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It is relatively cheap, it is abundant and its renaissance started before the Fukushima accident. In the future energy mix, gas and renewables will play an important role, but coal will be the most important source. That’s why we need to implement CCS and make it economically affordable if we want to meet our mitigation targets. Prof. Ottmar Edenhofer, in this interview conducted by Mauro Buonocore, talks about the future of energy, the opportunity of a European super-grid and proposes a two-track model for climate negotiations.

Prof. Edenhofer, how have climate negotiations been going since the last COP in Cancùn?  What can we  envision for the future of international negotiations on a post-Kyoto agreement?

It’s very hard to predict what will happen after Cancùn. By and large, I would say that the prospects for a quite comprehensive climate regime in the near future are not very good. And the likelihood that this would happen at the Cop 17 in Durban, South Africa, unfortunately is very low. Nevertheless people become aware of what happened in Fukushima, which has basically nothing to do with the climate change issue, but has a lot to do with the energy issue and will change things substantially in the energy market at the international level. I think that people are going to be a little bit more aware that energy security, human development, economic growth and climate change are all parts of the one integrated issue which deserves much more attention than we gave to these single topics in the last decade. So, I do not assume that the Cop in Durban will be a great success, but I think that in the next three years something will happen at the international scale, which will help us with the broader sustainability issue. The longer we wait, the more expensive mitigation becomes – and the risk increases that climate change reaches tipping points in the earth system like Greenland ice sheet melting.

Should the international community drop the project of a global agreement and should it concentrate its efforts on countries’ individual pledges without a legally binding framework?

I think that a legally binding agreement is important but this should not be the one and only target to camp on. Think about China, for example. China has recently presented the 12th five-year which is extremely ambitious, in some aspects. We don’t necessarily need legally binding agreements. What we need is some kind of international cooperation, which could be very effective as a starting point of negotiations and, with its new 12th five-year plan, China could be one of the driving forces for international cooperation.

After the conferences in Copenhagen and Cancùn the format of the COP was criticized and some experts said it was  not the most  effective way to get concrete results for climate negotiations. Do you agree with this assessment?

That’s probably true. The whole framework of the UNFCCC is good at getting a consensus in the end of a process, but it is not the best format to do real negotiations and therefore I would strongly propose to have a two-track model. On the one hand we could negotiate within the G20 and other international arenas about several issues. In the end if we have achieved any concrete results, the UNFCCC would be a very good framework to get everybody on board and to have the strongest legitimacy on the achieved outcomes.

Could you please make some examples of these other arenas?

G20 would be one of them, for example; or other arenas where you could achieve a bilateral agreement, let’s say between Europe and China, on climate and energy topics. Let me give  you a more concrete example. China intends to implement an emissions-trade scheme and the European Union,  which has great experience on this issue, could advise China on how to implement such a thing. This could be done at a bilateral level. There are so many opportunities for international cooperation and I would avoid the kind of negotiations where people are only focusing on the UNFCCC. I mentioned the G20 as a good arena to achieve outcomes because in the G20 we have already agreed to abandon fossil fuels subsidies. This kind of decision should be simply implemented and this would also be a very good starting point to do something at the international scale. So I think we have to combine different scales of cooperation, we should be aware that in the end we have to achieve an international agreement but there are many ways and many smaller steps that could have a strong impact on all the international negotiations.

Will the Fukushima nuclear crisis have any consequences on energy policy and on nuclear strategies around the world?

First of all, Fukushima has a strong impact on the European policy and I am quite convinced that in the end it will have a strong impact on the global energy policy. I would like to give you a number. Up to now, 14% of the  entire world’s electricity production comes from nuclear power. We have now about 455 light water reactors on the globe. And, given that the electricity consumption will double within the next 20 years, if we  would decide to stabilize the share of nuclear power on the electricity production, we will have to implement around 450 other light water reactors across the globe by the year 2030. I think that – independent of the question whether this is something to aspire to – at the international level we will simply not be able to stabilize the electricity production at 14% from nuclear plants around the world.  I also think that China and India will think about nuclear power again. I’m not saying that they would phase out nuclear power, but the speed and the race to build nuclear power plants might very well be much slower than the project many people anticipated before the Fukushima event. I would say that we could  expect a decline in the share of nuclear power in the global energy mix. From my point of view, in the global scale, the big issue in the future will be coal because it is relatively cheap, it is abundant and many countries will then substitute their nuclear power capacities with coal. Therefore, it is absolutely crucial for an ambitious climate policy, that we have Carbon Capture and Storage technologies available. I know that CCS is not available now at the commercial level and we have only a few pilot plans. People, particularly in Europe, think that CCS is not an important part of the mitigation portfolio. I think it is an almost inevitable part because coal remains the most important issue. Gas will also become important, energy efficiency also has to play a very important role. And the scenarios produced by IEA show that renewables will play an extremely important role and then we have to make sure that renewables really become competitive and cost efficient.

