COPENHAGEN disaster

www.energybusiness.in

All said and done, a lot was said at the Copenhagen climate conference but little was done. Why are we not surprised?
. Gayatri Ramanathan

This was perhaps one of the most anticipated international summits ever. It certainly turned out to be one of the most disappointing ones. The Copenhagen climate talks had raised much hope, and with equal vigour saw them all crashing as the summit

progressed along its two-week course.
If Bali saw action in the last few hours with negotiators charting a roadmap for the future, Copenhagen saw high drama in the closing hours with US president Barack Obama brokering a deal that was eventually not adopted by the Conference of Parties (COP).
The Copenhagen accord, agreed to by

High drama outside the summit venue

major economies including the US, EU, China, India, Brazil and South Africa, made a commitment to limit the rise in global temperatures to 2 degrees Celsius and raise US $100 billion annually by 2020 to help developing countries fight climate change.
However, the final document failed to specify caps on emissions to achieve the



theenergybusiness.

COVER STORY

objective. These caps, specified in the earlier drafts, were in fact taken out in the final accord document.
It was clear as early as September 2009 at the Bangkok preparatory meeting that far from seeking to deliver an ambitious, fair, comprehensive and legally-binding outcome, the Copenhagen summit would seek to impose a developed country agenda as Annex I countries sought bury the Kyoto Protocol.
At Copenhagen, even before the conference began on December 7, it became clear that the Danes (who held the presidency) were trying to push through a developed country agenda. They circulated a draft political declaration to a limited number of countries. Developing countries which were not shown the draft protested, bringing the proceedings to a halt. The next few days saw very little progress on the long-term cooperation and Kyoto Protocol drafts even after the high-level conference began.
In the end, the COP did not adopt the accord that arose from the 'super green room' where Obama played hardball with India, China, Brazil and a few other countries, but merely 'took note' of it.
In the language of the UN, 'taking note' gives a low or neutral status to the

January 2010

document being referred to. It means that the document is not approved by the meeting (in which case the word 'adopts' would be used). 'Taking note' also does not connote whether the document is seen in a positive light (in which case the word 'welcomes' would be used)

Even before the conference began on December 7, it was clear that the Danes were trying to push through a new agenda through a draft declaration that was circulated to only a few select countries

or negatively (in which case 'rejects' or 'disapproves of' would be used). There is no obligation, legal or political, for a party to the convention to implement the accord.
Questions about the extent to which the participants of the 26-country meeting are bound by the accord remain unanswered, as do questions about the implications of some wordings in the

draft such as 'consultation and analysis' of developing country targets. The group of 26 countries that hammered out the final draft included the US, Russia, Japan, Germany, Britain, France, China, India, Brazil, South Africa, Ethiopia, Grenada and Saudi Arabia.
Some delegates pointed out later that their agreement on the accord was on the assumption that it would eventually be adopted by all the parties to the convention. Following the adoption of the decision to simply 'take note' of the document, more hours were spent on how to interpret the 'take note' decision, with many of the developed countries trying to stretch its meaning. The intention of some of them seemed to be to convert the accord into an agreement which countries can sign on to, and which would enable developing countries to take on commitments to become eligible to get funding.

Drama in the final hours The conference floundered in its last hours when countries such as Venezuela and Tuvalu stood up for themselves.
As the Danish Prime Minister, Lars Rasmussen, who presided over the conference's final days, suspended the plenary for the parties to consider



theenergybusiness.

the draft accord, he was stopped by Venezuela's Claudia Salerno Caldera, who used her plastic country name-plate to loudly bang on the table for almost a minute.
"After keeping us waiting for hours, after several leaders from developed countries have told the media an agreement has been reached when we haven't even been given a text, you throw the paper on the table and try to leave the room," she said in a calm and determined voice to the silent and tense hall.
Caldera was referring to Obama's press conference in which he announced that an accord had been reached even before it was adopted by the conference. "Until you tell us where the text has come from, and we hold consultations on it, we should not suspend this session.
Even if we have to cut our hand and draw blood to make you allow us to speak, we will do so," she added, referring to how, in her effort to get the attention of Rasmussen before he left the podium, she had banged on the table so hard that she cut her hand.
Added Ian Fry of Tuvalu, a small island state that will be among the first to disappear as a result of rising seas, "We are offered 30 pieces of silver to betray our people and our future. Our future is

