Market intelligence: Copenhagen climate change meeting could be a bust

Copenhagen chicken & egg

05 October 2009 00:00  [Source: ICB]



 Which will come first - if anything?

IT LOOKS increasingly likely that the UN Climate Change Conference in Copenhagen, Denmark, in December will end in an empty declaration - if it doesn't collapse entirely.

The Copenhagen climate summit is supposed to craft a new and detailed global treaty to combat global warming - an expanded agreement that would extend the Kyoto climate treaty of 1997, which is due to expire in 2012.

But the meeting may well stumble on the same obstacle that kept the Kyoto treaty from ever becoming a meaningful and enforceable agreement - the inability of the US and China to agree on proportional participation.

With the December 7-18 Copenhagen conference looming, there is little indication that the US and China are any closer to a workable deal than they were in 1997.

The US government signed the Kyoto agreement, championed by then-President Bill Clinton. But the treaty was never ratified by the US Senate - and therefore never became legally binding US policy - because the Clinton administration never submitted the Kyoto deal to the Senate for approval.

With good reason. Even before the Kyoto treaty was signed, the Senate voted 95-0 to reject any UN climate-change treaty being negotiated then "or thereafter" that would limit greenhouse gas (GHG) emissions by the US and other developed nations "unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for developing countries parties within the same compliance period."

Even though Democrats nearly hold a 60-vote super-majority in the Senate, there is little prospect that the House will approve any sort of climate-change legislation of its own - much less any treaty that comes out of Copenhagen - without China's committed participation. To approve a treaty - such as the broadly opposed Kyoto agreement - two-thirds of the Senate must vote to approve it, meaning 67 votes.

"The Democrats don't have the votes," says Senator James Inhofe (Republican, Oklahoma), the Senate's leading global warming skeptic. "There are too many newly elected Democrats in the Senate who don't want to go home and tell voters that they just voted for the largest tax increase in American history," he adds, referring to Republican estimates that a cap-and-trade mandate would cost US consumers $2 trillion (€1.36 trillion) in higher energy costs.

Without China's participation, even a draconian US emissions mandate would have little or no impact on the world's climate. Even Environmental Protection Agency administrator Lisa Jackson, a dedicated climate treaty advocate, conceded in recent Senate testimony that the "US action alone will not impact CO2 levels."

At the special UN climate meeting held in New York, US, in September - called as a sort of pep rally by UN Secretary-General Ban Ki Moon in the hope of building momentum for the Copenhagen meeting - Chinese President Hu Jintao again resisted calls for commitments by Beijing to greenhouse gas (GHG) emissions reductions.

Instead, he merely promised that China would work to reduce its carbon intensity, the amount of carbon emissions per unit of production. But China could cut its carbon intensity by 20% and still increase its emissions by 20% because of population and production growth.

Hu called on developed nations to provide funds and royalty-free green technology to developing nations if the latter are to make any substantive GHG cuts.

According to Representative Jim Sensenbrenner, of Wisconsin, the ranking Republican on the House Select Committee on Energy Independence and Global Warming, what likely would be hundreds of billions of dollars in additional funding aid and royalty-free technology would constitute "an unacceptable price tag for the beleaguered American taxpayer.

"In light of this, will the Senate ratify an agreement that lets China, India, Brazil and other major developing economies off the hook indefinitely?" Sensenbrenner asked. "I have my doubts."

There are at least 13 Senate Democrats who have voiced strong reservations about a climate-change bill, much less a new binding global treaty.

"So what does all of this portend?" Sensenbrenner asked. "My more than 12 years experience with international climate-change negotiations tells me that we are heading towards a repeat of Kyoto - namely an environmentally ineffective agreement that cannot be ratified by the US Senate."

Essentially, it is one of those chicken-and-egg quandaries.

Climate change treaty advocates say the US must enact meaningful emissions reductions legislation before Copenhagen in order to convince China and other developing nations to make parallel and binding commitments.

Opponents contend that China must make binding emissions reductions commitments before the US can be expected to burden its industry and consumers with harsh energy penalties inherent in any emissions caps and cuts mandate.

Although President Barack Obama spoke forcefully at the UN climate-change meeting about the need for concrete action at Copenhagen, he also emphasized that China and other developing nations have to do their part. That does not appear likely, given China's own statements.

By: Joe Kamalick
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