The BASIC meeting in Rio has had many new developments, but they were not mentioned in the official Joint Statement. Ministers from the BASIC countries shared a growing sentiment that it is unlikely that a second period of commitment to the Kyoto Protocol will ever be agreed by parties to the climate talks. This sense that the Kyoto Protocol is no longer a feasible route will likely change their negotiation strategy in future global climate meetings. India was rather clear about the need fort such a change, proposing that they should, from now on, work towards a single, inclusive global climate change agreement. This was one of the many turns in the discussions among ministers and negotiators that was not in the Joint Statement issued at the end of the meeting.

The BASIC ministers’ joint statement still stresses the importance of the

“two pronged approach, which envisages, on one hand, an ambitious and comprehensive outcome for the negotiations under both the Ad Hoc Working Group on Long-Term Cooperative Action under the UNFCCC and the Ad Hoc Working Group on Further Commitments by Annex I Parties under the Kyoto Protocol.”

Another important sentiment the ministers have shared in their private conversations was that the notion of “historical responsibilities” and “equitable burden sharing” could hardly lead to legally binding responsibilities for developed nations’ past emissions, especially regarding the pre-industrial and early industrial times. CO₂ was not even regarded as a polluting emission at the time. This sobering view has also been concealed by the almost meaningless diplomatic jargon of the communiqué.

“A global goal for emission reductions should be preceded by the definition of a paradigm for equitable burden sharing. They emphasized that equitable access to carbon space must be considered in the context of sustainable development, the right to which is at the heart of the climate change regime, and which demands the implementation of ambitious financing, technological support and capacity building.”

Quantified comparable pledges

What the ministers in Rio have really concluded even though tentatively was that developing nations with advanced economies will have to adequately quantify their share of the burden to curb emissions. To do that they agreed to take the initiative to develop a model to assess their pledges registered under the Copenhagen Accord. A group of high quality experts was present to the discussions and will continue to meet in order to work towards this common assessment. Although there was some opposition to the idea, especially from the Brazilian side, they decided that experts should attempt to make all BASIC pledges comparable, and equally measurable, reportable and verifiable. Ideally, they should try to find a common base to convert all pledges to a single measure.

This goal of comparable pledges on a single base was particularly defended by India and South Africa. China gave it a reluctant support at the end, probably conditional on deliberation by the Chinese top leadership. Brazil didn’t veto the initiative, although opposed to it. The general feeling, however, was that the Brazilian government will give no material support to the group of experts.

South African experts have presented what appears to be a very interesting preliminary model, considering multiple indicators. There was a general feeling that it could serve as a starting point for the development of  a methodology to assess the pledges and measure their real implications for the continued economic and social development of the countries. The South African minister of Water and Environmental Affairs, Buyelwa Sonjica, stressed her country’s great interest on this technical work.

Less words, more numbers

What became clear from the discussions is that the BASIC countries will have to abandon rhetorical demands and start to table sound technical proposals at climate talks. Instead of saying, as they still do, that their contribution to the global goal of emissions reductions cannot impose restrictions to their development goals, they will have to show the real effect of their pledges on their economies. The Joint Statement still refers to the “equitable access to carbon space in the context of sustainable development”, but they all know this has become an empty phrase. Very soon they will have to put actual numbers on the table to add value to this demand in future negotiations. This quantification of pledges, their requirements and impact will also be necessary to assess the financial needs of these larger developing economies to contribute to global emissions reductions efforts. Finance is an important issue for South Africa and India. China and Brazil would be able to finance most of their own climate change programs, especially on their initial stages.

That is what is in between the lines of the joint statement, when it says that the ministers

“underlined the need for further collaboration among BASIC experts on this issue, with a view to understanding the economic, social, scientific and technical implications of equitable access to carbon space and strengthening a common consideration of this matter.”

MRVs

China’s top climate negotiator, Xie Zhenhua, has caused some surprise when he proposed that the methodology for MRVs (measurable, reportable, and verifiable actions) should be discussed and developed by the group of experts. MRVs will be on the agenda of the next meeting to be held in Beijing in October. This is another area where there is a considerable distance between what the BASIC countries actually think and what they keep saying in public.

The Joint Statement says that the ministers

“noted the distinction between MRV of emission reduction commitments by developed countries, which is related to compliance and comparability, and MRV of nationally appropriate mitigation actions (NAMAs) by developing countries, which is related to transparency. Ministers emphasized that work on the MRV of international support must advance urgently, including through the development of common procedures for the reporting of finance. They underscored that only supported NAMAs should be subject to international MRV, in conjunction with the MRV of international support, while non-supported NAMAs will apply a domestic MRV. International consultations and analysis of information regarding non-supported actions would be useful to enhance transparency, through a multilateral technical exchange under the UNFCCC.”

But in their conversations the ministers have shared the conviction that the Copenhagen pledges won’t escape being submitted to some MRV procedure still to be agreed upon. They know that to “non-supported NAMAs” that were registered as official pledges under the Copenhagen Accord will apply something more than “a domestic MRV”. They therefore concluded that the best thing to do is to be proactive and forward a methodology that could meet the terms of the Copenhagen Accord. That’s the true meaning of the phrase “international consultations and analysis of information regarding non-supported actions would be useful to enhance transparency, through a multilateral technical exchange under the UNFCCC”.

It was agreed that a starting point to develop this new form of MRV to meet the Copenhagen Accord requirements could be the procedure already adopted to review the national communications of emissions. National communications are reviewed by a group composed of representatives of the developed and developing countries, an UNFCCC technical official, and an independent expert.

It is interesting that the Joint Statement does not explicitly mention the Copenhagen Accord, although most of the technical issues they have agreed to pursue are associated to the pledges made under the Accord. The only mention to Copenhagen is indirect and related to finance.