Are the European targets on mitigation achievable with an energy strategy with no nuclear plants?

It is an issue, which has to be analyzed very carefully, but I have the feeling that the European Union  can achieve its mitigation targets if we have a common and a unified European energy policy. If we would have a grid across Europe, we would be able to have integrated energy from the best sites for renewables. We could concentrate, for example, solar power in Spain, wind plants in the North Sea, and so on. With this perspective, I think that we could achieve the ambitious climate protection goals even without nuclear power, but admittedly a   European super-grid requires a lot of investments in the infrastructure.

But renewables are not competitive in the energy market, today. And they are growing on public incentives. Do you think that they will soon become competitive?

It is a stepwise process and it has to be complemented by energy efficiency. Wind is to a certain extent already competitive and also an increasing CO2 price will make coal and gas less competitive. So this is a timing issue and I’m not saying that we can achieve it immediately, but over a reasonable time horizon we can build  this kind of super-grid which  integrates renewables from all over Europe. It’s definitely an option, but it takes time. Even in Germany we  are now debating about by when we should phase out nuclear power. It is my expectation that we will not phase out nuclear power immediately, but we will also do this step by step. And although we have to invest, we have to inform the people and  ask them if they would like to phase out nuclear power by 2020 or a bit later. Anyway, new investments in renewables are inevitable and people have to accept that this is not a free lunch.

Which kind of energy mix are China and India going to compose?

I definitely think China  now has the goal to increase the energy efficiency to an unprecedented scale so China is also thinking about an emissions trade scheme at a national scale, which is very encouraging. The Chinese energy portfolio will count on renewables, but they also have a huge amount of coal and gas. The role of nuclear power will depend on how fast they will be able to build up new nuclear plants. But, again, coal will be a  prominent energy source and so we need CCS and we have to clarify to what extent it is feasible and economically affordable. China is now willing and is committed to do something to reduce their emissions and I find this a very encouraging sign.

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In the last two years the international community shared the objective  to limit the increase of  mean global temperatures to 2°C above pre-industrial levels in order to prevent the risks and effects of climate change. This agreement was made in a number of international meetings: G8 2009/2010, G20 2009, UN General Assembly 2009/2010, Copenhagen Conference 2009.
The Council of the European Union, on October 29, 2010, acknowledged that to stay below 2ºC would require global greenhouse gas emissions to peak at least by 2020.  In order to limit the atmospheric carbon dioxide (CO2) concentrations to less than 450 parts per million (ppm), global greenhouse gas emissions are reduced by at least 50% compared with 1990 by 2050 and continue to decline thereafter.  The developed countries as a group should reduce their greenhouse gas emissions by 80% to 95% by 2050, through an intermediate legally binding quantified emission reduction commitment of 30% by 2020, with respect to 1990.
The developing countries as a whole should achieve a substantial deviation below the currently predicted emissions growth rate by 15-30% by 2020.
Furthermore, estimates based on available information such as current population projections by 2050, calculate that global average greenhouse gas emissions per capita should be reduced to around two tons  CO2 equivalent. A  gradual convergence of national per capita emissions between developed and developing countries would be necessary considering the national circumstances.

Feasible Targets? Atmospheric CO2 concentration and global emissions

The present atmospheric level of CO2 is approximately 390 ppm (NOAA, 2010).
Taking into account all the greenhouse gases, the CO2 equivalent is already 448 ppm  (EPRI, 2009, pdf) and it is expected to rise in the next years.

Until now,  efforts to reduce  carbon emissions through international legally binding agreements have not worked..
Ten years after the agreement of  the Kyoto Protocol, 1998-2007, the global emissions rose by an average of 2.5% a year. Although emissions fell in USA, Canada, Japan, EU, between 2008-2009 as the global recession took hold, they continued to grow in China, India and in the most of the developing countries. With 1.86 billion tons of CO2 emissions in 2009 (25% of the global emissions)China succeeded the USA as the world’s biggest carbon emitter.
Meanwhile India’s, emissions  have been growing at about a 5% yearly rate in the last decade,  succeeding Russia as the world’s third largest emitter.

