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Paris Agreement — A Good Foundation for Meaningful Progress

The Paris Agreement, a truly landmark climate accord, which was gaveled through today, December 12, 2015, at 7:26 pm (Paris time) at the Twenty-First Conference of the Parties (COP-21), checks all the boxes in my five-point scorecard for a potentially effective Paris Agreement, described in my November 17^th blog essay, Paris Can Be a Key Step. The Agreement provides a broad foundation for meaningful progress on climate change, and represents a dramatic departure from the Kyoto Protocol and the past 20 years of climate negotiations.

Essential Background

Anyone who has read this blog over the past several years, or – even more so — my academic writing over the past twenty years on international climate change policy architecture, knows that I have viewed the dichotomous distinction between Annex I and non-Annex I countries as the major stumbling block to progress. That distinction was first introduced in the climate negotiations at COP-1 in Berlin in 1995. That was, in my view, an unfortunate and narrow interpretation of the sound equity principle in the United Nations Framework Convention on Climate Change (UNFCCC, 1992) – “common but differentiated responsibilities and respective capabilities.” It was codified two years later in the Kyoto Protocol.

The Kyoto Protocol, which has been the primary international agreement to reduce the greenhouse-gas emissions that cause global climate change, included mandatory emissions-reduction obligations only for developed countries. Developing countries had no emissions-reduction commitments. The dichotomous distinction between the developed and developing countries in the Kyoto Protocol has made progress on climate change impossible, because growth in emissions since the Protocol came into force in 2005 is entirely in the large developing countries—China, India, Brazil, Korea, South Africa, Mexico, and Indonesia. The big break came at the annual UNFCCC negotiating session in Durban, South Africa in 2011, where a decision was adopted by member countries to “develop [by December 2015, in Paris] a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties.” This “Durban Platform for Enhanced Action” broke with the Kyoto Protocol and signaled a new opening for innovative thinking (which we, at the Harvard Project on Climate Agreements, took to heart).

The Paris Agreement is a Departure from the Past

Today, in Paris, representatives of 195 countries adopted a new hybrid international climate policy architecture that includes: bottom-up elements in the form of “Intended Nationally Determined Contributions” (INDCs), which are national targets and actions that arise from national policies; and top-down elements for oversight, guidance, and coordination. Now, all countries will be involved in taking actions to reduce emissions.

Remarkably, 186 of the 195 members of the UNFCCC submitted INDCs by the end of the Paris talks, representing some 96% of global emissions. Contrast that with the Kyoto Protocol, which now covers countries (Europe and New Zealand) accounting for no more than 14% of global emissions (and 0% of global emissions growth).

This broad scope of participation under the new Paris Agreement is a necessary condition for meaningful action, but, of course, it is not a sufficient condition. Also required is adequate ambition of the individual contributions. But this is only the first step with this new approach. The INDCs will be assessed and revised every five years, with their collective ambition ratcheted up over time. That said, even this initial set of contributions could cut anticipated temperature increases this century to about 3.5 degrees Centigrade, more than the frequently-discussed aspirational goal of limiting temperature increases to 2 degrees C (or the new aspirational target from Paris of 1.5 degrees C), but much less than the 5-6 degrees C increase that would be expected without this action. (An amendment to the Montreal Protocol to address hydrofluorocarbons (HFCs) is likely to shave an addition 0.5 C of warming.)

The problem has not been solved, and it will not be for years to come, but the new approach brought about by the Paris Agreement can be a key step toward reducing the threat of global climate change.

The new climate agreement, despite being path-breaking and the result of what Coral Davenport writing in The New York Times rightly called “an extraordinary effort at international diplomacy,” is only a foundation for moving forward, but it is a sufficiently broad and sensible foundation to make increased ambition over time feasible for the first time. Whether the Agreement is truly successful, whether this foundation for progress is effectively exploited over the years ahead by the Parties to the Agreement, is something we will know only ten, twenty, or more years from now.

