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Obama set to reinvigorate climate-change talks

Under Barack Obama, the US will introduce its own cap-and-trade greenhouse-gas emissions scheme and take centre stage in international climate talks, writes Tom Nicholls

"GLOBAL warming is real, is happening now and is the result of human activities." Unlike President George Bush, who prevaricated on the subject of global warming and international climate policy, Barack Obama's position is unequivocal: his election manifesto includes commitments to cutting greenhouse gas (GHG) emissions, introducing a domestic cap-and-trade scheme and investing in renewables (see box).

Obama has also promised that the US will take a "leadership role" within the UN Framework Convention on Climate Change (UNFCCC), the 1994 international treaty that established a structure for intergovernmental efforts to combat climate change.

As a result, his victory in last month's US presidential election signals a shift in US and global climate policy. Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change, says it "should generate optimism all round". Elliot Diringer, director of international strategies at the Pew Center on Global Climate Change, a non-profit organisation that promotes awareness on global-warming issues, says it presents a chance for a "genuine breakthrough".

But the prospect of the UN achieving its aim of reaching a new international agreement on climate change – a replacement for the Kyoto Protocol, which expires in 2012 – at its December 2009 meeting in Copenhagen is slight.

Stumbling block

The biggest stumbling block remains engineering a compromise between developed and developing countries on the action individual nations will take for reducing the output of GHG emissions: rich countries, such as the US, want rapidly expanding emerging economies – which will account for the bulk of growth in carbon dioxide (CO2) emissions – to take some responsibility for rising emissions.

Indeed, the US' main reason for refusing to sign up to the Kyoto Protocol is that the agreement covered only industrialised nations – not the developing world. The US is not alone: in a statement in October, the EU said developing countries in "many regions will need to make a substantial deviation of their emissions from baseline by 2020". It said developing countries as a group, "in particular the most advanced among them", should reduce their emissions by 15-30% below the business-as-usual projection over that period.

Conversely, developing nations, such as China, want to see more from developed countries before they take action. China, India, South Africa, Mexico and Brazil have called on rich nations to reduce their carbon emissions by 80-95% below 1990 levels by 2050 and by 25-40% by 2020.

Obama's environment-related energy policy pledges include ...
  • Implement a cap-and-trade scheme to reduce GHG emissions by 80% below 1990s levels by 2050, with all allowances auctioned. Implement intermediate goal of cutting to 1990 levels by 2020;
  • "Some of" the revenue generated by the auction of allowances to be invested in developing and deploying clean energy, and in promoting energy efficiency;
  • Invest $150bn over 10 years in "advanced" energy technologies, doubling federal science and research funding for clean-energy projects and investing in training to help workers and industries adapt to clean-energy technology development;
  • Establish a Clean Technologies Venture Capital Fund and extend Production Tax Credit for five years to encourage renewable technologies;
  • Establish a national low-carbon fuel standard, requiring fuels suppliers to reduce the carbon their fuel emits by 10% by 2020;
  • Require 25% of electricity to come from renewable sources by 2025;
  • Prioritise energy conservation, with national goals for improving the energy efficiency of buildings and financial incentives for early implementation;
  • Establish incentives for energy conservation by ensuring utilities receive increased profits for improving energy efficiency, rather than for higher energy consumption;
  • Increase fuel economy standards;
  • Invest in developing advanced vehicles and encourage consumers to buy more efficient vehicles through tax incentives;
  • Make the US a leader in combating climate change and re-engage with the UN Framework Convention on Climate Change (UNFCCC); and
  • Create a new forum of largest GHG emitters, based on the G8 and five other countries – Brazil, China, India, Mexico and South Africa. This forum will "complement and ultimately merge with" the negotiation process under way at the UN to develop a post-Kyoto framework.



The US' re-engagement with the UNFCCC process and the president elect's determination to introduce domestic carbon caps makes a consensus between rich and poor countries a more realistic prospect. "With domestic action in the US, as Obama has proposed, it will be much easier to get the Chinese on board," says Endre Tvinnereim, an analyst at Point Carbon, an energy and environmental consultancy. However, it will, he adds, "certainly be a challenge" to reach a post-Kyoto agreement by the end of next year.

Diringer goes further, arguing that a final agreement is "very unlikely" in Copenhagen. "The US position in Copenhagen will hinge heavily on the pace of domestic climate legislation." The Pew Center, he says, does not expect a climate bill to be enacted in 2009, making it "very unlikely for the US to be a position to negotiate a specific binding target" in Copenhagen.