The energy scenarios of 2030  project a significant increase in the demand for global fossil fuels as well as CO2 emissions. According to IEA World Energy Outlook 2009, the global demand grows by 40%  between 2008-2030, with coal use rising in absolute terms. The global energy demand is increasing mostly in the emerging and developing world, to sustain their economic growth and social development. CO2 emissions continue to grow (+45% in 2030) mostly from the emerging and developing world.

Nevertheless, per capita emissions in emerging and developing economies are far below those of most in  the developed world.
In 2010, per capita emissions in USA are three times larger than in China and 15 times larger than India.
Per capita emissions are a sensible indicator of the energy and social divide between the countries considering that 2 billion people in the developing world do not have access to energy.

The IEA Business As Usual scenario suggests  that after 2030, the global energy demand will continue to grow. In the Business As Usual (BAU) scenario, the “carbon neutral” energy sources (renewables, biofuels, nuclear),  combined with energy efficiency and the technology of carbon capture and storage are not sufficient to replace the fossil fuels  to meet the increasing energy demand, and fossil fuels will continue to supply more than two-thirds of the world’s energy.
Therefore, the global emissions will be larger than+ 130% with respect to 1990.

The “energy revolution” to meet the stabilization target

According to the ‘Blue Map’ scenario in 2010 Energy Technology Perspectives (IEA/ETP, pdf)

• global greenhouse gas emissions should peak by around 2020, and decline steadily towards the 50 % cut in carbon emissions by 2050;
• investments (public and private) in clean technologies should rise from the present $165bn a year, to $750bn in 2030 and $1.6 trillion in 2050;
• renewables should account for 48% of power generation, nuclear 24% and plants equipped with carbon capture and storage 17%;
• the widespread use of next-generation biofuels should replace gasoline and diesel;
• a huge improvement in energy efficiency should reduce the energy demand growth by only  32%, compared with 84 % under the BAU;
• the widespread introduction of electric, hybrid or fuel cells cars should account for at least 80% of all vehicles on the road;
• stable, long-term incentives such as feed-in tariffs, loan guarantees and tax credits must be introduced to encourage the adoption of low-carbon technologies, while market barriers such as planning obstacles, building codes and red tape must be cut.

The “Blue Map”, with the convergence of the “Per Capita Emissions” issue (2 tons  in 2050, as suggested by EU)  demand immediate global action to address :

• the “burden sharing” of 2020 peak and 2050 per capita emissions,  taking into account the present and predicted  gaps in carbon intensity and per capita between the countries;
• the energy technologies “revolution”  in terms of  agreed and mandatory
  • international standards ( in energy efficiency, sustainable biofuels, renewable performances…..);
  • international  rules to shift the energy system towards the “carbon neutral” technologies (for example phasing out the existing fossil fuel energy infrastructures not equipped with Carbon Capture&Storage technologies and forbidding  new plants, like in the case of  CFCs under Montreal Protocol);
• the international and domestic trade and fiscal rules, both to support low carbon technologies investments and to  avoid unfair competition and carbon leakage;
• the establishment and the management of international financial mechanisms to support the energy security in the developing world.

The challenge is new, complex and unprecedented. An international agreement to address the issues that are needed to tackle climate change, carbon intensity of the economies,and energy security has not yet been made. The traditional format of the agreements under the Climate Change Convention (Kyoto Protocol, Copenaghen Accord) is not adequate to meet the challenge.

The “test” of complexity lies within the combination of the low carbon strategies and measures with the existing and forecasted investments in oil and gas infrastructures. Is it possible to design and manage the exit strategy from fossil fuels while tens of  trillions of dollars are invested in new energy infrastructures based on oil, sand oil, natural gas and shale gas? How will it be possible to meet the long-term lifetime of such infrastructures with the 2020 peak?
Is the combination of international regulations  and the Environmental Social Responsibility of the private energy companies enough to address the exit strategy from fossil fuels?

Another test is the “parallel” case of China and USA

According to the head of the International Energy Agency, Nobuo Tanaka, “China’s emissions need to peak by 2020. Without such commitment from China, halving CO2 emissions by 2050, is simply impossible”.
According to the Chinese government, the 2020 peak target  combined with a projected 36 % cut in coal consumption by 2050, will force China to sacrifice economic growth.
China has already pledged to reduce energy intensity (CO2 emissions/GDP) by 40-45 % by 2020.  Today China is the biggest global investor in renewables, nuclear and carbon capture&storage technologies.
In addition, China’s per capita emissions , in comparison with USA, are 3 times lower in 2010, and are predicted to be 2,5 times lower in 2020.

As noted by Amy Heinzerling of the Earth Policy Instituter, 22% of China emissions come  from the production of exported goods, while goods imported by USA are responsible for 190 million tons of emissions per year.