What is key in the Agreement is the following: the centrality of the INDC structure (through which 186 countries representing 96% of global emissions have made submissions); the most balanced transparency requirements ever promulgated; provision for heterogeneous linkage, including international carbon markets (through “internationally transferred mitigation outcomes” – ITMOs); explicit clarification in a decision that agreement on “loss and damage” does not provide a basis for liability of compensation; and 5-year periods for stocktaking and improvement of the INDCs.

The Key Elements of the Paris Agreement

Here are some of the highlights of what stands out to me in the Paris Agreement.

Article 2 of the Agreement reaffirms the goal of limiting the global average temperature increase above the pre-industrial level to 2 degrees C, and adds 1.5 degrees C as something even more aspirational. In my opinion, these aspirational goals – which come not from science (although endorsed by most scientists) nor economics, and may not even be feasible – are much less important than the critical components of the agreement: the scope of participation through the INDC structure, and the mechanisms for implementation (see below).

Article 3 makes it clear that the INDC structure is central and universal for all parties, although Article 4 blurs this a bit with references to the circumstances of developing country Parties. But throughout the Agreement, it is abundantly clear that the firewall from the 1995 Berlin Mandate has finally been breached. In addition, five-year periods for the submission of revised INDCs (and global stocktaking of the impact of the Paris Agreement) are included in Article 14. The first stocktaking review will be in 2018, with the start date for new INDCs set for 2020.

Article 4 importantly describes transparency requirements (domestic monitoring, reporting, and verification). This is crucial, and represents a striking compromise between the U.S. and Europe, on the one hand, and China and India, on the other hand. All countries must eventually face the same monitoring and reporting requirements, regardless of their status as developed or developing.

Article 6 provides for international policy linkage, and is thereby exceptionally important for the successful exploitation of the foundation provided by the Paris Agreement. The necessary language for heterogeneous international policy linkage (not only international carbon markets, but international linkage of other national policy instruments) is included. I have written about this key issue many times over the past ten years. It can bring down compliance costs greatly, and thereby facilitate greater ambition over time. (See our paper on this from the Harvard Project on Climate Agreements: “Facilitating Linkage of Heterogeneous Regional, National, and Sub-National Climate Policies Through a Future International Agreement” By Daniel Bodansky, Seth Hoedl, Gilbert E. Metcalf and Robert N. Stavins, November 2014.) The Paris Agreement accomplishes this through provision for “internationally transferred mitigation outcomes.” With this provision, we have a new climate policy acronym – ITMOs – about which I suspect I will be writing in the future.

There is considerable discussion of “finance” in Article 9, but the numbers do not appear in the Agreement, only in the accompanying Decision, where item 54 states that by 2025, the Parties will revisit the total quantity of funding, using the current $100 billion target as a “floor.”

Finally, the Agreement’s Article 8 on Loss and Damage was necessary from the point of view of the most vulnerable countries, but the most contentious issue is settled in Decision 52, where the Parties agree that this “does not involve or provide a basis for any liability of compensation.” That decision was absolutely essential from the perspective of the largest emitters.

Anticipated Impacts of the Paris Agreement

Before I turn to my assessment of the Agreement, I should comment briefly on a topic that seems to be of considerable interest to many people (based on the questions I received from the press during my 10 days in Paris), namely what effect will the Agreement have on business, what signals will it send to the private sector?

My answer is that impacts on businesses will come largely not directly from the Paris Agreement, but from the policy actions that the various Parties undertake domestically in their respective jurisdictions to comply with the Paris Agreement. I am again referring to the 186 countries which submitted Intended Nationally Determined Contributions – INDCs – under the Agreement.

So, in the case of the United States, for example, those policies that will enable the country to achieve its submitted INDC are: the Clean Power Plan (which will accelerate the shift in many states from coal to natural gas for electricity generation, as well as provide incentives in some states for renewable electricity generation); CAFE (motor vehicle fuel efficiency) standards increasing over time (as already enacted by Congress); appliance efficiency standards moving up over time (as also already enacted by Congress); California’s very aggressive climate policy (AB-32); and the northeast states’ Regional Greenhouse Gas Initiative.

