Climate Negotiations: Clouds over Cancún?

Miquel Muñoz, Guest Blogger

In the last weeks, two hurricanes have threatened Cancún. Hurricane Paula veered east, hurricane Richard southwest, both sparing the resort city and venue for the upcoming UN Climate Change Conference (COP 16). If this post was about the last COP in Copenhagen, the headlines would be unmistakable: “Hurricane Threatens Climate Negotiations.” For Cancún, conversely, a better analogy can be found in Copenhagen’s winter weather: grey and overcast. This would fittingly describe the level of expectations for Cancún.

That Cancún is set to accomplish little (being generous) should come as a no surprise. In a dejà vu from last year, the AWG-KP and AWG-LCA (the working groups in charge of preparing the post-Kyoto agreement), recently met for the nth time this year (n=4) in Tianjin, China. The only thing the AWGs managed to do was to forward (again) heavily bracketed texts (which in negotiators parlance means text reflecting disagreement) to Cancún for the COP 16 to consider [to download the texts click: AWG-LCA, AWG-KP]. Unlike COP 15 in Copenhagen, the political pressure has evaporated, thus making the prospects of any agreement grim. While in Copenhagen agreement was arguably within reach, in Cancún agreement is not even on the agenda. Parties have given up and will be focusing instead on what they call “a balanced set of decisions.”

This post, rather than focusing on why nothing will happen in Cancún, explores another question: Does it matter?

To answer this, some historic context is necessary. After the Kyoto Protocol agreement in 1997, and following its rejection by the US in March 2001, two key dates, both in November 2004, determined why Copenhagen and Cancún mattered. On 2 November US President George W. Bush was reelected. On 18th November, Russia ratified the Kyoto Protocol. The Russian ratification meant that the Kyoto Protocol entered into force, thus shifting the negotiator’s attention from getting the Protocol ratified to the post-Kyoto negotiations (post-Kyoto refers to after 2012, when the Protocol’s first commitment period ends).

Bush’s reelection, given his administration positions on climate change, meant that no post-Kyoto agreement was possible before a new administration moved into the White House. Considering US election and inauguration and UNFCCC calendars, this meant that no agreement would be possible till at least COP 15, in 2009. But even before 2004 it was also clear that for carbon markets and flexible mechanisms, the mainstay of the Kyoto architecture, to survive beyond 2012, a deal was necessary by 2010 at the latest. Meeting this deadline was necessary to allow sufficient time for countries to ratify a new agreement and in order to prevent a gap in the carbon markets. This means that Cancun’s COP 16 was the last chance to save the carbon market architecture as we know it. Since parties have given up, it no longer is.

Coming back to my initial question: does it matter that no agreement will be reached in Cancún?

The answer is an unqualified YES. Why? Because saving the carbon markets was the only real driver for reaching an agreement on the post-Kyoto period by 2010.

A post-2012 Clean Development Mechanism (CDM) in one form or another used to be taken for granted. Not anymore. Lacking hard data, anecdotal evidence suggests that private investment in new CDM projects has all but dried up. The financial crisis and behavior of financial institutions have not done much to shore up further support for (carbon) market mechanisms. The international carbon market provided by the CDM, and to a minor extent Joint Implementation, was supposed to be the anchor guiding other national and regional carbon markets towards convergence. Without it, national carbon markets will not converge, as was hoped. They will instead probably diverge into a mosaic of smaller markets, each tailored to its own national priorities and likely containing protectionist measures.

The discontinuity of the CDM post 2012, however, has longer-range implications than just the carbon markets. As noted, saving the carbon markets was the real driver giving urgency to climate negotiations. Without a carbon market to save, all urgency is lost (to negotiators, that is), and we could see climate negotiations for a new comprehensive (and meaningful) agreement last longer than the Doha round already has. This would effectively lock us into another “lost decade” of sterile climate change negotiations. How long the impasse will last no one knows. But new momentum for global concerted action on climate change is unlikely until we witness mounting climate change impacts and experience a shift in the global energy matrix. That also rules out an agreement at Johannesburg’s COP 17.

The forecast is indeed gloomy. And since I’m back to the weather analogy, let’s see what happened to the hurricanes threatening Cancún: Paula went on to drench Cuba; Richard pummeled Belize, and crossed the Yucatan peninsula, threatening the Texas coast. Cancún may have dodged the storms, but let’s not forget they hit elsewhere. Analogously, an uneventful meeting in Cancún may dodge the kind of storm we saw in Copenhagen. But the impacts of inaction, like those of hurricanes Paula and Richard, will be felt elsewhere, both by developing and developed countries.

Dr. Miquel Muñoz is a Fellow at Boston University’s Pardee Center.