Key Insights and Learning from COP15 (by Professor Anant Sundaram)

I came away from the week in Copenhagen with three key insights related to the process of getting to a solution to the problem of climate change.  The bottom line? In terms of process, COP15 was a logistical and organizational disaster. It may be time for the UN to step aside so that the issue of climate change can be addressed in a quicker and more substantive manner. Policymaking should be left to a smaller group of countries, and the implementation should be left to global corporations. In terms of outcome from COP15, the five-nation agreement that came out of COP15 was a huge plus, although the idea of an ‘adaptation fund’ needs to be jettisoned.

1) The UNFCCC lacks basic organizational capabilities. Their inability to pull together something as simple as a conference gives one pause about their capacity to shepherd a multi-nation solution to the larger problem, namely climate change.

  • COP15 was an organizational disaster in every sense of the phrase. One can understand if it was, say, COP1 or COP2, but folks, this was COP15!
  • Shame on UNFCCC for not bothering to even post an apology on their website for all the indignities and discomfort imposed on thousands of delegates (who traveled far and wide, and often on extremely limited resources). Such silence conveys an unfortunate lack of appreciation for the opportunity costs associated with other people’s time and money. One has to wonder if such a mindset carries over to the manner in which more important decisions are framed and made by the organization.
  • That the UNFCCC has not learned much after nearly two decades of doing this is symptomatic of a larger problem, namely inability to build capabilities. A few simple suggestions: (i) Outsource such events to a professional conference- or event-planning firm. Better yet, turn it over to the folks who ran the Beijing Olympics. (ii) Negotiate decent rates with hotels. Locals were stunned to hear what I was paying for my hotel in Copenhagen: Their guess? I was being gouged for at least twice the normal rate. (iii) Given that COPs are a December event, organize it in a place less prone to freezing weather. (Hint: The tropics or the South are not bad that time of year; they are more affordable too, compared to Northern Europe. Mexico City for COP16 is not a bad choice, in that regard).
  • One cannot help but take away the following message: If this is where we are, logistically and organizationally, after two decades into the UNFCCC-led process to address climate change, one can’t be too optimistic about how much further along we will be by 2030. By then, incidentally, the problem can only have got worse, with options to address it having become fewer and costlier.

2) A small group of countries accounts for over 90% of global GHG emissions. It is time to jettison the UN-led ‘one nation, one vote’ process and move it to a more manageable forum, with a smaller group of high-emission countries committed to solving the problem.

  • The UN’s decision-making process, involving nearly 200 countries, each with an equal say, is inherently too slow and inefficient to tackle climate change. From the standpoint of practicality or urgency, it makes little sense that a Burkina Faso or a Maldives, accounting for barely any global emissions, has the same ability to hold up negotiations as, say, a US that accounts for one-fifth.
  • But, aren’t countries such as Maldives likely to be significantly affected by climate change? Yes. Won’t they need to have access to resources and technology to cope? You bet they will. However – this might sound a tad harsh – we need to come to grips with the practical fact that, at this time, they are not part of the solution. If the high-emitters don’t find a collective way to reduce emissions, it is all beside the point for countries such as the Maldives anyway.
  • It would therefore make sense to create a separate, smaller, more manageable forum (e.g., under the auspices of the G-20) to set the guidelines and targets for emissions-reduction. Things will move much quicker.
  • Will such a process will produce an outcome that ignores the concerns of the other 180 nations? I don’t think that is not a terribly valid concern at this stage. Unless the top emitters agree to reduce their emissions drastically (and verifiably), everything else is beside the point. The good news is all major emitters have come around to the view that something significant needs to be done, and equally, the view that countries facing the most significant impacts will need to be provided the resources and the technology to cover adaptation costs.
  • Once the US, the EU, Japan, Australia, BRASICs (Brazil, Russia, ‘Africa Sud,’ India, and China), and a few others (including some of the major oil-producing countries) have signed on, things will start to unfold very quickly.
  • The great news out of COP15 is, with the exception of a few oil-producing countries in the Middle East who are dragging their feet, everyone is pretty much on board. The feet-draggers will have no choice but to go along as the momentum builds. (More on this in the next blog).

