Sergio Abranches

Brazilian state-owned financial institutions will finance research and development of cellulosic ethanol, reports the Brazilian daily newspaper Valor Econômico.

The National Development Bank, BNDES  and FINEP, the science and technology finance agency, will offer about R$ 1,1 billion (US$ 600 million) this year in subsidized loans, grants in aid and equity sharing to companies to develop pilot projects of cellulosic ethanol. There are already 14 business plans under consideration by the two financial agencies.

Brazil has a highly competitive sugarcane ethanol industry, but research on second generation biofuels has lagged behind. Ethanol companies are also facing mounting problems on their supply chain with falling productivity of sugarcane plantations. Extreme climate events have led to recurring harvest losses over the last years. Aging plantations have lower and falling productivity levels. There has been very little investment on plantation renewal over the last five years. Once a net exporter, Brazil has become a large ethanol importer. In 2011, the country imported about 1.1 billion liters of ethanol, mainly from the US, and this year estimates are it will have to import 1.7 to 2.0 billion liters. As crop yields will be around 10% lower in 2012 (they’ve been falling over the last four harvests) Brazil could end up by importing as much ethanol as it exports.

Second generation biofuels will allow greater production without competing with food crops. Brazilian cellulosic ethanol would help to increase production and productivity without demanding new areas for plantation. Brazil has at least two excellent sources for cellulosic ethanol: sugar cane straw, today burnt on the fields and doing severe harm to workers’ health and the environment, and eucalyptus offshoots left on the plantations’ sites after logging. Both have high cellulose content. Cellulosic ethanol production could increase ethanol production by at least 50% using straw and bagasse from existing sugarcane crops. Other agricultural leftovers and residues could also be used productively for cellulosic ethanol production further boosting the volume generated without increasing crop area. This would reduce the need for sugarcane plantations to expand over areas dedicated to other crops, thus becoming an indirect driver for deforestation and food insecurity.

The National Development Bank has also budgeted about R$ 2 billion (US$ 1.1 billion) to finance new biochemical products from sugarcane, and gasification of sugarcane bagasse to generate biofuels and plastics.

It is a good start, although investment on the development of second generation biofuels will demand far greater sums. The Brazilian government and biofuel companies have been neglecting R&D for second generation biofuels. The country is still under the risk of losing competitiveness and leadership on the future global biofuels markets. Brazilian competitive advantages on crop-based biofuel production comes more from the greater efficiency  of sugarcane’s photosynthesis, than from ethanol companies’ technical and managerial virtues. Now, the country will have public policies, public finance, and corporate programs supporting the development of second generation biofuel technology.

Sergio Abranches

Why the Durban Platform is a political breakthrough, but a dismal outcome in the light of climate science?

The second part of the question is far easier to answer. Negotiators in Durban have agreed to review the pledges for emissions reductions in the second commitment period under the Kyoto Protocol and Cancun Agreement by 2015 in the light of the fifth assessment report on the state of science, to be released by the Intergovernmental Panel on Climate Change from September 2013. However, as the IPCC said on a press statement about COP17, “in its fourth assessment report published in 2007, the IPCC showed that a temperature increase of 2 degrees Celsius could have a damaging effect on water supplies, biodiversity, food supplies, coastal flooding and storms and health.”

Additionally, the IPCC also states that:

“The fourth assessment report shows that emissions of the greenhouse gases that contribute to global warming must fall by 2050 by 50-85% globally compared to the emissions of the year 2000, and that global emissions must peak well before the year 2020, with a substantial decline after that, in order to limit the growth in global average temperatures to 2 degrees Celsius above pre-industrial levels.”

From the standpoint of science Durban has decided on too little too late.

In the political realm, though, COP17 was a watershed. First of all, it closes a whole chapter of negotiations on commitment periods under the Kyoto Protocol. There will be only a second one, with fewer ratifiers than the first. COP18 will still have to decide whether it will end by 2017 or 2020. There has been no consensus on the end date, and the alternatives ended up within brackets. But the main point has been resolved: it will be replaced by a new “protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties”, no later than 2020. That’s the core decision contained in the Durban Platform.

The above expression is a political breakthrough, one that has been progressively taking shape since COP15, in Copenhagen. There, for the first time ever, the United States and the BASIC countries (Brazil, South Africa, India and China) have agreed to offer quantified pledges for emission reductions under the United Nations Climate Convention (UNFCCC). They were voluntary, not legally binding, but they have been formally registered with UNFCCC”s Executive Secretariat. It was a major first step and, at the same time, a frustrating decision.

Much more was expected from the leaders of both developed, and emerging world powers. Besides, the leaders left abruptly, creating an authority gap, between the political summit and the official Conference of the Parties. A weak COP presidency and the resulting authority gap led the plenary to only “take note” of what the leaders had agreed. The Copenhagen Accord was noted as a political decision, but did not become an “official” agreement under the track of the Convention.

