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

COP17 in Durban is braced to start dealing with a deadlocked agenda. Negotiators will have to find a middle ground to prevent the talks to collapse and wreck the United Nation’s architecture for climate change policy and politics.

The central focus will be the second period of commitment of the Kyoto Protocol. Developed countries will arrive at Durban with diverging positions among themselves on this issue. U.S. negotiators simply say that Kyoto is not on their agenda because the U.S. Congress chose not to ratify the Protocol.  Some parties to the Protocol are saying they will not adhere to a second period of commitment. Their priority is a new international binding agreement that reaches all large emitters, including the U.S. and the major developing economies. According to Bloomberg’s Kim Chapman, Todd Stern, U.S.’s lead negotiator, told reporters during a Nov. 18 briefing in Arlington, Virginia that “it’s premature to decide on what the ultimate legal form [of a new international agreement] might be until you have a much better sense of what the content would be”. Stern said that any binding accord in which the U.S. participates must be “highly symmetrical” and require mandatory action from all major emitters, such as China, and not only from industrialized economies.

The European Union is open to commit to a second phase for the Kyoto Protocol, but wouldn’t risk to be alone, as the other parties maintain their decision to stay out of it. European Commissioner for Climate Action Connie Hedegaard said that the EU won’t commit to a new set of targets under Kyoto unless countries including the U.S., China and other big emitters agree on a pathway to a new binding treaty.

There is a clear and present risk that developed countries fail to reach a consensus on a second period of commitment. In other words it is not only a divide between developed and developing countries that is preventing parties to break the logjam on the Kyoto Protocol.

This divide does exist though. Developing countries say they will not start talking about a new international deal before there is a second period of commitment. There appears to be a strong consensus among them regarding the centrality of a second period of commitment of the Kyoto Protocol, as a sine qua non for the continuation of the talks. All the relevant groups representing developing countries have decided on their preparatory meetings that their priority, and imperative condition, in Durban would be the approval of a second period of commitment.

But this consensus is one of the few points that hold together the sum total of developing countries. These countries under the umbrella of G77+China comprise a very heterogeneous group. Whenever the G77+China speaks for them all it will defend only a few broad points that are able to reconcile very different clusters of interests, diverse needs, a wide spectrum of financial, technical, economic, and political capabilities, and contrasting levels of vulnerability to climate change. One can expect a more coherent framing of  substantive negotiating positions, that could better represent these contrasting domestic realities, when these groups break into more compatible representations such as the BASIC (Brazil, South Africa, India and China), the AOSIS (small island states), the African Union, and the LDC (least developed countries) during negotiations.

There is a growing uneasiness with the idea that developed countries are negotiating among themselves a new climate change agreement to become operational in 2020. This behind the scenes negotiation risks to create a grave crisis of confidence that could further endanger the Durban talks. It was the realization that a Copenhagen agreement was negotiated within a small group of developed countries through an initiative of Lars Løkke Rasmussen, Denmark’s prime-minister at the time, that triggered a crisis of confidence that ultimately led Copenhagen to fail.

The solution to this logjam has a double path. One to take steps to ensure all parties that no deal previously closed within closed doors among a few parties will be tabled. The other to set a new roadmap having on its design both a transition period for the Kyoto Protocol and a frame of reference for a future all-encompassing binding protocol or treaty.

South Africa’s Environment Minister Edna Molewa recognized “that a comprehensive legal agreement will not be reached,” in Durban. That said, “South Africa envisages that” negotiations “pave the way for a comprehensive multilateral, rules-based climate regime.”

This is a tricky move. There already is a roadmap, drawn in Bali, which has not been completed, and it is unlikely it will ever be. A new roadmap would have to somehow be stronger, more doable, and substantive than the Bali’s work plan to gain credibility.

Two operational points could help to wrap up the new roadmap on a satisfying, though meager, package deal. Some progress on the transparency issue – monitoring, reporting, and verifying mechanisms – that has started to be negotiated in Copenhagen, was rediscussed in Cancun, but still has a long way to go. Both were an important part of the Copenhagen Agreement , and further reinforced by the Cancun Agreements. They are: the full operationalization of the Climate Technology Centre and Network, and the  Green Climate Fund. Finishing the job on both would represent an important step forward, and could help the parties to agree on a frame of reference and a time frame for a new climate change accord.

The Green Climate Fund is additionaly related to a crucial issue regarding global climate change policies: that of adaptation. Channelling public, multilateral, and private long-term financing towards developing countries for greenhouse gas emission reductions, and new clean technologies (mitigation) is not really difficult. Finance for adaptation, that is to deal with the effects present and future of climate change has been lacking. There is a permanent complaint from developing countries that negotiations have been giving far more weight to mitigation than to adaptation. And the poorer or more vulnerable countries desperately need money and technology for adaptation.