Further domestic and international commitments made by China can be considered only if USA and the most developed countries make proportional and comparable commitments.  These commitments also depend on the efforts supported by multilateral/bilateral technology and financial cooperation in China.
Otherwise  China’s peak of emissions will be reached between 2030-2040,  under the present domestic policies and measures.

The United States have not been able to make commitments  to reduce emissions and shift from fossil fuel to a low carbon economy.
In September 1999, the US Senate rejected the ratification of the Kyoto Protocol, proposed by the Clinton Administration, considering that the international treaty would affect the energy security and the national sovereignty of USA.

In 2010, the US Senate refused to examine the draft law for the introduction of limits to CO2 emissions through a mechanism similar to the European one. This occurred because of missing cost estimates and serious concerns regarding the effects on energy security and on the national sovereignty.
Furthermore, US Senate expressed its uneasiness to accept commitments that emerging economies, such as China and India, have not shared.

Meanwhile, in 2010, the EU countries and Japan, with comparable standards of life in  USA, emit only half per capita CO2. This is a case of unfair competition by  USA with EU and Japan because of unequal commitments for the emissions reduction.

A new leadership for Europe?

The European Council on October 28 suggested  “a second commitment period under the Kyoto Protocol, as part of a wider outcome including the perspective of the global and comprehensive framework engaging all major economies “
Perhaps it is time that the EU  acknowledge that the Kyoto format is not adequate to meet the multiple challenges of climate change, low carbon economy and energy security.
Rather than focusing on complex legal structures and the construction of a new international bureaucracy on climate change, Europe should focus on promoting international projects. These projects will face the global technological challenge using the great potential of the European integrated economy, which has already achieved important levels of efficiency and innovation.
Europe should test the possible rules and measures necessary to promote a global “de-carbonized” economy able to sustain growth and reduce emissions, building a European “Global Platform” based on the three technological pillars: energy efficiency, renewable energy and nuclear energy, also including forestry management.

In this perspective, it is necessary to work at two levels:

The national level: through common EU policies and strategies on technologies and financing measures.  In spite of the framework established by the “climate and energy package” the lack of harmonized measures for energy efficiency, efficiency standards for renewables, nuclear, energy fiscal policy, agriculture and animal husbandry, forestry management, financing for research and development, hinder the valorization and development of the European potential to build a “green” and “de-carbonized” economy;

The international level: through a new and structured European initiative for the technological cooperation with emerging economies and with USA/Canada/Japan in order to use the European platform as a “Hub” for the global innovation and dissemination of low-carbon technologies. The technological initiative could represent an evolution of the Kyoto Protocol JI and CDM mechanisms.

The Threat of Climate Change: the Need of Adaptation Measures

Waiting for USA and China,  no agreement will be effective, and tackling global climate change will be more difficult, also because of the increasing CO2 concentration in the atmosphere.
The Atmosphere CO2 stabilization at 450 ppm is difficult to achieve.
Some scientific institutions suggest the consideration of more realistic targets, taking into account that the CO2 concentration, due to carbon cycle, is the result of both the emissions and the carbon dioxide already “stored” in the atmosphere.
According to EPRI (2009), two stabilization targets could be considered, taking into account the radiative forcing and the relative increasing in the mean global temperature.

Click to enlarge

Stabilization at 550 ppm  (target 3,7) which corresponds to + 2,5 °C,  requires too strong of a commitment even if postponed, in the deviation from the emissions baseline.
Stabilization at 650 ppm ( target 4,5) which corresponds + 3 °C,  requires challenging global measures  which address the emissions reduction and the adaptation to the effects of the temperature increasing above 2°C

However, as the temperature is increasing, extreme events may occur with greater frequency and intensity.

Last summer many regions and countries  were affected by extreme events, worse than any other in the historical record, with high economic costs and the loss of thousands of lives: flooding in Pakistan, Western China, and India; heat waves in eastern USA, parts of Africa and  Asia, and Russia with unprecedented drought and fires.

According to the National Oceanic and Atmospheric Administration, in the first six months of the year 2010, the average temperatures were the warmest on record, in accordance with the trend of the recent decades.
Statistics show that the added heat in the atmosphere in the last decades is the driving force for the worsening of the extreme events.

Locally, “some extreme events occurring over a relatively short time period, especially in close proximity, could mutually reinforce each other in such a way that the resulting cascade of consequences becomes a global catastrophe.” Other extreme events can have secondary consequences that generate additional, substantial damage.   Secondary consequences, in turn, can trigger tertiary consequences that further amplify the adverse consequences, and so on” (“Responding to Threats of Climate Change Mega-Catastrophes”, Carolyn Kousky and others, 2009).