There is no reference to Copenhagen when the Statement informs their position on MRVs, and the communiqué does not convey transparently what they have really concluded about  the need to develop an MRV methodology to meet the Accord’s transparency requirements. This was an issue arduously negotiated between President Obama and Prime Minister Wen Jiabao in a historical meeting of the BASIC countries at the last hours of the Copenhagen Summit. Obama and Wen Jiabao discussed for a couple of hours the MRV issue and reached an agreement with the active intermediation of India’s Prime Minister Manmohan Singh and Brazilian President Lula da Silva. It is a good sign that the Chinese government is trying to honor what they have agreed. The relevant line of the Accord in this regard reads

“Non-Annex I Parties will communicate information on the implementation of their actions through National Communications, with provisions for international consultations and analysis under clearly defined guidelines that will ensure that national sovereignty is respected.”

BASIC+

A side issue with some disruptive consequences for the geopolitics of climate change talks was whether they should move towards a BASIC+ arrangement. That is, whether other countries should be admitted as voting parties to the group. Indonesia, for instance, seems to aspire becoming a full member. The ministers have shown strong concern that such an idea could raise great difficulties with G-77 countries. South Africa’s minister, Buyelwa Sonjica, was particularly concerned that any expansion of the group could raise dissatisfaction among other parties. Since Copenhagen, the South African government has been under considerable pressure from African Union countries because of its participation in the BASIC. The living example was of the G-8 being superseded in many relevant issues by the G8+5 and, ultimately, by the G-20.

Although the BASIC countries are also a part of the G-77 all of them have it clear that their interests are becoming increasingly differentiated from the interests of the majority of other member states. They decided to maintain the BASIC original formation and to have observers and discussants at all their meetings, without decision-making power. This time, one of the invited observers was Venezuela. Yemen, now holding the G-77 chair, was also present and will be invited to all forthcoming meetings. The ministers have also agreed to always have observers from the small-island States, AOSIS, and from the African Union. Other developing countries would be invited when they could contribute to the debate of central issues in the agenda. In Beijing, for instance, one of these issues will be the impact of climate change negotiations on the international market. Argentina has been leading discussions on this issue within the G-77 and will be invited to Beijing.

Eppur si muove

There has been small, but significant, progress in the meeting of  the BASIC countries in Rio. Far more than the official Joint Statement has conveyed. Progress and consensus are stronger at the expert level. At the political level there still are important differences on the degree of conviction of each country regarding these new views. India and South Africa seemed far more convinced of the need for a change in attitude and negotiation strategy. China seems to be moving forward more cautiously. Brazil is far more reluctant to accept any change.

Jairam Ramesh, India’s Environment Minister, made a compelling defense of the benefits of giving more transparency to these shared views. He would like them to show in the communiqué. But Brazilian officials preferred a noncommittal phrasing of the joint statement.

Ramesh has also manifested his government’s willingness to lead the BASIC group into an effort to bridge the gap between them and the United States. He has also called the BASIC countries to reach out to develop countries like France and Germany that hold similar views to their own about global climate change.

It is unlikely that these changing views will be mature enough and find sufficient common ground among the BASIC countries to lead to a different attitude at COP16, in Cancun. But some of the sentiments they’ve revealed are likely to emerge more publicly in Mexico. It is likely, for instance, that they will have more technical proposals to table. It is also likely, but less probable, that their insistence upon a second phase of commitment of the Kyoto Protocol will recede to some visible degree, helping faster progress on the AGW-LCA towards a more inclusive global agreement some time in the near future. The signs of a paradigm shift on the BASIC countries’ climate change politics are becoming clearer.

The MEF gathers seventeen major economic powers, not by chance also major carbon emitters. The “chair’s summary” of the “Seventh Leaders’ Representative Meeting” meeting mentions the Copenhagen Accord several times as a guideline for further progress. It says that “participants emphasized the importance of quickly implementing the Copenhagen Accord’s Fast Start financing provisions.” The communiqué also stressed the need for transparency and maximum clarity to build international confidence as a requisite for a balanced outcome in Cancun. Many participants argued the need to focus adaptation efforts on less developed countries particularly vulnerable to climate change. The note also informs that member countries “provided updates on their actions to meet their fast start financing commitments under the Accord.”

The MEF has also discussed the divisive issue of “monitoring, reporting and verifying” (MRV) emission targets, i.e. the transparency of emission reductions commitments. According to the chair’s summary “it was suggested that, per the Copenhagen Accord, there are essentially three areas of MRV to be addressed”, namely mitigation efforts of countries that are in Annex I of the Kyoto Protocol; financial and technological support of mitigation efforts of “non-Annex I” countries; and mitigation efforts of “non-Annex I” countries.

“Participants noted the various mitigation targets and actions listed under the Copenhagen Accord. They further discussed how such targets and actions might be reflected in a future outcome, including with respect to whether or not they should have a legally binding character, whether there should be a single instrument or two instruments, the timing of reflecting mitigation targets/actions, the application of the principle of common but differentiated responsibilities and respective capabilities, and other aspects.”

The paragraph above shows that the Copenhagen Accord although a political signpost has left several crucial questions open to doubt or contradiction. The two-instrument issue, was clearly not adequately solved by the Accord. The doubt remaining is whether there should be an additional legally binding agreement for “non-Annex I” countries that ratified the Kyoto Protocol, and for countries that have not ratified it, like the US, and have registered emission reduction targets under the Copenhagen Accord, or a single new treaty binding to all and superseding the Kyoto Protocol.

This contradiction between the political support to the Copenhagen Accord by the leaders of the world’s major nations, and the resistance of the parties to UNFCCC to admit it into the official proceedings of the Climate Talks is a central issue the new climate secretary Christiana Figueres will have to deal with. If the Accord does not become an integral part of the Convention, it will always serve as a an escape route for countries that are associated to it and have registered their commitments in its annexes to avoid further binding commitments under the UNFCCC. It will also be used by recalcitrant parties to veto any progress supported by the majority of the parties at COP-16.

