Conflicts of interest

The magic number for the Copenhagen talks is 2. A rise in global temperatures of 2˚C above pre-industrial levels has been broadly settled upon as the limit of safety, beyond which scientists estimate that climate change will become catastrophic and irreversible.

Most countries – developed and developing – agree with this target. In order to hold warming below 2˚C, scientists estimate that global emissions must be halved, compared with 1990 levels, by 2050. Accordingly, a global target of halving emissions by 2050 has been espoused by the developed countries. Those in the G8 have gone further, and promised to cut their own emissions by 80 per cent by 2050.

But major developing countries – chiefly China and India – have not agreed to this global 50 per cent cut, despite agreeing to aim for a 2˚C limit. That is because they fear that agreeing to such a goal would mean they would later come under pressure to adhere to national targets to cut their emissions – something they have resisted and are not being asked to do at Copenhagen.

Developed countries would still like to see a global 50 per cent goal, but this target no longer forms one of the four key issues to be resolved at Copenhagen, and countries are unlikely to insist on such a goal at the expense of an agreement.

Mid-term targets
Developed countries must take on targets to cut their emissions substantially by 2020 if the Copenhagen conference on climate change is to be a success. Developing countries want the reductions to be in the range of 25-40 per cent, compared with 1990 levels, which they say is consistent with scientific advice from the Intergovernmental Panel on Climate Change, a United Nations scientific body.

Though most developed countries have pledged emissions cuts, few fall within this range. However, the reductions that are on the table may be enough to satisfy developing countries if they are combined with a strong package of financial pledges.

The European Union has pledged to cut its emissions by 20 per cent by 2020, compared with 1990 levels, and offered to increase this to 30 per cent if other countries participate. Japan has offered to reduce emissions by 25 per cent by 2020.

The US has offered to reduce emissions by 17 per cent compared with 2005 levels, provisional on legislation passing the Senate.

Green groups have called the US target inadequate, and on the surface it looks much less impressive than the EU’s offer. But the US says the EU need only cut its targets by 18 per cent from 2005 levels to meet its promise, a level of effort comparable to its own. Meanwhile, the EU can argue that its effort is less only because so much has already been achieved, which will make further emissions reductions harder.

Appropriate mitigation
On current trends, developing countries will account for the vast majority of the growth in greenhouse gas emissions between now and 2050, according to the International Energy Agency, an intergovernmental advisory organisation.

However, poor countries argue that, in comparison with rich nations, they bear much less responsibility for the stock of emissions already in the atmosphere. They add that their emissions per capita are still much lower than those of industrialised nations.

As a result, poorer countries will not be asked to take on absolute cuts in their emissions at Copenhagen. They will instead be asked to sign up to “nationally appropriate mitigation actions” that would, in the UN jargon, cause their emissions to “deviate from business as usual”. These measures to curb the future growth of greenhouse gas emissions include improvements to energy efficiency, investments in renewable power generation and moves to slow or halt deforestation.

Most of the leading developing countries have already committed domestically to implementing these actions. For instance, China and India both have programmes to improve energy efficiency and expand dramatically their renewable energy capabilities. But neither country has yet agreed to formalise its domestic targets on the international stage.

By resolving to make substantial cuts compared with their emissions trajectory, some countries have gone further and put numbers on the effects their policies will have. Brazil, for instance, has offered to curb emissions by 36-39 per cent compared with business as usual by 2020, while Indonesia has proposed 26 per cent, by the same yardstick – rising to 41 per cent if it receives financing.

Would these actions be enough for a deal? Leading developed countries, including the US, have clearly signalled that they could be. Although industrialised countries would also like to see major emerging economies commit to a “peak year” – from when their emissions should start to fall – that has not yet been agreed and looks less likely.

Financing
For a deal to be successful, rich countries would have to agree to offer substantial funding to poorer countries, to help them cut their greenhouse gas emissions and to adapt to the effects of climate change.

But this is proving one of the hardest areas to resolve. In the midst of a recession, developed countries are finding it difficult to come up with cash from budgets already more stretched than at any time in recent history. They are also reluctant to come forward with figures until late in the process, because they see financing as a valuable bargaining chip, which will not be played until the endgame.

