12 November 2009
Mitigation Policy Central Challenge in Climate Change Negotiation
Market solutions like putting price on CO2 to be discussed in Copenhagen
Washington ― Some of the hottest debate over international approaches to fight global warming concerns how to reduce the concentration of carbon dioxide (CO2) in the atmosphere. Policies designed to reduce CO2 emissions and stabilize greenhouse gases at a level that is environmentally sustainable are crucial to mitigate the effects of climate change.
Achieving international agreement on what constitutes a sustainable level and how to get there is no easy feat. Copenhagen will be the 15th conference of the parties (COP-15) to the United Nations Framework Convention on Climate Change (UNFCCC). The Kyoto Protocol, established at COP-3 in 1997, created binding commitments for industrialized nations to reduce their output of specific greenhouse gases, but several large emitters, including the United States, did not ratify the treaty.
According to the 2007 Fourth Assessment Report of the Nobel Prize–winning Intergovernmental Panel on Climate Change, even a 1 to 1.5 degree increase in global temperatures will have negative environmental impacts. The report’s policy working group says limiting global temperature rise to 2 degrees will require developed countries to reduce their emissions 10 percent to 40 percent by 2020 and 40 percent to 95 percent by 2050. The group asserted that “emissions in developing countries would need to deviate below their current path by 2020, and emissions in all countries would need to deviate substantially below their current path by 2050.”
With provisions of the first phase of the Kyoto agreement set to expire in 2012, the Obama administration has identified climate change action as a foreign policy priority and committed the United States to international leadership. COP-15 negotiators are working to craft a successor to the Kyoto Protocol that will be environmentally effective and politically feasible for all member countries. (Read more about international action on climate change.)
DEVELOPMENT GAP
Most parties agree to the general principle of “common but differentiated responsibility” enshrined in the Kyoto Protocol. Determining exactly what that entails has been the source of much international debate.
According to Professor Robert Stavins, head of the Harvard Project on International Climate Agreements, bridging the divide between developed and developing countries is the biggest obstacle for Copenhagen and subsequent COP meetings.
“There is a negative path dependency created in Kyoto,” Stavins said, “and it’s the distinction between Annex I [developed] and non-Annex I [developing] countries. That’s the most meaningful barrier we are facing today.”
Developing countries such as China, India and Brazil stress that developed countries created the CO2 problem and should bear the costs associated with mitigating CO2 concentrations. They further object to limitations being placed on their own growing emissions, arguing that they should be given the same opportunity as Western countries to develop their economies unfettered by international environmental regulations.
Industrialized nations such as the United States object to taking on binding mitigation obligations if the developing world’s emissions continue to grow exponentially, outstripping current levels of emissions from the developed world. China overtook the United States as the world’s largest CO2 emitter in 2006, according to the Netherlands Environmental Assessment Agency, and more than 80 percent of future emissions will come from developing countries.
One approach recently proposed by Stavins and the Harvard Project is that each of the major emitting countries, developed and developing, take on a “portfolio of domestic commitments.” Under this model, countries would choose a subset of policies specifically tailored to their domestic needs and capabilities. Such a framework would allow countries flexibility while providing for international cooperation along a continuum of responsibility.
MARKET SOLUTIONS
Much of the policy discussion for curbing emissions focuses on “cap and trade” systems. Countries create emissions markets that price carbon and require emitters to remain under the “cap” of allotted permits. Companies that can easily lower their emissions are allowed to sell or “trade” extra emission permits they have to companies with costlier or longer-term adjustments. Over time, the cap is steadily lowered until CO2 emissions reach an agreed-on target.
Implementing a carbon tax on emitters is an alternate market intervention that some economists favor. The tax rate would steadily increase, allowing companies to adjust their operations and lower emissions under a predictable regulatory environment. The tax revenues generated could be used to increase economic efficiency in other areas.
Both of these market-based policies could be designed to equalize the cost of abatement over a longer period of time, thus minimizing the economic strain associated with reducing carbon output. Economists also favor market-based approaches as having the broadest impact to reduce CO2 emissions across sectors.
“We not only want people to drive more fuel-efficient vehicles, we also want them to drive less,” explained Ian Parry, a senior fellow working on climate change at the Resources for the Future research institution. “To reduce emissions from the transportation sector, we need to have both. That’s the beauty of raising the price of emissions and therefore all these dirty fuels. It encourages all possible options for reducing emissions throughout the economy. That’s very cost-effective compared with other options.”
INTERNATIONAL COORDINATION
According to the most recent report from the U.N. Conference on Trade and Development, however, market solutions alone will not address the perceived opposition between mitigation and economic growth in the developing world. Therefore, policies related to the financing of clean development projects, the wider transfer of carbon-reducing technology and the development and spread of more climate-friendly modes of production are also a focus of international discussion.
For example, Denmark is investing approximately $1 million (0.7 million euros) to replace several heavily polluting brick kilns in Dhaka, Bangladesh, with 20 more efficient factories. The project is expected to improve air quality in Dhaka and save 50,000 tons of CO2 from entering the atmosphere annually. The project should offset increased emissions associated with hosting COP-15 in Copenhagen, making this round of talks effectively climate neutral.
Other policy options under consideration include avoidance of deforestation, population planning and control, investment in research and development for new mitigation technologies, and public awareness campaigns that educate individual consumers about ways to reduce their CO2 emissions.