The Copenhagen Accord is clearly not a finished job. But is has a critical advantage over the UNFCCC. The Accord has the formal commitment of the major carbon emitters, with quantified targets for emission reductions. It represents the first portfolio of national actions ever to commit large emitters as the United States, China, India, and Brazil, among others. It covers over 80% of total emissions, far more than the Kyoto Protocol. It is clearly not sufficient to reduce carbon emissions to the safety level. But it is a major political resource that should not be neglected.

Although not legally binding, it has been adopted by the major developed and emerging powers as a politically biding reference. The UNFCCC’s Executive Secretary’s challenge is to find a way to positively use this political commitment to remove vetoes and to ensure that deals closed in Copenhagen are not reopened in Cancun. The Copenhagen Accord is a political tool that should be used to help nations move towards a new future climate treaty.

‘Coalition of the Willing’ is a collaborative animated film and web-based event about an online war against global warming in a post Copenhagen world.

Directed and produced by Knife Party, written by Tim Rayner and crafted by a network of 24 artists from around the world.

The film explores, in an optimistic vein, how one can use new Internet technologies to leverage the powers of activists, experts, and citizens in collaborative ventures to combat climate change.

It makes the case for online activism analyzing swarm activity and social revolution.

See it here:

Coalition Of The Willing from coalitionfilm on Vimeo.

The preparatory Climate Change meeting in Bonn has closed showing small progress. It should be clear by now that UNFCCC will never lead to a “grand accord”.

The best way possible is to build upon the Copenhagen Accord: targets and actions already filed represent 86% of total global carbon emissions. The sum total is still not enough. But it is far more than the Kyoto Protocol will ever be able to deliver. The task, now, should be to operationalise the Accord, design a mechanism to review the portfolio of national actions every two years, put REDD and the fast-track finance in place, and start working towards the long-term fund.

Many observers say that the major outcome from the Bonn preparatory talks was the climate of mutual engagement and trust that marked the meeting in spite of the rifts that remained. Yvo de Boer said that “countries started talking to each other rather than at each other”.

But the most significant political signal of the meeting was the veto imposed by Saudi Arabia, Venezuela and a few other oil-producing countries to the request by small island states for an update on the latest scientific evidence for global warming. The request was based on the fact that the UN’s Intergovernmental Panel on Climate Change (IPCC) is not due to complete its fifth assessment until 2014 and doubts have been cast on some elements of its fourth assessment, published in 2007. It seems only sensible that  an update of all solid peer-reviewed scientific work should be consolidated under the IPCC umbrella to guide the climate negotiations. (See Mood thaws on climate change).

As Christiana Figueres has said a global, binding, meaningful agreement will probably never be possible within the confines of the UNFCCC. The only viable outcome would be an ongoing, always provisional, agreement to be revised and improved over the years ahead. The best we can hope is always a compromise that “would not meet all needs of everyone but at least meet the basic needs of everyone.”

A new look at the Copenhagen Accord would show that, in spite of all the frustration it brought against the backdrop of inflated expectations, it is the best outcome we’ve ever had from any global climate negotiation since the Rio ’92 meeting. To enforce the targets and actions all major carbon emitters have filed, and the commitments the Accord contains would be a much more concrete and definitive step, than keep investing on the unending phrase by phrase negotiation that would hardly lead to anything better than the Accord we already have.

The Forestry Code was instrumental in reducing deforestation rates. Deforestation although still not entirely sustainable has prevented the loss of a large amount of the Amazon forest. The proposal responds solely to the interests of the more traditional sector of the Brazilian agribusiness. Its main effect, if turned into law, would be to pardon illegal practices that led to deforestation and destruction of riparian vegetation that caused the erosion of river beds and drying of water sources. I’ve been to areas of soybean plantation where producers are desperate about water scarcity brought about by land clearing that destroyed all the previous vegetation, including the riverine, to increase agricultural area. Now rivers and sources are drying, and they’re left with no water for irrigation. In the future they’ll leave the land bare, and look for new areas to occupy pushing deforestation further into the Amazon and the savanna fields (Cerrado).

If approved, the proposal would do harm not only to the environment, but to the economic sustainability of competitive agricultural production in many areas. It benefits a traditional  mode of production that destroys the vegetal riparian protection of river banks and water sources; clears the vegetation that prevents landslides on steep hillsides; disregards the legal reserve of primary forest as a means to protect biodiversity. It is detrimental to a contemporary and competitive agricultural commodity business.

Large global buyers are banning all grain, beef and leather coming from land illegally cleared, or produced with the use of forced labor from their supply chains. In the Brazilian domestic market large retailers such as Walmart, Pão de Açúcar and Carrefour are also banning beef coming from areas of deforestation from their shelves. Major Brazilian exporters of leather goods will soon be forced to do the same.

The bill goes to the extreme of giving fiscal benefits to those who have illegally cleared their land and disrespected rules for the protection of riparian vegetation and primary biodiversity. Farmers who have obeyed all rules and paid a price for being legal will now see those who have thrived in illegality getting subsidized long-term finance to abide by far less demanding rules. Rules that will lead to the resumption of deforestation and destruction of river courses.

How can that happen? An alliance between a communist and the more conservative forces of the right linked to traditional rural practices of production and domination? How come the successors of the Brazilian latifundia can find political help from a supposedly left wing politician? How can a government led by a president who came from the progressive metalworkers union movement, leader of a labor-oriented party let such a bill follow its course unhindered? The government leadership is taking no action either to block or to modify a proposal that contradicts current government policies. It would, among other things, prevent the government from meeting the deforestation targets it has registered under the Copenhagen Accord. Several representatives of the Social-democrat opposition are also supporting the proposal or have adopted an attitude of benign neglect.

The Brazilian political system has some very specific features that help to explain such apparently surreal outcomes. Features that are hard to explain to foreign audiences.