“Finance will be the last thing to be decided,” says Ed Miliband, secretary of state for energy and climate change in the UK.

The EU is so far the only party to put a financing offer on the table, but the range it has proposed – from €3bn-€15bn ($4.5bn-$22.4bn) has yet to be narrowed to a final offer, and also represents the amount to be offered annually by 2020, with no indication of what will be given in the meantime.

A key difficulty for developed countries is that the recipients of financing could include rapidly emerging economies such as China – and, while polls indicate voters would be willing to offer aid to poorer countries, China is viewed as an industrial rival that should take responsibility for its own emissions.

One possible way around this is the idea, originally put forward by the Mexican government, that proposes that all governments except the very poorest should pay into a fund that would disburse money to the countries that needed it most. In effect, countries such as China could still end up being net beneficiaries – but the indirect nature of the mechanism could deflect criticism.

Ultimately, public funds will make up only a minor part of the financial assistance poorer countries will need. More important will be setting up mechanisms that encourage the flow of finance from the private sector, which will far outweigh any money likely to be disbursed from taxpayers’ coffers in the rich world.

Under the 1997 Kyoto protocol, that mechanism was carbon trading. Trading is likely to continue to play a part under a new agreement, but the current system will need to be overhauled, and may be supplemented with other incentives.

Legal obligation
Though Copenhagen will not produce a legally binding treaty, the question of what legal form a treaty should take still overshadows these talks.

The world already has a treaty on global warming: the UN Framework Convention on Climate Change, which was signed in 1992 and is the parent treaty to the Kyoto protocol.

By binding together all the countries of the world, including the US, the UNFCCC tries to address the problems of climate change. But it has little in the way of concrete obligations for governments. That was left for the Kyoto protocol, and therein lies the problem. While the US is still a party to the UNFCCC , it has never ratified the Kyoto protocol and never will. Todd Stern, special envoy for climate change to Barack Obama, US president, says an agreement based on the Kyoto protocol will not be accepted.

There are three forms that a new agreement could take: a deal under the UNFCCC; a continuation of the Kyoto protocol; or a new agreement independent of either.

But though the second form is not an option for the US, developing countries have insisted that the Kyoto protocol must continue and must be the basis for all discussions. This point risks creating a serious impasse.

The EU and other developed nations have taken a more pragmatic stance and are willing to decant some aspects of Kyoto into a form agreeable to the US.

However, there is a get-out clause – the fact that a fully binding legal treaty will not be signed at Copenhagen. This means that countries can duck the question at this month’s talks and leave it open until next year, giving them breathing space to sort out these tensions, while still achieving agreement on the key issues this year.

A further, and more complex, question is how any international treaty will relate to countries’ domestic legislation. The US favours allowing countries to decide most of their commitments at a domestic level, while other countries want more of the decisions to be subject to an international agreement. That, too, will create tensions next year.

Technology transfer
One of the key aims for developing countries, since the 1997 Kyoto protocol and beyond, has been “technology transfer” – usually taken to mean that poor countries would receive intellectual property from rich countries for free. The intellectual property in question would be low-carbon technology, such as renewable energy generation.

But developed countries will not countenance this, for obvious reasons.

The argument also seems to have been overtaken by events. In 1997, poor countries had little access to low-carbon technology. But now, developing countries accommodate vast investments from technology companies in rich countries. For instance, companies such as General Electric, Siemens and Vestas have invested in wind turbine manufacturing plants in China, now one of the biggest exporters of turbines.

In recent months, countries appear to have come close to a settlement by changing the focus of discussions. Rather than debate the free transfer of technology, there is talk of co-operation and collaboration, which could result in the co-development of new technology by developed and developing countries.

But poorer countries are still sensitive on the issue. Manmohan Singh, Indian prime minister, has called for rich countries to offer low-carbon technologies to poorer countries in the same way that drugs companies offer low-cost medicines to treat HIV/Aids. Negotiators report that India is much less demanding in private, but Singh’s words illustrate a clear danger in the whole Copenhagen process – that countries can resurrect problems that appeared to have been settled.

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