CLIMATE CHANGE
ROAD TO COPENHAGEN THE COPENHAGEN CLIMATE CHANGE TALKS: WHAT IMPACT ON BUSINESS? INTRODUCTION Despite much optimism earlier this year that Copenhagen would produce a breakthrough deal on climate change, the odds are now equally on a breakdown. We are presently witnessing official and political efforts to lower expectations for a substantial deal, and to shift focus to the detailed negotiations that are expected to follow the conference. However, climate change is now almost universally accepted as the key global challenge facing human civilisation. The upward trend in extreme weather events, changing patterns of rain and drought, melting polar ice caps and rising sea levels are seen as signs that we are already experiencing early impacts of climate change due to greenhouse gas (GHG) emissions. The United Nations Climate Change Conference, which will take place at the Bella Centre in Copenhagen, Denmark, from 7- 18 December 2009, is a key milestone in global action against this problem. The conference is comprised of the 15th Conference of the Parties (COP15) to the United Nations Framework Convention on Climate Change and the Fifth Meeting of the Parties (COP/MOP 5) to the Kyoto Protocol.
The meeting aims to agree a new framework for coordinated international responses to climate change beyond 2012 to supersede the Kyoto Protocol. The key political challenge will be to reach an agreement in which both the developed world and developing nations accept mutual obligations that are equitable, proportionate, measurable and accountable. This Burson-Marsteller Insight looks at the main players and issues for these vital talks – and at the impact of the climate change conference on business.
KEY ISSUES Any agreement at the talks on climate change will be a complex matrix of environmental, economic, scientific, political and social considerations – comprising emissions targets, the role of emerging economies, compensation for vulnerable low-lying nations, and the use and funding of new technology. Four necessary building blocks of a successful climate change framework at Copenhagen will be agreements on the following broad key negotiation issues1: > Emission reduction commitments from developed countries should be the basis of any global agreement. The criteria for judging the comparability of targeted reductions – and the degree of enforceability – lie at the heart of the negotiations. Opinions diverge deeply because many countries use different criteria and a different benchmark year to assess targets. This debate focuses on whether to calculate individual targets by comparing the clear-cut economic costs of making emission cuts or by comparing a set of criteria such as ability to pay, mitigation potential, business-as-usual (BAU) emissions growth and historic GHG emissions. > Matching commitments from developing countries are needed to reach a peak in global emissions in the next two decades, since the rates of growth in their emissions are much higher than in the developed world. However, developing countries point out that they bear less historical responsibility for the emissions already in the atmosphere, and that their emissions per capita are far less than those of the developed world. They view demands for binding emissions reductions as being at odds with the Millennium Development Goals. The role of so-called ‘offsets’ is also important since emerging economies deplore this approach, which allows developed countries to pass up domestic emission reductions by paying for efficiency projects in developing countries where it is cheaper.
> Funding and the financial architecture refer to the necessary arrangements for money transfers from developed countries to developing countries. It is still unclear exactly what wealthier countries, especially the United States, will propose. According to European estimates, the total net additional cost of mitigation and adaptation in developing countries could amount to 150bn USD annually by 2020. This bill needs to be shared between domestic financing, carbon market-based financing and international aid. A quasi-global emissions market could lessen the need for government funding, generating billions in financial flows. However, in recent negotiations, developing countries have requested up to 400bn USD a year by 2020, far outstripping the money that developed nations are likely to propose. > Technology transfer arrangements refer to the process of sharing skills, technologies, processes and R&D to ensure that low-carbon energy and mitigation technologies are accessible to a wider range of countries. For example, the EU has announced plans to finance pilot projects of carbon capture and geological storage technology in cooperation with China. This could act as a model for international action to combat climate change. Intellectual property (IP) rights are critical to this, as most of the low carbon technology is usually owned by the private sector in developed countries. Developing nations, with the support of key environmental NGOs, argue that climate technologies should either be open-sourced as common property or provided on highly favourable terms.
1 Other issues on the table include reform of the Clean Development Mechanism (CDM; agreed under the Kyoto deal), and inclusion of issues such as forestry, the global carbon market, aviation and shipping.
ROAD TO
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