Brazil has a presidential political system in which the President depends on a multiparty coalition to govern. I called it a ‘coalition presidential system’ a long time ago. It explains why president Lula is so uninterested on the fate of the Forestry Code. He has many traditional rural business sectors in his coalition that have a direct interest in changing the Code for their own benefit. The majority of the progressive forces in his coalition are not really interested in what happens to the distant Amazon region or the rich savanna fields of the Brazilian midwest.

Brazilian parties are two-headed entities, with a “national head” focused on presidential coalition politics, and a “regional head” focused on state and local politics. The Forestry Code is far more about regional and local interests than it is about general, strategic national issues. And this is also a measure of the little importance environmental issues have in the national political agenda. There is no place in the Brazilian party system for ideology or policy-oriented behavior. Parties are machines finely tuned to grabbing power and controlling the largest possible share of the national budget. All political dealings are led by the convenience of personalities, factions and their allies. Paramount among allies are business sectors that can provide resources to parties’ and politicians’ campaign finance; labor organizations that can provide loyal vote clusters; and organized sectoral lobbies controlling either money or vote pools.

Ideologies in this system are so fuzzy that ultra-right and ultra-left nationalists can easily coalesce to fight what they see as the perils of globalization. Retrograde business groups and opportunistic politicians who identify themselves as “progressive”, “communist”, or “socialist” can easily find common ground to justify their alliance. Ideological identifications are today no more than meaningless labels. That’s how a “communist” can staunchly defend the interests of landowners. Among the landowners to be benefitted there may be several who have had illegal or illegitimate access to land either by directly appropriating public land, or buying illegally grabbed land with fraudulent property documentation. Some of them are being prosecuted for the use of forced labor in their farms. The proposed version of the bill does not make any clear distinction between legitimate owners of legal land and land-grabbers.

The bill is presently at the stage of House committees review. After being voted at the House floor it has to be reviewed by the Senate. As we are approaching the campaign for general elections, including a presidential election, it is unlikely the bill could become law this year, under normal circumstances. Here lie the hopes of those who want to defend Brazilian forests and rivers: to obstruct the decision-making process and wait for the new correlation of forces that will come out of the elections. Seat turnover is likely to be very high this year: 100% of House seats and two thirds of the Senate seats are up for the grabs. Safe seats will be no more than 30% in the House. In other words only around 30% of the House are likely to get reelected. At least 60% of the Senate seats will change hands, a turnover of around 40%. Newcomers to the House can be as much as 50% of the total. We should also include in the renewal at least another 20% or 30% of seats that will likely be gained by former House members that did not run at the previous election or failed to get elected.

With the possibility of a power shift at the Presidency and a substantial change in party seat share in the Congress, the best strategy for those who oppose these changes to the Forestry Code should be to prevent the bill from being voted this year. The issues addressed by the bill will certainly be debated during the campaign and different points of view will become better known to the public. This would the best way to deal with the complexities and idiosyncrasies of the Brazilian political system.

The proposal responds solely to the interests of the more traditional sector of the Brazilian agribusiness. Its main effect, if turned into law, would be to pardon illegal practices that led to deforestation and destruction of riparian vegetation that caused the erosion of river beds and drying of water sources. I’ve been to areas of soybean plantation where producers are desperate about water scarcity brought about by land clearing that destroyed all the previous vegetation, including the riverine, to increase agricultural area. Now rivers and sources are drying, and they’re left with no water for irrigation. In the future they’ll leave the land bare, and look for new areas to occupy pushing deforestation further into the Amazon and the savanna fields (Cerrado).

The proposal does harm not only to the environment, but to the economic sustainability of competitive agricultural production in many areas. This mode of production destroys the vegetal riparian protection of river banks and water sources; clears the vegetation that prevents landslides on steep hillsides; disregards the legal reserve of primary forest as a means to protect biodiversity. It is detrimental to a contemporary and competitive agricultural commodity business. Large global buyers are banning all grain beef and leather coming from land illegally cleared, or produced with the use of forced labor from their supply chains. In the Brazilian domestic market large chains such as Walmart, Pão de Açúcar and Carrefour are also banning beef coming from areas of deforestation from their shelves. Major Brazilian exporters of leather goods will soon be forced to do the same.

The proposal goes to the extreme of giving fiscal benefits to those who have illegally cleared their land and disrespected rules for the protection of riparian vegetation and primary biodiversity. Farmers who have obeyed all rules and paid a price for being legal will now see those who have thrived in illegality getting subsidized long-term finance to abide by far less demanding rules. Rules that will lead to the resumption of deforestation and destruction of river courses.

How can that happen? An alliance between a communist and the more conservative forces of the right linked to traditional rural practices of production and domination? How come the successors of the Brazilian latifundia can find political help from a supposedly left wing politician? How can a government led by a president who came from the progressive metalworkers union movement, leader of a labor-oriented party let such a bill follow its course unhindered? The government leadership is taking no action either to block or to modify a proposal that runs against current government policies. It will, among other things, prevent the government from meeting the deforestation targets it has registered under the Copenhagen Accord. Several representatives of the Social-democrat opposition are also supporting the proposal or have adopted an attitude of benign neglect.

The Brazilian political system has some very specific features that help to explain such apparently surreal outcomes. Features that are hard to explain to foreign audiences.

Brazil has a presidential political system in which the President depends on a multiparty coalition to govern. I called it a ‘coalition presidential system’ a long time ago. It explains why president Lula is so uninterested on the fate of the Forestry Code. He has many traditional rural business sectors in his coalition that have a direct interest in changing the Code for their own benefit. The majority of the progressive forces in his coalition are not really interested in what happens to the distant Amazon region or the rich savanna fields of the Brazilian midwest.

