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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.

Paris Can Be a Key Step

I returned from a brief trip to Paris two days before the horrific events of November 13^th, which have shocked and saddened civilized people everywhere. I was in Paris for discussions regarding climate change policy at OECD headquarters. Now, I’m preparing to return to Paris in less than two weeks with my colleagues from the Harvard Project on Climate Agreements (I’ve inserted a list of our forthcoming “public” activities at the Paris climate talks at the end of this blog post).

My purpose today, in this essay, is to explain why I believe that the Paris talks may turn out to be a key step in the international negotiations, and more important, a significant step in efforts to address the threat of climate change.

Background on the Paris Climate Talks

The international climate change negotiations that will take place in Paris the first two weeks of December, 2015, are officially the 21^st Conference of the Parties of the United Nations Framework Convention on Climate Change. It will be many years before any of us can truly assess the impact of the Paris talks, but it is clear now that they represent – at the very least – an important attempt to break with the past thrust of international climate policy and start anew with a much more promising approach.

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 Road to Paris

In Paris next month, countries will likely adopt 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.

The current commitment period of the Kyoto Protocol covers countries (Europe and New Zealand) accounting for no more than 14% of global emissions (and 0% of global emissions growth). But as of November 9^th, 156 of the 196 members of the UNFCCC had submitted INDCs, representing some 87% of global emissions (and this will likely reach 90% or 95% by the time of the Paris talks)!

Such broad scope of participation is a necessary condition for meaningful action, but it is not a sufficient condition. Also required is adequate ambition of the individual contributions. But keep in mind that this is only the first step with this new approach. The INDCs will likely 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 2.7-3.5 degrees Centigrade, more than the frequently-discussed aspirational goal of limiting temperature increases to 2 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) will quite possibly 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 being taken in the forthcoming Paris Agreement can be a key step toward reducing the threat of global climate change. Only time will tell.

A Paris Scorecard

I’ve been asked many times what success will look like in Paris. Here’s my scorecard and my predictions of five key elements that – if all were achieved — would constitute an exceptionally 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 will definitely be achieved.

Establish credible reporting and transparency requirements. It is likely that this will be achieved.

Begin to set up a system to finance climate adaptation (and mitigation) — the famous $100 billion commitment. A key question is whether it includes private-sector finance, in addition to public-sector finance (that is, foreign aid). This is likely to be achieved.

Agree to return to negotiations periodically, such as every 5 years, to revisit the ambition and structure of the INDCs. It is likely this will be achieved.

Put aside unproductive disagreements, such as on so-called “loss and damage,” which looks to rich countries like unlimited liability for bad weather events in developing countries. Another unproductive disagreement is the insistence by some parties that the INDCs themselves be binding under international law. This would probably mean that the Paris Agreement would require Senate ratification in the United States, which means that the United States would not be a party to the Agreement. I can only hope that the delegates will realize the futility of pursuing such unproductive elements.

As you can see, I anticipate that elements #1 through #4 will be achieved in the Paris Agreement, and hopefully #5 as well. So, my fundamental prediction for Paris is success. (Unfortunately, some greens and some members of the press will mistakenly characterize this same outcome as “failure,” because the 2 degree C target has not been achieved immediately.)

Finally, for those of you who will be in Paris and/or like to keep up on the work of the Harvard Project on Climate Agreements, here is a partial schedule of our activities there (“partial” only because some of our engagements, including numerous bilateral meetings with national negotiating teams, press engagements, and other private meetings, are not included):

Harvard Project on Climate Agreements

Robert Stavins, Director, Robert Stowe, Executive Director, Jason Chapman, Program Manager, Harvard Environmental Economics Program

Events at the Twenty-First Conference of the Parties of the United Nations Framework Convention on Climate Change, November 30 – December 11, 2015, Paris, France

Events Co-Sponsored by the Harvard Project on Climate Agreements:

“Dialogue on the Comparison of Climate Change Policies”

Friday, December 4; 1:00 -3:00 pm; Pavilion of the People’s Republic of China (“Blue Zone”) — Co-host: National Center for Climate Change Strategy and International Cooperation (NCSC; Beijing) — Participants: Robert Stavins; Zou Ji, Fu Sha, Qi Yue, Chen Ji (NCSC); Duan Maosheng (Tsinghua University); Thomas Brewer (International Centre for Trade and Sustainable Development); Wang Mou (Chinese Academy of Social Sciences).

