Modest signs of progress in Poznan

by Michael Richardson

SINGAPORE — The world remains on a path toward a new treaty to limit greenhouse-gas emissions, blamed by some scientists for warming the planet to potentially dangerous levels. But clinching a comprehensive deal designed to control climate change has been made increasingly difficult as both developed and developing countries argue over how to apportion costly emission cuts at a time of deepening global recession.

This is the conclusion many officials and environmental activists have reached in the aftermath of the latest round of United Nations-sponsored negotiations in Poznan, involving over 185 states. The meeting in Poland, held Dec. 1-13, was the halfway point in a two-year process intended to lead to a final international agreement in Copenhagen in December 2009.

It was never going to be easy to conclude an effective successor pact to the Kyoto Protocol, which expires in 2012. However, the difficulty in hammering out an accord among such a large number of countries with such divergent interests has been magnified by the slump in the global economy and fossil-fuel prices. When prices were high for these fuels, it brought them closer to the cost of some renewable energy sources, including wind and solar power, which often have to be subsidized to make them competitive.

Recession is expected to reduce the rapid rise in greenhouse-gas emissions. But it may be only a temporary respite. In Poznan it was clear that the chief preoccupation now for many countries is to revive the very economic growth that is contributing to climate change.

Much of this growth is energy- and carbon-intensive, based on fossil fuels and the conversion of forests into farmland. Energy-related carbon dioxide accounts for 61 percent of global greenhouse-gas emissions; forest conversion, about 20 percent.

Still, there were some modest signs of progress in some areas at Poznan. In the final day of talks, delegates agreed on principles for financing a fund to help developing nations cope with the effects of climate change. However, developing countries criticized the plan, saying funding would fall far short of what was needed. Earlier, delegates approved a mechanism to incorporate forest protection into efforts to curb greenhouse-gas emissions — a step sought by Indonesia and other forest-rich developing countries.

Several developing countries, including Mexico and South Africa, offered concrete plans to lower their own emissions, despite the costs involved. Brazil made a commitment to reduce deforestation 70 percent by 2017, a move that would cut its greenhouse-gas contribution by more than a third.

In a related move in Brussels at the end of a two-day summit Dec. 12, leaders of the European Union endorsed a plan for a 20 percent cut in Europe’s emissions from 1990 levels by 2020. This was coupled with a promise to make a 20 percent improvement in energy savings by then and bring renewable energy sources up to 20 percent of energy use by the same date.

But under pressure from manufacturers worried by the impact of recession as well as competition from countries outside Europe that might not be subject to the same controls, the EU watered down the polluter-pays principle. Under the accord agreed in Brussels, industrial sectors such as cement, chemicals and steel will receive free carbon-emission permits at least until 2020, instead of having to buy them under an auction scheme, as envisaged in a plan by the European Commission.

Japan, Canada and other advanced economies have been wary of committing to binding national emission cuts because of the costs involved and because they want to see what the United States will offer. They also expect China, India and other leading developing country polluters to accept significant obligations in any new global framework to control emissions.

U.S. President-elect Barack Obama has promised to bring the U.S. back into the U.N. climate negotiations after he takes office on Jan. 20. Under the Kyoto Protocol, which Washington signed but then refused to ratify, the U.S. was required to reduce its emissions by 7 percent by 2012 over 1990 levels. They are now 16 percent above this benchmark. Obama has pledged to pare U.S. emissions to 1990 levels by 2020. However, China’s chief negotiator in Poznan, Su Wei, while welcoming European and U.S. promises as a step forward, said they were not enough. He also said China was “disappointed with the slow progress — even no progress” in Poznan. “We have not got any progress on the substantive issues — technology transfer, capacity building, financial resources and even adaptation,” he added, referring to pillars of the Bali Action Plan agreed in Indonesia a year ago at the start of the U.N. negotiations on a post-Kyoto pact.

The longer and deeper the recession, the more difficult it is likely to be to reach a post-Kyoto deal on comprehensive emission controls. There is already intense wrangling over how to share responsibilities and costs of limiting greenhouse gases because they affect competitive advantage among economies and industries. In the worst case, the talks might collapse, as happened last July with the global trade negotiations. Or they may have to be extended beyond the December 2009 deadline.

Technology transfer is a make-or- break issue for China, which has recently overtaken the U.S. as the single biggest source of global warming emissions according to several studies.

Wan Gang, minister of science and technology, has said that developed economies should speed up the transfer of clean energy technologies to China and other developing nations and lower the cost. The International Energy Agency has calculated that an additional investment of $44 trillion in technologies to curb greenhouse-gas emissions will be needed from 2010 to 2050 to ensure a climate-safe future.

Kyoto binds 36 industrialized countries and the European Union to cut greenhouse-gas emissions by an average of 5 percent below their 1990 levels by 2012. Kyoto sets no mandatory targets for developing countries. But now that China, India and other fast-growing developing economies have emerged as major contributors to global emissions, they are under pressure to join a post-Kyoto accord and cap their pollution. Part of the price for doing so will be transfer of technology and resources from industrialized countries to cushion the cost of moving to economic development based on cleaner energy. Yet the current economic and financial crisis is likely to result in less aid to developing nations to curb their soaring emissions.

Even in good economic times, this would be a difficult undertaking. Robert Dixon, chief of the U.N.’s Global Environment Fund, says that while governments can provide regulation and policy settings, technology and resources come overwhelmingly from the private sector. As an example, he notes that 86 percent of worldwide financial flows linked to clean-energy technologies come from private business.

The recent sharp falls in the price of oil, coal and natural gas tend to reduce the incentive to switch to more expensive sources of alternative energy. But consultants McKinsey & Co think that the best hope of slowing climate change in the current crisis is to promote energy conservation and efficiency schemes that save money. They reckon that emissions-cutting measures such as better building insulation, lower fuel consumption in vehicles, and more efficient lighting and air conditioning, pay for themselves over time via lower energy bills.

However, the McKinsey researchers found that the most costly projects, such as capturing carbon dioxide from coal-fired power plants and storing it underground, refining biodiesel, and some renewable energies that are much more expensive than fossil fuels are likely to be casualties of prolonged recession. Plans to expand nuclear power to generate electricity may also take a hit. These plants emit no carbon dioxide, the main greenhouse gas. But they need a lot of capital investment, which is now in short supply.

Michael Richardson is an energy and security specialist at the Institute of Southeast Asian Studies in Singapore.