Mitigation is an issue for the big players, developed and developing. To put it simply it is an issue for the G20 or Major Economies Forum (MEF). Adaptation is a critical issue for the long-term well being of the majority of the developing countries.

The roadmap, as well as the financial and technological mechanisms, would have to be more clear and direct in addressing adaptation needs for a new deal to become possible.

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.

The Asia-Pacific Economic Cooperation (APEC) countries may become a good example of how to deal politically with deadlocking issues. At their summit in Honolulu last week,they agreed to reduce import tariffs to boost trade in products that cut fossil fuel use and reduce pollution. 

With dismal expectations for the COP17 climate change talks, which will open in Durban, South Africa later this month, this agreement looks like a lesson on how to bridge differences and reach consensus. It could also somehow inspire the parties to the climate convention about to gather in South Africa. Durban’s COP17 risks provoking the collapse of the UN climate change negotiations architecture if it ends on a standstill.

The APEC meeting started with sharp differences between the U.S. and China. Opening statements from both countries’ leaders, Barack Obama and Hu Jintao, explicitly mentioned their disagreements. Obama even showed a trace of irritation with Chinese trade practices. “We’re going to continue to be firm that China operate by the same rules as everyone else,” he said at the close of the 21-nation APEC summit, after saying that “enough is enough”.  It looked like a deadlock would be unavoidable.

In his opening statement, Hu Jintao insisted on more clout for China as an emerging global power. He also made clear Beijing prefers to work through existing global trade architecture rather than allow itself to be subject to U.S.-led efforts to open Asia-Pacific markets at any cost. Chinese officials also warned that the U.S. decision to launch a probe that could lead to anti-dumping duties on Chinese-made solar cells and modules could impair energy cooperation within APEC.

But, at the end of the meeting, both countries managed to agree to cut import tariffs on environmental goods (mainly clean energy products) to 5 percent by 2015. APEC members also pledged to eliminate domestic content requirements that distort environmental goods and services trade by the end of 2012.

Additionally the APEC leaders agreed to:

* rationalize and phase out inefficient fossil-fuel subsidies that encourage wasteful consumption, and set up a voluntary reporting mechanism on progress, to be reviewed annually;

* promote energy efficiency by taking specific steps related to transport, buildings, power grids, jobs, knowledge sharing, and education in support of energy-smart low-carbon communities; incorporate low-emissions development strategies into our economic growth plans and leverage APEC to push forward this agenda;

* a goal of reducing the region’s energy intensity by 45 percent by 2035;

* work to implement appropriate measures to prohibit trade in illegally harvested forest products and undertake additional activities in APEC to combat illegal logging and associated trade.

Read more

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.

Two new standards were published this week for businesses to measure, manage, and report their greenhouse gas emissions. The guidelines, jointly developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), were launched under the Greenhouse Gas Protocol, an “international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions”.

There is no way a company can be sustainable if it doesn’t make sure its supply chain is sustainable. Likewise, there is no sustainable products, only sustainable product life cycles, from “cradle to cradle”. WRI interim president Manish Bapna said that with these new standards “ companies will be able to measure and manage the full scope of emissions in their value chain and products”. He added that they “will help move businesses and reporting programs to one harmonized global reporting framework”. WBCSD president Bjorn Stigson said the new standards “provide companies with a comprehensive view of the emissions produced when making a product and across the value chain. They will help companies make better business decisions”.

These standards provide a good opportunity for companies to seriously look at their carbon footprint. Reducing emissions and the company’s carbon footprint is a clean way to enhance productivity, reduce costs, and manage risks. This process creates value for shareholders, not expenses for companies. As Heather Clancy, contributing editor to Smart Planet, puts it: “the time for corporate procrastination when it comes to assessing the environmental impact of business partners across the supply chain is past”.

The Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard is here.

Greenhouse Gas Protocol Product Life Cycle Accounting and Reporting Standard is here.

Sergio Abranches

The last official preparatory meeting to the Climate Change Convention in Durban is taking place in Panama, since last Saturday. Negotiators will attempt to arrive at feasible drafts to be tabled at the next session of the Climate Convention, COP17, in Durban, South Africa. The signs are that an agreement on the core issues deadlocking conversations is unlikely to happen.

A radical polarization between developed and developing countries emerged since the first preparatory meetings, early this year. This was somehow surprising. COP16, in Cancun, seemed to have restored confidence among parties, and to point towards a more cooperative dialogue. No party or observer would really imagine that a major deal was possible this year, or even next year, especially after the worsening of global economic conditions with a new turn of the financial crisis. But there was some hope that a few meaningful strides would be possible, until conditions were ripe for a final deal.