Brazilian parties are two-headed entities, with a “national head” focused on presidential coalition politics, and a “regional head” focused on state and local politics. The Forestry Code is far more about regional and local interests than it is about general, strategic national issues. And this is also a measure of the little importance environmental issues have in the national political agenda. There is no place in the Brazilian party system for ideology or policy-oriented behavior. Parties are machines finely tuned to grabbing power offices and getting a fair share of the national budget. All political dealings are led by the convenience of personalities, factions and their allies. Paramount among allies are business sectors that can provide resources to parties’ and politicians’ campaign finance; labor organizations that can provide loyal vote clusters; and organized sectoral lobbies controlling either money or vote pools.

Ideologies in this system are so fuzzy that ultra-right and ultra-left nationalists can easily coalesce to fight what they see as the perils of globalization. Retrograde business groups and opportunistic politicians who identify themselves as “progressive”, “communist”, or “socialist” can easily find common ground to justify their alliance. Ideological identifications are today no more than meaningless labels. That’s how a “communist” can staunchly defend the interests of landowners. Among the landowners to be benefitted there may be several who have had illegal or illegitimate access to land either by directly appropriating public land, or buying illegally grabbed land with fraudulent property documentation. Some of them are being prosecuted for the use of forced labor in their farms. The proposed version of the bill does not make any clear distinction between legitimate owners of legal land and land-grabbers.

The proposal is presently under discussion by the House at the committee level. After being voted at the House floor it has to be reviewed by the Senate. As we are approaching the campaign for general elections, including a presidential election, it is unlikely the bill could become law this year, unless President Lula tells his leaders in Congress to give it urgency status. Here lies the hopes of those who want to defend Brazilian forests and rivers: to obstruct the decision-making process and wait for the new correlation of forcers that will come out of the elections. Seat turnover is likely to be very high this year: 100% of House seats and two thirds of the Senate seats are up for the grabs. Safe seats will be no more than 30% in the House. In other words only around 30% of the House are likely to get reelected. At least 60% of the Senate seats will change hands, a turnover of around 40%. Newcomers to the House can be as much as 50% of the total. We should also include in the renewal at least another 20% or 30% of seats that will likely be gained by former House members that did not run at the previous election or failed to get elected.

With the possibility of a power shift at the Presidency and a substantial change in party seat share in the Congress, the best strategy for those who oppose these changes to the Forestry Code should be to prevent the bill from being voted this year. The issues addressed by the bill will certainly be debated during the campaign and different points of view will become better known to the public. This should be the best way to deal with the complexities and idiosyncrasies of the Brazilian political system.

After a few days of internal squabbling president Lula decided to drop a proposal from the Ministers of Finance and Science & Technology to launch a program to incentivize domestic production of electric cars.

The decision came after pressure from the Development Minister, responding to the auto industry and ethanol lobbies. He argued that incentives to electric cars would jeopardize the ethanol economy. Brazil is the leading producer of sugarcane ethanol, and according to the Development Minister, the Brazilian car fleet is progressively becoming mostly sustainable.

President Lula seems to have agreed. To justify his decision to drop the incentive plan he said that “almost 100% of the cars sold in Brazil have flex-fuel engines, and 60% of flex car owners prefer ethanol to gasoline.”

But this is not entirely true. Today, almost 100% of popular cars sold in the country are, in fact, flex-fuel cars. Flex-fuel engines can run on either ethanol or gasoline or any possible mix of the two. But fuel consumption increases significantly when engines run on ethanol. Because of the relevant consumption differential, what determines the choice of fuel is the price at the pump.

Over the last several months, ethanol prices have been higher, on average, and the difference between ethanol and gasoline at the pump has been reduced. Higher sugarcane prices and vigorous export sales have led to decreased production of ethanol for domestic consumption, resulting in raising ethanol prices at the pump.

I’ve been talking to flex car owners at gas stations and with cab drivers using flex-fuel engines instead of natural gas (mostly used in the cities of Rio de Janeiro and São Paulo). Everyone to whom I asked has told me that the fuel of their choice was presently “gasoline”. The reason: the price of ethanol is too high. A cab driver who travels almost daily between neighboring cities in the States of São Paulo and Minas Gerais told me he is now choosing ethanol when he is in São Paulo, and gasoline, when in Minas Gerais, because in São Paulo ethanol is cheaper than in Minas Gerais.

This means that Brazilian flex cars are not that sustainable. It will always depend on the price difference between ethanol and gasoline at the pump. Price variability is intrinsic to the ethanol economy because producers’ strategies will always be dictated by the commercial advantages of the relative balance between sugar and ethanol production. Unless the government subsidizes ethanol to maintain a ceiling to its price, totally distorting the economic equation of the industry, this variability will always mean cycles of greater use of gasoline alternating with cycles of greater consumption of ethanol.

The best policy solution would be to create incentives for the development of hybrids running on ethanol and of electric cars, leading to a diverse fleet with the aim of increasing overall sustainability and the lower emissions rate possible.

Policy, however, is not determined by intelligence or technical rationality. The main factor behind policy choices still is lobby power. And the ethanol lobby is among the most powerful in the country. When allied to traditional carmakers it becomes almost invincible.

We should not expect too much from the first climate talks after Copenhagen, now taking place in Bonn. There are still some political obstacles to tackle before we can get any real further progress.Copenhagen was marked by excessive expectations and curtailed by the plot of a small group of nations to impose an agreement they had previously negotiated behind the curtains. The inflation of expectations has led to an almost general disregard for what has been effectively gained in Copenhagen. It has also made invisible to many some of the virtues of the Copenhagen Accord. The whole story of the “Danish document” has generated a crisis of confidence since the beginning of the talks. The lack of trust among the parties has irremediably contaminated the climate for climate change negotiations.

Copenhagen was rescued from oblivion by the massive amount of nations associating themselves to its terms and filing their mitigation actions. The Accord seemed to have been abandoned as a failed attempt, since the COP15 plenary only took note of it. But it could no longer be ignored after 125 nations have associated to it and 75 have registered their national mitigation actions/targets. The Accord has become the most important official portfolio of national mitigation actions, covering around 80% of global carbon emissions.

