Solution or source of global climate change
In this week’s column I shall wrap up the discussion over the past few weeks of the key lessons that should be learnt from the recent Copenhagen climate summit. This will lead into a discussion of carbon trading, carbon finance, offsetting and related matters, which lie at the heart of the LCDS and the Memorandum of Understanding (MOU) between the Government of Guyana and the Government of the Kingdom of Norway that I am in the process of evaluating.
Annex 1, non-Annex 1 parties
As I have previously pointed out in these columns the Copenhagen Accord does not indicate specific targets of greenhouse gases reductions for participating countries. To that extent, therefore, it does not spell out specific actions designed to achieve global temperature increases of less than two degrees celsius below the pre-industrialization levels. The accord also does not specify or put in place a replacement treaty for the Kyoto Protocol, signed in 1997 and set to expire in 2012. However, the accord does specify the obligations of what are termed as “Annex 1 and non-Annex 1 Parties” in the Kyoto Protocol. Under the Kyoto Protocol, the Annex 1 Parties are basically the developed industrialized countries and the so-called “emerging market economies” of Central and Eastern Europe. The non-Annex 1 Parties refer to the rest of the world (that is, the developing countries including emerging market economies in the South, like Brazil, China, and India).
Under the accord Annex 1 Parties of the Kyoto Protocol are committed to implement individually or jointly, quantified economy-wide emissions targets for 2020 as specified in submissions in the format given in Appendix 1 of the document to the Secretariat of the United Nations Framework Convention of Climate Change (UNFCCC) by today (January 31, 2010). Non-Annex 1 Parties are to submit to the UNFCCC by the same date mitigation actions they propose to take. The submissions on emissions reductions by Annex 1 Parties are to be measured, reported, and verified on the basis of rigorous transparent indicators based entirely on internationally agreed-to guidelines. Non-Annex 1 Parties are permitted to rely on domestic measurement, monitoring, reporting, and verification. These should be submitted through “national communications with international consultation and analysis” every two years.
Based on the traditional (Kyoto Protocol) distinction between Annex 1 and non-Annex 1 Parties, we find today that there are more than fifty non-Annex 1 countries with a higher per capita national income than bottom-tier Annex 1 countries! This erosion of the traditional distinction between developed and developing countries, is one of the principal reasons why not only the Copenhagen climate summit has failed, but the future of global climate change and global warming negotiations continues to look so bleak.
Under the Copenhagen Accord the least developed countries (LDCs) and the small island developing states (SIDS) are exempted from mandatory emissions reduction targets but it is hoped (expected) that they may undertake voluntary actions, with or without the support of other countries. However, if there is support from other countries they would be subject to stringent monitoring, review, and verification. Thus these exemptions, which it is presumed, arises because of their poverty and minuscule or trivial contribution to greenhouse gas emissions, disappears if they receive assistance to pursue a low carbon development path, as under the LCDS.
Private markets
One further lesson to be drawn from the Copenhagen climate summit is that, although the accord is the product of a political deal brokered by governments, it clearly and unambiguously legitimizes a leading role for the private sector and private markets in finding solutions to the problems of climate change and global warming. Although the global climate problem is largely the product of the private-for-profit plunder of the earth’s resources with no regard to environmental preservation, this same sector is seen as essential to a long-run global solution. In the accord this is to be achieved in several ways.
First, all parties to the accord have agreed to establish “positive incentives to encourage flows of financial resources and technology transfer from rich to poor countries.” Further, in order to promote cost-effectiveness it was agreed to utilize the mechanism of private markets as much as possible. Second, predictable and adequate funding is to be provided for emissions reduction as well as reduced deforestation and adaptation. The financial targets indicated are 1) that Annex 1 Parties are to provide US$30 billion of additional resources between this year and 2012 for “balanced” adaptation and mitigation actions and 2) US$100 billion annually by 2020, from both public and private sources; 3) the crucial role of REDD and REDD plus and their implied financing has been endorsed in principle; and, 4) long term funding is expected to come from a wide variety of sources: bilateral, multilateral, public, private as well as any other alternative sources.
This explicit endorsement of a strong future role for private finance, private markets and the private sector leads directly to consideration of the sources of private carbon finance. This is expected to come mainly from carbon trading in private self-regulated carbon markets and the role of “emissions offsetting” in all this. Readers are no doubt fully aware that the LCDS is premised on the evolution of carbon trading in private markets and the sale of Guyana’s pristine forests as emissions offsets to CO2 spewed into the atmosphere by rich polluting countries. I shall be continuing the discussion along these lines next week.
In conclusion let me make a final observation on lessons to be learnt from the Copenhagen climate summit. At the end of the Copenhagen Accord there is a commitment to evaluate the way it is being implemented by 2015. A key intention of this evaluation is to strengthen the long-term orientation of the accord and therefore the need for continued and sustained global cooperation, particularly in light of possible future scientific results concerning climate change and global warming, including a reduction of the temperature target to 1.5 degrees Celsius.