It seems unlikely that global climate negotiators will be able to solve conflicting views on the core issues that are deadlocking climate talks in this climate of sharp polarization. The present situation seems to indicate that countries have moved backwards to the old veto politics that impeded any significant global climate deal for one decade.

This persistent deadlock threatens the credibility of the Climate Convention (UNFCCC) as the multilateral instrument to negotiate a future, substantive and encompassing global climate deal. A deal that is binding to all major emitters, setting emissions reduction targets that meet the scientific consensus about the minimum levels necessary to achieve relative climate security.

The divide between developed and developing countries seems to have increased over the last months. On the one side developing countries say there will be no broader deal prior to the approval of a second commitment period for the Kyoto Protocol. The first period ends in 2012. Developing countries argue that they are already committed to reduction goals proportionate to their historical obligations, and commitments from developed countries are still lacking.

It is true that the aggregate commitment from developed countries is still behind scientific requirements. The goals set for the United States in Copenhagen are too low for the major developed emitter. There is little  room in most developing countries to implement emissions reduction policies without substantial financial and technological support from developed countries. But this is definitely not true for the larger emerging economies such as China, India, Brazil, Mexico, and several others. These countries are doing less than they could and should, particularly when we take into account their future emissions, and the pace their emissions is increasing as their economies grow.

Insisting on the continuation of the Kyoto Protocol seems increasingly less credible as a strategy to achieve a meaningful global climate deal. The countries that owe more on the side of further commitments to reduce their emissions are all outside it, namely the United States, China, Brazil, India, and a few other G20 members.

It is more plausible to say that their concern is not really with the future of global climate change policy, but with the immediate impact of the first commitment period of the Kyoto Protocol ending, without a decision about a second one. The focus of concern is what would happen to the financial and technological cooperation mechanisms under the Protocol and to the Clean Development Mechanism (CDM) that allows for investments in emissions reducing ventures in developing countries to be used as offsets by developed countries.

The negotiators for the European Union said, on a press briefing in Panama, that CDM projects would continue to be accepted as offsets within EU’s own cap and trade framework, even if Kyoto Protocol’s commitments are not renewed.

While developing countries insist on placing the Kyoto Protocol on center stage of negotiations, developed countries are playing it down. U.S. chief negotiator, Todd Stern has been clear in all his statements that his country is out of it, and has no intention to approve it in the future. The U.S. stance has not changed in Panama. The representative from Japan reiterated his country will not be a party to a second commitment period. New Zealand said that they remain prepared to take on a second commitment period only in the context of a comprehensive global agreement that contains legally-binding emission reduction targets for all major emitters. Australia’s position is more or less the same, if not a bit more direct in the sense of only accepting a successor to Kyoto that reaches all major emitters at once.

A second commitment period seems far away, unless there is enough progress on the “long-term” negotiations (AWG-LCA) aiming at a concomitant and comparable deal that encompasses all large emitters, developed and emerging, especially those outside the reach of the Kyoto Protocol.  This global deal, however, is nowhere in sight.

The Kyoto Protocol has very few virtues as far as necessary climate change mitigation is concerned. It is the only legal framework we have. It helped to create a carbon market. But, alas, in spite of being legal, it reaches about a third of  the global emissions encompassed by the pledges registered under the Copenhagen Agreement. It is legal, but it is hardly binding, because there is no enforcement mechanism in place. Its compliance instruments are either lacking or too weak to make a difference. If what counts is the moral and political constraints of being a signatory, than it does not differ too much from the Copenhagen Agreement, especially after its main elements were approved into the Climate Change Convention framework in Cancun. The carbon market has so far failed to prove itself as a working mechanism to effectively reduce emissions, and is far from becoming a global institution.

UNFCCC’s executive secretary, Christiana Figueres, reported progress on the design of the Green Climate Fund (GCF) and the Technology Executive Committee (TEC), but she raised concerns about the need for progress on monitoring, review and verification (MRV). She has also said that negotiators are for some time working against the clock under the Kyoto Protocol. On the motivational side, she said that Durban needs to address further commitments for developed countries under the Protocol and the evolution of the mitigation framework under the Convention for developed and developing countries. That is precisely the key for the deadlock.

Informally what is already under negotiation is a transition regime once the first commitment period of the Kyoto Protocol ends. The major concern is what will happen to the financial and technological cooperation mechanisms created by the Protocol and with CDM. It doesn’t seem too difficult to foresee that a legal extension of these mechanisms beyond the Protocol’s first commitment period is far more probable to happen than the approval of a meaningful second period. This transition rule and progress on the institutional design of technology cooperation and of the Green Fund seem to be the feasible goals for Durban.