Altogether the mitigation actions in this portfolio fall short of what is recommended by the best science available. They are, however, a political breakthrough, a turning point after more than a decade of deadlock. All the relevant countries that have systematically refused to internationally commit themselves to mitigation targets have registered their actions under the Copenhagen Accord. Particularly relevant was the decision by the USA, China, India and Brazil to register their national actions. They were the decisive players at the final moments leading to the Accord. In other words, the stronger veto players that have contributed to a long sequence of deadlocked talks have become the key leadership to close the deal. And let’s not forget, they are full members at the top of the global high-carbon club.

There were also a few setbacks after Copenhagen. First, until now President Obama has failed to obtain a climate change law from Congress. This means that  actions the U.S. has filed under the Copenhagen Accord lack a legal domestic foundation. Secondly, the Brazilian government is delaying the adoption of enabling legislation that would allow the Federal climate change law to be properly enforced. Brazilian actions registered under the Copenhagen Accord also lack the necessary legal domestic foundation to be actually implemented. The government is additionally delaying the country’s emissions report. Without an updated inventory of emissions it is almost impossible to design effective sectoral and corporate policies to reduce emissions. Thirdly, China an India keep making contradictory political statements regarding global climate negotiations. At times it seems they are proposing to throw the Copenhagen Accord into history’s wastebasket. At other times it seems they are willing to move ahead considering what has been decided in Copenhagen as a done deal. The bright side is that both countries have adopted several important policy steps that will enable them to meet the targets they’ve registered under the Accord, if not to go beyond them. Among the BASIC nations, Brazil is clearly the laggard.

There has also been some progress on specific issues after Copenhagen. A case in point is REDD. After the Oslo talks we may be just a few steps from closing a deal on its initial architecture. To have the deal done should be one of the priorities in Cancún. But make no mistake, under the Climate Convention, nothing is closed until everything is closed.

For this year’s climate talks to succeed two major steps should be taken. On the one side, developed countries should take action to start the fast-track finance flow they’ve approved in Copenhagen. This is a sine qua non to restore confidence among the partners of the Copenhagen Accord, as well as among the Parties to the Climate Convention. It goes far beyond the money issue. It is about doing what has been agreed upon without further ado.  A good opportunity to do that would be the G20 Summit in Toronto, at the end of this month.

On the other side, organized civil society and political environmental organizations should concentrate efforts to ensure progress on domestic grounds. The priority should be to try to speed up climate change legislation in the U.S. and Brazil. European civil society should make every effort to see that their respective countries give support to Connie Hedegaard’s proposal for an unilateral upgrading of the European Union emissions reduction target. Such a move would also very much help confidence building among the relevant parties to the climate talks.

These initiatives would make a relevant and sufficient agenda for 2010. The “post-Cancún” challenge would be to create the necessary and sufficient political and diplomatic conditions for a binding global climate change agreement, embracing the Copenhagen Accord and expanding upon it. This task depends on these incremental advancements in 2010.

To embrace the Copenhagen Accord would mean to incorporate into the LCA working group proposal its architecture of annexes containing the portfolio of national actions. The path inaugurated by the Copenhagen Accord, “from domestic grounds to the multilateral forum” is far more conducive to a global agreement than the traditional UN path “from the multilateral forum to domestic grounds”. In other words, the “bottom up” strategy of the Copenhagen Accord is better than the “unanimous assembly of nations” approach of the Climate Convention. The idea that the decision by unanimity in the plenary of the Convention is the most democratic way is plainly wrong. It is simply the best way to empower intransigent minor veto players to block any meaningful progress desired by a large majority.

The endeavor to progressively adjust the portfolio of national actions to the necessary scientific requirements will more likely be accomplished between 2012-2015. This is probably the most friendly way to go in the political field. The pending political requirement is the effective implementation of the Copenhagen decisions. What the governing leaders have agreed last December must hold, otherwise no deal will be trusted. Political decisions need some maturing time before they can be adjusted to scientific needs. To try to subordinate politics to science is a shortcut to failure. The greatest progress we’ve seen in Copenhagen was the transformation of deniers imposing cross-cutting vetoes, into negotiators proposing ways to get out of the deadlock. Important mature and emerging powers, such as the United States, China, India and Brazil, have moved from denial to agreement even if yet a reluctant, conditional agreement. It really doesn’t matter. The real progress was to stop saying only “nay” and to start saying a few decisive “yea”. This was the essential gain in Copenhagen. Now, this “yea” has to be translated into domestic legislation and policy. Laws have yet to be enforced, policies have to yield effective, measurable actions. Decisions made in Copenhagen should be implemented immediately. This is the case of the fast-track short-term finance agreed upon last December.

Only after going through these preliminary steps can we start thinking about improvements upon what was accomplished in Copenhagen, taking further action and committing to higher targets.

The Brazilian agribusiness is at a crossroads. After a success story it is now running the risk of loosing quality markets due to bad social and environmental practices.Brazil has become the largest market for about a dozen of pesticides that have been banned in the U.S. and the European Union because they are hazardous to human health. One of the largest Brazilian newspapers, the Estado de São Paulo, has a story (Port) showing that producers are using large amounts of these pesticides. It also shows that the Federal regulatory agency, Anvisa, is delaying a ban on these products responding to pressure from politicians and producers. Brazil has, for instance, imported 1.84 thousand tons, in 2008, and 2.37 thousand tons, in 2009, of Endosulfan, an organochlorine chemical that has been banned because of its acute toxicity, potential for bioaccumulation, and role as an endocrine disruptor.

