France, Germany, and the United Kingdom have simultaneously launched a call for the European Union (EU) to commit to a larger reduction of greenhouse gas emissions by 2020. In recent months, the EU has weathered economic troubles. But the current plan for increased energy cuts is being billed as a bid to help economic recovery and to shore up energy security.

Currently, the agreed EU target is to reduce energy use by 20% from 1990 levels by 2020. In scientific terms, the current 20% reduction target is not likely to restrict global temperature rise to the 2°C – the key climate danger threshold identified by the IPCC.

The main line of argument being repeated across the three major EU powers is that Europe’s current focus on recovery from recession must not distract from the type of economy that is appropriate in the medium and long-term. Thus, Jean-Louis Borloo, France’s Energy and Climate Change Secretary, states that “without a path to a sustainable low-carbon future, we will face continued uncertainty and significant costs from energy price volatility and a destabilizing climate.” His counterparts, in the UK and Germany respectively, Chris Huhne and Norbert Roettegen, agree. “We’re determined to make the economic case for the EU to cut its emissions by 30% by 2020 as quickly as possible,” Huhne said.

The current argument is that the recession itself has cut emissions in the EU’s traded sector by 11% from pre-crisis levels. Thus, the current carbon price is too low to stimulate significant investment in “green jobs” and “green technology.” Thus, Borloo, Huhne and Roettegen contest that if the EU sticks to 20% reduction targets, Europe is likely to lose the race to compete in the low-carbon world to countries such as China or the USA—which, following from the Copenhagen COP, they are looking to create attractive environments for low-carbon investments.

Though, reduced emissions during the recession has brought projected annual costs in 2020 of meeting the existing 20% target down a projected third from €70bn ($89bn, £59bn) to €48bn. A move up to 30% is now estimated to cost only €11bn more than the original cost of achieving a 20% reduction. To put this into perspective, according to the International Energy Agency, every year of delayed investment on low-carbon energy sources costs €300bn to €400bn at the global level into the future.

But it remains to be seen what the tangible motivation will be for increasing thresholds on carbon reductions to 30%. In the past, feed-in tariffs have been successful; but with a declared reduction target, perhaps even written into law formally, there will be issue with anxiety related to the current recession. Also, competition is key to motivate changes and the USA Congress just dropped the proposed comprehensive climate change package.

The Environment Ministers in the UK, Germany, and France have addressed general public in their call for increased reduction targets. In recent months there has been a surge in popular press discussion of extreme temperatures. The first six months of 2010 brought a string of warmest-ever global temperatures. Connecting these extreme weather months to long-term climate change patterns remains difficult, according to experts. “When we are looking at the scale of a season or a few months, we can’t talk about trends related to climate change,” Herve Le Treut, head of France’s Laboratory of Dynamical Meteorology. But, for the general public these extreme temperatures reflect the concept of climate change.

Between the extreme temperatures recently and potential business-case outlines, 30% reduction targets seem to have some potential. But only time and changing circumstances will tell…

Author: Maša Kovi?

(Image by: Bigger Picture)

The G77+China group of states is the largest negotiating bloc at the COP15 in Copenhagen. It currently consists of 130 developing countries and was established in 1964 to promote the collective economic interests of the developing countries and increase their negotiating powers within the United Nations. The G77 countries and China as a group, call for a legally binding agreement, stabilization of temperature increases at 2°C, urgent and predictable financial resources for adaptation from the developed countries, and US joining the Kyoto Protocol. While the G77+China is the largest group of countries, it is also the most diverse group. This diversity has been the reason for several twists and misunderstandings within the group at the Copenhagen conference. The issue of financing for adaptation is in the center of these “disputes”.

The fact that all the countries of the G77 are developing countries nowadays seems to be the only common element of this group. Namely, it consists of the leased developed states, small island states, African states, countries members of the OPEC group and major developing economies. Their interests and especially needs for financial resources for adaptation vary immensely, with the OPEC countries even questioning the causes of global warming. During the past week several events have affected these interests and created a divide between the least developed states and the major developing economies of the G77+China group.

