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Cancun: the glass half full

16 December 2010

Cancun will restore confidence among governments and business that action is going to occur, writes Michael Jacobs, and that makes progress more likely


Standing ovation at the final session of COP-16 in Cancun on 11 December 2010. Michael Oko/WRI

Standing ovation at the final session of COP-16 in Cancun on 11 December 2010. Michael Oko/WRI

“I HAD low expectations,” said one environmentalist at the conclusion of the UN climate change conference in the Mexican resort of Cancun at the weekend, “and they’ve been fully met.” It’s a reaction that’s been widely shared over the last few days. Enough had been achieved to save the UN process, observed Greenpeace, but not enough to save the planet. Yet the downbeat assessment stood in stark contrast to the cheering, foot-stomping euphoria of the delegates themselves as the chair of the conference, the Mexican Foreign Minister Patricia Espinosa, brought down her gavel on a wide-ranging set of agreements in the early hours of last Saturday morning.

Why the difference in reaction? Well for the delegates it was no doubt relief that, at the very last minute (in fact, beyond it – the conference was due to close on Friday), consensus had been snatched from the jaws of the failure that looked much more likely until just hours earlier. But it also represented a fundamental difference in understanding of the political economy of climate change – for Cancun has performed the remarkable feat of simultaneously changing nothing, and changing a great deal.

It changes nothing, because the commitments countries have made to reduce their emissions, and to provide finance to help poorer countries, are exactly the same as they made in the Copenhagen Accord, the agreement that failed to get UN approval this time last year. On the surface, all Cancun does is to bring countries’ existing targets under the formalities of the United Nations. It adds nothing to Copenhagen’s financial commitments, which remain at “approaching $30 billion” of mostly reallocated (not new) aid up to 2012, with $100 billion per annum from as yet unidentified sources as the goal for 2020.

Meanwhile the new features in the Cancun Agreements are largely institutional rather than substantive: a Green Climate Fund to channel assistance to poor countries, new rules on measuring and supporting rainforest protection, new processes of monitoring emissions, a committee to promote technology transfer, and another on adaptation, which is at last to get a fairer share of political priority and finance. None of these elements in themselves cut emissions, or help poorer countries cope with climate impacts now: indeed, none of them are final agreements at all. They will all require a huge amount of further negotiation over the next few years before they become operational.

And yet Cancun is still a very significant moment. Why? Because it will restore confidence among both governments and businesses that action on climate change is going to occur. And, in turn, that makes it more likely that such action will occur. That circularity is a critical feature of the way decision-making on climate change works, one too little recognised by NGO and media critics.

Climate change presents a classic case of the prisoner’s dilemma. Every country will benefit if all countries take action to combat climate change. But it’s only in my interest to take action if I know others are doing so too; and if I think they’re not, it’s in my interest not to. For businesses, a future world in which emissions are curbed and clean technologies are incentivised makes it worthwhile investing in low-carbon systems now. There are huge advantages in being first in the market with green solutions. But if that world isn’t going to happen, such investments could prove to be expensive mistakes.

Since Copenhagen that’s been the fear. The sense that the world was not going to come to an agreement on climate change, that the differences between the United States and China were irreconcilable, that new markets for low-carbon goods could not be guaranteed, has had a chilling effect both on developed countries’ commitments and on business investment. In the United States and Australia, public support for action on climate went into reverse. Buckling under the weight of its financial crisis, Europe lost its appetite for climate leadership. Investors have put new low-carbon energy projects on hold. And into the damp pool of uncertainty have swarmed the climate sceptics and those – oil and coal companies and others – with a vested interest in stagnation.

Cancun reverses that downward spiral. It has the chance of restoring belief that countries will indeed be taking action, and that the low carbon economy will therefore happen. For governments, it re-establishes the crucial norm of international cooperation: very few countries, including the United States and China, will wish to stand outside that. Already there is a sense of renewed momentum. In Europe there are calls for the European Union to move to its 30 per cent emissions reduction target for 2020; with the recession having pulled current emissions down to 17 per cent below 1990 levels, it’s not now such a stretch. In every country it will bolster the forces seeking a faster transition to the low-carbon economy and weaken those looking to hold it up.

In the Great Depression Franklin Roosevelt said that the only thing to fear was fear itself. So it is with climate change: belief in failure breeds an unwillingness to act, which then becomes self-fulfilling. But equally, belief that action is under way encourages clean energy investment, which then makes the progress real.

