Manmohan Singh (source:wikimedia.org)

Manmohan Singh recently argued that annex 1 countries should provide 0.5% of GDP to help developing countries reduce emissions, and that India would not collaborate with inspection of their emissions unless this rose to 0.8%. It seems that conditional bargaining chips are all the rage these days in climate negotiations, after the EU’s offer of “a 20% reduction, or 30% if everyone plays nicely”.

Dr Singh’s plan is quite ambitious – Obama’s climate change envoy Todd Stern has already dismissed it out of hand. India’s climate change gurus have been taking an ear-bashing from Hillary Clinton this week, marking another rise in tensions between the US and India over emissions reductions.

Stern argues that India should fix a year for peak emissions and make sure that its emissions reductions are “MRV-able”, but as mentioned above, India demands increased amounts of cash if that is to happen. This does seem a little bit unreasonable. 0.5% of GDP seems like a fair deal given the various estimates of the costs of mitigation and adaptation for developing countries that have been flying around.

Something has to give somewhere, and you can bet that the horse trading will carry on right until the COP. It will be interesting to see how this pans out over the next few weeks, with only a few months until Copenhagen, and countries leaving themselves ever less wiggle room.

Wednesday saw Chancellor Alastair Darling announce the first official UK carbon budget to tackle the problems of climate change, which is designed to finance existing policy commitments to achieving a low carbon future.

Darling announced that:

- £405 million will be provided to finance the development of low-carbon energy and advanced green manufacturing sectors.

- £375 million will support energy and resource efficiency in businesses, public buildings and households for the next two years, out of which £100m is allocated to social homes and £100m for the construction of new green homes.

- £70 million of funds are earmarked for small-scale, decentralised low-carbon energy projects.

Whilst plans are designed to encourage investment in resource efficiency and low carbon buildings, it is also designed to cut 34 per cent of greenhouse gas emissions by 2020 to keep the UK on track for its long term goal of cutting emissions by 80 per cent by 2050.

The budget does therefore, show a strong commitment to creating a low carbon economy, as it is the first legally binding green budget of its kind.  However, critics of the green agenda, and forecast based on Stern’s recommended total budget investment, will strongly argue that the 2009 budget falls short of the investments needed to achieve strong economic growth in the environmental sector, and to gain a slice of the anticipated £107 billion economy (1997-8).

The funding levels set aside for Housing and Green Stimulus initiatives is causing much debate among construction industry professionals, as it is said to be “simply not enough.” 

Given that the construction sector is the biggest UK carbon emitter (approximately 50% of the UK market), with energy used in homes responsible for over a quarter of the UK’s carbon emissions (Source: Direct.gov), giant steps are needed to tackle this struggling industry at present.  At its worst, projects are halted (Colleges), funds are not running directly into project delivery due to lack of finance from banks, and sustainable energy features are being compromised in the efforts to cut costs.

However, in a climate where most businesses, including the government are forced to cut costs, should critics of the budget request a much larger budget in order to kick start the housing and construction economy, and deliver 3 billion new, green, homes by 2016?

Please tell us your view, environmental budget versus-governments cutbacks – How should our UK budget be spent?

2 April was a big day for the international community; the leaders of the Group of 20 countries (the G20) had a dramatic one-day gathering at the ExCel Centre in London.  The goals of the meeting were three-fold:

1.      Reach an agreement on global stimulus measures to halt the economic slide;

2.      Develop new parameters for global regulation of the financial sector;

3.      Reach an agreement to create stricter regulations for tax havens.

World leaders achieved #2 and #3 to some extent, but there was little accord on stimulus spending directed to halt the global economic decline.  This process is commendable considering the tension that has built between world leaders over the days preceding the Summit. 

There was a notable lack of direct discussion of environmental issues throughout the course of the Summit.  As Cliamatico’s G20 Reporting team relates: “in the substantive elements of the Summit outcomes there is little mention of climate change.  In the summary communiqué climate change is mentioned in the second-to-last and penultimate paragraphs only.”  Yet, there are strong implications to the final decisions that may affect climate issues, especially in developing nations.

A lot of press was dedicated to the French President, Nicolas Sarkozy’s, threat to walk out of the negotiations if the outcome did not meet his expectations.  At a joint news conference with the German Chancellor, Angela Merkel, Sarkozy said now was the time to “moralize the system…we are just trying to take responsibility.”  When challenged if he would truly refuse to sign an agreement that does not meet his expectations, he added: “This is a historic opportunity afforded us to give capitalism a conscience, because capitalism has lost its conscience and we have to seize this opportunity.”  France and Germany were well aligned in their expectations going into the Summit.

Sarkozy discussed “red lines” on tax havens, hedge fund regulation, banking transparency, and a worldwide cap on bankers’ pay.  In the end, he got most of what he asked for.

In the end world leaders pledged $1.1 trillion(USD)  in loans and guarantees to poorer nations.  This money includes $300 million(USD) over the course of three years for multi-country development banks to lend to poor countries that have seen reductions in credit after crisis-hit banks closed their doors. 

There has been little direct discussion of the specifics of how this money will be directed.  In theory, a certain percentage could go towards certified sustainable development projects but this is speculation and is not certain in the least.  Since 2007, France’s environment ministry has subsumed once-larger rival ministries, such as transportation, energy and raw materials.  It is notable that in many decisions the French state has included direct considerations for environment.  Perhaps in the next Summit, Sarkozy can stamp his feet to demand more action on that point. 

After some tense moments between Sarkozy and Chinese President, Hu Jinato, agreement was reached to crack down on tax havens and hedge funds.  Additionally, a new supervisory board to highlight problems arising in the global financial system was created.

Yet, the U.S. and British calls for new stimulus measures were not satisfied during the course of the Summit.  But by all accounts (following from public statements by key G20 nation leaders) they did bridge the gap between the stance of the USA and Britain against that of some European nations.  Sarkozy openly praised USA President Obama for “helping to create consensus and persuade China…”  He went on to say, “there were moments of tension, but never would we have thought to get as big an agreement.”

In some ways the

French President Sarkozy and German Chancellor Merkel held their news conference before the G20 summit.

Summit was a vital event not only to help the world dig its way out of financial troubles, reduce the probability of future issues, but to see how the leaders of the G20 interact with a new face around the table, that os US President Obama.