The first event was the leakage of the “Danish text”. The “Danish text” establishes a special category of the most vulnerable countries, which would receive the majority of financial assistance for adaptation, and places emission reduction targets on developing states, especially the major developing economies. The response to this text was not a strong position of the G77+China, but the filing of three separate proposals of draft texts. The first proposal was by the major developing economies (Brazil, China, India and South Africa – the BASIC group). The second and third proposal was from the Alliance of Small Island States (AOSIS) and from the African Group, claiming that the proposal by major developing economies inadequately addresses the needs of the least developed countries. According to their proposal, the least developed states have “special needs and priorities,” and their “special position has been agreed in the UNFCCC.” The proposal by the emerging developing economies however, denies any differentiation between the developing countries.  Ambassador Lumumba Di-Aping, at the press conference tried to deny a split between the G77+China, focusing his comments on the lack of responsibility of the developed countries for their climate debt. However, the fact that several separate proposals were created speaks for itself: the G77+China have a difficulty bringing their interests together.

A further punch to the unity of the G77+China was the press conference of the Chief US negotiator Todd Stern. Stern committed that the US will provide a fair share of financial resources for adaptation actions. However, he emphasised that the US public funds for adaptation cannot be given to major emerging economies, such as China. These resources should be available only to the leased developed countries. This position was supported by the EU leaders. They committed to USD 3.6 billion a year up to 2012 for adaptation for the most vulnerable countries, especially on the African continent. While the Chinese lead negotiator Su Wei refused to comment the US position, Di-Aping found US as “lacking common sense” and EU leaders “acting as if they were climate sceptics.”

The need of the least developed countries for the major share of the financial resources for adaptation was confirmed on Saturday by the Bangladesh State Minister for Environment and Forest Hasan Mahmud. Mahmud called for the allocation of the financial resources for adaptation according to the percentage of the population affected by climate change in the developing countries, adding that 15% of them live in Bangladesh. This reflects the belief of several least developing countries within the G77+China group, that their more developed co-members should do more in the fight against climate change.

The denial of the separate category of least developed states by the major developing economies puts the unity of the G77+China in question. It also puts the adoption of the Copenhagen agreement in question, as the least developing countries are becoming more vocal about their demands. On the other hand the emerging economies are firm with their positions that without key financial resources for adaptation, the major developing economies will not commit to emission targets. Without their commitment to emission targets the developed countries will neither commit to emission reduction, nor to providing financial resources for developing countries for adaptation. The least developed countries are thus caught in the middle of the negotiations that more and more seem to reflect the question of what comes first – the egg or the hen. The outcome of this revolving circle after the first week of negotiations is more likely a failed agreement, which would not bring new financial assistance for the adaptation projects neither for the most vulnerable states, nor for the emerging economies.

The second week of negotiations will be a test of the real unity of the G77+China bloc. Can the developing countries oversee their differences and step together as a solid bloc in negotiations with the developed countries?

Author: Nyla Sarwar

Activist sign in front of President's office in Finland (Image by: Greenpeace Finland)

The high level segment of the 15^th Conference of Parties (COP 15) opened this morning, with over 110 heads of State arriving at the Bella Centre – adding political pressure to finalise an agreement in the remaining 3 days of the conference.

Australian Minister for Climate Change & Water, Penny Wong, made a statement on behalf of the Umbrella Group (UG), which represents non-EU developed countries including Australia, Canada, Iceland, Japan, New Zealand, Norway, the Russian Federation, Ukraine and the US. She reaffirmed the UG’s strong position on formulating an agreement, which aims to reduce temperature increases to 2C and stabilise atmospheric carbon to 450ppm.

A previous statement by the Swedish PM, which currently holds the EU presidency, offered a similarly positive and encouraging statement on behalf of the European Union, with the EU committing to its higher proposal for a 30% emissions reduction by 2020.

Perhaps a more controversial statement was made by Ethiopian PM, Meles Zenawi, who presented a detailed proposal for long term financing on behalf of the African nations – though he suggested that it wasn’t fully supported by all African nations.

Zenawi proposed the establishment of a start up fund of $10bn per annum to be used for urgent adaptation and mitigation, including forestry; with the opportunity to scale up funding in coming years.  He added that the fund should be managed by a Board of Trustees, representing the recipient and donating countries, with the aim of launching the fund by mid-2010 and quick allocation thereafter.

