to imposing caps on their emissions. So the problem with the current approach is in my view that it is trying to do the second step before the first. Governments first need to convince themselves that ambitious emission reductions are actually possible without wrecking the economy. So what I’m advocating is that in the near term countries, in particular developing countries, should be given the option to frame their commitments in ways that best suit them, as long as they can show that they are ambitious commitments.

      “An “renewables-only” approach also lacks to consider existing power relations: the coal, gas and oil reserves privately owned by large energy corporations around the world are about five times what the atmosphere can absorb to remain below 2 degrees warming; and these corporations certainly want to achieve some return on their investments!”

      Yes – but any approach that is actually adequate to the problem will basically expropriate those reserves, no matter how you frame it. And this is exactly why getting climate policy on the road has been so difficult. If you haven’t read Bill McKibben’s Rolling Stone article, I highly recommend it. I did a brief summary here.

      Reply

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