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As largely predicted by many analysts, the Fifteenth Conference of Parties (COP 15) held at Copenhagen from the 7th to the 18th of December, did not lead to the signature of a legally binding agreement to replace the Kyoto Protocol after 2012.

The outcome of COP 15 could have not been different and hopes for a different result did not take into account the reality of facts. First, it would have been impossible for the United States to sign a binding agreement without first having the Senate pass the Boxer-Kerry Bill that, coupled with the already approved American Clean Energy and Security Act (Waxman-Markey Bill), would give President Obama the credibility to propose more ambitious steps internationally. Second, without the commitment of fast-growing developing countries to reduce emissions – not necessarily immediately, more realistically after a “grace” period – any attempt of developed countries to contain temperature rise below safe levels would be vain.

Fast-growing developing countries are reluctant to take on any legally binding commitment on the grounds that their primary objective is to reduce poverty and to widen economic well-being, and that the responsibility for the high concentrations of Greenhouse Gases (GHGs) in the atmosphere is only marginally attributable to their emissions. Hence, their refusal to sign any legally binding agreement when the major world economies are not ready to do so is largely comprehensible.

These are in the essence the basic ingredients of the so-called “climate deadlock” that prevented to sign a real substitute for the Kyoto Protocol and pushed the climate summit in Copenhagen to “take note” of a more modest Copenhagen Accord on the morning of Saturday, December 19th.

Effectiveness and consistency of the Copenhagen Accord

Let us analyse the first one. Are the domestic abatement plans announced in Copenhagen sufficient to significantly reduce global GHG emissions and to contain temperature increase below the proposed 2°C target?

Table 1 – The Copenhagen Emissions Reductions Commitment. Click the picture to enlarge

Table 1 summarizes the emissions targets that major countries have announced in Copenhagen. Unfortunately, the Annex I to the Copenhagen Accord, in which abatement targets were listed for each country, was empty in the official version released by the UNFCCC. We gathered the national targets from a variety of sources, including the unofficial Annex I to the Copenhagen Accord, and we homogenized them to reflect changes of emissions with respect to 1990. For those countries that have used the Business as Usual (BaU) scenario as a reference, we employed the WITCH model BaU scenario to calculate future emission reductions. China and India have indeed announced an intensity target: they pledge to reduce the carbon intensity – the ratio between carbon emissions and GDP – of their economies by 45% and 20-25%, respectively. Both these targets appear to be non-binding according to the BaU scenario of the WITCH model (which predicts autonomous carbon intensity reductions of 53% for China and 42% for India). The recently published World Energy Outlook (WEO) 2009 also confirms that China might have chosen a BaU scenario and India might have simply underestimated the BaU improvement of its carbon intensity (WEO 2009 predicts a 45% reduction of carbon intensity for China and a 38% reduction for India). Accordingly, for both India and China we substituted the announced targets with BaU emissions of all GHGs.

As a group, the Copenhagen commitments for the biggest emitters, if confirmed, would imply a 28% increase of emissions above the 1990 level. With respect to the BaU scenario for those countries, emissions would be reduced by 21%. Assuming that the rest of the world continues on a BaU path, global emissions would increase to about 48 GT CO2-eq by 2020. This represents a 29% increase with respect to 1990, a 5% increase with respect to 2005 and a 16% reduction with respect to BaU.

Are the promised emissions reductions sufficient to control global warming? The stabilization scenarios presented in the Fourth Assessment Report of the IPCC show that emissions of CO2 need to peak before 2015, to decrease by roughly 5-10% at 2020, and then decline steadily to limit temperature rise above the pre-industrial level to 2.0-2.4°C by 2100; if emissions peak before 2020, the temperature rise will be of 2.4-2.8°C¹. Therefore, although not negligible if compared to the BaU, the emissions reduction declarations proposed in Copenhagen are clearly insufficient to control global warming below 2°C.

Hence, the first seemingly good news – the Copenhagen emission reduction declarations – is largely inconsistent with the 2°C temperature target re-stated in the Copenhagen Accord². What about the second important news, i.e. that additional, predictable and adequate funding, and improved access to technologies, will be provided to developing countries to enable and support action on mitigation and adaptation?

Financial adequacy of the Copenhagen Accord

The commitment contained in the Copenhagen Accord is to set-up a fast track fund that will consist of USD 10 billion per year from 2010 to 2012 (totalling USD 30 billion). If there is sufficient and transparent action towards mitigation, developed countries commit to mobilize, jointly, USD 100 billion dollars a year by 2020. This funding will come from private and public sources, bilateral and multilateral, including alternative sources of finance. A significant portion of such funding will flow through a newly established Copenhagen Green Climate Fund (CGCF).

The distribution of funds between mitigation and adaptation efforts is not yet defined and it deserves careful consideration. Even though it is now clear that both mitigation and adaptation will be needed to reduce the negative impacts of climate change, the optimal timing of investments is not the same. Recent research with an enhanced version of the WITCH model – designed to quantify the optimal time profile of investments in adaptation and in mitigation – clearly shows that while it is optimal to invest immediately in mitigation actions, most investments in adaptation could be delayed to later in the future³. The reason is that while it is imperative to control GHG emissions as soon as possible to attain low temperature targets, in the short term climate change impacts are still moderate and adaptation measures can be put in place relatively fast later on in the future.

