Around the Halls: Copenhagen Climate Change Conference

Experts from the Global Economy and Development program analyze the talks at the 15th U.N. climate change conference in Copenhagen and provide comments on the key areas that will likely be addressed, including the status of U.S. climate legislation, low-carbon energy technologies, and financing for Africa.

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In this edition:

How will the current state of U.S. climate legislation impact negotiations in Copenhagen? And, following COP15, how will the negotiations affect next steps for U.S. legislation?
Adele Morris, Fellow and Policy Director for Climate and Energy Economics, Global Economy and Development

President Obama is being as forthcoming as he possibly can in the climate talks without having legal authority to implement an economy-wide constraint on greenhouse gas emissions. He needs new authority to pursue his target of emissions reductions in the “range of 17 percent” relative to 2005 levels. Although the EPA just finalized its finding that greenhouse gases are dangerous, which is an important step toward using the Clean Air Act (CAA) to control greenhouse emissions, the existing authority is ill-suited to controlling climate change in a low-cost way. Probably the most effective way the EPA can use the CAA is to credibly threaten costly regulation to prompt Congress to enact a new, more efficient climate law.

With whatever comes out of Copenhagen, the ball really stays in Congress’ court. Congress isn’t bound by administration promises abroad, and it appears to be a steep climb in the Senate to pass legislation to meet the president’s goal. Indeed, if the U.S. delegation caves in to demands by the Europeans and others for even more stringent U.S. commitments, the Copenhagen agreement could flop domestically. Thus the president is seeking the slim intersection of what is achievable in the negotiations and what is implementable at home. We’ll see over the coming months whether that intersection exists.

What type of low-carbon projects are appropriate for developing countries, and how can they be financed?
Nathan Hultman, Nonresident Fellow, Global Economy and Development

While popular attention has focused almost exclusively on the the allocation of emissions targets across countries, the Copenhagen conference is also about much more: establishing new and effective approaches to technological innovation, improving international carbon market operations, establishing sound mechanisms for advanced developing countries to make concrete commitments on low-carbon energy infrastructure, setting new procedures for reducing deforestation, and initiating new funding for helping the poorest countries adapt to likely climate changes. The key emitting countries have already made specific and concrete proposals across all these areas, including quantitative targets from China, India, and the U.S. As such, while a complete and final agreement on targets may be unlikely at Copenhagen, substantial resolution of multiple climate goals is more likely now than at any other time in the past.

As we look at the anticipated growth of emissions over the coming decades, it is clear that the large emerging economies—China, India, and Brazil to name a few—are of fundamental importance. Their emissions might be expected, absent any action, to grow faster and far more substantially than other countries’. As such, innovative approaches to reducing this rate of growth are essential as part of a global climate policy. These countries are embracing the challenge, setting forth ambitious energy policy goals and emissions intensity targets, but international support can provide additional assistance. For this reason, expansion and improvement of international carbon markets—such as those established under the Clean Development Mechanism—is a key task of the Copenhagen meeting. In addition, concrete agreements on technology cooperation, creative international approaches to technological innovation, and honest treatment of intellectual property rights can provide the basis for unleashing these countries’ vigorous entrepreneurial engines to implement those low-carbon energy technologies that are best suited to their own development contexts.

With climate change already affecting African farmers, food productivity and prices, how can leaders at Copenhagen protect Africa’s vulnerable nations?
Emmanuel Asmah, Africa Research Fellow, Africa Growth Initiative, Global Economy and Development

Although Africa only contributes between two to five percent of greenhouse gas emissions worldwide, it faces some of the greatest threats from climate change: floods and droughts further imperil agricultural production and food security, water availability, and threaten coastal cities and towns. Mitigation and adaptation costs are especially high for Africa, while most African countries do not have the technological, financial, or human resources available to combat these effects. Developed countries, which have emitted the greatest share of greenhouse gases currently in the climate system, should demonstrate more commitment to reducing emissions to the levels that mitigate global warming effects.

More than rhetoric, African countries desperately need a quantifiable and binding commitment  by the wealthy nations to support efforts by African governments to 1) transform agriculture through technology transfer, and 2) provide financial aid and capacity building for mitigation activities. This will be an important signal by world leaders at the forthcoming Copenhagen conference that they are committed to addressing the food security and poverty effects from climate change. A further commitment to reward African governments that demonstrate sound agricultural practices and innovative policies to reduce deforestation and land degradation will be a bigger step in the right direction.

What can the leaders in Copenhagen do to move the global community toward effective climate action?
Peter J. Wilcoxen, Nonresident Senior Fellow, Global Economy and Development

The Copenhagen climate conference could break a long-standing deadlock in international climate policy. Climate negotiations since 1996 have taken a top-down approach focused on setting internationally-enforceable national targets and timetables for emissions reductions. That has lead to years of stalemate because it demands that national governments cede control of their energy sectors to new international institutions. Countries with large emissions or rapid economic development have been reluctant to do so. 

Copenhagen could lead the way toward a much more effective and practical climate policy as long as negotiators are willing to move toward a more flexible approach with a greater role for carbon prices. A successful treaty would work from the bottom up: enhancing, encouraging and extending the wide diversity of policies currently undertaken at regional or national levels.

For the bottom-up approach to work, provisions are needed that would allow carbon prices (including the price equivalent of regulatory policies) to complement or replace emissions targets as a recognized means of compliance. Prices provide an excellent measure of the stringency of alternative policies and would provide a clear standard for comparison across countries. Treaty language addressing prices would also help ensure that the treaty achieves the goal of “comparability of effort” established during the 2007 Bali negotiations. 

A good approach would be to include a “price collar” that allows each country to set specified upper and lower limits on carbon prices within its borders—including an initial price floor and ceiling per ton of carbon-equivalent emissions, and an annual real growth rate for both. The floor would eliminate the incentive for countries to negotiate very lax emissions targets, and the ceiling would provide a politically crucial mechanism to contain costs. A price collar would provide much greater predictability about the returns to investments that reduce emissions. It would help the policy weather future economic turbulence, and would accommodate developing countries like China that are uncomfortable with hard emissions caps.