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The failure of “treaties, targets and trading” and the future of Australian climate policy

2 February 2012

In the first of a two-part series examining the future of Australian climate policy, Fergus Green explains why the international policy consensus, on which Australia has based its carbon pricing scheme, has broken down

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The EU’s Climate Commissioner, Connie Hedegaard (above), claimed that the outcome at Durban vindicated Europe’s negotiating strategy.
Photo: connect.euranet/ Flickr

The EU’s Climate Commissioner, Connie Hedegaard (above), claimed that the outcome at Durban vindicated Europe’s negotiating strategy.
Photo: connect.euranet/ Flickr



FOR climate change policy, 2011 ended with two contradictory scenes: one, the successful passage through parliament of Australia’s carbon price laws; the other, the dispiriting conclusion to the international climate change talks in Durban.

Critics of Australian climate action would see the contradiction in the mere fact of Australia acting, given the paralysis in the international talks. But this perspective is narrow and ultimately self-defeating, since it assumes that Australia’s efforts should be predicated on success in UN negotiations.

Rather, the contradiction is a more subtle one. It lies in the fact that Australia has embedded in its laws a climate policy based overwhelmingly on a model of international climate action that has been revealed, yet again, to be staggeringly unrealistic — and unhelpful.

The international climate talks have been all about treaties, targets and trading – about agreeing to an international treaty to reduce greenhouse emissions to a globally safe level by allocating all major emitters an individual target to be met by a specified date and, moreover, by allowing countries to trade their emissions entitlements among themselves so that reductions occur where they cost the least.

The Copenhagen conference in late 2009 was meant to “seal the deal” on a treaty of this magnitude, but failed to do anything of the sort because of widespread disagreements among countries on nearly every issue on the agenda — the thorniest being how to allocate the emissions reduction burden between rich countries (who benefited most from past emissions) and their rapidly industrialising counterparts (responsible for most of the future growth in emissions).

Whether or not a new agreement should take the form of an extension of the Kyoto Protocol or an entirely new treaty was another major sticking point in Copenhagen. (The Protocol, the first commitment period of which expires at the end of 2012, contains binding targets for developed countries only. Not surprisingly, they want to scrap it while poorer countries want to retain it.)

At the Cancun conference a year later, countries made progress by largely ignoring these two deeply contentious issues, agreeing instead on frameworks to raise money for climate action in poor countries, including helping them to adapt to unavoidable climate impacts.

In Durban, parties re-engaged with the more difficult issues regarding emissions reductions and the future of Kyoto – with disastrous results. The European Union sought to cajole developing countries into agreeing to its “roadmap” for a new treaty, under which a treaty would be agreed by 2015 and impose binding targets for developed and most developing countries from 2020. The quid pro quo for developing countries proposed by the Europeans was an extension of the Kyoto Protocol from 2013 to “bridge the gap” to 2020. For most of the conference, India played “bad cop” for the big developing countries, trading barbs with the European Union in the sidelines of the conference and refusing to accept any roadmap that envisaged developing countries signing up to binding targets.

In a classic end-of-conference rabbit-from-hat exercise, negotiators managed to agree on language for the roadmap that allowed all sides to save face and herald progress in the talks. The text of the roadmap commits the parties to a new process for the negotiation by 2015 of “a protocol, another legal instrument or an agreed outcome with legal force,” with the associated emissions reduction obligations to come into effect from 2020. The Europeans had wanted the text to refer to “a legally binding” treaty, but this formulation was deemed unacceptably strong to developing countries because of the reference to the word “binding.” The disagreement threatened to derail the talks, which by that stage had already gone into overtime. A last-minute “huddle” on the floor of the conference hall between the Europeans, India and other key countries resulted in the compromise language.

World leaders were quick to pronounce the success of the negotiations on the back of this compromise. The head of the UN’s climate secretariat heralded the outcome as “a historic agreement that has met all major issues.” The EU’s Climate Commissioner, Connie Hedegaard, claimed that the outcome vindicated the Europeans’ negotiating strategy. Australia's climate change minister, Greg Combet, said the outcome was a “massively historic step” that “means we are negotiating a legally binding agreement that would bind all developing and developed countries.”