The second step towards the breakthrough was made in Cancun. The pledges under the Copenhagen Accord were adopted by the Cancun Agreement, that has also made official several other decisions made in Copenhagen, as well as some that were left to be finalized by COP16, in Mexico. In Cancun, the voluntary commitments became official ones, under the umbrella of the Climate Convention.

In Durban, negotiators from the United States, the BASIC group, and the European Union underlined the official nature of the Cancun Agreement, as a preparation of the groundwork for the Platform to launch the process leading to the new universal agreement with legal force applicable to all parties to the Climate Convention. In a nutshell, it was acknowledged by all relevant parties that these commitments are legal, although not binding. The difference: the Kyoto Protocol, besides being a legal instrument, explicitly states that the targets for the countries (“industrialized countries”) listed on its Annex I are mandatory. The Cancun Agreement is part and parcel of the Climate Convention, therefore it has legal status, but the commitments registered by the parties are voluntary, not mandatory.

Finally, the Durban Platform takes the decisive step: it commits all major emitters outside the Kyoto Protocol to the negotiation of a new agreement with legal force, under which all commitments will have the same legal treatment, although they could be quantitatively differentiated on the basis of each party’s capacities.

This is not an easy decision to make. Even before it is formally adopted it is likely to cause the countries to start planning domestic actions to enable them to meet the targets yet to be defined. It is unrealistic to imagine, as some environmentalists do, that a “top down approach”, by which a decision under the Climate Convention would bind countries to take actions, would ever work.

Even the Kyoto Protocol praised for its “legally binding” status has no enforcement mechanism. What enforcement mechanism could lead Canada to meet its targets for the first period of commitment next year? None at all. Even with UN officials stating that although outside the Protocol it still has the obligation, Canada will likely fail to meet its Kyoto target, and there will hardly be any consequence to its noncompliance.

Politics hardly moves ahead of the facts. It is not a proactive process. It is a responsive one. Politics responds to active interests in economy and society. It seldom reflects even the “inactive majority” or the majority of “public opinion”. Political decisions respond to “active interest groups”, to economic constraints and inducements, and to the domestic correlation of power. Countries that show greater ambition of emissions reductions also have greater active political support from domestic economic and social forces to policies aiming at coping with climate change. Their domestic policies are usually more ambitious than their multilateral commitments.

If one looks at China’s domestic policies to reduce emissions and other forms of pollution, one will easily see that they are far ahead of what Chinese lead negotiators are willing to commit to at the Climate Convention.

Politics, in this sense, consolidates what countries are ripe to commit to at the multilateral level. The approach that really counts, and leads to progress in the negotiations under the Climate Convention is the bottom up one.

What is meaningful and relevant about the Durban process is that over the last three years major developed and emerging countries have become readier to admit to the possibility of a single climate change regime encompassing them all. The US, China, India, and Brazil said that much several times during COP17, and signed into it at the end. This outcome was not guaranteed at the outset of the climate talks. It was the result of intense negotiation and consultation. Negotiators have likely had to obtain a specific mandate from their leaders, in mid-game, to go as far as they’ve gone.

What will happen next will depend on what happens inside each of these countries. The focus of pressure should be domestic politics, rather than diplomatic undertakings. Not that the COP process doesn’t matter. It does, very much. But its main function is not to shape climate change policies to be adopted domestically. It is to consolidate progress on domestic climate change policies at the multilateral level, adding cross-country constraints and global transparency to the agreed actions. This enables, for instance, a network of domestic and global civil society organizations to join forces to act as watchdogs, to ensure that policies are in line with targets. It does make a difference to have a global accounting system for greenhouse gas emissions, and to have a global registry for quantitative targets for emission reductions. These outcomes would strengthen the multilateral regulatory system, and would also give more punch to domestic pressure from civil society and opposition parties in overseeing their government’s implementation of climate change policies.

The year 2015 has become a new milestone for global climate change politics. Two crucial decisions shall be taken at COP21, if the Durban Platform is to be completed. Firstly, the review of the emission reduction commitments to seek coherence with the 2 degrees Celsius target. As pointed before, it is absolutely sure that the new IPCC report will show a serious gap between committed actions and warming trends. If parties are to take their commitments seriously, they’ll have to revise their targets upwards for the period 2015-2020. Secondly, they’ll have to decide on the new “protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties” to be adopted no later than 2020.

The political engine is set to move. The pace and destination it will take will depend on the evolution of domestic economic and social forces over the next three years. Another important factor will be the domestic interplay of interests, and the power of pressure and advocacy groups. Bilateral and multilateral politics do have a role, but never a dominant one. Competition and coalition among nations and groups of nations, also help in shaping decisions. They’ll help to pave the way to future outcomes. But they do so by responding to domestic interests and projecting them on the global arena.