These various policies are credible, and they will send price signals that affect business decisions (but not across the board nor with ideal efficiency, as would a national carbon tax or a national carbon cap-and-trade system). In terms of impacts on specific companies, impacts will continue to vary greatly. But a useful generalization is that a major effect of most climate policies is to raise energy costs, which tends to be good news for producers of energy-consuming durable goods (for example, the Boeing Company) and bad news for consumers of those same energy-consuming durable goods (for example, United Airlines).

An Assessment with my Paris Scorecard

Lastly, here is my November 17^th scorecard and my assessment of the five key elements I said would constitute a successful 21^st Conference of the Parties:

Include approximately 90% of global emissions in the set of INDCs that are submitted and part of the Paris Agreement (compared with 14% in the current commitment period of the Kyoto Protocol). This was obviously achieved, with total coverage reaching 96% of global emissions.

Establish credible reporting and transparency requirements. This was achieved, through long negotiations between China and India, on the one hand, and Europe and the United States, on the other.

Move forward with finance for climate adaptation (and mitigation) B the famous $100 billion commitment. This was achieved.

Agree to return to negotiations periodically, such as every 5 years, to revisit the ambition and structure of the INDCs. This was achieved.

Put aside unproductive disagreements, such as on so-called “loss and damage,” which appears to rich countries like unlimited liability for bad weather events in developing countries, and the insistence by some parties that the INDCs themselves be binding under international law. This would have required Senate ratification of the Agreement in the United States, which would have meant that the United States would not be a party to the Agreement. There was success on both of these.

Final Words

So, my fundamental assessment of the Paris climate talks is that they were a great success. Unfortunately, as I have said before, some advocates and some members of the press will likely characterize the outcome as a “failure,” because the 2 degree C target has not been achieved immediately.

Let me conclude where I started. The Paris Agreement provides an important new foundation for meaningful progress on climate change, and represents a dramatic departure from the past 20 years of international climate negotiations. Of course, the problem has not been solved, and it will not be for many years to come. But the new approach brought about by the Paris Agreement can be a key step toward reducing the threat of global climate change. In truth, only time will tell.

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As many of you know, over a period of ten days, we (the Harvard Project on Climate Agreements) were hard at work at COP-21 in Paris. I made a dozen presentations and we held bilateral meetings on a daily basis with national negotiating teams and and others. You will find videos, photos, and numerous stories about our activities in Paris at our Tumblr page. Thanks are due to the entire team who were with me in Paris – Robert Stowe, executive director, Jason Chapman, program manager, and Doug Gavel, director of media relations — as well as Bryan Galcik, communications coordinator, back in Cambridge.

Assessing the Outcome of the Lima Climate Talks

In the early morning hours of Sunday, December 14^th, the Twentieth Conference of the Parties (COP-20) of the United Nations Framework Convention on Climate Change (UNFCCC) concluded in Lima, Peru with an agreement among 195 countries, the “Lima Call for Climate Action,” which represents both a classic compromise between the rich and poor countries, and a something of a breakthrough after twenty years of difficult climate negotiations.

Just before two o’clock in the morning, the President of COP-20, Manuel Pulgar Vidal, Peru’s Minister of Environment, gaveled the approval of the text, without dissent. At that moment, the foundation was established for the next major international climate agreement, which – under the auspices of the Durban Platform for Enhanced Action – will be finalized and signed one year from now at COP-21 in Paris, France, for implementation in 2020.

After five days on the ground in Lima, where I participated in a variety of events and met with a diverse set of national negotiating teams, I’ve reviewed the agreed text of the Lima Call for Climate Action (which I abbreviate below as the “Lima decision”), and can now reflect on its gestation, its meaning, and its implications.

The Lima Call for Climate Action

By establishing a new structure in which all countries will state (over the next six months) their contributions to emissions mitigation, this latest climate accord moves the process in a productive direction in which all nations will contribute to the reduction of greenhouse gas emissions.