Pitcure from  “Climate Change and its possible security implications” – Report of the Secretary General to the General Assembly (September 2009) Click to enlarge

Drought and/or flooding, are the best examples of extreme events, which generate multiple effects: food and water shortage, loss of cultivated areas, devastation of urbanized areas in the coastal zones, migration of the populations, regional conflicts, and political instability in some of the most volatile regions of the world.
Projected climate change will seriously exacerbate already marginal living standards in many Asian, African, and Middle Eastern nations, causing widespread political instability and the likelihood of failed states.
According to UN secretariat (2009) the multiplier threat of climate change should be addressed while considering the adaptation (prevention policies) and the international assistance in the case of the extreme events.
Until now, such policies  have not been put in place.
This is an additional and urgent task for the international community.

References

• Geoffrey J. Blanford, International Participation in Post-Kyoto Climate Policy, Epri 2009
• Amy Heinzerling, Global Carbon Dioxide Emissions Fall in 2009 – Past Decade Still Sees Rapid Emissions Growth, Earth Policy Institute, July 2010
• International Energy Agency  – World Energy Outlook 2010
• International Energy Agency  – 2010 Energy Technology Perspectives (pdf)
• International Energy Agency  – World Energy Outlook 2009
• Martin I. Ioffert, Climate Change: Farewell to Fossil Fuels?, Science, 10 september 2010
• Carolyn Kousky, Olga Rostapshova, Michael A. Toman, Richard Zeckhauser, Responding to Threats of Climate Change Mega-Catastrophes, RFF Discussion Paper 09-45, November 2009
• Richard Richels, Feasible Climate Targets, Epri 2009 (pdf)
• UN General Assembly, Climate Change and its possible security implications – Report of the Secretary General to the General Assembly, September 2009

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“The first issue is that anything that results in foreign policy from any particular government whether it’s a developed country or a developing country is really based on the domestic policies of those countries. You can’t have foreign policy without a foundation of domestic policy. Basically what is this going to cost to deal with it? I think that’s true in the US, it’s true in the EU, and it’s certainly true in the Brics countries”.

To achieve a new climate agreement we need both domestic and global policy, Ray Kopp (Resources for the Future – RFF) says in this video interview to Climate Science&Policy

Challenges for a Post-Kyoto Agreement

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USA and Developing Countries. Domestic and International Initiatives in Climate Policy

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Resource for the Future and the Think Tank’s Role in Climate Change Policy

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The Oil Spill and Its Impact in the American Debate

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It could be described as the ability to shape the preferences of others and attract them so that they want what you want. It is Soft Power and it is crucial in order to create a narrative of climate change which is widely accepted. But soft power alone isn’t enough: we need smart power, a combination of soft power and hard power.
Prof. Joseph S. Nye (Harvard’s Kennedy School of Government) talks about the role of transnationl institutions, the new american course on climate policy  and “How could we get everybody into the act and still get action”. “We are going to have to use a variety of international institutions and focus the European phrase, Variable Geometry”, Prof. Nye says to Climate Science&Policy.

Soft, Smart, and Hard. A Combination of Power for International Climate Politics

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Obama and the New American Course on Climate Politics

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Variable Geometry. A Useful Definition for Climate Institutions

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Narratives and Transnational Institutions

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USA/China: Are We Coming Back to a Bipolar World?

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Get Everybody into The Act. International Relations and Climate Change

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We have learned great deal at Copenhagen: whatever agreement we will come to, it has to be about the quality of economic growth and the way that it goes forward.
Interviewed by FEEM, Prof. Thomas Heller (Stanford University and Executive Director at Climate Policy Initiative) explains why, after the Cop15, we have now a better sense of what the problem is and where the solutions lie.
“It’s the same for all policy – Prof. Heller says – no matter how well it is designed, no matter how well it is intended, there are always questions about how it is implemented or how effective will it be”.

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The Copenhagen conference is a bitter disappointment for European countries. While environment is one of the domains in which European integration is deepest, European countries failed to build and support a common position that would have weighed on the outcome of the conference, the Copenhagen Accord. Significantly, this outcome has been negotiated and signed at the national level and European countries had different position on its content. Moreover, this Accord appears at odd with the expectations of most European countries. In particular, this agreement gives up the “global governance” approach of the Kyoto Protocol, which set a collective goal in terms of reduction in greenhouse gas emissions and translated this collective goal into individual targets for each member country. In the Copenhagen accord, instead, each country announces unilaterally an individual target for its 2020 emissions, and the accord introduces a simple verification of individual commitments.

