8 December 2010

Special to ‘Financial Chronicle’

by Praful Bidwai

The Cancun climate conference, now in its second week, seems headed for an impasse on a series of issues. The most important are the industrialised nations’ reluctance to make quantifiable reductions in their greenhouse gas emissions beyond 2012; their failure to deliver “fast start” assistance of $30 billion to the poor countries over three years; and continuation of talks on technology transfer and intellectual property rights (IPRs).

No one expected Cancun to produce an ambitious, legally binding and comprehensive agreement on the whole gamut of issues in the UN Framework Convention on Climate Change process. But even the “deliverables” are not materialising and a “balanced outcome” looks extremely unlikely. Major differences exist on what constitutes “balance”.

While there is some progress on issues such as Reduced Emissions through Deforestation and Degradation, and a framework for adaptation to climate change, there has been little headway on mitigation of climate change, and on how the worldwide gap will be filled between the emissions needed to contain global warming to 2 °C and “business-as-usual”, estimated by the UN Environment Programme at 12 gigatonnes of carbon dioxide by 2020.

There are also differences over which agencies would supervise assistance from the industrialised North to the developing South. There is equally wide divergence on the measurement, reporting and verification (MRV) of the binding commitments the North makes, and on the South’s voluntary commitments. At Copenhagen last December, some Southern countries agreed to dilute North-South differentiation and accept a weaker form of verification through international consultation and analysis (ICA).

In line with this, Indian environment minister Jairam Ramesh made a proposal at Cancun on MRV-ICA, linking it to a quid pro quo on technology transfer and IPRs. Under this, all countries with emissions equivalent to or more than one percent of the global average must accept ICA once every three years. Others would do so every six years.

This was India’s way of “bridging the gap” between the United States and others. The US welcomed it. But it was opposed by the BASIC grouping (including Brazil, South Africa and China) which India joined last year. Other members of the G-77+ China group are also unwilling to open their domestic voluntary actions to international scrutiny when there is no clarity on what the North would offer in return.

Ramesh was mandated to make the ICA proposal by the Manmohan Singh Cabinet as part of its attempt to show the US that India is prepared to engage it on the issue. This was a shift away from the G-77 position, to which India formally subscribes, which insists on preserving a clear North-South differentiation on responsibility for remedying climate change.

The ICA is not a make-or-break issue. But India’s proposal strengthens suspicions, highlighted by Wikileaks exposures, that the Western powers have tried to divide the developing countries. In particular, they used strong-arm tactics and inducements to get smaller, poorer Southern countries to sign on the so-called “Copenhagen Accord”, a collusive agreement first negotiated between the US and BASIC and then signed by 21 others while bypassing the multilateral UNFCCC forum.

The Kyoto Protocol, the world’s sole legally-enforceable climate agreement, has emerged as a make-or-break issue. The present commitment (obligation) period of the Protocol ends in 2012. Japan has flatly refused a second commitment period. Russia and Canada have joined it. This is a big setback not just for the South, but for the prospect of an effective global climate agreement.

BASIC emphasises in a ministerial statement that “any ambitious outcome at Cancun must be built on an agreement on the second commitment period of the Kyoto Protocol and comparable commitments by the US; immediate disbursement of fast-start finance in form of new and additional resources through multilaterally supervised mechanisms; and … continued dialogue on IPR issues as a part of the technology development and transfer issues.” In place of “new and additional resources”, the North is recycling existing aid or offering loans and equity.

Yet another setback is the negotiating text on the Clean Development Mechanism, which includes controversial technologies like Carbon Capture and Storage (CCS). The CDM allows trading in carbon credits between the North and the South through “offsets” earned by Southern projects which potentially reduce emissions. The CDM has been extensively abused and is replete with inappropriate or questionable projects. CCS is an unproven but potentially high-risk technology to pump CO2 into the oceans or the earth. Its effectiveness has not been demonstrated. Environmentalists oppose it because it has not been established as environmentally safe.

The only silver lining in the cloud over Cancun is a report of Britain’s statutory Committee on Climate Change, which recommends a 60 percent cut in UK emissions by 2030 (over 1990), with the use of offsets “only at the margins”. A 50-percent reduction is mandated for 2025. This is more ambitious than the European Union’s offer of a 20-percent reduction (with offsets) by 2020. This is a useful trust-building measure. Regrettably, as Cancun grapples with thorny questions, such offers are few and far between.