“Comparison and Linkage of Mitigation Efforts in a New Paris Regime”

Monday, December 7; 11:45 am – 1:00 pm; Pavilion of the International Emissions Trading Association (IETA) (“Blue Zone”) — Co-Hosts: International Emissions Trading Association (IETA), World Bank Group Networked Carbon Markets initiative — Participants: Robert Stavins; Dirk Forrister (IETA); David Hone (IETA and Shell); Andrei Marcu (Centre for European Policy Studies); Gilbert Metcalf (Tufts University); Vikram Widge (World Bank Group)

“The IPCC at a Crossroads: Enhancing the Usefulness of IPCC to the UNFCCC Process”

Wednesday, December 9; 11:30 am – 1:00 pm; Observer Room 12 (“Blue Zone”) — Co-Hosts: Fondazione Eni Enrico Mattei (FEEM; Venice and Milan), Mercator Research Institute on Global Commons and Climate Change (MCC; Berlin), Stanford Environmental and Energy Policy Analysis Center (SEEPAC) — Participants: Robert Stavins; Carlo Carraro (FEEM); Ottmar Edenhofer (MCC); Charles Kolstad (SEEPAC); Hoesung Lee (Chair, Intergovernmental Panel on Climate Change)

“Key Elements of the Paris Agreement and Implications for Business”

Wednesday, December 9; 3:30 – 5:00 pm; Room 9, Climate Generations Area (“Green Zone”) — Co-Host: Enel Foundation — Participants: Robert Stavins; Joseph Aldy (Harvard Kennedy School, by Skype); Dirk Forrister (IETA); Simone Mori (Enel SpA)

Other public events at which Robert Stavins is speaking:

“International Carbon Markets in a Post 2020 Climate Regime”

Thursday, December 3; 4:00 – 5:30 pm; Africa Pavilion (“Blue Zone”) — Hosts: African Development Bank Group, European Commission

“China-California Low Carbon and Climate Change Cooperation”

Monday, December 7; 2:00 – 4:00 pm; Pavilion of the People’s Republic of China (“Blue Zone”) — Hosts: State of California and the National Development and Reform Commission (Government of the People’s Republic of China)

“Can National Policies and INDCs Alone Lead to a Workable and Effective Climate Regime?”

Based on new book, Towards a Workable and Effective Climate Regime (available for free here), edited by Scott Barrett, Carlo Carraro, and Jaime de Melo — Tuesday, December 8; 11:30 am – 1:00 pm; Observer Room 4 (“Blue Zone”) — Hosts: Fondation pour les Etudes et Recherches sur le Développement International (FERDI), University of Venice, ClimateWorks Foundation — Participants: Carlo Carraro (University of Venice and Fondazione Eni Enrico Mattei), Surabi Menon (ClimateWorks Foundation), Roger Guesnerie (Collège de France), Jaime de Melo (University of Geneva), Scott Barrett (Columbia University), Robert Stavins

“Exploring the Potential for International Trading Partnerships in Emissions Permits”

Thursday, December 10; 12:00 – 1:30 pm; Pavilion of the International Emissions Trading Association (IETA) (“Blue Zone”) — Host: Electric Power Research Institute

“Building a Low-Carbon Society: Think Tank Views on Long-term Action”

Thursday, December 10; 1:00 – 3:00 pm; Pavilion of the People’s Republic of China (“Blue Zone”) — Host: Government of the People’s Republic of China

I’m exhausted just reading that list, but I promise to report on some of the highlights from Paris during and after COP-21.

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.