The critics of Cancun are of course right to say that the emissions reduction commitments in the new agreements are not sufficient. A valuable new analysis by the UN Environment Programme sets out the “emissions gap.” To have a reasonable chance of keeping the global temperature rise within the 2°C global goal that Cancun confirms, greenhouse gas emissions in 2020 need to be around 44 gigatonnes (GT) per annum. But if all countries’ pledges are fully implemented, emissions will be around 49GT, and higher if there is some backsliding. So the emissions gap will be at least 5GT and could be more.

This will require countries to make further commitments. But that’s exactly what the Cancun agreement acknowledges: noting the gap between the commitments and the 2°C goal, it establishes a comprehensive review of the adequacy of pledges to begin in 2013, based on the latest scientific evidence.

At the same time the significance of these pledges should not be underestimated. Although China and India would not agree in Cancun on a date for global emissions to peak, in fact full implementation of the commitments would see the maximum point reached around 2020. This would represent a historic turning point in humankind’s 200-year experiment with burning fossil fuels – and the essential basis for emissions to decline in the future. And one should be wary of claims that these commitments lock the world inevitably into 3–5 degrees of warming. That remains likely, and deeply alarming – and for that reason Cancun agreed on an international mechanism to address climate loss and damage, as requested by the most vulnerable nations. But it’s also true that the eventual global temperature rise will be determined as much by actions taken after 2020 as before. Maintaining a chance of achieving a 2C world will require dramatic reductions in annual emissions post-2020; these will be more expensive than taking the same action now, but they may not be impossible in a world of greater technological innovation.

SO DELEGATES had some justification for their celebrations at Cancun’s end. Going into the conference plenty of people were using “last chance saloon” metaphors for the UNFCCC, the unwieldy assembly of the UN climate convention in which the negotiations take place. If an agreement could not be reached at two successive conferences, it was argued, perhaps the UN route, with its requirement for consensus among 194 countries, should be abandoned, and responsibility given to a more manageable group of the largest economies, such as the G20. But this was never a possibility; for the emerging economies the United Nations is the only legitimate forum for formal climate negotiations. And there’s no question that Cancun gives multilateralism a huge shot in the harm. As a British diplomat put it, after the hurt and acrimony of Copenhagen it was “both a healing process and a catharsis” to demonstrate that the United Nations was capable of achieving a strong agreement. (It even proved that the UNFCCC’s awkward “consensus rule” does not have to mean unanimity – the agreement was reached despite the remaining objections of one rejectionist country, Bolivia, which tried but failed to argue that it had an effective veto.)

The contrast in atmosphere with last year’s conference could not have been greater. Yet in reality what Cancun has done is to complete the process originally intended to end in the Danish capital. The Copenhagen Accord, frequently reviled, has been largely endorsed, with key text incorporated into the new agreements, filled out by further detail, much of which was also on the table a year ago.

So why did it take a year longer to achieve? Two critical insights have come to be accepted over the past twelve months. The first is that the world cannot allow itself to be dragged backwards by the inability of the American political system to cope with climate change. In the past, the failure of the United States to pull its weight in emissions reduction has been seen as a reason why others, particularly developing countries, should not do so. Now, China and others accept that they are just going to have to live with inadequate US effort, for the present at least; the global threat is too critical for action to be stalled in a futile wait for equity. The view now is that Congress will only come round to taking action when the costs to the American economy of remaining on a high-carbon path in a low-carbon world become too obvious to ignore.

Second, countries have reluctantly acknowledged that a legally binding agreement – whether a continuation of the Kyoto Protocol or a new treaty – is not possible at the present time. An artful fudge was concluded in Cancun by which decisions on both options are put off for another year. But few expect that either the United States or China will be willing to be bound to their targets by international law in the immediate future; and Japan, Russia and Canada have made it abundantly clear that they are unwilling to extend the Kyoto Protocol unless Washington and Beijing are also in a legally binding treaty.

So the Copenhagen–Cancun climate regime does not look like the model architecture to which environmentalists have adhered for so long. In place of a legally binding treaty will be merely the “soft law” of UN decisions. Instead of a top-down global target set by scientific analysis, distributed between countries according to some formula of equity, countries will make their own bottom-up commitments, which may or may not – in fact, do not – achieve the global goal they have themselves agreed, and so will need constant upward pressure to be revised. There will be no penalties for failing to meet commitments; rather, the world will have to rely on the sanctions of domestic politics in each major country.

It is not ideal; it could yet be replaced in the future by a legally binding regime. But it need also not be the disaster some have been painting it. For now that the negotiators have gone home, the real issue appears through the mist. Cutting global emissions is not achieved by an international agreement. That provides a crucial foundation of confidence, which is why Cancun should be seen as a vital success. But the real work will be done by hundreds of billions of dollars of investment in low-carbon energy and transport systems and forest protection. It is to delivering this that attention must now turn. •

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