Working to fulfill the promise made in the 2011 Durban Platform for Enhanced Action to include all parties (countries) under a common legal framework, the Lima decision constitutes a significant departure from the past two decades of international climate policy, which – since the 1995 Berlin Mandate and the 1997 Kyoto Protocol – have featured coverage of only a small subset of countries, namely the so-called Annex I countries (more or less the industrialized nations, as of twenty years ago).

The expanded geographic scope of the Lima Call for Climate Action and thereby the incipient Paris agreement – and the emerging architecture of a pragmatic hybrid combining bottom-up “Intended Nationally Determined Contributions” (INDCs) with top-down elements for reporting and synthesis of contributions by the UNFCCC Secretariat – represents the best promise in many years of a future international climate agreement that is truly meaningful.

Importantly, the Lima decision provides that each country’s INDC shall include a clear statement of emissions mitigation, and may include quantifiable information on reference points (such as base year), time frame of implementation and coverage, assumptions and methodological approaches for estimating and accounting for greenhouse gas emissions, as well as each country’s own assessment of its INDC’s fairness and ambition. These statements of national contributions are to be submitted by the end of March, 2015, although countries that miss that “deadline” can then make their submissions by June.

Compromises, Compromises

Because of the ongoing sharp divide in climate talks between developed and developing countries, the Lima decision was difficult to accomplish and could only be achieved through compromises that had the effect of watering down various aspects of the accord. This suggests that the road to Paris may be difficult for the negotiators.

The substitution of the phrase “may include” for “shall include” in regard to the elements of the INDCs was one of the compromises that was necessary to gain the approval of developing countries. So, the U.S.-favored requirement for the use of transparent elements in INDCs that would facilitate comparisons among countries was dropped.

However, at least one negotiating team with whom I met in Lima maintained that the analyses and comparisons of INDCs that will inevitably be carried out by various NGOs and research organizations (including universities) will provide the needed transparency and therefore the needed encouragement to countries for greater ambition.

A review period for the INDCs, favored by the countries most vulnerable to climate change (sub-Saharan Africa and the small island states), was also scrapped. Instead, a synthesis report will be prepared by the UNFCCC Secretariat by November 1^st, 2015 (based on INDCs submitted by October 1^st).

The Key Roles Played by China and the United States

Throughout the time I was in Lima, it was clear that the joint announcement on November 12^th of national targets by China and the United States (under the future Paris agreement) provided necessary encouragement to negotiations that were continuously threatened by the usual developed-developing world political divide.

The delegates from the vast majority of countries were well aware of the fact that the announced China-USA INDCs move the world from the 14% of global CO₂ emissions covered by nations participating (a subset of the Annex I countries) in the Kyoto Protocol’s current commitment period to a future Paris agreement that now covers more than 50% of global CO₂emissions, with Europe already on board.

Under the decision text of the Lima Call for Climate Action, within the next six months the other industrialized countries will announce their own contributions, and — more importantly – so will the other large, emerging economies – India, Brazil, Korea, South Africa, Mexico, and Indonesia. Coverage of 80% to 90% of global emissions can be anticipated, although major questions remain regarding what can be expected from some key countries, including India, Russia, and Australia.

Broad, Then Deep

In a 1998 book, edited by Bill Nordhaus (Economics and Policy Issues in Climate Change), Dick Schmalensee wrote about “Greenhouse Policy Architectures and Institutions,” and lamented that the Kyoto Protocol exhibited narrow scope (covering only the Annex I countries) but aggressive ambition for that small set of nations. He presciently noted that this was precisely the opposite of what would be a sensible way forward, namely broad participation, even if the initial ambition is less. Based on the 2011 Durban Platform and the 2014 Lima Call for Climate Action, it now appears that with the 2015 Paris Agreement that approach is finally being adopted.