The institutional rules that govern the UN’s decision-making process feeds cross-cutting vetoes and has a clear bias towards the status quo. Usually the only viable exit from a deadlocked status quo is muddling through, or accepting piecemeal, minimal changes at a time. The unanimity rule precludes substantial consensus-based decisions leading to a change of regime. This is particularly true for the global climate change regime. If unanimity is to be enforced in absolute terms, no substantive consensus would be possible in this heterogeneous assembly of 193 countries, that ranges from oil producers to small islands threatened to disappear; from giant emitters, developed and developing, to poor countries that have very low emissions. Some of the smaller emitters show nevertheless a far more consequential disposition to find a new path towards low-carbon development, than most of the fast growing large emitters.

In Copenhagen, the application of the absolute interpretation of the unanimity rule led to the collapse of a deal based on a large consensus among all relevant players. It was defeated by the veto of a handful of ideology-orientated countries, largely peripheral to global politics, and to global climate policy. In Cancun, a more relativistic interpretation of the unanimity rule allowed the waiver of a small minority’s whimsical veto, and the approval of the Cancun Agreements.

If negotiators fail to find a way to solve the gridlock within the next few years, the UNFCCC risks loosing its credibility and legitimacy. It will come to be seen as an irrelevant segment of climate politics, one dominated by diplomatic fencing. The sustainability of the Climate Convention will be in jeopardy. But, much worse, if the logjam extends beyond 2012 the danger increases of the world loosing the possibility of maintaing unavoidable climate change within relatively safe boundaries.

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.

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Sergio Abranches

The Carbon Disclosure Project (CDP) its annual survey of the Global 500 largest companies by market capitalization included in the FTSE Global Equity Index Series provides some interesting indications on how the larger public corporations are dealing with climate change.

The study on behalf of 551 investors with US$71 trillion of assets, has asked the Global 500 to measure and report what climate change means for their business. This year, 81% (404) of the Global 500 responded to the CDP questionnaire.

These responses provide some insight into “how companies are preparing for a resource constrained world and show a shift in company strategy to prepare better for a low carbon economy and act on the business opportunities”, says de  CDP report.

The most interesting indication from the survey is that those companies with more advanced strategies and better carbon performance, those in the Carbon Performance Leadership Index (CPLI) – tend to perform better, not only in terms of greenhouse gas emissions management, but also in terms of financial performance.

The companies in the 2011 Carbon Disclosure Leadership Index (CDLI) and Carbon Performance Leadership Index (CPLI) provided approximately double the average total return of the Global 500 between January 2005 and May 2011. Companies in the CPLI had a total average return in this period of 82.44%. Those in the CDPLI yielded a total average return of 85.72%. Their rates of return compare to 42.71% for all Global 500. This suggests “a strong correlation between higher financial performance and good climate change disclosure and performance”, concludes the report.

Other interesting findings are:

74% (294) of the Global 500 respondents disclose absolute or intensity emission reduction targets, an increase from 65% (250) in 2010.

68% (269) of companies are integrating climate change initiatives into their overall business strategy, up from 48% (187) in 2010.

The majority  of 2011 respondents (93%, 368) report board or senior executive oversight for their company’s climate change program, up from 85% (328) in 2010. This shows a marked rise in companies linking their climate change strategy with their overall business strategy.

45% (178) of respondents have made emissions reductions in some or all of their business from specific measures. This compares with 19% (75) of respondents that had reduced emissions in 2010. The leaders are clearly moving ahead in this regard with all of the CPLI (2010: 52%, 25) and 73% (38) of the CDLI (2010: 47%, 24) showing emissions reductions.

59% of emissions reduction activities reported by the Global 500 respondents have a payback period of three years or less and 41% of initiatives have paybacks of over three years.

A total of 1,780 emissions reduction activities are reported by 97% (384) of responding companies in 2011. Energy efficiency (building fabric, building services and processes), low carbon energy installations, and behavioral change are the most commonly identified activity types.

65% (259) of respondents provide monetary incentives to staff for managing climate change issues, versus 49% (188) in 2010.

The Energy sector is showing the lowest proportion of companies with targets (55%, 22) and is underrepresented in both the CPLI and CDLI. In view of the high emissions from the Energy sector, this points to the need for improvement. The Consumer Staples sector has the highest proportion of companies with emissions reduction targets (94%, 32).

Utilities emerged as the sector with the best average climate change performance (band B). The sector with the lowest average performance score was Information Technology (band C). The only sector with no companies in the CPLI was Telecommunications.

Companies in Australia, Germany, Italy, Switzerland and the UK are demonstrating strong performance leadership. Canada, Japan and the USA lag behind on performance^.