Sergio Abranches, from Durban

The documents still circulating at COP17 show notable political progress, but fall short of adequately meeting the risks already pointed out by the Intergovernmental Panel on Climate Change — IPCC — fourth assessment of climate science. They are still under discussion, and final decision may still be significantly different. It is likely, however, they will keep the general thrust of the documents.

Politics is rarely moved by the science on the issues requiring policy decisions. Politics is moved by interests, interactions, power competition, alliances, and conflicts. All that play a strong role to shape the global politics of climate change. At the political level there are unprecedented moves reflected on documents not yet approved by COP17 plenary.

Perhaps the most important one is the support from the United States, China, India and Brazil of a a “process to develop a Protocol or another legal instrument applicable to all Parties under the United Nations Framework Convention on Climate Change”. This process, says the draft document, shall “begin immediately and be conducted as a matter of urgency”, so that the new working group the plenary should create can “complete its work as early as possible but no later than 2015, in order to adopt this legal instrument” at COP21. It “shall raise levels of ambition and be informed, inter alia, by the fifth assessment report of the Intergovernmental Panel on Climate Change, the outcomes of the 2013-2015 review”.

In short this means that by 2020 there should be a common legal regime on climate change encompassing all parties to the climate convention, that this legal instrument could even be a new protocol, thus legally-binding, it would have quantified mitigation targets for all major emitters. The new instrument should be ready to be adopted by 2015, at COP21. The quantitative targets should in line with the new IPCC assessment report, that should be used to guide the review of the commitments made in Copenhagen and reaffirmed on the Cancun Agreement.

The other breakthrough is the formal admission that there is a “significant gap between the aggregated effect of Parties’ mitigation pledges in terms of global annual emissions of greenhouse gases by 2020 and aggregate emissions pathways consistent with having a likely chance of holding warming below 2°C or 1.5°C above pre-industrial levels.”

In other words the document formally notes, and with grave concern, that there is a gap between the commitments to reduce GHG emissions and the commitment to keep the chances of warming below 2°C or 1.5°C. The 2°C is the target approved under the Copenhagen Accord, and the Cancun Agreement. The 1.5°C is a demand from the small islands states, the African Group, and the Less Developed Countries, admitted by the Cancun Agreement.

These hard to make political steps forward are a sine qua non for a more ambitious, science-based, rule-based future global climate change policy.

Sergio Abranches, from Durban

COP17 president, South African minister of Foreign Relations Maite Emily Nkoana-Mashabane has asked a small group of parties to facilitate the final negotiations towards a package deal to be delivered in Durban. It is a sign that negotiations are moving towards a close. There still are some key issues pending a compromise solution, but all negotiators indicated they’ll cooperate to get the best outcome possible.

The outcome in Durban will be a compromise solution, and the outlines of the package deal to be agreed upon begins to show on the nuances of negotiators’ new statements to the press. Bits and pieces of a coming deal can also be collected on the corridors of the Durban Convention Center.

Connie Hedegaard, EU Commissioner for Climate Action, said the European Union is ready to take a second commitment period under the Kyoto Protocol (‘second KP’). She said the EU must be assured that others will agree on a new legally binding framework. Europe will sign into a ‘second KP’ even if other countries choose not to join. The EU is not requiring the ‘roadmap’ towards a future legal agreement to go into too many details. It should just show there is a firm decision to arrive at a new agreement, and a timeline with a few significant deadlines. Ideally the agreement should be completed by 2015, to be in force from 2020 onwards, replacing both the Kyoto Protocol, the Copenhagen Accord, and the Cancun Agreement.

US lead negotiator, Todd Stern, often cited as the main opponent to the idea of a commitment to a legally-binding agreement, said his country would have no difficulty to sign into a legally-binding agreement that binds all major emitters with equal legal force. He said he wouldn’t object to agreeing on a process to lead to this agreement. The US would rather discuss the process, and let its unfolding define the legal nature of the outcome, than defining the legal form beforehand, to design a process to get to it. It seems that the EU and the US are fine-tuning their views to move towards a deal that satisfies both.

Todd Stern said he didn’t think China, India, and Brazil are ready to sign into a binding agreement that would give identical legal treatment to developed and emerging nations. No problem there, he said. Commitments  that are not legally-binding, like the ones made in Copenhagen and reaffirmed in Cancun, are politically and morally binding.

He added that the US has no quarrels with the principle of “common but differentiated responsibilities, and respective capacity” under a new legal agreement, provided that ‘capacity’ is also taken into account. He said the US interprets this principle as leading to a ‘continuum of responsibilities’, rather than to as a firewall separating in absolute terms all developing countries from the developed or industrialized ones. The US major concern is with the idea that the principle be applied to prevent even the larger emerging powers to have binding emissions targets. Today, they insist their pledges are voluntary, and demand that all developed countries have mandatory targets.

Chinese minister Xie Zenhua said to the plenary of Cop17 high level segment yesterday that China wants a future legally-binding agreement under the principle of common but differentiated responsibilities. He arrived in Durban saying that China could accept binding emissions reduction targets.