As I predicted in my previous essay at this blog, in which I previewed the COP-20 talks, the Lima decision will surely disappoint some environmental activists. Indeed, there have already been pronouncements of failure of the Lima/Paris talks from some green groups, primarily because the talks have not and will not lead to an immediate decrease in emissions and will not prevent atmospheric temperatures from rising by more than 2 degrees Celsius (3.6 degrees Fahrenheit), which has become an accepted, but essentially unachievable political goal.

As I said in my previous essay, these well-intentioned advocates mistakenly focus on the short-term change in emissions among participating countries (for example, the much-heralded 5.2% cut by the Annex I countries in the Kyoto Protocol’s first commitment period), when it is the long-term change in global emissions that matters.

They ignore the geographic scope of participation, and do not recognize that — given the stock nature of the problem — what is most important is long-term action. Each agreement is no more than one step to be followed by others. And most important now for ultimate success later is a sound foundation, which is what the Lima decision can provide.

Major Challenges Along the Road to Paris

The major sticking points from now until the Paris talks, where it is hoped that the new post-2020 agreement will be signed, are all associated with the divide between rich and poor nations.

The ongoing talks will need to satisfy the interests of both the rich and the poor countries in regard to finance mechanisms, including the realization of the $100 billion commitment that was made in Copenhagen.

Also, looming in the wings is the loss and damage mechanism created in the Warsaw talks last year to help the most vulnerable nations cope with the effects of climate change. Island nations want that mechanism to become another stream of funding from the rich countries, but the rich countries are concerned that the mechanism might lead to some notion of legal liability (and thereby a blank check). The loss and damage concept was reiterated (but not expanded) in the Lima decision.

These and other pending issues mean that the upcoming talks in 2015 in Geneva and Bonn, prior to the December 2015 Paris Conference, will continue to require difficult negotiations across the divide between rich and poor countries.

Difficult indeed. Whereas the agreed decision text from Lima (the “Lima Call for Climate Action”) is less than four pages in length, the Annex (“Elements for a Draft Negotiating Text”) of additional options for the Paris Agreement extends to more than 37 pages!

The Bottom Line

Although it is true that the Lima decision text was watered down in the last 30 hours (as a result of very effective opposition by developing countries), the fact remains that a new way forward has been established in which all countries participate and which therefore holds promise of meaningful global action to address the threat of climate change. So, despite all the acrimony among parties and the 30-hour delay in completing the talks, the negotiations in Lima these past two weeks may turn out to be a key step along the way.

The Warsaw Climate Negotiations, and Reason for Cautious Optimism

The Nineteenth Conference of the Parties (COP-19) of the United Nations Framework Convention on Climate Change (UNFCCC) came to a close in Warsaw, Poland, on Saturday, November 23^rd, after what has become the norm – several all-night sessions culminating in last-minute negotiations that featured diplomatic haggling over subtle changes to the text on which countries were finally willing to agree. The key task of this COP was essentially to pave the way for the negotiations next year at COP-20 in Lima, Peru, as a lead-up to the real target, reaching a new international climate agreement at the 2015 negotiations in Paris to be implemented in 2020, when the second commitment period of the Kyoto Protocol comes to an end. If that was the key objective, then the Warsaw meetings must be judged to be at least a modest success – the baton was not dropped, rather it was passed successfully in this long relay race of negotiations.

Before going further, I would like to acknowledge something else about COP-19 in Warsaw, namely the excellent logistics. Anyone who suffered through the disastrous logistical arrangements for COP-15 in Copenhagen will not take this for granted. Perhaps ironically, in the years I’ve been participating in these annual events, the two best organized conferences (in terms of logistical arrangements) were the two Polish COPs – COP-14 in Poznan in 2008 and COP-19 in Warsaw this year.

As I have written in many previous essays at this blog, the challenges standing in the way of an effective international climate change agreement are numerous and severe. A brief historical account is necessary to explain the significance of what transpired in Warsaw. However, if you’re familiar with international climate policy, particularly the history of these international negotiations, I suggest you skip the next section and move directly to “Issue #1: Making Progress toward a Post-Kyoto Agreement.”