Compared to the Kyoto approach, four essential elements are lost. Firstly, the agreement is not legally binding and there is no provision in case of non compliance. Secondly, in a system where each country unilaterally announces its commitment to reduce emissions, there is no guarantee that individual efforts are of comparable magnitude, and we can only note that the Russian and American proposals are more modest than European ones. Thirdly, although the Copenhagen agreement recalled the objective of maintaining global warming below 2°C, there is no guarantee that the sum of individual commitments is sufficient to achieve this collective goal. And we know that in the current situation, the efforts announced drive us toward a 3°C-or-more warming. Finally, the Copenhagen agreement was negotiated by 28 countries only, and has not been validated by the 192 member countries that are parties to the Climate Convention of the United Nations. It is therefore a partial agreement to a problem that concerns all countries, and the way this agreement has been reached threatens the Climate Convention, a unique 17-year international negotiation process.

Forget Kyoto: Four European Answers

For all these reasons, the outcome of the Copenhagen conference is disappointing. But today, it appears that it was simply impossible to maintain the Kyoto approach. Instead of distributing blames and accusations to explain this failure, it seems more reasonable for Europe to forget the Kyoto Protocol and its philosophy and to recognize that it is an important progress to have included the United States and China in a unique agreement. From there, Europe could try to (re)construct a common position on how to build on the Copenhagen Accord to make it more ambitious and credible. Such a common European position could be based on answers to the four limitations mentioned above.

First, progress is needed on the fact that the accord is not legally-binding and lacks credibility. In the current situation, building a legally-binding framework seems impossible. But if all countries wish to fulfil their obligations, and their reluctance to accept stronger commitments suggests they do, then they can accept a control that is stronger than what is currently agreed on. To do so, an international organization could be created to control emissions of each country and verify that commitments are respected. This proposal was already supported by France and others at Copenhagen, but it met strong opposition. It could now be supported by the European Union, its chance of success increasing if a cap-and-trade law passes the US Congress in 2010. Of course, such an international organization would not make the agreement legally-binding, but it would give weight to the political agreement signed in Copenhagen.

Then, it seems clear that no country can agree to make efforts that are much greater than what other countries are doing, at the risk of disadvantaging its industry and losing jobs and market shares. From an ethical point of view, moreover, it seems unfair that the most ambitious countries suffer from their desire to protect a global public good. In absence of an international mechanism to share emission reduction efforts in a fair manner and in the framework of unilateral commitments, it appears unavoidable to recognize the right to establish fiscal compensation mechanisms. Countries with most ambitious climate policies, whose production costs would increase, would be allowed to introduce a border tax to maintain their competitiveness on their domestic market. The most publicized risk associated with such a tax, namely its use for pure and simple protectionism, could be mitigated if the commitment-control international organization were required to authorize the tax before its introduction. At a later stage, such fiscal mechanisms could even be used to ensure compliance: in practice, a border tax could be applied to exports of countries that do not meet their commitments, after proper analysis and control by the international control organization.

Third, a solution needs to be found to ensure that the sum of individual national efforts is sufficient to achieve the collective objective of maintaining global warming below 2°C. The lack of consistency between the collective goal and individual commitments is undoubtedly the most glaring weakness of the Copenhagen Accord. As the philosophy of this agreement makes it inadequate to impose additional emission reductions, an incentive-based system should be favoured. To do so, the Climate Convention or the IPCC could make a systematic evaluation of the sum of national commitments – in developed and developing countries – and provide an estimate of future emissions trajectories and of the corresponding climate projections. A comparison of these climate projections against the 2°C collective objective would allow to announce a “commitment shortfall,” i.e. the need for additional action to achieve the collective objective. Such an analysis has been done by Carlo Carraro and Emanuele Massetti, and published in Climate Science&Policy (“Two good news from Copenhagen?” January 7th, 2010). They show that the abatement plans proposed by major emitters in Copenhagen are inconsistent with the 2°C target, even if all the climate international finance proposed in the Accord is dedicated to mitigation in developing countries, and they discuss the need for additional effort, i.e. the commitment shortfall. From this type of information, a further mission of the annual Climate Convention conferences could be to announce this commitment shortfall, and to invite all countries to do more to reduce this deficit. The shortcomings of such a process are obvious, but it now seems difficult to do better, and hopefully public opinion pressure will encourage countries to make the necessary commitments.