Negotiators were clearly more confident yesterday night that an agreement might be possible here in Durban. One of them said that the negotiations that started yesterday evening and would continue throughout the day today could be a “watershed”. COP17 will anyway close a chapter of the negotiations that has been opened years ago. It is the last stop before the first period of commitments under the Kyoto Protocol ends. The mandate of the working group created in 2005, during COP11, and the first Meeting of the Parties to the Kyoto Protocol to decide on other commitment periods will be completed in Durban one way or another. The Protocol will very likely be amended to have a second period to 2020.

Negotiators are clearly making every effort to prevent COP17 from failing. There is a noticeable concern to reach an outcome as significant as possible, in large part as a deference to Africa, the continent most vulnerable to climate change. They are really engaged in the efforts to ensure a second period of commitment under the Kyoto Protocol. The plea made by the Africans at the beginning of COP17 that Africa does not become the graveyard for the Protocol appears to have impressed them all. The risk of a breakdown of the Kyoto Protocol has been progressively reduced by intense negotiations.

The EU is conceding more than it seemed to be willing to concede when negotiations began. The BASIC (Brazil, South Africa, India and China), the stronger group within G77+China, is participating of all decisions. South Africa, presiding COP17, is doing its best to make this African climate summit to succeed. Brazil is among the facilitators in the talks leading to the completion of  a package deal. Brazilian negotiators will feel responsible for the package deal, as its coauthors. China arrived in Durban announcing it wants to play a game of cooperation, differently from previous COPs, when China blocked progress in several key issues. India has been striving to ensure parties and press that its position is not different from China’s. The BASIC will likely have a common positive standing on negotiations.

The president of the African Group, Tosi Mpanu-Mpanu, said the Africans have a “vested interest in the success of COP17”. “It is a very important meeting for us in Africa,” he added. None of the demands of the African Group he mentioned seem too difficult to get the support from all negotiators in Durban. The African Group’s minimum expectations are to have a ratifiable second period of commitments under the Kyoto Protocol (‘second KP’), making the Green Climate Fund fully operational, even if some issues remain to be solved later on. “We don’t want it to be an empty shell. But let’s first make sure we have the shell, an then fill it”, he argued. He also said it would be necessary to go back to the Climate Convention fundamentals, through a process that could lead to a future legally-binding deal.

In short, to Africa, the expected package deal would be: the ‘second KP’, the ‘Cancun Package’, to make the Cancun Agreement fully operational, with special reference to the Green Climate Fund, and a ‘process’ to lead to a future common legal framework binding all. Something around these lines, perhaps with a few adjustments to reach a compromise leading to consensus, is likely to be approved at the final plenary.

The Durban outcome will very likely have all the elements demanded by the African Group. There are indications that until 2020 the commitments made in Copenhagen, and built into the UNFCCC tracks by the Cancun Agreement will be considered ‘legal’ commitments, although not ‘fully binding’ commitments. The countries that would sign into the ‘second KP would make their Cancun commitments ‘fully binding’. In other words all commitments to 2020 will be politically binding under the legal framework of the Convention, a smaller portion would also be legally binding under the Kyoto Protocol.

These commitments would be reviewed in 2015, on the basis of IPCC’s fifth report to be approved in 2013-2014. The parties could then decide to raise their ambitions regarding emissions reductions to bring them closer to the findings of climate science. After 2020, a new legal framework will be put in place to regulate actions to meet the climate change challenge.

The Durban outcome is likely to be a mix of some action, and new processes leading to future action.

Sergio Abranches, from Durban

After a Thursday of rumors and very few press briefings, the technical segment of COP17 closes today with no clear outlines of a deal. A delegate said negotiators feel like walking a minefield with parties holding to incompatible bottom-line positions. Several key negotiators said yesterday that a relatively good package deal is likely to be approved, but they can’t foresee what it may contain.

A negotiator from the BASIC group (Brazil, South Africa, India and China) said the technical segment is moving forward faster than in other COPs, but final decisions will come the hard way. There are no easy ways here, he added. Another negotiator acknowledged a deal is likely, but so far it is impossible to know what it will contain.

The European Union has reiterated its support for a multilateral, rules-based, legally-binding treaty encompassing all countries. Australia and Japan supported this new legally-binding instrument, with specific obligations for a larger set of parties than the Kyoto Protocol.

On the side the EU and other key parties have been trying to convince both the United States and China to sign on to a roadmap leading to this new treaty by 2015. The US negotiator said on the same stocktaking informal meeting that his country supports a legally-binding agreement including commitments from all major economies. He may be referring to the countries that participate in the Major Economies Forum (MEF).

On a radio interview, US chief climate negotiator Todd Stern, has said that his country “is not prepared to go forward on the basis of the old-style agreement, which essentially had a firewall between all developed countries and all developing countries.” All these words could be summarized as “we want China into the agreement”.