The Brazilian agricultural industry has a story of success and spectacular growth over the last twenty years. Brazilian agricultural export commodities are more technologically advanced than locally manufactured goods. But the progress on animal and plant genetics, as well as several other technological gains were not accompanied by comparable advances in sustainability and corporate social responsibility. The Brazilian agribusiness is a major vector of deforestation in the Amazon, the savannah (Cerrado) and the Atlantic rainforest. The Federal labor authorities, the Federal Prosecutors, and the Federal Police have detected a large number of cases of forced labor in several Brazilian farms and ranches. Several large exporting companies fail to manage their supply chain, buying products originating from illegally grabbed and cleared land.

Tolerance to bad environmental and labor practices leads to a generalized view that Brazilian commodities are of low social and environmental quality. There are, however, producers that do adopt good sustainability practices. But, as there is no segregation between commodities produced according to the best practices and the rest, the good are mixed with the bad. All one can see is the ugly face of the business.

Some segments of the industry have only adopted better practices after facing concrete threats to their exports. Amazon soybean exports were such a case. The major trading companies were forced by their larger consumers to adhere to a moratorium on soy produced on deforested areas. Greenpeace targeted larger Brazilian soy consumers, such as McDonalds, to persuade them to stop buying Amazon soybean. The threat of a ban on Amazon soy led the trading companies to adopt better supply chain management practices, and to commit to the moratorium. This has effectively reduced the contribution of soybean production to Amazon deforestation.

The Brazilian beef wholesalers and slaughterhouses have not yet learned the lesson though. In spite of having committed to steps to ensure that the meat they sell does not contribute to further deforestation, most of them have failed to control their supply chain as promised.

It was also a report from Greenpeace, Slaughtering the Amazon, that triggered the decision of large supermarket chains like Walmart, Carrefour, and Pão de Açúcar to suspend contracts with suppliers found to be involved in Amazon deforestation. Leading shoemakers, including Timberland, Nike, Adidas, and Clarks have also decided to bar leather producers associated with Amazon deforestation from their supply chain.

A few days ago, the Brazilian government, in consultation with U.S. Federal authorities, has just suspended all shipments of beef to the United States, after the U.S. authorities recalled 40 tons of corned beef from large wholesaler JBS Friboi. Samples of the corned beef showed an amount of the antiparasitic Ivermectin exceeding the tolerance level established by the U.S. Food and Drug Administration (FDA).

JBS is one of the signatories of the beef accord, and has failed so far to trace the beef it sells along the supply chain, to ensure it is not contributing to Amazon deforestation. The Brazilian Development Bank, BNDES, has provided generously subsidized finance to its activities, although it obviously fails to meet minimum sustainability requirements.

The Brazilian cattle industry has been a technological and commercial success case. Brazil has become the largest world beef exporter over the last decade, winning over major competitors such as Australia, New Zealand and Canada. Brazilian commodity exports have been the decisive factor behind the country’s trade balance surplus. The trade balance for the manufacturing industry displays a large deficit, while the balance for agriculture shows a significant surplus.

But this story of technical and business success has also its dark side. The Brazilian Agricultural elite responds to the interests of the median producer. They refuse to advocate the adoption of best practices of production and supply chain management as an industry wide strategy. On the contrary, they are trying, for instance, to change the Brazilian Forestry Code to reduce the area of forest protection, and to open the way to further deforestation in the Amazon. They have also lobbied the Federal regulatory agency, Anvisa, to delay the ban on acutely toxic pesticides. Now they justify overusing toxic products because it is not forbidden by the government.

The head of the major agricultural trade organization has openly attacked rules to enforce labor rights, health and safety. By doing so the Agribusiness trade associations are defending the worst practices, rather than working together with farmers and ranchers to raise the bar on product quality, sustainability and CSR practices, as tools to enlarge their markets and profitability.

The labor rules that have been described as excessively bureaucratic, burdensome, and costly by the Agribusiness leadership are simply elementary rules of civilized business practice as the O Globo columnist, Miriam Leitão has showed recently:

“Overall 3o thousand workers were found working in conditions analogous to forced labor in the farms inspected [by the Federal authorities].”

What are these unbearable rules criticized by the Agribusiness elite?

“The company has to provide drinking water to workers. This is one of the 252 rules the Labor Ministry has issued regarding farming practices. Why did the authorities consider it necessary to mandate such an obvious behavior? Because they found workers in 451 farms working without an adequate source of drinking water, between 2003 and 2008. (…)

Other examples of basic humane rules that are often disregarded by employers: housing facilities should provide bathrooms; before each meal workers should have where to wash their hands; housing units should be separated by gender; family housing cannot be collective; a worker shall not pay for the tools or the safety equipment he uses; if there is an accident the worker has to get immediate first aid care. (…) The reports from the monitoring groups who visited near 1,800 farms, since 2003 show that what should be normal labor practice on a civilized society is frequently ignored in several rural properties”. (Miriam Leitão, on her column Against the facts).

I’ve been to a soybean farm area in the savannas (Cerrado) of the state of Minas Gerais, where farmers are desperate about the lack of water. The Brazilian Savannah is a source of water. Water is usually abundant there. Why is it now lacking? Because of deforestation and the devastation of the riparian vegetation. Water sources were not protected. Farmers have also polluted and provoked the erosion of riverbeds and overused water on badly specified irrigation projects. Now they’re trying to get legislation to transform protected neighboring areas into farmland, to have access to the abundant and clear water, as well as to the fertile land of the reserves.

Brazilian export agriculture is threading a very dangerous path. The very short-term gain obtained through unsustainable practice may soon turn into an economic and commercial disaster. The political attitude of its leaders induces the worst practices in the industry, instead of encouraging the adoption of best practices as part of overall business strategy. One that might ensure its sustained competitiveness in global markets.

We are entering an era in which supply chain management will be dictated by the consumer, rather than the producer.  The quest for technical, social, and environmental product quality is an unavoidable trend. Businesses that do not follow this trend will run the risk of being segregated to rogue markets, low quality niches, and marked as low quality suppliers.