Finally, it is essential to bring the Copenhagen Accord under the UN Climate Convention and ensure that all countries join its new approach. It could be possible to give up this global approach and work only among big emitters, like in the Major Economies Forum on Energy and Climate. But this approach is inadequate because the climate change issue will not be settled if the most vulnerable countries are not at the negotiation table. And even if mitigation commitments could be discussed in such a group, it is inappropriate to discuss mitigation and adaptation in different arenas, since these two topics are interlinked through financial flows, technology exchanges, and infrastructure design. The Copenhagen approach, based on the selection of a few “representative” countries is also flawed: on which basis should the Maldives be considered as representative of all small islands? In absence of any better solution, therefore, it is urgent to reinstall the Copenhagen agreement within the Climate Convention. And today, acknowledging the impossibility to save the Kyoto Protocol, it may be possible to convince all countries to join a new approach, provided that the three preceding issues are treated properly and that the Copenhagen Accord reaches an acceptable level of credibility.

The Financial Fluxes Issue

In addition to these four questions, it will be necessary to specify as rapidly as possible the modalities of the financial transfers planned by the Copenhagen agreement, i.e. $30 billion for the 2010-2012 period, and annual flows increasing to $100 billion per year in 2020. To make the agreement acceptable to all developing countries, these transfers will have to support emission reduction and adaptation to climate change effects. Supporting emission reductions in developing countries can be done through the financing of the additional costs due to climate policies. These fluxes will be mainly directed toward big emerging economies. Adaptation support, on the other hand, should target in priority the poorest countries through the financing of their infrastructure deficit, i.e. the required infrastructures to manage water, waste, energy, and natural hazards. Adaptation funding should help pay the cost of these basic infrastructures, and not only the additional cost due to climate change, since a poor country that cannot finance any dike system would have little use of a funding source that pay only the cost of upgrading it.

Furthermore, the Copenhagen Agreement puts on an equal foot the adaptation of Bangladesh to rising sea level and the adaptation of Saudi Arabia to climate-policy-driven reductions in oil consumption. Without reconsidering this agreement, financing arrangements have to be developed in such a way that oil-exporting countries do not capture too much funding, to ensure that aid is effective and directed towards the most vulnerable populations.

These five points provide for the year 2010 a European roadmap that is simple, realistic and potentially acceptable by all countries: the creation of an international institution to control country-level commitments, the recognition of the right for countries with particularly ambitious climate policies to introduce fiscal border-adjustment mechanisms, the annual publication of the commitment shortfall, the reinstatement of the strengthened Copenhagen Accord within the Climate Convention, and the development of efficient and fair financial transfer modalities. Rebuilding a European position could help make significant progress on these points over the year, and turn the Copenhagen failure into a Mexican success.

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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.

After Copenhagen,
which prospect for climate negotiations?

The answer by
Christa Clapp, OECD Environment Directorate
"A twofold mission for the next year: strangthening signals from Copenhagen with an effective international regime and domestic policy frameworks” (read more)

The answer by
Manfred Fischedick, Vice-President and Director Wuppertal Institute for Climate, Environment and Energy
and
Wolfgang Sterk, Project Co-ordinator Wuppertal Institute for Climate, Environment and Energy
“Don't tie horses to the US waggon: for a green coalition leaded by EU” (read more)

The answer by
Emilio Lèbre La Rovere, Coordenador Executivo, Centro de Estudos Integrados sobre Meio Ambiente e Mudanças Climáticas – CentroClima and Universidade Federal do Rio de Janeiro
“Climate negotiations will have to promote additional mitigation commitments from both Annex I and emergent countries” (read more)

London Parliament, by Claude Monet; picture by {link:http://commons.wikimedia.org/wiki/Commons:10,000_paintings_from_Directmedia}The Yorck Project{/link}

On the eve of the UN’s highly-anticipated Copenhagen meeting, international climate policy negotiations remain in gridlock.  Many OECD countries insist on binding emissions limits for their economic competitors in the developing world, while countries such as China and India are unwilling to accept such responsibility.  They argue that because they are poor, low per-capita emitters and have contributed relatively little to cumulative emissions, they should not be asked to forgo the use of cheap fossil fuels to drive their own industrialization.  Moreover, they point out that since the 1997 agreement in Kyoto, developed countries as a whole have failed to cut emissions and take the first steps indicated by the UN framework.
While the new US and Japanese administrations have renewed hopes that developed economies are now ready to take on serious climate obligations, fears over the economic recovery and the international repercussions of national policies in only a subset of countries might limit their willingness to act.  In the US in particular, politicians are concerned that increases in energy costs at home relative to those abroad would lead to more offshore outsourcing, exacerbating the already high unemployment rate.

