Designing a Deal

This article originally appeared in Carbon Finance.


The aftermath of December’s Copenhagen talks shows that a new approach to international climate policy is needed to reach a post-2012 climate deal, says Elliot Diringer.

The popular view around the world is that the Copenhagen climate conference last December was a failure. In truth, it was a victim of false expectations. From the very start of the negotiations in Bali in 2007, there was little reason to believe that Copenhagen could deliver a binding climate agreement. Yet that was the expectation governments set, and maintained, through round after round of fruitless negotiations. When in the end a non-binding Copenhagen Accord materialized in place of a treaty, the common perception, unsurprisingly, was one of failure.

One obvious lesson is that expectations matter. Less obvious, but far more critical, are the lessons for next steps in the international climate effort.

Copenhagen calls for a new vision of the way forward. While a binding treaty should indeed be the goal – it is essential we keep that in sight – it is time to rethink when and how we get there. More frenzied high-level summitry is not likely to be the route. Rather, an ambitious and binding framework for global climate action will have to be built over time. No treaty is likely this year, or perhaps next year, either. How much longer it will take is impossible to say.

While a binding treaty should indeed be the goal – it is essential we keep that in sight – it is time to rethink when and how we get there. Probably the most practical course for now is to put aside more intractable issues such as burden-sharing and focus instead on the nuts and bolts. The Copenhagen Accord lays out the bare essentials of a post-2012 framework. The goal for talks in Cancún later this year should be a package of decisions that begins fleshing out this architecture, particularly in the areas of transparency and support for developing countries.

Even incremental progress is by no means assured, however, owing in part to the peculiar origins and status of the Copenhagen Accord, and the political and procedural complications left in its wake.

On one hand, the accord represents the most substantial climate consensus among the largest group of world leaders since the signing of the UN Framework Convention on Climate Change in 1992. This consensus includes: a goal of limiting warming to 2°C; a balanced but differentiated approach to mitigation, with economy-wide emissions targets for developed countries and nationally appropriate mitigation actions for developing countries; agreement in principle on how these efforts are to be verified; new mechanisms to support mitigation and adaptation in developing countries; and clear goals for climate finance out to 2020.

But, on the other hand, having surfaced at the eleventh hour from behind closed doors, the accord was promptly rejected by a handful of countries as a backroom deal by a powerful few. They succeeded in blocking the accord’s formal adoption, leaving it a purely political outcome with no formal standing in the UN process. The emergence of this small but vocal bloc has injected a fractious new dynamic into the negotiations.

In the first negotiating session since Copenhagen, in Bonn in April, parties managed a procedural compromise indirectly acknowledging the accord as one basis for drawing up a new negotiating text. The next session, in June, may reveal more about what that means substantively – and what could be in store for Cancún.

For concrete decisions to be feasible in Cancún, they must reflect progress across a range of issues balancing both developed and developing country needs. In Copenhagen, parties appeared closest to agreement on adaptation, technology, and forestry. The accord touches on these only lightly. But decisions in these areas will likely be possible only with further progress on the core issues of transparency and finance, two areas where the accord has more to say.

On transparency, the accord calls for developing countries to report on their mitigation actions every two years, followed by “international consultations and analysis”. In Cancún, parties must at least make a start on the guidelines needed to operationalize these, and on parallel processes to verify support from developed countries.

On finance, the $30 billion in prompt-start funding promised in the accord can and should begin flowing this year through established channels. But further decisions are required on the structure of the Copenhagen Green Climate Fund, and on the broader arrangements that will be needed to achieve the accord’s goal of $100 billion a year in public and private resources by 2020.

A central issue for Cancún is not simply whether operational progress on these fronts is possible – a challenge in itself – but whether all parties would deem it sufficient. Some will also want to address more difficult political questions, including the adequacy of the 2020 actions pledged thus far and the fate of the Kyoto Protocol. Insisting on decisions on these in Cancún, however, could mean no outcome at all.

An incremental approach may seem a paltry response to a desperate challenge growing only more urgent. What is urgent, however, is the need for action. And, for the time being, we have no binding treaty to deliver it. Too many countries – not only the US – are not ready to sign on. The immediate drivers for action – and for the carbon market – must be domestic.

At the international level, we must look for practical outcomes that, step by step, erect a functioning multilateral framework. As the post-2012 regime takes shape, and parties begin working within it, they will grow more comfortable and confident. As they move forward with domestic actions, their confidence will grow – confidence in their ability to confront the challenge at home, and confidence that others are acting, too. In time, this will hopefully translate into a willingness to assume more ambitious – and binding – commitments.

A new binding treaty is not, in this vision, an essential foundation for near-term action. Rather, it will be the culmination of this next critical stage in an evolving international effort. Modest successes, each contributing to the next, will likely get us there sooner than grand but false expectations. That, hopefully, is the message we take from Copenhagen.