3) After COP15, I am more convinced than ever: If practical solutions to the problem of climate change are going to be found, financed, and implemented, it is global firms that will get it done. The international public policy apparatus – including the UN – has a role to play in enabling and overseeing this, but other than that, it needs to get out of the way.

 

  • Ultimately, if the problem of climate change is going be solved, at the ground level, it is not the UN or governments that will do it, but corporations. Companies are the constituency with the largest cause-and-effect relationship to climate change. By their resource use and greenhouse gas (GHG) emissions, they are the largest cause. And, the effect of mitigating and adapting to climate change will be a major source of costs for some, and benefits for others.
  • If we take a step back and think about the solutions, there are really only three: become more energy efficient in the things we do, switch to non-fossil fuel-based sources of energy, and where neither is possible, capture the carbon we put out into the atmosphere and store it forever. All three require innovations, R&D, and technologies that only global corporations can deliver; moreover, they require the scale of financial resources that only global corporations can provide.

 

  • If it was up to me, I’d figure out a way for the multilateral bureaucrats and the heads of state focus on just three issues. Then, get out of the way. One, develop a mechanism to put a global price on GHG emissions. Two, develop institutions to oversee its fair, transparent implementation. Three, tell firms they can deploy resources to that part of the global value chain where they can get the most bang for their buck by enabling a system of offset credits for emissions reductions that says ‘reductions from anywhere count one for one, if you can prove it; if you lie, you’ll be punished.’
  • I think an approach like this could produce an outcome that will not only blow past Kyoto goals, but it is also a way to get the emissions-reduction innovations to quickly diffuse across the globe. What is more, local or smaller competitors to these global corporations will have no choice but to follow suit – since they would face the negative effects of the higher costs associated with carbon otherwise – further amplifying the positive outcomes.

 

 

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COP15 Grade Card: LP (by Prashant)

I’m going to disagree with Pat on this – the climate deal at Copenhagen wasn’t meaningful (enough). While the COP15 established the Copenhagen Accord which “is operationally immediately”, the fact that the conference hasn’t triggered anything concrete for the near future is probably a good indication of its ineffectiveness.

Although the accord targets a temperature increase of less than 2°C, it failed to reach country specific emission targets, in addition to the accord being non-binding. The UNFCC now requires that all member countries submit their voluntary emission reduction targets by January 2010. According to a U.N. report, the current voluntary emission targets amount to a 3°C in temperature. I don’t see many countries offering drastic additional reductions in the next month, so the COP15 agreement to limit temperature increase to 2°C means very little. Between now and COP16 at Mexico City, some headway will be made towards reducing emission to target 2°C temperature increase, but an excellent opportunity to make concrete progress has been lost at Copenhagen. Also, the accord promises developing countries $100B a year by 2010, but does not mention which countries will contribute how much money to this cause.

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COP15: Essential Beginning or Failure? (By Pat)

UN chief Ban Ki-moon described the accord from COP15 as an “essential beginning” and U.S. President Obahma, called it “ a meaningful agreement” while critics labeled the accord a sham and a failure. Having spent the week in Copenhagen focusing on climate change issues, do I view the conference with positive hope for the future or not? Was COP15 worth the time, cost, and carbon emitted from the travel miles of tens of thousands of people?

I fall into the ‘glass is half full’ camp. I have hope because of the variety of people I saw in Copenhagen deeply engaged in the issue of climate change: from the managing directors of the major Wall Street firms to presidents of international environmental groups to country delegates from across the globe. The issue of climate change has smart, passionate people across multiple sectors— government, private, and public— ready to tackle what they know will take years to address. Tracy R. Wolstencroft, Managing Director at Goldman Sachs, reminded the audience in a session organized by the International Emissions Trading Association, that successful firms look ahead, and both a low carbon economy and policy changes related to climate change are part of that future. He quoted world-famous hockey player, Wayne Gretzky, who said that, ”I skate to where the puck is going to be—not where it is.”