But the text of the Durban outcome does not commit developing countries to binding targets and anyone who genuinely thinks it does understands neither the meaning of the words agreed to nor the circumstances in which they were agreed. One could drive a truck through the compromise language. Countries agreed to negotiate a Protocol or another “legal instrument” or “an agreed outcome with legal force.” The Kyoto Protocol didn’t impose binding, quantified targets on developing countries, yet it was nonetheless a “legal instrument” (to which developing countries were parties) that had “legal force” (including with respect to developing country parties). Developing countries can therefore rightly argue that their participation in a future agreement that again imposed binding targets, on developed countries only, would fulfil their commitment at Durban.

Arguably, even the formal decisions that are issued at the end of each major conference (like the one containing the Durban outcome) are “legal instruments” or at least “outcomes with legal force,” which means that fulfilling the Durban mandate doesn’t even require the negotiation of a new treaty. The Durban outcome is about as much of a “roadmap” as a blank piece of paper with some faint topographical markings on it.

As such, the text barely conceals the gaping disagreements between developed and developing countries on display throughout the Durban conference — and at all such conferences for the past five or more years. A few words on a page have not changed the political reality that countries have fundamentally different views about the appropriate form and content of climate action. And you can bet the underlying tensions will re-emerge at every opportunity, punctuated only by further diplomatic fudges at the end of each conference so that the illusion of progress can be maintained.

It is not merely the object of future agreement, but also the timeline, that is unclear following Durban. While the text is an expression of commitment to negotiate an agreement by 2015 (which would take effect from 2020), it is nothing more than a (non-binding) “agreement to negotiate.” What conveniently short memories our leaders have of the last such “agreement to negotiate,” the Bali Roadmap agreed in 2007. That was meant to result in a binding agreement by the end of 2009… in Copenhagen. When the impossibility of that outcome became clear, the parties simply extended indefinitely the date for negotiation of an agreement. Now we have a new process that could just as easily go unfulfilled, be extended, or be replaced by another process in four or five years’ time in a never-ending bureaucratic dance.

But let’s be generous and imagine that an agreement will be reached in accordance with the Durban roadmap. Even then, it is almost unimaginable that it would plug the multibillion-tonne disparity between science-based reductions and the currently pledged emissions targets that are likely to form the basis of the new treaty — the so-called “gigatonne gap.”

Even the inadequate commitments that countries do make can easily be hollowed-out through complex accounting loopholes like the forestry accounting rules negotiated by Australia under Kyoto, or through provisions that enable the trading of international offsets of dubious quality (as many of them are under the Kyoto mechanisms). The Kyoto Protocol experience has shown just how easily the system can be manipulated by countries so that they end up taking far less onerous action than is implied in a superficial “target.”

Kyoto has also shown just how easily countries can simply ignore their “legally binding” commitments altogether if they deem them to be inconvenient. The UN climate process lacks the “teeth” — the judicial and enforcement mechanisms that typically accompany domestic regulatory regimes — to incentivise compliance in the absence of political will by states. This weakness was on display in Durban, with the long-intransigent Canada (now well shy of its Kyoto target) announcing its intention to withdraw from the Kyoto Protocol altogether rather than face higher commitments in the next period to compensate for its egregious failure to reduce emissions during the current period.

The fact is, the Durban outcome is a non-binding commitment to negotiate, by a nominal time four years in the future, “an outcome with legal force” of an as yet unspecified content that will have little basis in science and be effectively unenforceable when it takes effect some eight years from now at the earliest.

For a country that has placed its domestic policy eggs in the treaties, targets and trading basket, where does this leave Australia? •

Fergus Green is a lawyer and policy analyst specialising in climate change. He writes each month on climate policy issues for Inside Story.

Part two of this series is here.

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