Some Historical Background to Place the Warsaw Talks in Context: the UNFCCC, the Berlin Mandate, the Kyoto Protocol, and the Durban Platform

The U.N. Framework Convention on Climate Change, adopted at the U.N. Conference on Environment and Development (the first “Earth Summit”) in Rio de Janeiro, Brazil, in 1992, contains what was to become a crucial passage: “The Parties should protect the climate system for the benefit of present and future generations of humankind, on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities. Accordingly, the developed country Parties should take the lead in combating climate change and the adverse effects thereof.” [emphasis added] The countries considered to be “developed country Parties” were listed in an appendix to the 1992 Convention – Annex I.

The phrase – common but differentiated responsibilities – was given a specific interpretation three years after the Earth Summit by the first decision adopted by the first Conference of the Parties (COP-1) of the U.N. Framework Convention, in Berlin, Germany, April 7, 1995 – the all important Berlin Mandate, which interpreted the principle as: (1) launching a process to commit (by 1997) the Annex I countries to quantified greenhouse gas emissions reductions within specified time periods (targets and timetables); and (2) stating unambiguously that the process should “not introduce any new commitments for Parties not included in Annex I.”

Thus, the Berlin Mandate established the dichotomous distinction whereby the Annex I countries were to take on emissions-reductions responsibilities, and the non-Annex I countries were to have no such responsibilities whatsoever. This had wide-ranging and profound consequences, because it became the anchor that prevented real progress in international climate negotiations. With 50 non-Annex I countries coming to have greater per capita income than the poorest of the Annex I countries, the distinction was out of whack within a few years.

But, more important than that, this dichotomous distinction meant that: (a) half of global emissions would be from nations without constraints; (b) the world’s largest emitter – China – would be unconstrained; (c) aggregate compliance costs would be driven up to be four times their cost-effective level, because many opportunities for low-cost emissions abatement in emerging economies were taken off the table; and (d) an institutional structure was perpetuated that made change and progress virtually impossible.

The dichotomous Annex I/non-Annex I distinction remained a central – indeed, the central – feature of international climate negotiations from COP-1 in Berlin in 1995 continuously until COP-15 in 2009, when hints of possible change first appeared. The Copenhagen Accord (2009) and the Cancun Agreements (2010) began a process of blurring the Annex I/non-Annex I distinction. But this blurring was only in the context of the interim pledge-and-review system established at COP-15 in Copenhagen and certified at COP-16 in Cancun, not in the context of an eventual successor to the Kyoto Protocol. Thus, the Berlin Mandate retained its centrality.

Then, in December, 2011, at COP-17 in Durban, South Africa, the Durban Platform for Enhanced Action was adopted. Under some interpretations, it essentially eliminates the Annex I/non-Annex I (or industrialized/developing country) distinction. In the Durban Platform, the delegates decided to reach an agreement by 2015 that will be applicable to all countries by 2020.

Rather than adopting the Annex I/non-Annex I (or industrialized/developing country) distinction, the Durban Platform focuses instead on the pledge to create a system of greenhouse gas reductions including all Parties (what matters, really, is all key countries) by 2015 that will come into force by 2020. Nowhere in the text of the decision were phrases such as “Annex I,” “common but differentiated responsibilities,” “distributional equity,” “historical responsibility,” all of which had long since become code words for targets for the richest countries and blank checks for all others.

By replacing the Berlin Mandate, the Durban Platform opened an important window. National delegations from around the world took on the challenging task to identify a new international climate policy architecture that is consistent with the process, pathway, and principles laid out in the Durban Platform, namely to find a way to include all (key) countries (such as the 20 largest national and regional economies that together account for upwards of 80% of global carbon dioxide emissions) in a structure that brings about meaningful emissions reductions within an appropriate timetable at acceptable cost, while remaining within the overall framework provided by the UNFCCC, including the celebrated principle of common but differentiated responsibilities.

