A fair, ef­fi­cient, and fea­si­ble cli­mate agree­ment

Financial Mirror (Cyprus) - - FRONT PAGE -

How should one eval­u­ate the agree­ment reached in Paris this month at the United Na­tions cli­mate change con­fer­ence? No sooner was the deal an­nounced on De­cem­ber 12 than the de­bate erupted.

Some avid en­vi­ron­men­tal­ists were dis­ap­pointed that the agree­ment did not com­mit firmly to lim­it­ing global warm­ing to 1.5 de­grees Cel­sius above prein­dus­trial lev­els by 2050.

But such a com­mit­ment would not have been cred­i­ble. What emerged in Paris was in fact bet­ter, be­cause the ne­go­tia­tors were able to agree on prac­ti­cal steps in the right di­rec­tion. In­di­vid­ual coun­tries pledged to limit their emis­sions in the near term, with pro­vi­sions for fu­ture mon­i­tor­ing and pe­ri­odic re­views of tar­gets. This is far bet­ter than set­ting lofty goals for the dis­tant fu­ture while giv­ing lit­tle rea­son to think that they would be met. The im­por­tant thing is to get started.

In four key re­spects, the agree­ment is a good one for those who re­gard global cli­mate change as an im­por­tant prob­lem and want to take fea­si­ble steps to ad­dress it.

First, and most im­por­tant, par­tic­i­pa­tion is com­pre­hen­sive, with 188 coun­tries offering in­di­vid­ual com­mit­ments, called In­tended Na­tion­ally De­ter­mined Con­tri­bu­tions (INDCs). In the past, only rich coun­tries were ex­pected to re­duce their green­house-gas emis­sions; de­vel­op­ing coun­tries were ex­plic­itly spared that within the UN Frame­work Con­ven­tion on Cli­mate Change. That had to change, partly be­cause it is in de­vel­op­ing coun­tries, not the ad­vanced economies, that emiss­sions are grow­ing the fastest. Fur­ther­more, coun­tries like the United States would not agree to limit their emis­sions if they feared that car­bone­mit­ting in­dus­try would sim­ply mi­grate to de­vel­op­ing coun­tries.

Sec­ond, the agree­ment in­cludes a process of fu­ture as­sess­ment and re­vi­sion of tar­gets. Ev­ery five years, the par­ties will take stock and re­new the com­mit­ments. Tar­gets can be ad­justed in light of fu­ture devel­op­ments to be more or less ag­gres­sive, (prob­a­bly more, if the sci­en­tists’ pre­dic­tions are borne out). Ne­go­ti­a­tions on the INDC re­vi­sions are to be­gin in 2018, even though the first set of tar­gets is sched­uled to take ef­fect in 2020.

Third, the Paris deal takes steps to­ward trans­parency in mon­i­tor­ing, re­port­ing, and ver­i­fy­ing coun­tries’ progress. Start­ing in 2023, coun­tries are to re­port ev­ery five years on com­pli­ance with their emis­sions tar­gets. The US and Europe had to push China and In­dia to agree to this. But with­out trans­parency, the INDCs would not be cred­i­ble.

Fourth, the agree­ment con­tains mech­a­nisms to fa­cil­i­tate in­ter­na­tional link­age, in­clud­ing scope for res­i­dents of rich coun­tries to fi­nance emis­sions re­duc­tions in poor coun­tries. This is im­por­tant be­cause it is cheaper to pay a poor coun­try to re­frain from build­ing new coal-fired power plants than it is to shut down an ex­ist­ing plant in a rich coun­try. And achiev­ing the first pe­riod’s INDCs at low cost will be an im­por­tant de­ter­mi­nant of coun­tries’ will­ing­ness to take fur­ther steps in fu­ture pe­ri­ods.

Achiev­ing more ag­gres­sive en­vi­ron­men­tal goals, par­tic­u­larly lim­it­ing warm­ing to 1.5C, or zero green­house­gas emis­sions in the sec­ond half of the cen­tury, would of course be de­sir­able in terms of min­imis­ing the risk of dis­as­ter sce­nar­ios. In fact, the first INDCs, by them­selves, are nowhere near enough even to limit warm­ing to 2C (the global goal that was agreed in Cancún in 2010).

But pro­claim­ing am­bi­tious tar­gets is very dif­fer­ent from achiev­ing them. It is al­most be­side the point that the eco­nomic cost of pur­su­ing a goal of 1.5C would be very high. In any case, lead­ers can’t make cred­i­ble com­mit­ments 35 years into the fu­ture. And the plan needs to be cred­i­ble if it is to in­flu­ence myr­iad busi­ness de­ci­sions made to­day.

Some de­vel­op­ing-coun­try lead­ers may be dis­pleased for an­other rea­son: the fig­ure of $100 bln in fi­nance from rich coun­tries does not ap­pear in the legally bind­ing body of the agree­ment. The rich coun­tries did ad­mit their moral re­spon­si­bil­ity to help small is­land states, for ex­am­ple, cope with “loss and dam­ages” from sea-level rise. But they re­jected de­mands for for­mal ac­cep­tance of le­gal li­a­bil­ity.

This was a rea­son­able out­come in a dif­fi­cult sit­u­a­tion. Rich coun­tries can’t deny that their past emis­sions have in­flicted harm on the world. In a do­mes­tic le­gal sys­tem, an en­tity whose land was, say, flooded would have a claim to com­pen­sa­tion from the en­tity that had caused the dam­age. But sov­er­eign coun­tries are not op­er­at­ing in such a sys­tem. The $100 bln in fi­nance has al­ways seemed prob­lem­atic. The de­vel­op­ing coun­tries fear that the rich coun­tries won’t de­liver the money, at least not cash; and they are right. The rich coun­tries fear that such “repa­ra­tions” would dis­ap­pear into the pock­ets of lo­cal elites; and they, too, are right. So it is bet­ter not to make prom­ises.

The poor coun­tries do have a strong case. The av­er­age Amer­i­can still ac­counts for ten times the emis­sions of the av­er­age cit­i­zen of In­dia, and In­dia should not be de­prived of the right to de­velop eco­nom­i­cally. But the best way to ad­dress th­ese fairness con­cerns is through the agreed emis­sions tar­gets. The ef­forts that richer coun­tries promised should be – and gen­er­ally are – greater than the ef­forts of poor coun­tries. The richer a coun­try is, the ear­lier the date at which its emis­sions should peak. The richer it is, the more sharply its tar­get should cut emis­sions rel­a­tive to the base­line. With tar­gets that take into ac­count their stage of de­vel­op­ment, poor coun­tries can be paid for ad­di­tional emis­sions cuts un­der the in­ter­na­tional link­age mech­a­nisms.

In such ways, the Paris agree­ment en­sures both fairness and ef­fi­ciency. Achiev­ing it was a daunt­ing chal­lenge, and more chal­lenges lie ahead. But the ne­go­tia­tors’ suc­cess in con­verg­ing on a plan that of­fers hope of prac­ti­cal progress is an un­am­bigu­ous tri­umph.

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