The negotiations at Copenhagen are part of a long series of meetings and conferences organized by the United Nations that span years. It was well know before the doors to the Bella Center opened and COP15 began, there were significant differences between countries. Perhaps, in addition to poor planning for the massive number of prospective participants, the UN was guilty of setting expectations too high, and we all had hoped for too much progress. Despite this, there are positive results to note from COP15. Both developed and developing countries have set a mitigation target of two degrees Celsius, declared a finance mechanism to support developing countries, and agreed to share information on the implementation of their actions. Lars Josefesson, President and CEO of Vattenfall, the Swedish energy company serving 4.7 million customers in northern and central Europe, said in another meeting I attended, “We are in the process of re-engineering the entire world. We need to move systematically forward. COP15 is one step.”  Slow but steady progress is being made and for that reason alone, I am hopeful.

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A unique Israeli experience (by Itamar)

On Wednesday morning, due to the UNFCCC decision to stop the accreditation process for NGOs without any advance warning, I ended up being the only Tuck student delegate that attended the actual conference. In addition to attending some side events, varying from climate change adaptation costs in Africa, through Senator John Kerry making his forecast on what the US will do in the next 6 months to the tension between climate change mitigation and adaptation efforts in the city level to the ones in the national government level, I also tried to find a way in which at least one of us will be able to attend the conference on Thursday.

The UNFCCC has limited the number of observers on Thursday to only 1,000 (as opposed to 7,000 on Tuesday and Wednesday) and a new secondary badge was required. As it turned out, the overhead organization for research and independent NGOs (RINGO) was the one capable of providing us with such badges yet they decided to give priority to organizations that have attended past RINGO meetings during the conference. Since we never even got a chance to attend one, we were out of the race.

I decided to try the Israeli delegation. Since I didn’t see too many Israeli NGOs around, I figured they might have some extras. Unfortunately, the contact person for Israeli NGOs did not have any badges but when I asked him if he knows anything about the itinerary for the expected visit of Mr. Shimon Peres, President of the State of Israel, past Prime Minister and Nobel Peace Prize winner, he invited me to attend a closed event with Mr. Peres for the Israeli delegation later on that afternoon in one of the hotels in town. Having never met Mr. Peres in person before, needless to say I was quite excited.

It was interesting to see the dynamics in the meeting: Mr. Peres began by stating that his goal in that meeting was to make sure that tomorrow everybody is going to be on the same page, and gave the rough outline of his planned speech for the Plenary meeting emphasizing the Israeli opportunity to develop climate change related technology, Israel’s willingness to share its knowledge and expertise with the rest of the nations and its commitment to comply with the international standard, whichever it may be. He then asked the audience for feedback and comments and hearing some of them incorporated in his speech the next day brought a smile to my face.

We then proceeded to the Jewish Synagogue in central Copenhagen which was packed with the local Jewish community to light the 6th candle of Hanukkah.  Being a rather secular Jew myself, I still found the situation to be quite emotional and Mr. Peres’ speech addressing the congregation very moving.

Through some creative thinking but primarily luck, a rather dull morning has turned into one of the most memorable experiences I will have from this conference.

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The many sides of COP15 (by Frank)

The Tuck delegation meets with IPCC chairman Dr. R.K. Pachauri

If the history of warfare has taught us to never fight a land war in Asia, then you might say that COP15 has taught us to never hold a December conference in Scandinavia.  Snow, freezing temperatures, and bitterly cold winds made Copenhagen a less than desirable destination on Thursday, providing a bit of a reminder of the Hanover winter we had just left behind.  However, with heads of state descending on Copenhagen over the next two days, the UN had announced it would further cut NGO access to the Bella Center today and Friday, meaning we again focused our efforts on outside events (no waiting in line!) rather than once again braving in the cold for hours on end to get into the conference.  Given the weather today, the 12 hours I spent waiting in line on Monday, Tuesday and Wednesday didn’t seem so bad.

A day after attending a series of panels organized by the International Emission Trading Association (IETA) at the Crowne Plaza, I started Thursday with a trip to the Klima Forum at DGI-byen.  The two hotel conferences were near perfect foils, representing the stunning diversity of NGOs trying to leave their mark on the climate change debate.  At the modern, swanky Crowne Plaza you can get your fill of star-gazing: Thomas Friedman ate brunch across the way from us, while Al Gore made an appearance later in the afternoon on the way to a VIP event being held there.

