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.

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: