The Copen­hagen-Paris ex­press

Financial Mirror (Cyprus) - - FRONT PAGE -

In 2009, when Copen­hagen hosted the United Na­tions Cli­mate Change Con­fer­ence, I was there as a mem­ber of par­lia­ment, and I had the feel­ing that I was wit­ness­ing a world-chang­ing event. For years, ne­go­tia­tors had been work­ing to­ward an am­bi­tious, bind­ing agree­ment to limit green­house-gas emis­sions, and the world’s at­ten­tion was di­rected to­ward Den­mark. Un­for­tu­nately, the global fi­nan­cial cri­sis and na­tional spe­cial in­ter­ests col­luded to de­rail a com­pre­hen­sive deal.

Now, cli­mate ne­go­tia­tors are gath­er­ing once again – this time in Paris, where expectations for an agree­ment are equally high. This time, how­ever, chances are good that a ro­bust deal will be struck. I will be in at­ten­dance, as the Dan­ish min­is­ter re­spon­si­ble for cli­mate is­sues, and I be­lieve that this year’s con­fer­ence will mark the mo­ment when the world got se­ri­ous about bring­ing global warm­ing un­der con­trol.

The po­lit­i­cal en­vi­ron­ment is very dif­fer­ent from that of six years ago. When the con­fer­ence in Copen­hagen took place, the world was still reel­ing from the near-col­lapse of global fi­nance, prom­i­nent politi­cians were ques­tion­ing whether hu­man ac­tiv­ity was re­spon­si­ble for cli­mate change, and in­dus­try groups were cam­paign­ing against bind­ing emis­sion cuts.

To­day, the global econ­omy is re­cov­er­ing, cli­mate sci­en­tists have dis­missed the last doubts about the causes of cli­mate change, and the busi­ness com­mu­nity has en­tered the fight on the side of the en­vi­ron­ment. In 2009, green busi­ness lead­ers could be counted on the fin­gers of one hand. To­day, their ranks have grown into an army. In Novem­ber, for ex­am­ple, Gold­man Sachs an­nounced that it would in­vest $150 bln in green en­ergy by 2025.

The dy­nam­ics of the ne­go­ti­a­tions them­selves have changed fun­da­men­tally. The goal is no longer to forge an agree­ment dic­tat­ing the emis­sion cuts that coun­tries must make; in­stead, we are de­vel­op­ing a frame­work for re­duc­ing emis­sions that al­lows gov­ern­ments to de­cide what their coun­tries can put on the ta­ble. As a re­sult, in­di­vid­ual coun­tries are driv­ing the deal for­ward. They have re­alised that the con­se­quences of do­ing noth­ing will be dire, and that cut­ting emis­sions will pay off over the long run.

Signs of progress are every­where. Last year, for ex­am­ple, the United States and China en­tered into a bi­lat­eral agree­ment to fight cli­mate change. The US agreed to re­duce its CO2 emis­sions by 26-28% by 2025, and China com­mit­ted to reach­ing peak emis­sions around 2030 and bring­ing emis­sions down there­after.

This new ap­proach has broadly ex­panded the scope of the cli­mate ne­go­ti­a­tions. The agree­ment in Paris is set to in­clude more than 180 coun­tries, and cover at least 90% of global CO2 emis­sions. By com­par­i­son, the 1997 Ky­oto Pro­to­col cov­ered less than 15% of global emis­sions.

To be sure, much more can and needs to be done. Den­mark will con­tinue the fight against cli­mate change. Over the next 25 years, global de­mand for en­ergy will in­crease by al­most a third, pri­mar­ily in non-OECD coun­tries like China and In­dia, and we must en­sure that this de­mand is met in as sus­tain­able a man­ner as pos­si­ble. Or­gan­i­sa­tions such as the In­ter­na­tional En­ergy Agency could play an even larger role in help­ing to drive the clean-en­ergy tran­si­tion.

The in­ter­na­tional com­mu­nity seems on track to reach the goal agreed to in Copen­hagen of mo­bi­liz­ing $100 bln a year in cli­mate fi­nanc­ing for de­vel­op­ing coun­tries by 2020. To ac­com­plish this, we will need to har­ness the power of the mar­ket­place, lev­er­ag­ing pub­lic funds to at­tract pri­vate in­vest­ment. In this, the Dan­ish Cli­mate In­vest­ment Fund, through which the gov­ern­ment in­vests, to­gether with large Dan­ish pen­sion funds, in cli­mate projects for the ben­e­fit of Dan­ish com­pa­nies, could serve as an ex­am­ple for oth­ers.

The ef­fort will also in­volve phas­ing out fos­sil-fuel sub­si­dies, as well as de­vel­op­ing new fi­nan­cial tools to mo­ti­vate in­vestors to help solve prob­lems on their own, with­out re­ly­ing on pub­lic funds.

An agree­ment in Paris would put in place the much­needed global frame­work the world needs to re­duce to­tal green­house-gas emis­sions. And while it would by no means mark the suc­cess­ful con­clu­sion of the fight against cli­mate change, it would pro­vide a strong foun­da­tion for the global tran­si­tion to a green econ­omy.

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