At the DGI-byen?   Not so much.  The conference center is home to hundreds of mostly environmentalist exhibitors set up in crude cubicles–think junior high science fair, complete with raised basketball hoops overlooking the ramshackle affair.  Meanwhile, the hallways are crammed with mostly young people huddled over their laptops to use the free wifi.  Groups are there from around the world, campaigning against everything from nuclear power to carbon offsets to multinationals’ role in Argentine crop experimentation.  For an MBA student, the DGI-byen obviously offered little of the business focus we came to learn more about, but it’s still an interesting counterpoint to the more practical, big picture view offered at events such as IETA.  Everywhere you find people looking to make connections, make their points, and get a better feel for the complex problems ahead of us.

But perhaps the highlight of the conference thus far came Thursday evening, when the ten of us from Tuck had the opportunity to speak with IPCC Chairman and Nobel Laureate Dr. Rajendra Pachauri.  Despite his whirlwind schedule, he generously sat down with us for nearly an hour, answering questions on a broad range of topics: the importance of 350 vs. 450 ppm atmospheric CO2 concentrations, the ethics of mitigating vs. adapting to climate change, and the communication challenges of the recent “Climategate” scandal to name a few.    Listening to Dr. Pachauri recall stories about everything from the rigorous IPCC peer review sessions to his meetings with Angela Merkel and Vladimir Putin, it’s easy to see not only how challenging his role as IPCC chair has been, but also how he’s managed to pull it off: with a disarming mixture of humility, compassion, realism, and respect for others.

As for Climategate, it was clear that Dr. Pachauri had been frustrated by both the foolishness of some of the emails as well as the resulting relentless drone of media conspiracy theorists.  But he’s also a realist.  While the IPCC has already addressed and refuted the specific concerns about the emails, he acknowledged that it was difficult to do much beyond investigate the issue and reaffirm the IPCC’s findings.  While many on the other side had strong financial incentives to push the issue into the forefront, the UN itself had neither the funding nor the mandate to fight a PR battle.  That could prove a problem going forward in the U.S., but it’s clear from the past two weeks of COP15 that national delegations themselves remain focused on the bigger issue of mitigating climate change.

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A few inconvenient truths but a few convenient ones too…. By Manoj

As I write this blog post world leaders from 119 different countries are negotiating to pull up an agreement. But the overwhelming majority out here doubt whether negotiators can pull it off from where things stand today. But as I envision a world 50 years from now does success at Copenhagen matter? Well, only time will tell. I believe whether the world is able to successfully combat climate change depends on technological breakthroughs not political pledges at Copenhagen.

It is our 5th day at COP15, and we as a group have attended dozens of sessions on topics such as climate justice, policy making, emerging clean technologies, role of NGOs and sub-national governments, tax implications of carbon credits, and oversight of carbon market. During all these events the sidelines, we had the opportunity to interact with the attendees (climate change scientists, CEOs of energy companies, policy makers including governors and legislators, NGOs, climate activists etc.) from different parts of the globe. Personally, I have been overwhelmed by the diversity of perspectives I have got in such a short span of time. It has been a real learning expedition, and I am happy that I made the trip.

I would like to summarize my experience so far by highlighting some inconvenient truths and some convenient ones too. First the inconvenient ones….

• An agreement even without binding legal framework rather than a hollow political commitment, which seems to be the most probable result as I write the blog, would have given impetus to the efforts made so far and sent a signal that the political leadership of the world is serious about tackling climate change.

• There is no talk about “Climate Gate” at Copenhagen. While everyone believes that there is climate change not everyone believes that it is global warming that is the root cause of climate change. My personal belief (which is shared by most of my business school colleagues) is that the UNFCCC can communicate its stand on the “Climate Gate” in a more emphatic way so that it is clarified once and for all. We are meeting with Dr. R. K Pachauri ( Chairman of IPCC, Inter Governmental Panel on Climate Change) this evening on the sidelines and would keep you updated about his thoughts on this issue.

• In any negotiation the powerful ones can’t win at the cost of the weaker ones. A win – lose outcome is not necessarily good for the winner at the end of the day. If the developed countries think that they can win by committing less reductions while extracting developing nations to cap their emissions they probably are short sighted. It has to be a WIN-WIN for both.

• One of the widely talked about topics at COP15 is MRV (monitoring, reporting and verification) of target reductions. The developed countries think that the developing nations will both cheat the system and take advantage of it. To me it seems that the developing nations are the clear victims of the impact of climate change. If they fail to live up to their commitment, it would be to their destruction. My belief is that no sovereign country would agree to audit by other countries. Would the US agree to an audit by China?