Overlaying the political debate is the physical reality that time is running out.  While it may be perfectly reasonable to expect wealthy, industrialized countries to pay a larger share of the global climate protection bill, it has become increasingly clear that, whoever pays for them, reductions in developing countries must begin very soon to keep acceptable climate targets on the table.  Dominated by China, this group will be responsible for nearly all growth in global emissions in coming decades in a “no policy” baseline scenario as demand for cheap coal-based energy expands with economic development.  Even if OECD countries were able to take the extraordinary measure of completely eliminating their emissions by 2050, uncontrolled emissions from the remaining countries by themselves would be sufficient to push atmospheric concentrations beyond any of the global stabilization targets currently proposed.

The essential involment of China

Thus the involvement of countries like China is essential to achieve global carbon reduction goals and to gain the support of OECD countries, but they make a strong case for a free pass.  What can be done?  In a pair of recently published articles (see Climatic Change Letters, Volume 1), we propose one way forward.  The key insight in our analysis is that a commitment now on behalf of China and other key developing countries to accept pre-specified future emission reduction targets could effectively address all three concerns.  Parallel studies based on two widely used integrated assessment models of the global economic, energy, and climate systems show that anticipation of a credible future policy target induces a smooth transition, leading to reductions from baseline emissions well before the policy actually begins (Figure 1).

Figure 1. Energy-related CO2 emissions in China under a no-policy reference case and a future commitment scenario.  Note that agreeing to future commmitments beginning in 2030 leads to reconfiguration of capital stock beginning immediately. The ranges reflect differences between the two models used in the parallel studies. Click the picture to enlarge

The primary driver for this result is the long lifetime of capital in the energy system, in particular of conventional coal-fired electric generation, the main source of emissions in the developing world (now and in an expected “no policy” future).  The most attractive abatement options involve investing instead in low- or zero-carbon generation capacity, including renewables, nuclear, advanced coal with carbon capture and storage (CCS), and improvements in end-use efficiency. This strategy would optimize the replacement of carbon-intensive capital, whose costs are sunk once the capacity is installed.  Equally important, many low-carbon options will require a sustained research and development (R&D) effort to bring them to market.  Thus if a country is eventually to undertake emissions reductions, the sooner its firms and households know about it, the better will be their investments in both capital and technology.

Two studies, one proposal

The parallel studies compared two pathways the world might take to achieving a stabilization goal of limiting the total impact of atmospheric greenhouse gases to the equivalent of a doubling of pre-industrial CO2 (this translates to a roughly 50% chance of keeping global average temperature increase in 2100 below 2.5 degrees C).  In both scenarios, we made what we believe to be realistic assumptions about when developing countries join the effort with legally binding targets, allowing China for example to remain out until 2030.  In one scenario, we assume that non-participating countries undertake no advance planning prior to joining the coalition, while in the other, expectations of future commitments lead to advanced planning.  In this case, we assume that the targets for 2030 and beyond are announced immediately and optimally anticipated.  The results are striking.  In the no advanced planning scenario, developing countries like China are left with stranded assets when their commitment period begins, whereas better investment planning in the “anticipate” scenario dramatically reduces the overall cost of their participation in the global effort, by 20 to 40%.

Meanwhile, because far-sighted investment decisions in developing countries have the collateral benefit of reducing their emissions in the near-term, OECD countries leading the effort today can avoid some of their most costly reductions while keeping the global pathway consistent with the climate stabilization goal.  Both models show that this effect can lead to a cost savings of nearly 50% to the OECD.  Moreover, since the anticipatory actions by China and others save money by shifting some costs forward in time in exchange for avoiding high adjustment costs later, the near-term competitiveness gap could shrink considerably.  Finally, the notion that credible targets are anticipated by rational agents provides much-needed leverage on the thorny issue of verification.
An easy test for the credibility of a Chinese announcement of a future commitment will be whether or not it begins configuring its capital stock accordingly in advance.  Although not a perfect solution, firm future commitments by developing countries can reduce the cost of stabilization for all parties without violating political constraints or compromising reasonable global environmental goals.  Such a winning combination could be a breath of fresh air for the climate stalemate.

Authors’ affiliations: G. Blanford and R. Richels: Electric Power Research Institute (EPRI). V. Bosetti: Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center for Climate Change (CMCC). C.Carraro: University of Venice, FEEM and CMCC. T. Rutherford: Swiss Federal Institute of Technology (ETH). M. Tavoni: Princeton Environmental Institute, FEEM and CMCC.