The leading Brazilian agribusiness companies, the ones that have already adopted better and sustainable practices as a competitive strategy, are being only too complacent with the risk of accepting such a retrograde political leadership. Trade barriers will be raised against their products. Product recalls will increase. Brazil will loose the best portions of the global commodity market.

Is this really the goal of the Brazilian agribusiness?

After a fast-track approval of the climate change bill, its enabling legislation is deadlocked at the Civil Household. The bill was rushed through Congress for president Lula to arrive in Copenhagen with the law already signed. But without the enabling legislation it is useless, and emission reduction targets cannot be enforced.

The Civil Household filters and process all government proposals before they are taken to the President. While Chief of Civil Household, Presidential candidate Dilma Roussef commanded all aspects of government policy but foreign affairs with a very strong hand and an outstretched arm. She has never been very enthusiastic about climate change policies.

Sources who have been involved in the decision-making process told me that conflict among government representatives responding to different sectoral interests have become almost intractable. A majority among them resists mandating any carbon curbing action other than reducing deforestation. There is strong resistance to any emission reduction targeting for the industrial, energy, and transportation sectors.

There are several sources of veto to sectoral actions on climate change. The officials in charge of climate policy at the Ministry of Science and Technology are against any carbon reduction policy other than curbing deforestation. They claim Brazil already has a low carbon economy. Scientists who work at the National Institute for Space Research (INPE), under the Ministry of Science and Technology umbrella, strongly disagree. They are among the most active advocates for fast and encompassing climate change regulation. The Development, Transportation, Energy, and Agriculture ministries also oppose adopting targeted sectoral actions. To them any delay on regulation would be welcome, especially in the pre-electoral and campaign seasons. It is obvious to anyone with a minimum knowledge of the Brazilian economy that it belongs to the high carbon family. It will move faster towards higher levels of carbon intensity, if nothing is done.

Since Dilma Roussef’s times the Civil Household has resisted climate change-oriented policies. The two first Environment ministers, Marina Silva and Carlos Minc, have always had to fight for their policies, often clashing with other ministers, and frequently failing to get them approved by the President.

In one of the fiercest confrontations around policies for the Amazon region, Marina Silva, now an opposition presidential bidder, has resigned. She was replaced by Carlos Minc who, through confrontation and concession, was able to get Lula’s approval to the policy now filed under the Copenhagen Accord.  Minc left the Ministry to run for the state of Rio de Janeiro’s House of Representatives.

The incumbent minister, Izabella Teixeira, does not have the leadership nor the experience required to break this deadlock. The present Chief of Civil Household also lacks expertise and leadership. Without President Lula’s direct intervention it is unlikely regulation would be adopted anytime before this year’s elections.

This places Brazil far behind its two major partners in the BASIC group, China and India. After the BASIC and President Obama brokered the Copenhagen Accord, both China and India have been very active in adopting new policies that would enable them to meet the targets they’ve registered on the Accord’s Annex.

The Gulf of Mexico oil spill tells us a story of disregard for the risk of deep sea oil extraction, and bad risk governance. It reflects an overall failure to account for risk of environmental damage and the associated economic losses of deep sea oil drilling and extraction projects.

That the leakage continues uncontrolled 14 days after the rig explosion, on April 20, tells a lot about BP’s impact analysis of the operation, and quality control of the equipment leased. It also reveals the lack of technology to deal with that sort of leakage. Nobody knows how to stop such a leakage before it turns into a major disaster.

The environmental cost will be immense. Cleaning is not clean. It’s just a lesser evil. Dispersants are toxic and will have a negative impact on maritime and coastal environments.

Economic losses will be huge. The whole southern coastal economy will be affected. BP liabilities will probably be higher than those paid by Exxon in the case of the Exxon Valdez spill. The Exxon Valdez has been the most expensive oil disaster to date in the US. It also showed that environmental damage, always overlooked on risk assessments, unfolds for decades after.

The first lesson is that risk is higher than acknowledged. The second one is that technology provides neither adequate risk prevention, nor prompt damage control. The third lesson is that such disasters have long run consequences. They are not short-term events. The fourth lesson is that this kind of oil project has hidden costs.

“What is likely to become one of the most damaging spills in history unveils the hidden costs of our addiction to fossil fuels. The truth is, fossil fuels are injurious in so many ways — to our health, the environment and national security.” (John Podesta and Joseph Romm – “Limited Government can, and often does, lead to unlimited pollution and unlimited disasters”, Climate Progress.)

This cost does not enter any business plan, project estimate, risk and financial assessments. The hidden cost of risk – both environmental and economic – distorts pricing, particularly comparative pricing confronting oil to alternative energy sources. It doesn’t show in the price equation neither at the rig, or at the pump. Oil is more expensive than it appears because it is riskier. It has become even more so as we moved from on-shore traditional drilling to off-shore deep water exploitation. The markets and insurance companies should carefully consider these lessons before jumping at the rather unwarranted benefits of future pre-salt drilling. Hidden costs and real risks will be multiplied by a significant factor when moving from deep-sea to sub-salt drilling.

“The only effective strategy is strong regulatory oversight to prevent disasters in the near term. And getting off oil in the longer term.” (Podesta and Romm)

In Washington, safety considerations have already made President Obama to condition his decision to allow off-shore drilling to safety considerations. But he

“offered little in the way of concrete promises. He said he still believes that ‘domestic oil production is an important part of our overall strategy for energy security,’ but said ‘it must be done responsibly for the safety of our workers and our environment’.” (Dave Levitan, Solve Climate).

It is unlikely that a disaster of that magnitude would not have political aftereffects over the long run both in the US and abroad.

This accident makes a good case  for everybody to probe deeper into corporate sustainability claims. The credibility of sustainability reports and impact assessments has never been very high. The spread of this oil spill should remind everybody to not take corporate statements and reporting at face value. Sustainability actions should be not only reported, but designed in such a way that they could be reported, measured – through good and proven metrics – and verifiable.