January 2010

www.energybusiness.in

Brazilian president Lula da Silva who made an impassioned speech at the plenary

not for sale. Tuvalu cannot accept this document." No clarity for businesses If smaller nations and civil society groups were disappointed with the outcomes at Copenhagen. businessmen

who went to Copenhagen in the hope that clarity on carbon markets, adaptation and mitigation finance would emerge came back empty-handed. The accord did not set targets that'would boost the demand for carbon permits. At the

,



theener

COVER STORY 1-- January 2010

Prime Minister Manmohan Singh at the summit

European Climate Exchange in London, carbon dioxide allowances for delivery in December 20 I 0 declined as much as 8.7 per cent on the following Monday.
"It would be foolish to be anything other than dispirited by the outcome of the

Copenhagen COP," the International Emissions Trading Association said in an e-mailed statement.
While it is clear that a major chunk of the US $100 billion a year fund that the accord talks about will come from private

businesses, it is not clear how the fund will be raised or who will administer it. It is also not clear where it will be invested.
As PricewaterhouseCoopers' Prashant Singh pointed out, "Business needs a clearer sense of direction if it is to make

(



the enormous investments needed to shift towards a low-carbon economy. That clarity has not come out of the Copenhagen accord." "The implications for investment flows are very clear. We're irreversibly on a low-carbon path," said Rajeev Chandrashekhar, Rajya Sabha MP and entrepreneur. "But before shifting his platform to a newer or higher cost technology, any businessman will want to know how the cost of this move is going to be compensated. That clarity is yet to emerge." Chandrashekhar anticipates that this will come once domestic legislation follows in the wake of the international agreement.
Observers point out that the issue is not as simple as that. "The accord has moved away from what developing country businesses were looking for~clarity on adaptation, mitigation and carbon finance. We were hoping to see a scaleup in these areas. Now we will have to wait for a year to see what shape the funding mechanism takes at Mexico, or we may be looking at a situation where the funding is bilateral with the US or other contributors dictating terms," said a Mumbai-based analyst.
Another analyst with an international consultancy firm remarked, "We have

January 2010

the example of GEF which has been in existence since the 1980s, but which has so far invested only US $4.5 billion in projects; the entire overseas development assistance is around US $60 billion-70 billion. This accord promises to add another US $100 billion to that amount, but it does not say where the money will come from or how it will be invested.

But before shifting his platform to a newer or higher cost technology, any businessman will want to know how the cost of this move is going to be compensated. That clarity is yet to emerge

We are not sure that the amount can be absorbed in developing countries under the existing circumstances, that is, without technology rransfer platforms in place." It is certain that the low carbon growth path is here to stay-and that means increasing investments in wind, solar and bio-mass technologies for power

www.energybusiness.in

generation. What is not certain is the level of monitoring that individual businesses will have to submit to. "Given the ambiguity in the accord and the way it is worded - 'consultation and analysis', we may very well see a situation when developed countries impose business specific or plant specific restrictions on imports. It could develop into something similar what happened on child labourrelated products. Import restrictions may come up on cement from a certain plant or steel from another plant," said a senior government official on condition of anonymity.
That the US wants to monitor domestic actions by India and China is already clear from statements made by White House advisor David Axelrod, who said three day after the summit closed that the US would not only "review" domestic actions by these countries but "challenge" them if it thought that targets were not being met or were being fudged.
Though Jairam Ramesh, the minister for environment and forests, rubbished the statement as an incorrect interpretation of the words "international consultation and analysis" mentioned in the accord document, it is however a clear statement of the US' intentions.

I

·1

I



theene .~ business.

