How to Prevent the Climate Change Summit From Failure

WASHINGTON: In December 2009, the parties to the Framework Convention on Climate Change will meet in
Copenhagen. Their aim will be to conclude an agreement that will succeed the Kyoto Protocol, which terminates in 2012. Given the abysmal failure of Kyoto one may be permitted to ask, Will
Copenhagen succeed any better? The answer depends on expectations of what can be achieved in this short amount of time; the answer depends on how “success” is defined.

It is easier to define failure. Most climate watchers would define failure to mean lack of an agreement by states to “commit” to limiting their emissions dramatically. I would define failure to mean repeating the mistakes made in
Kyoto in 1997. The worst outcome would be for the
United States to “commit” to meet quantitative targets and timetables of emission reduction without being sure that these obligations will be approved by Congress.

It is most unlikely that the
United States will make this mistake again. The most plausible way forward would be for the
US to adopt domestic legislation for reducing emissions, and then to agree to fulfill these commitments subsequently in a treaty. Domestic legislation requires 60 votes in the Senate (to avoid a filibuster), plus passage by the House. Treaty ratification requires 67 votes. The difference—just seven votes—is huge in political terms.

The chances that Congress will approve climate change legislation before
Copenhagen are poor. The
US timetable is simply out of synch with the negotiation timetable. Can an international agreement be reached without US support? Probably not. The US wants to avoid negotiating a treaty that it will never ratify, but other countries want to avoid participating in a treaty that lacks
US support.

It is more realistic to aim to negotiate a skeleton agreement in time for Copenhagen, to save face, with the details being finished later—a
Copenhagen bis agreement (bis is Latin for “a second time”). Though many people emphasize the need to act quickly, it is much more important that the
US develop an institution that will work, a foundation for making incremental improvements over time.

Indeed, there is a feedback between domestic negotiations in Washington, and the negotiations in
Copenhagen and beyond. What the
US agrees to do domestically will depend on what the rest of the world can be expected to do.

Congress will be especially concerned about
China. China is an even bigger emitter today than the
US. If US action is to have much effect,
China must act, too. But so too must many other countries, including industrialized economies like the European Union and Japan and other large, fast-growing developing economies like India and
Brazil. This is why the Obama administration is organizing a meeting of the major economies to be held later this month in
Washington. The countries invited include the ones just mentioned plus Australia, Canada, France, Germany, Indonesia, Italy, Japan, Mexico, Russia, South Africa, South Korea, and the
United Kingdom.

The participation of these countries is also important for another reason. If the
US were to act unilaterally, “competitive advantage” in trade-sensitive sectors may shift to these other countries. This would harm
US industry. It would also undermine the environmental effectiveness of the domestic action.

How should a new treaty be designed? The focus has been on the negotiation of a new set of economy-wide targets and timetables. The European Union unilaterally set the goal of reducing emissions 20 percent from the 1990 level by 2020, but pledged to reduce emissions by 30 percent provided the United States and other industrialized countries agreed to the same target. President Obama has favored a 15 percent reduction in emissions from the 2005 level by 2020, and 80 percent by 2050. How do these numbers compare? The Obama target would only return emissions to the 1990 level by 2020. This is less than Kyoto required, and a lot less than
Europe is proposing. However, the setting of targets and timetables is a shell game. For example, the EU target applies not to the original 15 EU countries that negotiated
Kyoto but to its current membership of 27 states, including the economies in transition whose emissions are substantially below the 1990 level today. Targets suffer a “comparability” problem.

Targets and timetables are also difficult to enforce. We know this because
Kyoto established economy-wide targets and timetables and has been ineffective. This is the mistake we must not repeat.

The Montreal Protocol has shown us how we could do better. That agreement, which aims to protect the ozone layer, was adjusted in late 2007. The adjustment requires substantial cuts in HCFCs, an ozone-destroying chemical. Coincidentally, the manufacture of HCFCs produces HFCs as a byproduct, and HFCs are a greenhouse gas controlled under the Kyoto Protocol. This latest adjustment thus mitigates climate change even as it protects the ozone layer. Indeed, it is estimated to achieve as much as the Kyoto Protocol ever aimed to achieve. And we can be confident that it will be enforced because Montreal is enforced by trade restrictions, whereas
Kyoto lacked an enforcement mechanism.

Montreal has several important features that are not shared by
Kyoto. First, it not only limits production (like
Kyoto); it also limits consumption (defined as production plus imports minus exports). Second, it not only requires industrialized countries to limit their emissions (like
Kyoto), it requires developing countries to reduce their emissions, too. Third, while Kyoto’s limits apply for just five years,
Montreal’s cuts are permanent. Fourth, under
Montreal, industrialized countries finance compliance by developing countries.

This arrangement is a more effective way of reducing HFC emissions and the emissions of other “industrial gases” controlled under the Kyoto Protocol. Separate agreements should be negotiated for these gases.

Carbon dioxide, the main greenhouse gas, cannot be controlled in this same way. The approach favored so far is to negotiate national caps on carbon dioxide emissions. The problem here is that no country will want to reduce its emissions substantially using a national cap, for this will leave its trade-sensitive sectors, like aluminum, steel, and cement, exposed to “unfair” competition.

An alternative approach is to address these sectors at the global, rather than at the national, level. New technical standards should be negotiated, creating a new “level playing field.” These can then be implemented in the same way as the
Montreal restrictions.

Carving out the trade-sensitive sectors will reduce opposition to limiting the emissions in the rest of the economy. These emissions can be reduced by relying on domestic enforcement.

Ultimately, effective policy for addressing climate change must bring about a transformation in technology. R&D should not “pick winners” but reveal possibilities. Some technologies, however, are begging to be investigated. An example is “carbon capture and storage”—a technology that removes carbon dioxide from large, coal-fired plants. So far, there is not a single large-scale demonstration plant operating anywhere in the world. A great many are needed so that we can learn how this technology works, and how we can make it work efficiently and safely. An agreement of this kind would require only the participation of the major economies, and can be easily negotiated on
Copenhagen’s timetable.

My recommendation for the US would be to negotiate a skeleton agreement in time for
Copenhagen, and follow up with supporting agreements focusing on individual gases, sectors, and R&D efforts. Success in
Copenhagen should not be defined by setting goals that lack domestic support and that cannot be enforced but by laying a foundation for making incremental improvements over time.