The proposal suggested that funding should start in 2013, reaching up to $50bn per annum by 2015 and $100bn per annum by 2020, with 50% of the money being assigned to adaptation in vulnerable regions, such as Africa.

Maybe the most controversial aspect of the proposal was Zenawi’s suggestion that Africa’s share of the fund be managed by the African Development Bank. However, several African nations, including Senegal, have declared their unease at such proposals.

Negotiations have continued through the night to finalise decisions and draft text agreeable by all parties to be signed by the Heads of State on Friday. Despite ministerial consultations and ongoing technical negotiations, significant contention still surrounds levels of financing, its governance and delivery mechanisms, and the need to raise the aspirations of pledges made by developed countries which simply aren’t enough to address limit temperature increases to a 2C warming.

The African nations have become split over the proposals in the text over the last few days, and negotiations have continued to breakdown with the same major roadblocks that had hampered negotiations in Bangkok and Barcelona. An interesting development has been an emerging consensus between the least developed countries (LDCs) that global average temperature increases should be limited to 1.5 degrees Celsius (as opposed to 2C enshrined in the convention), with atmospheric carbon levels not exceeding 350ppm – previous targets have aimed to stabilise at 450ppm as current levels already stand at ~380ppm. This increased ambition might well require CO₂ already emitted to the atmosphere to be extracted using sequestration technologies.

With increasing pressure building to reach agreement as time runs out, and Ministers and Heads of State arriving, efforts to present a text which might see consensus is looking bleak. However, rumors suggest that the Danes plan to distribute further new texts today with the hope of reaching an agreement, without getting bogged down in the wording of previous texts. There is hope for some final decisions on the AWG-KP and AWG-LCA from today’s ongoing negotiations – which no doubt will continue into the night.

A lot of work is still outstanding with only 3 days to go, and you could argue that getting consensus from over 190 countries with different capabilities and political agenda is impossible…but when there is so much at stake…miracles can happen!

Author: Nyla Sarwar

"Big Heads" seek financing for climate change (Image by: Oxfam)

An ambitious and positive draft text presented at the UN climate summit has failed to impress developing countries, who argue that more finance is needed to support their low carbon development and adaptation in some of the most vulnerable nations.

The so-called “long-term action plan text” believed to be much more positive that the “Danish text” leaked earlier in the week, sets GHG reduction targets for developed countries of around 25-45% by 2020 against a 1990 baseline. These targets are expected to be extremely ambitious, and will require the sequestration of already emitted atmospheric carbon, potentially limiting worldwide temperature increases to 1.5C – 2C. The text is now up for negotiation, and demands much stronger commitments from the developed counties, compared to figures already laid out on the table.

UK PM Gordon Brown has been actively engaged in the negotiations to encourage the EU to confirm its more ambitious commitment to reduce GHG emissions by 30% by 2020 against a 1990 baseline. It is expected that this will require the UK to contribute 40% emissions reductions by 2020, instead of the 34% share previously committed.

Gordon Brown has also been pivotal in negotiations among EU leaders to provide immediate finance for developing countries to adapt to climate change. Announcing that the EU would commit 7.2bn euros (£6.5bn, $10bn) for adaptation in developing countries over the next three years, Swedish Prime Minister Fredrik Reinfeldt reaffirmed Europe’s commitment to moving the Copenhagen negotiations closer to a global deal.

The UK’s promise, at £500m ($800m; 553m euros) a year, was the highest. Reports from Brussels suggest the German contribution will be 480m euros per year from 2010 to 2012. Earlier, Mr Brown and France’s President Nicolas Sarkozy told a joint news conference their two nations would contribute at least £1.5bn (1.7bn euros; $2.4bn) spread over the three years.

The money pledged is for a “fast start” fund to help the world’s poorest nations tackle rising sea levels, deforestation, water shortages and other consequences of climate change between 2010 and 2012, and reduce their own emissions.

The promised EU contribution will make up a sizeable portion of a proposed global figure of $10bn (7bn euros) annually.

Financial discussions in Brussels saw EU leaders during the International Monetary Fund (IMF) to consider a global tax on financial transactions to reduce the risks of a further financial crisis and raise funding for tackling climate change.