• The rationale I hear quite often in debates about climate change in the US is that it will hurt the American economy and there will be job losses as other developing countries, like India and China, will gain an unfair advantage if there is no cost of carbon in those countries. As I think through the reasons, I would like to give the example of the European Union. Have Germany, Denmark and Spain lost jobs or become uncompetitive in the process of becoming a greener economy? No, they have definitely not. In fact, they have clear competitive advantage in clean technologies which will drive the world tomorrow while US is behind. To put it in Tom Friedman’s words from one of the COP 15 events, “Being Green is the next big opportunity. Countries like China are not becoming green by choice but out of necessity. China will probably lead the world into a cleaner world as they believe in making things happen not in pep talk. Friedman says “If the US could become China for a day, it would be a different world”

• While the world focuses on Copenhagen let us not forget the biggest challenges facing mankind today: hunger, poverty, and access to water. Some of these issues are as important as climate change.

But not everything is lost. The world today is a healthier, safer and better place than it was 50 years ago. So I have no doubt what so ever in my mind that it will change for better only in the next 50 years as well. Now the convenient ones …..

• Developing countries like India, China and Brazil now appreciate that they are equally responsible to combat climate change as the developed nations. They simply cannot hide behind the wall. And there is a big opportunity out there. Who knows if the next big innovation will be in India or China instead of in the Silicon Valley?

• While national governments are negotiating over issues related to climate change, the sub-national governments have been actively embracing change and taking the lead in implementing policies and initiatives to combat climate change. This is the biggest silver lining, and my MBA colleagues have covered this aspect in detail in previous blogs.

• While the world continues to debate how to combat climate change, efforts will not succeed unless there is a behavioral change in every human being on earth. Unless each one of us change our lifestyle, minimize waste and lead a sustainable life, the battle of climate change will never be won.

I sign off with my favorite poem “The Road Not Taken” by Robert Frost praying that our leaders chose the one less traveled by and act so they will be remembered in history for having the courage to do so.

“Two roads diverged in a yellow wood,

And sorry I could not travel both

And be one traveler, long I stood

And looked down one as far as I could

To where it bent in the undergrowth; ……………..

I shall be telling this with a sigh Somewhere ages and ages hence:

Two roads diverged in a wood, and I,

I took the one less traveled by,

And that has made all the difference.

Note: We had a great meeting with Dr. R. K Pachauri on the sidelines at COP15 and a separate blog post covering our interaction with him follows…..

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Terminator 5: A Glimpse of Hope (by Steve)

Over the past two days we attended side events organized by the International Emissions Trading Association (IETA).  So far the events have been great, with a focus on potential future legislation and sub-national governments and businesses.   It appears to us that business and a number of state agencies are a lot further ahead than the UN in thinking about and making climate change reforms.  One of the events focused on sub-national collaboration acting not only as a bridge between any UN agreement and actual implementation, but also as a leader in achieving real climate change action. 

An example of this is the formation of the Regional Group of 20 (R20), which Arnold Schwarzenenegger, Governor of California, announced on Tuesday at the Governors’ Summit.  This is a group of sub-national governments who plan to fast track legislation within their own jurisdictions to fight climate change.  The group will address strategies to mitigate current and future climate change through public-private partnerships, technology development and transfer, and financial measures. 

Mr. Cherif Rahmani, Minister of Environment, Algeria; head of the UNFCCC Africa group; and a member of the R20 spoke at one of the IETA events we attended about the R20, Algeria’s existing relationship with the government of Quebec and the need to develop more of these types of coalitions.   The event also highlighted a number of achievements already made on the sub-national level, like the California EPA, which has implemented real mechanisms to reduce greenhouse gases in state energy production.

A common thread in many of our blog posts has been the potential for more local and sub-national action. From business school students’ perspective this is a very encouraging development because it is an area that most of us will be able to engage in and have an immediate impact on in the short term.   For those of us in the Tuck Delegation who have been disappointed by the gross inefficiencies demonstrated by the UNFCCC at Copenhagen this is especially encouraging.   Who knew it would be none other than “The Terminator” who gave us this glimpse of hope!

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