Securing Congressional approval for domestic US carbon limits and a cap-and-trade scheme will be a lengthy progress in itself. The government has plenty of other pressing business to which it must attend – such as stabilising the economy – and climate legislation may be treated as a lesser priority. In addition, any proposal for a cap-and-trade scheme will have to reconcile and accommodate a wide range of economic interests among states – as the Lieberman-Warner bill discovered in June, when it was killed off in the Senate.

Given the time it will take for the US to agree domestic goals, a more realistic aspiration for international negotiations – albeit still an ambitious one – would be for an intermediary agreement establishing the "basic architecture" for a post-Kyoto scheme, says Diringer. This might consist of binding economy-wide targets for developed countries and policy commitments from the largest emerging economies – as well as support mechanisms for technology, finance and adaptation in developing countries. Such an agreement would then serve as the basis for further discussions on specific targets.

Yet there is no doubt that Obama wants prompt action on climate change. In October, his energy adviser, Jason Grumet, said an Obama government would classify CO2 as a pollutant under the 1990 Clean Air Act if Congress has not taken action within 18 months of him taking office – enabling the Environmental Protection Agency to regulate CO2 emissions.

But while this may reflect Obama's determination to make progress on the climate question, it is no-one's preferred course of action, says Veronique Bugnion, managing director of Point Carbon. "It's carrot and stick approach. It will increase pressure on Congress to come up with concrete legislation."

In addition, although negotiations between rich and poor countries are likely to prove the biggest sticking point in defining an agreement to replace the Kyoto Protocol, an agreement must first be reached between developed countries on the level of GHG-emissions cuts they are willing to sanction – and that will not be straightforward either. The EU has committed to cutting GHG emissions by 20% below 1990 levels by 2020 and is calling for all developed countries, including the US, to go further – 25-40% below the 1990 level.

However, the US appears unlikely to agree to comparable targets. The failed Lieberman-Warner bill sought to return the US to its 1990 level by 2020 – not to cut below that level. This goal is shared by the most advanced US state in terms of climate legislation, California, which, in 2006, became the first state to introduce an emissions cap. It is also shared by the Western Climate Initiative – a coalition of seven US states, including California, and four Canadian provinces dedicated to finding solutions to climate change. And it was mentioned by Obama as an intermediate goal on the way to the 80% reduction below the 1990 level by 2050 included in his campaign literature.

The US' view is that because US emissions and its population have expanded at a greater rate than Europe's since 1990, cutting emissions back to 1990 levels within 12 years would be much more onerous for the US. It would be fairer, suggests Diringer, to select a different benchmark year. If cuts are compared with emissions in 2005, for example, there is "close alignment" between the present EU target and the target proposed by the Lieberman-Warner bill: both would reduce emissions by about 15% below 2005 levels. "You can look at the numbers from different vantage points," he says and adds that unrealistic expectations in Europe over the size and timing of US cuts could undermine the prospects for any agreement in Denmark next year.

Good COP, bad COP

THE 14th Conference of the Parties (COP) – the UN's annual climate-change meeting – takes place in Poznañ, Poland, in the first half of this month. But it is COP 15 – in December 2009, in Copenhagen, Denmark – on which the UN is pinning its hopes for progress.

The main achievement of COP 13, which took place in Bali last December, was an international agreement to launch formal negotiations for an international agreement to succeed the Kyoto protocol when it expires in 2012. The UN Framework Convention on Climate Change's (UNFCCC) aspiration is that these negotiations are concluded at COP 15, allowing sufficient time for a treaty to be implemented by 2013. Poznañ, says the UNFCCC, will "build momentum towards an agreed outcome at Copenhagen".

The Kyoto Protocol was the first international climate agreement to set binding targets for the reduction of greenhouse-gas emissions. Under its terms, 37 industrialised countries and the EU were required to reduce emissions by an average of 5% against 1990 levels over the period 2008-12. However, the effectiveness of the agreement was undermined by the refusal of the US, the world's biggest energy user, to take part.

Among the priorities for Copenhagen, says Yvo de Boer, UNFCCC executive secretary, is defining mechanisms to identify the technology needs of individual countries and how emerging green technologies can be deployed at scale -- and quickly enough to prevent a climate catastrophe.

"Copenhagen 2009 needs to give environmentally sound technologies a revolutionary push," de Boer told a conference in China last month. "It needs to provide a clear framework for the aim, time-line and functioning of a new technology mechanism." That mechanism, he said, could be based on the wedges approach – the idea, put forward by Princeton University's Robert Socolow and Stephen Pacala in 2004, that a portfolio of technologies will be required to combat climate change successfully – with incentives for business to invest and for increased investment in research and development.n



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