Table 2 - The Mitigation Potential of the Copenhagen Green Climate Fund. Click the picture to enlarge

Let us therefore suppose that the financial resources mobilised in Copenhagen will be used to mitigate GHG emissions, at least from 2011 until 2020. We also assume that these emissions reductions will be additional to those already announced, including the Clean Development Mechanisms (CDMs). Are these resources sufficient to fund the investments which are necessary to restructure the energy system, reduce deforestation, improve land use, in order to close the gap between the announced emissions reductions and the optimal trajectories towards a safe GHG concentrations stabilization pathway?

Our estimates, again using the WITCH model, show that, by directing about 60% of the CGCF to financing low cost abatement actions in developing countries, global emissions could peak in 2020, as shown in Table 2⁴. About 50 billions per year from 2011 until 2020 would reduce emissions by 2.9 GT CO2-eq between 2011 and 2015 and by 2.4 GT CO2-eq from 2016 to 2020, for a total of 26.4 GT CO2-eq⁵. It is hard for emissions to peak before 2015 with this financing scheme. The emissions trajectory would thus show a remarkable contraction with respect to the BaU, but the abatement effort would still be insufficient to achieve the announced temperature target.

Figure 1 - Historical and BaU Scenario Emissions, Copenhagen Commitment and the role of the CGCF for Mitigation. Click the picture to enlarge

The transformation of the CGCF into a full mitigation fund (100% for abatement actions) would allow to reduce emissions by 3% with respect to 2005, it would limit to 18% the increase with respect to 1990 and it would reduce emissions by 22% with respect to BaU. With smooth rapid mitigation action, it is in principle possible to have the peak of emissions around 2015, but in order to achieve the required emissions reductions in 2020 (-5% -10% wrt 2005), additional funding would be needed. A graphical representation of the abatement potential of a mitigation-driven CGCF is given in Figure 1.
Therefore, even if all financial resources were devoted to mitigation, they would not be sufficient to direct carbon emissions along a path consistent with the 2°C target. A much bigger financial effort seems to be necessary.

Conclusion

A first analysis of the mitigation targets to which major world economies informally committed for the year 2020 in Copenhagen, reveals that the expected impact on global emissions is not negligible if measured with respect to BaU, but it is still insufficient to curb emissions below 2005 levels by 2020, a necessary condition to contain global warming within safe levels. GHGs will continue to grow and concentrations in the atmosphere will easily pass 450 ppm CO2-eq at 2020, a threshold above which it will be almost impossible to keep temperature increase below 2°C.

It would therefore be necessary to invest in the development of low carbon technologies and their diffusion, on energy efficiency, avoided deforestation, carbon capture and storage, etc. If all the Copenhagen Green Climate Fund is used to finance cheap, additional, mitigation actions in developing countries, this would make emissions peak before 2020. With steady emissions cuts in the following decades, it would be possible to limit temperature increase to about 2.5°C, above the 2°C threshold but well below the temperature level that would be achieved without strong mitigation action.

There seems to be mixed news coming from Copenhagen. Announced mitigation targets are far from being adequate to control climate change. However, if all financing to developing countries is directed towards mitigation, there are chances to put the world on the right trajectory to reduce global warming significantly. Therefore future negotiations rounds should devote a great attention on how to shape the Copenhagen Green Climate Fund.

Carlo Carraro: University of Venice, Fondazione Eni Enrico Mattei (FEEM), and Euro-Mediterranean Center for Climate Change (CMCC):
Emanuele Massetti: Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center for Climate Change (CMCC).

1. IPCC, Fourth Assessment Report, WG3, Chapter 3, Table 3.10. In order for temperature increase to be contained between 2.0 and 2.4 °C CO2 concentrations should not exceed 350-400 ppm, all GHG concentrations should not exceed 445-490 ppm CO2-eq; in order for temperature increase to be contained between 2.4-2.8 °C, CO2 concentrations must remain below 400-440 ppm and GHGs concentrations below 490-535 ppm CO2-eq. In our estimates we assume that all GHGs are abated in equal proportions. [↩]
2. For an analysis of the chances to achieve the 2°C target please see Carraro and Massetti, “The Improbable 2°C Target,” voxeu.org, 3 September 2009 [↩]
3. Bosello, F., C. Carraro and E. De Cian (2009). “An Analysis of Adaptation as a Response to Climate Change.” University of Venice, Working Papers of the Department of Economics, No. 2 6 /WP/2009, Sept 2009. [↩]
4. Emissions reductions do not include the abatement to which Brazil has already committed at Copenhagen. Reducing emissions by 36% below BaU is a challenging task for Brazil that requires strong action against deforestation. [↩]
5. These estimates are based on marginal abatement costs at the year 2015 and 2020, and thus represent an upper bound to average abatement costs. On the other hand, we assume smooth and costless transactions, which is clearly optimistic. [↩]