This does not seem an impossible demand any longer. An expert with a Chinese government think tank, Xu Huaqing, has told China Daily that China is likely to agree to a quantified target to limit its greenhouse gas emissions after 2020. Negotiators here in Durban have been hinting that China will go one step forward towards accepting to be a party into a future legally-binding agreement. It would depend on a similar move from the United States.

These same negotiators think that the US could also make a step forward. If both do move, the European Union proposed roadmap may well be the way all parties commit in principle to a future deal. Negotiators from the BASIC countries have held an informal talk with Europe “to better understand their idea of a roadmap”. On a meeting of G77+China several parties have raised concerns that this proposal for a new treaty would mean changing the Climate Convention to remove the clause on differentiated obligations. G77 countries consider this clause irremovable and non-negotiable.

It seems the EU negotiators have convinced the BASIC delegates that this is not the case. The new treaty would bind all, but with differentiated obligations. The BASIC envoys seemed satisfied, but they will have a hard time convincing the more recalcitrant and/or unconfident G77 parties. Reaching a consensus on the most relevant issues within the amorphous and heterogeneous G77 has become almost impossible.

Lack of consensus within the G77 may not however be an insurmountable obstacle to a deal. As the group breaks into more coherent coalitions, such as the BASIC, the AOSIS (small island states), the Less Developed Countries (LDCs), fractionalization may lead to a better understanding. After all, what is really being negotiated is a future agreement binding the  developed and the BASIC countries. If China moves, Brazil, India, and South Africa are very likely to move in the same direction. The BASIC countries seem almost ready to do such a move, provided they are assured their binding obligations will be differentiated quantitatively and/or in terms of their timing.

Several G77 countries have been demanding an agreement binding all major emitters, including the larger developing countries. Although G77+China is a negotiating group, vote can be split, and a non-veto instance could be negotiated among them. Such a deal would very likely depend on other issues being drafted as asked by these other G77 countries. They are far more concerned, for instance, with the non-discriminatory distribution of the Green Climate Fund resources, adaptation, and technological cooperation.

Whether decision on all open issues will converge to a satisfactory package deal by the end of COP17 remains to be seen. There still are contradictory signs. But it is fair to say that negotiators are trying hard to clear a path leading to such a deal. It is not an easy one, but it falls within the range of possibilities.

Sergio Abranches, from Durban

The first day fully dedicated to informal consultations and negotiations in Durban, South Africa, where COP17 is convened, has produced faint signs that some progress may be possible over the next days. Some negotiators said today that there has been some movement forward regarding what they call technical issues.

Some were hopeful that tangible progress could happen in the days ahead to close a package deal comprising the Green Climate Fund, and the Technology Center and Network, both deemed necessary to support developing countries do adapt to climate change and to adopt clean technology and renewable energy as they develop their economy. On what is considered to be the political agenda, regarding a second period of commitment under the Kyoto Protocol, and a new global climate change agreement under the Climate Convention, there has been no progress at all. Very subtle signaling from some key parties have, however, raised hope that some progress may be obtained over the weekend.

The chief negotiator for the European Union, Arthur Runge Metzger, has acknowledged the expectation that a package deal of financial and technological resources could be approved soon. He said that the European Union would rather have a different solution on some points of the document on the governing structure of the Green Climate Fund, but would approve the formula presented by the Transitional Committee created in Cancun to design the fund. The EU would like, in turn, that the Green Climate Fund could start operating as early in 2012 as possible.

Other negotiators argue the Europeans are eager to have the technical package deal wrapped up to have something tangible to offer its African partners. And what the African countries need the most is financial and technological help for adaptation to climate change.

Ambassador André Corrêa do Lago, Brazil’s chief climate negotiator sees a financial and technological package deal as more likely now. He explained that negotiators are trying to accommodate corrections some parties say are a necessary condition to approve the package, but without having to reopen the document.

Reopening a document on a COP is no simple matter. Negotiations follow a rule saying that “nothing is closed until everything has been closed”. If a clause is reopened all other are automatically set to be rediscussed as well. This could represent losing months of work in a single hour. Diplomats are now trying to figure out a way to make corrections on some points of the document without declaring it reopened. Making corrections on a closed document is no easy feat, but, if there is good will and no party objects, diplomats have a few tricks that would make it to happen

On the political track of the convention, discussing a new period of commitment under the Kyoto Protocol, and a new global agreement under the Climate Convention, progress has been far less visible. But negotiators give notice that there have been a few subtle moves that might indicate the possibility of some progress in the days to come. A phrase showing a very discreet change of attitude on a statement, a subtle use of words during a conversation are read as signs that a party may be more open to remove a veto and become more cooperative under certain conditions. Like a discreet nod of the head or a slight wave of hands to incrementally raise the bid on a very disputed auction, these signs are used by negotiators to keep talking in the direction so indicated as more conducive to an agreement.