Issue #1: Making Progress toward a Post-Kyoto Agreement

In Warsaw, the negotiators were tasked under the Durban Platform track (the so-called “ADP” track) to develop a work plan of substantive topics and a related calendar that will lead to the development of the text of an agreement of a new comprehensive policy architecture that can be discussed at COP-20 in Lima one year from now and then subject to final consideration and adoption a year after that at COP-21 in Paris. This they did, and in the process they identified six components for the new architecture: mitigation, adaptation, finance, technology development and transfer, capacity-building, and transparency of action and support. Some of these are more necessary than others, but it was this package that generated agreement in Warsaw.

The actual agreement in Warsaw could only be achieved through carefully negotiated text. The delegates’ obligation is to eventually adopt “a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties…” In truth, the phrase “under the Convention” is not necessary, because any decision by the UNFCCC is under the Convention, and therefore it is the case that any agreement produced under the Durban Platform is still subject to the UNFCCC principle of “common but differentiated responsibilities.” But the large emerging economies tend to view the phrase “under the Convention” as supporting the dichotomous distinction of, on the one hand, commitments for Annex I (industrialized) countries to reduce emissions, and, on the other hand, no obligations for non-Annex I (developing) countries, who would take actions only voluntarily and only with financial assistance from the Annex I countries. The same set of large emerging economies insisted that if they were to be included in the agreement, then the word “commitments” must be replaced by “contributions.”

It is looking increasingly likely that the 2015 agreement will take the form of a hybrid architecture, combining: (1) a bottom-up system of national commitments (sorry, national contributions) that arise from – or are at least consistent with – national policies and goals; plus (2) top-down, centralized management of oversight, guidance, and coordination, with an eye to increasing ambition over time. At the Harvard Project on Climate Agreements, we outlined such a hybrid international climate policy architecture four years ago (“A Portfolio of Domestic Commitments: Implementing Common but Differentiated Responsibilities”), and we explored it further just last month in a new report (“Identifying Options for a New International Climate Regime Arising from the Durban Platform for Enhanced Action”). In Warsaw, we co-hosted and participated in two sessions that explored these ideas in considerable detail (you can learn more about that here; we will soon place all of the slide decks from those sessions at the Harvard Project web site).

Issue #2: Loss and Damage

As I predicted at the conclusion of last year’s climate negotiations (COP-18) in Doha, Qatar, the issue that held the greatest potential for blowing up this year’s talks in Warsaw was the topic of “loss and damage,” which the delegates agreed to put on the agenda for discussion this year at COP-19. The phrase “loss and damage” is typically understood to refer to the range of damages and loss associated with climate change impacts in developing countries that are particularly vulnerable to the adverse effects of climate change. Discussions about potential international policy in this realm frequently bring up thoughts about who should pay for such loss and damages, presumably those most responsible for climate change.

Since climate change is a function not of current emissions, but of concentrations, responsibility for damages is presumably correlated with cumulative emissions. Hence, the industrialized countries, in particular, the United States, worry that negotiations on “loss and damage” would soon raise the specter of unlimited legal liability.

The link is less direct than one might think, however. First, there is the global commons nature of the problem, meaning that climate change cannot be linked to emissions from a specific country. Second, there is the highly stochastic link from climate change to changes in weather patterns, so that no specific weather incident – whether Superstorm Sandy in New York, Hurricane Katrina in New Orleans, or Typhoon Haiyan in the Philippines – can be deterministically linked with global climate change. These two scientific realities mean that moving from “loss and damage” to legal liability would be a long and perilous road.

But this is a very important issue in the climate negotiations for many developing countries, in particular, for the small island states that are most at risk. Hence, it should not be surprising that this area of discussion – in some ways only a sideshow of the primary talks on reducing emissions and the risk of climate change – almost caused the talks to collapse.

In the end, the delegates agreed to finesse the topic by creating the Warsaw International Mechanism for Loss and Damage, which does not mention liability or promise compensation, but rather states that this is a topic to be discussed further at future meetings, and under the general topic of adaptation to climate change.