“The European Council encourages the IMF to consider the full range of options including insurance fees, resolution funds, contingent capital arrangements and a global financial transaction levy in its review,” the summit’s final statement said.

Whilst the text confirms the consensus between nations that halting forest protection is crucial, the details of measures to reduce deforestation are still al long way off. Developing countries are still demanding more funding from developed countries, and the details of a long term and fundamental financial package still remains hugely uncertain. The new text also requires developing countries to cut their carbon emissions by 15-30% by 2020 compared to BAU, and developing countries retired from the plenary requesting further time to digest the potential consequences of such commitments.

Additionally, reports suggest that the EU and US have finally agreed to a twin track deal which ensures that the Kyoto protocol – the only legally binding treaty that forces rich countries to cut emissions – continues at least until a new legal treaty is signed.

“This is very, very complicated. It’s tough because the world is trying to peak emissions. There is a long way to go. We are anxious and conscious of the scale of the challenge that remains,” said the UK climate and energy secretary, Ed Miliband.

The text will be negotiated in more detail next week, with details of a finance package and forest protection measures expected to dominate discussions. Developing countries will be calling for tougher commitments, and as Nasa scientist Jim Hansen recently commented – the climate agenda is not amenable to half measures. “It would be like saying, I’ll agree to cut 40% of slavery.”

Up until now, global climate negotiations between the G20 countries have taken place within a context of economic expansion, although growth rates have varied between countries. But with the financial crisis, the economic realities have changed dramatically. For 2009, the IMF projects that overall global economic growth will contract, with growth in advanced economies going negative, the first time since 1945. While emerging economies will experience less growth, effectively, a recession in the G8 means 100 percent of global growth will happen outside of the US and the Eurozone.

This dire economic prognosis comes as large emitters in the global south are asking (justifiably so) that developed countries should foot a disproportionate share of the bill. China wants them to devote 0.5 percent of GDP to mitigation and adaptation, India says 1 percent.

Given the lack of progress on show in Poznan (Kevin Watkins calls it a “shambolic display“), all signs suggest that this demand is unlikely to be met. Following costly bank rescues, EU politicians are arguing for a scaled-back or amended climate package. Tightening economic conditions have triggered calls for compensation from emission-intensive industries and coal-dependent EU members. As previously reported by Climatico’s Dafydd Elis, given this impasse, an EU meeting in Brussels 11-12 December may be more important to the future of multilateral negotiations than what happens in Poznan. Progress hinges on leading EU member states pushing on despite economic woes, and finding ways to temporarily accommodate Poland and other emission-intensive countries who face huge adjustment costs to a carbon-constrained EU, without lowering ambitions.

With regards to the US, the big question is; will the US Congress vote in favor of adopting higher mitigation targets (and associated short-term costs) than governments in the soaring economies of China, India, and Brazil, at a time when the US economy is spiraling downwards ? Economic woes and a dense congressional calendar in the US does not bode well for favorable congressional action in time for COP-15 in Copenhagen next November, as highlighted by the Pew Center and Joseph Romm, among others. Indeed, perhaps a more likely scenario is congressional action that seeks protections for American industry similar to the Byrd-Hagel amendment, which passed just prior to Kyoto on a 95-0 vote, at a time when the US economy was soaring, not tanking. Avoiding this seems to rest on Obama using his political capital to successfully garner support for the idea of a green New Deal in Congress by winning over skeptics with the prospect of millions of green jobs.

Overall, the extent to which policy-makers accept Stern’s argument that mitigation makes economic sense is currently being put through a very serious test. Amidst the disturbing signs, some good news though. Multilateral cooperation outside of the limelight is happening, such as UK-China ministerial-level collaboration (as reported by Climatico’s Nyla Sarwar). Moreover, Brazil recently committed to cut deforestation by 70 percent by 2020, which has been hailed by many as a breakthrough. But this commitment may be a very shrewd one, driven by an expectation of economic gains through selling emissions reduction credits as a result of forestry being included in the CDM market.

Update, December 12: Once a vanguard, always a vanguard. California, unlike the EU, seems set on addressing the recession  without watering down its commitment to transitioning to a low-carbon economy.