These very subtle cues seem to indicate that the European Union, Australia and New Zealand could support a second period of commitment under the Kyoto Protocol. This outcome for the Kyoto Protocol would require that the United States agree to a future binding agreement, and that China, once seeing such a move from the US would also point to the possibility of being a party to this future agreement. If China does move in this direction, Brasil, India and South Africa would follow suit. If the US and the BASIC countries agree to a future agreement, then all other developed countries unwilling to be a party to a second period of commitment under the Kyoto Protocol would also agree to be a party to the new agreement. Hopefully, says a negotiator who supports a second period under Kyoto, even would ultimately sign in to a second period.

The tricky question would be the timeline for all these new moves. Some negotiators think that the only feasible date for a future agreement would be 2020. Others consider 2020 too late, and ask that the new global agreement be signed in 2015. This has a relationship with the scope of the second period of commitment under the Kyoto Protocol. If the magic date becomes 2015, those countries advocating a five-year second period of commitment would probably prevail. If the deadline becomes 2020, it is likely that the second period of commitment would be eighth years long as the first.

No one is envisaging a game changer in Durban. What they see is just a bridge to cross these troubled economic times. After the crisis has passed, negotiators would likely be more willing to commit to more ambitious emission reduction targets. A global climate change regime that could bridge the “ambitions gap”, that is the gap between what science considers necessary to face the dangers of climate change, and what the countries are willing to do is still too far away on the horizon.  The goal in Durban is to approve a practical package deal, and try to prevent fatal damage to the credibility of the UNFCCC.

Sérgio Abranches

A document from the State Council released today spells out Beijing’s views on domestic climate change policies and the Chinese government’s expectations and demands regarding COP17’s negotiations.

The document China’s Policies and Actions for Addressing Climate Change has high demands, but offers little in turn as a quid pro quo. It provides a lengthy description of the country’s efforts to curb emissions of greenhouse gases. And it is indeed a major endeavor. One that, by the way, could be easily turned into law-binding commitments under a new climate protocol.

“China is the world’s largest developing country, with a large population, insufficient energy resources, complex climate and fragile eco-environment. It has not yet completed the historical task of industrialization and urbanization and its development is unbalanced.”

As a developing country, China feels entitled to a waiver from any immediate mandatory obligations under a global climate change regime. Brazil and India share the same point of view.

“Climate change generates many negative effects on China’s economic and social development, posing a major challenge to the country’s sustainable development.”

The negative effects climate change has on China’s economic and social development shows it is a paramount global issue, and Beijing says that much: “climate change is a global issue of common concern to the international community. (…) It has become a main world trend that all countries join hands to respond to climate change and promote green and low-carbon development.”

The Chinese State Council says in this regard that “the most urgent task” in Durban, “vital to the conference’s success” would be to make clear as soon as possible “the emission-reduction plan for developed countries in the second commitment period under the Kyoto Protocol (…) so as not to leave a space between the two commitment periods under the Kyoto Protocol, as is required by the Cancun Accord.” At the same time, Beijing expects that Durban approves an “emission reduction commitment under the UNFCCC for developed countries outside the protocol, which should be comparable with that of developed countries inside the protocol.” These commitments “should be comparable in terms of the nature and scope of emission reduction, and the compliance mechanism.”

The developing countries “should also actively reduce their emissions within the framework of sustainable development with funds and technological support from developed countries.” China, Brazil and India consider themselves to belong to this category, even though their governments do not really expect to get a significant share of the funds coming from developed countries.

Brazil’s chief climate change negotiator, Luiz Alberto Figueiredo Machado, told journalist Claudio Motta from O Globo newspaper that the Kyoto Protocol is the most important item on Durban’s agenda: “we are working with other countries to create the political conditions for a viable second period of commitment.” He also said that it is “important to ensure that we will take new steps forward. They may not be as large as we would like them to be, but we must not step backwards.”

The crucial point that could lead to a compromise comes as a conditional clause: “after developed countries assume their law-binding emission reduction targets under the UNFCCC and the second commitment period of the Kyoto Protocol, developing countries’ similar targets should also be clarified in the form of law, and their efforts for emission reduction should also be recognized.” The problem lies in the “after”. Even if the U.S. were prepared to accept a “law-binding” commitment in Durban on the wake of highly polarized presidential elections, Washington has made it clear that it would have to encompass all large emitters, including the “big three” developing countries, China, India and Brazil.

In other words a “law-binding” deal committing the advanced economies of the developing world would have to come concomitantly, not after the deal including all developed countries outside the Kyoto Protocol. But U.S. negotiators are unlikely to take any substantive new step towards closing a deal this year. Realistic expectations would set 2015 as the most probable date for a possible climate change accord.

The deadlock in Durban is likely to be centered on reciprocal vetoes from the developed U.S. and the developing China. “You first,” says China. “Not without you”, says the U.S. For China to move a step forward, the U.S. would also have to make a comparable move first. For the U.S. to move, China would have to come pari passu.