COVER STORY

I

The draft Copenhagen Accord was linked to the draft decision of the UNFCCC's Conference of Parties and Meeting of Parties (COP and COP/MOP) decision.
This was further negotiated in the last and dying moments of the Summit, amidst growing opposition. Eventually, a consensus emerged not to adopt the accord as a COP and COP/MOP decision but just a noting of it, with a call to countries to subscribe to it individually.
Some of the countries said the accord in itself would lead to a climate disaster.
Sudan's representatives went to the extent of calling it as "a suicide pact".
The reason being, the accord does not detail any deep emission reduction targets for industrialised countries in a legally binding frame work. Instead allows them to commit to implement economy-wide emissions targets by 2020 on the basis of individual country pledges. That too with the existing emission reduction offers made by some of them, which is not more than 15-18 per cent emission reduction to 1990 levels by 2020. This is far short of Intergovernmental Panel on Climate Change (IPCC) suggested range

January 2010

of 25-40 per cent emission reduction target to 1990 levels by 2020. The accord neither mentioned the issue of flexible mechanisms nor did it mention the Kyoto Protocol's rules. It is still unclear whether and how issues such as the banking of hot air, land use and land use change, and forestry and offsets will be dealt with.
On the issue of financing, governments

Some of the countries said the accord in itself would lead to a climate disaster. The accord does not detail any emission cuts for industrialised countries in a legally binding framework

agreed to provide adequate, new and additional funding to developing countries to finance action on mitigation, deforestation, adaptation, technology development and transfer and capacity-

Protesters insist on bicycling to reduce emissions from automobiles

building.
The step which can be tem1ed as positive from the summit, is the commitment made in the accord by the developed countries to raise US $30 billion for the year 2010-2012, with funding prioritised for the most vulnerable countries. And a goal of jointly mobilising US $100 billion a year for emission reduction, forest protection and adaptation in developing countries by 2020. It remains unclear as to where and how this money would be raised - except that it would come from all possible sources, (but without any firm commitments from any country). It is possible that part of this amount will be private finance and potentially include financing received through the carbon market.
On the actions taken by the developing countries, the accord talks of implementing nationally appropriate mitigation actions (NAMAs), voluntary.
However, there is no aggregate aim for the ambition of developing country actions, but their pledges are listed in an annex. This is again contrary to the IPCC's suggestion of developing

(



January 2010

www.energybusiness.in

countries deviate from the Business as Usual emission to the tune of 15-30 per cent by 2020. Perhaps, the only good thing in the accord is about national communication, with governments agreeing to submit their national communication once every two years. This is indeed significant, as many of the developing countries have so far submitted only one national communication. India for instance has so far submitted only one, way back in 1994.
Even on issues where the negotiations had progressed such as the fund for reducing emissions from deforestation, land use change and on technology cooperation, the accord remains silent on rules to implement them.
Last but not the least, the accord in itself is not legally binding; it is a political declaration. And is supported by an unknown number of countries. Moreover, there is no guarantee that it will be implemented.
The Copenhagen summit did come out with a number of decisions, known commonly as the decisions of the Conference of Parties and Meeting of Parties. However, only three are of importance to the future of climate negotiations. They are - a) the decision on the Copenhagen Accord, b) the decision on the outcome of works under the AWG-LCA and AWG-KP. While the decisions of the LC and KP leave it

goriations ders. if an _ n- ...::, -'''5.ned in the

by the US, with support from Canada, Australia and Japan have benefited by delaying the announcement of concrete emission reduction action plans by a year.
In addition to this, they also managed to make the continuation of the Kyoto Protocol open ended. It means that they push for domestic legislation and a pledge and review approach as against an internationally binding regiment. This also leaves room for the manner in which they reduce their emissions, domestic targets versus offsetting, by buying credits, by investing in developing country actions.
Large emitters from the developing countries also benefited, as it successfully stalled any attempts to get them on to a "legally binding emission reduction regime". This also means that, they are free from subscribing to any "emission peaking year".
The clear losers are the least developing economies and the smaller of the developing economies. The reason, they have by and large vast population which are highly vulnerable to climate change. The prevailing economic condition of the countries does not help the population to cope up with the issue.

Road Ahead As far as the Mexico Climate Summit is concerned there continues to be some hope. The world leaders have seen the public dismay at their conduct at Copenhagen and given the fact that there is still room open for negotiations as per the decisions taken at Copenhagen. However, countries now need to look at the issue as a "Global Issue" rather than as a "trade issue". A number of heads of states have announced that a global deal is possible in Mexico, which includes the Indian Prime Minister. It is now left to collective effort to make it a reality.
Not just a deal but a fair, ambitious, equitable and internationally legally binding framework for a post 2012 era.
One which will ensure the maximum temperature rise to be kept as far below as two degrees Celsius, limiting it to 1.5 degrees as far as possible.

The author is policy advisor, Greenpeace, India.