Issue #3: Finance

Those are two – the Durban Platform, and Loss and Damage – of three major issues that were considered in Warsaw. The third was “finance,” that is, the question of when and how the industrialized countries will meet the commitment they made at COP-15 in Copenhagen in 2009 to begin delivering $100 billion per year of financial assistance to developing countries in 2020 to help with mitigation and adaptation. Not surprisingly, there was little or no progress on that front. More about this in a future essay. For now ….

The Path Ahead – Any Reason for Optimism?

Given my description above of the debates and “resolution” regarding the major issues, is there any cause for optimism regarding the path ahead. Regular readers of this blog will know that I tend to see the half-full glass (or one-tenth full glass) of water, and in this case I think there really is cause for cautious optimism regarding the path ahead.

This is based upon a singular reality – the growing convergence of interests between the two most important countries in the world when it comes to climate change and international policy to address it, namely, China and the United States.

First of all, the annual carbon dioxide (CO₂) and greenhouse gas (GHG) emissions of these two countries have already converged. Whereas U.S. CO₂ emissions in 1990 were almost twice the level of Chinese emissions, by 2006 China had overtaken the United States. We are the world’s two largest emitters.

Second, as I explained above, cumulative emissions are particularly important, because they are what cause climate change. Any discussion of distributional equity in the climate realm inevitably turns to considerations of historic responsibility. Looking at the period 1850-2010, the United States led the pack, accounting for nearly 19% of cumulative global emissions of GHGs, with the European Union in second place with 17%, and China third, accounting for about 12% of global cumulative emissions. But that is changing rapidly, because of the fact that emissions are flat to declining throughout the industrialized world, but increasingly rapidly in the large emerging economies, in particular, China. Depending upon the relative rates of economic growth of China and the United States, as well as many other factors, China may top all countries in cumulative emissions within 10 to 20 years from now.

Third, China and the United States both have historically high reliance on coal for generating electricity. At a time at which U.S. dependence on coal is decreasing (due to increased supplies of unconventional natural gas and hence lower gas prices ), China continues to rely on coal, but is very concerned about this, partly because of localized health impacts of particulates and other pollutants. Importantly, both countries have very large shale gas reserves. U.S. output (and use for electricity generation) has been increasing rapidly, bringing down CO₂ emissions, whereas Chinese exploitation and output has been constrained by available infrastructure (i.e., lack of pipelines, but that will change).

Fourth, in both countries, sub-national climate policies – cap-and-trade systems – are moving forward. In the case of the China, seven pilot CO₂ cap-and-trade regimes at the local level are under development, while in the United States, California’s ambitious AB-32 cap-and-trade system continues to make progress.

Fifth and finally, there is the reality of global geopolitics. If the twentieth century was the American Century, then many observers, including leaders in China, anticipate (or hope) that the twenty-first century will be the Chinese Century. And, as I was quoted by David Jolly in the New York Times as saying, “If it’s your century, you don’t obstruct, you lead.”

Conclusion

There was no fundamental setback in Warsaw to the stream of work that needs to be accomplished in Lima in 2014 in preparation for an agreement to be reached in Paris in 2015 under the Durban Platform for Enhanced Action. This, combined with the reality of increasing convergence of Chinese and U.S. perspectives and interests, leaves me cautiously optimistic (or perhaps, just hopeful) about the path ahead.

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You can view and listen to an assessment of the Warsaw negotiations in a discussion in which I participated on the PBS NewsHour on November 27^th, moderated by Judy Woodruff.

For other summaries and analyses of Warsaw’s COP-19 climate conference, I recommend:

Carraro, Carlo. “COP19: Between Weak Commitments and Tiny Successes.” International Center for Climate Governance. November 27, 2013.

Center for Climate and Energy Solutions. “Outcomes of the U.N. Climate Change Conference in Warsaw.” November, 2013.

Stowe, Robert. “COP-19: Different Strokes?”The Energy Collective, November 27, 2013.