To be fully fair, Beijing is in a better position today to effectively move forward, than the U.S. The power transition in Beijing has already been solved. In the U.S. president Obama faces a though bid to get reelected.

If China makes a bolder move, Brazil and India would ultimately follow suit.

The Brazilian chief negotiator, Luiz Alberto Figueiredo, also told O Globo’s Cláudio Motta that the desirable deal would be one in which science determines the emissions reduction globally necessary to mitigate climate change, and the countries would share the responsibility to meet this goal committing to mandatory targets. It is a welcome view of a possible, though unlikely, future.

Sergio Abranches

The BASIC countries have adopted a unified position ahead of Durban as their official negotiating stance. It points to the continuation of deadlocks on major issues that frustrated the official preparatory meetings this year.

Brazil, India, China, and South Africa met last Tuesday, November 1, in China and reached a consensus on global climate negotiations to begin later this month in Durban, South Africa. On a joint statement, the ministers of the four emerging nations said that the climate talks “should achieve a comprehensive, fair and balanced outcome” and “clearly establish the second commitment period under the Kyoto Protocol”. The ministers stated that the Kyoto Protocol is “the cornerstone of the climate regime”, and called a second commitment period as the “the essential priority” for the summit’s success. Kyoto Protocol’s first commitment period ends in 2012.

This was the last meeting of the BASIC countries before Durban, and they did little more than to reiterate positions they’d already held on the preparatory meetings that ended on a cul-de-sac. The insistence on a second commitment period for the Kyoto Protocol means in fact that only developed countries should have legal responsibility for climate change policies and binding targets for greenhouse gas emissions reductions. As minister Jayanthi Natarajan from India made clear: “India is opposed to any legally binding cuts for developing countries”. Chinese and Brazilian officials have said that much on several occasions.

There has been some friction concerning South Africa’s stance on this point. South Africa’s partners shared the perception that its government was under pressure, as the host of COP17 and its acting president, to strike a balance between the BASIC and the developed countries on the need for a more encompassing, and biding, accord reaching all major GHG emitters.

South Africa’s lead climate negotiator, Alf Wills, sought clarify his country’s standpoint on legally binding emission reduction commitments to developing countries. It is a misunderstanding “that South Africa is advocating that developing countries take on quantified emissions reduction objectives,” he said. “We have always held the position that we will meet our legal obligation to take mitigation actions consistent with our respective common but differentiated responsibilities and our respective capabilities.”

He also said that South Africa shared the view that “the current Kyoto Protocol system, which elaborates those specific legal obligations that developed countries have in a multilateral rules-based system… provides the benchmark and cornerstone for any future climate change regime or system.”

The lack of differentiation between the poorer developing countries, and the advanced emerging economies serves as a convenient shield for these larger nations from binding commitments.

Developing countries are insisting on the Kyoto Protocol on purely ideological, and economic terms. The Protocol has achieved too little on emissions reductions under its first commitment period, if anything at all. Developing nations fear the developed ones would use the lack of a legal framework after the demise of the Kyoto Protocol to shied away from their obligations. They also fear that without the KP the mechanisms for investment and financial flows it contains, such as the Clean Development Mechanism, would be abandoned.

Only Europe seems today willing to be a part of it. Other major developed countries such as Japan, Australia, New Zealand, and Canada have been announcing they would not join a second commitment period. The United States is already out of the reach of KP’s binding obligations. China, India, and Brazil want also to be out of the reach of any internationally binding emissions reduction treaty for as long as possible.

The corollary to their view on the Kyoto Protocol as the cornerstone of any future climate regime is that a new “comprehensive, fair and balanced” global climate agreement should not impose binding obligations to developing countries. In other words, this new agreement amount to extend to the U.S. binding provisions that hold for other developed countries in the Kyoto Protocol’s Annex I. But China, India, and Brazil, although leading emerging economies and major GHG emitters, should not be asked to abide by the new legal regime.

U.S. official negotiators have stated several times their country’s view that any new climate agreement would have to extend the reach of binding commitments to encompass China, India and Brazil at the very least. They admit a sort of proportionality rule based on “common but differentiated responsibilities”, but no exemption. Exemptions should be circumscribed to the poorer developing nations.

This polarization is likely to prevent diplomats in Durban from breaking the standoff that paralyzed negotiations all year long, and put the global climate talks on track again.

Brazil has suddenly realized the attractiveness of its immense wind power potential. Once deemed too expensive and small-scale, unable to meet the country’s power needs, it is now braced to grow sevenfold to 2014.

Brazil has today a dismal 1 gigawatt of wind power installed capacity. But the government’s regulatory agency has already approved an additional 6.7 gigawatts to 2014. Wind power got the largest share in the last energy auctions for new electricity capacity. Bid prices for wind were lower than those offered by gas-fired thermo projects. Wind farm bid prices have dropped 33 percent since 2009. The Brazilian regulatory agency estimates that wind farms could yield over 12 gigawatts in 2020. Experts and industry representatives have told me they expect wind farms to get a larger share of the electric power grid. They estimate that total installed capacity could almost triple from 2014 to 2020, nearing 20 gigawatts, provided the government does not hold investors back.

Several myths about wind power are falling down, and its many advantages are starting to show. The first to go was that it was far too costly. Today prices are lower than those for hydro and thermo power generation. An industry CEO told me, however, that these lower prices are in part a result of the European crisis. They could increase up to US$ .04 per Kw if the industry recovers in Europe and the United States. Even then, wind power would continue to be competitive.

Read more…

Sérgio Abranches

The early-warning satellite system for monitoring deforestation in the Brazilian Amazon, DETER, developed by the National Institute for Space Research, INPE, has detected an atypical increase in cleared forest area on March-April this year. It was the largest area cleared in this period since 2008. Compared to 2010 deforestation was 473% greater. Today, INPE has announced that deforestation in May was 146% greater than in May, 2010.

There is a clear trend towards increased land clearing. The chart shows DETER‘s figures for both periods.

Deforestation has been greater in 2011 than in 2009 and 2010. The figure for March-April 2011 is anomalously high because these months close the rainy season. The explanation for this sudden increase in land-clearing even before the dry season begins is the anticipation of the congressional approval of a new Forestry Code.

The bill reduces the mandatory forest reserve in the Amazon from 80% to 50% of the property area, as well as the extension of riparian vegetation to be preserved or restored on both margins of rivers, from 30 to 15 meters. These changes were already approved by the House. If the bill becomes a law, landholders will have to register their properties indicating the areas of mandatory protection. The bill also eliminates fines and administrative and legal proceedings against illegal deforestation until 2008. The likelihood of its approval has triggered “preemptive clearing”, a policy of “fait accomplit”, before the bill is converted into law.

The dry season in the Amazon begins in May. The  risk of intentional wildfires and land clearing is at its highest from May through to September. Fire usually comes after the electric saw and the tractor-pulled chain, two common methods of land-clearing. The most devastating one is the use of large freighter anchor chains connected to two high-power tractors that would pull every tree, and kill every animal on their way. This method easily clears near 100 hectares in a day’s work. (See a video here.) Fire has also been used to clear drier tracts of native forest. Cleaning up the rest becomes an easy task for a tractor shovel.

The chart with aggregate deforestation areas from March to May gives a clearer picture of the present trend towards higher clearing rates.

INPE has indicated that 81% of the deforested area in March-April was in the state of Mato Grosso, Brazil’s larger soybean and beef producer. In May, 35% of the cleared area was in Mato Grosso; 25% in Rondonia, where the government is building two large and controversial hydropower dams; 24% in Pará, a large beef and timber producer; 11% in the state of Amazonas; and the remaining in the states of Maranhão, Tocantins and Acre.

The state of Mato Grosso has active lobbies and political networks related to the two major traditional drivers of Amazon and Savannah (Cerrado) deforestation: soybean cultivation and cattle ranching. The pressure from soybean cultures over  the forest has been smaller for the last 5 years due to the “Soy Deforestation Moratorium” signed in 2006 by Brazilian soy industry representatives, trading companies and large producers, after major U.S. and European consumers refused to continue buying soy from illegally cleared land. This movement was triggered by a well orchestrated campaign from Greenpeace’s Brazilian branch.

A story by Bettina Barros (in Portuguese) for Valor Econômico, a Brazilian daily business newspaper, shows that the soy industry is already considering relaxation of the moratorium due to the upcoming change in the forest law. They argue that their agreement cannot ask more from producers than the law. But the fact is that the “Soy Deforestation Moratorium” did ask more than the law from producers before it became clear that the law was about to be changed.

The motive for ending the ban on soy from illegally deforested areas comes from the market. World soybean prices were quite low by the time the “Moratorium” was signed at US$ 5.50/bushel. Now they are as high as US$ 13.60/bushel.

The market has also changed. Most of the demand in the early 2000’s came from the European Union and the United States. Under the pressure of environmentalists, the media, and their consumers U.S. and EU customers have decided not to buy soy coming from deforested land, and to ask for certification of origin. Today most of the demand comes from China. Chinese buyers ask no questions. They are insensitive to what happens in their supply chain to have their food industry adequately fed.

On another recent story (also in Portuguese), Cláudio Ângelo, a senior reporter for the Brazilian daily newspaper Folha de São Paulo reported that land clearing for soybean plantation had increased by 85% in 2011 in comparison to the area cleared in 2010. He also used data from INPE, and mentioned the incentive from high global soy prices. Senator Blairo Maggi (PR-MT), one of the world’s largest soybean producers told him that prices “have never been that high for the last 70 years.”