Beyond the Climate Impasse: How the Major Economies Forum Can Lead the Way

During George W. Bush’s administration, the government was under pressure to act on climate change, but saw the U.N. as a dead end for negotiations.  Instead of the cumbersome talks with almost 200 countries at the table, the Bush administration favored “minilateral” or “plurilateral” solutions with small groups of countries. 

Now in 2013, with a new president in the White House who was feted by the Nobel committee for renewing multilateralism, the idea of smaller plurilateral solutions seems to have kept its currency.  After two arduous decades of negotiations since the 1992 Rio de Janeiro Earth Summit when the first climate framework treaty was penned, it’s time to reconsider whether these smaller groups can break the endless stalemate. 

Although the negotiations have grown tremendously complex, the core difficulty is who has to act to reduce their emissions, how much and when.  An “apple pie” phrase in the 1992 treaty is that countries should act according to their “common but differentiated responsibilities and respective capabilities.”  It’s a pretty agreeable statement: everyone’s responsible for this global crisis, but some countries created much more of the problem so they should act, and especially those countries with the most funds. Developing countries see this as obligating the wealthy nations who have dumped the most carbon pollution into the atmosphere to act first and most aggressively to cut their emissions.  Some key wealthy countries have resisted acknowledging “historical responsibility,” since doing so might mean damage to their economic competitiveness, or maybe even imply legal liability. 

But the clock has been ticking these 20 years, and time is running out.  We need a viable coalition for efficiently and adequately addressing emissions reductions, consisting of a group small enough to avoid the unworkability of full universal multilateralism and, at the same time, large enough to significantly address the issue.  This could be the week for such a step, as the Obama administration hosts representatives from a group of countries assembled precisely for breaking this impasse.

George W. Bush began a group called the “Major Economies Meeting on Energy Security and Climate Change” back in 2007, and upon arriving in the White House, President Obama renamed the group the “Major Economies Forum on Energy and Climate.”  The new “MEF” was officially launched in March 2009 “to facilitate a candid dialogue among major developed and developing economies [and] help generate the political leadership necessary to achieve a successful outcome at the annual U.N. climate negotiations.”

The group has met 14 times since then, and will next meet this week from April 11-12, 2013 in Washington.  Its members include Australia, Brazil, Canada, China, the EU-27, India, Indonesia, Japan, Korea, Mexico, Russia, South Africa and the U.S.  If you add them all up, over four-fifths of all contributions to fossil fuel greenhouse gas emissions in the world are represented.  A reasonable deal within this group would be nearly five times more effective than the current commitment period of the Kyoto Protocol, which only covers 15 percent of global emissions. 

In a recently published Brookings’ paper, Marco Grasso of the University of Milan-Bicocca and I propose a compromise by which the MEF could break the climate negotiations impasse.  Markedly, our approach requires all key players to compromise on some demands in order for their own to be met.  The goals are fairness and feasibility.

First, we suggest the use of ‘consumption-based accounting,’ which counts emissions where products are consumed, not produced.  This would be fairer and beneficial for China, the leading current emitter and third highest emitter historically. China is the ‘workshop of the world’ and essentially the place to which other countries have outsourced their highly polluting stages of manufacturing. Because of its diverse economy, which includes significant resource extraction and primary processing of those resources, this kind of accounting also doesn’t hurt the U.S. significantly. 

Second, we create a ‘carbon budget,’ based on the total amount of emissions that can still be released while keeping us below a 25 percent chance of the world warming above 2 ˚C on average.  That’s the level at which the climate change is expected to worsen to the point of unpredictable and unacceptable impacts.  Also central to the compromise, to apportion the carbon budget we propose a ‘short horizon polluter pays principle,’ which calculates responsibility for climate change from past fossil fuel emissions, but only from 1990 to 2010.  India, China and other developing nations have demanded that the wealthy countries be obligated to act based on their long histories of emitting and their capability to pay, and our short horizon polluter pays principle and use of national income as an indictor of capability address their concern.  However, limiting the responsibility for past fossil fuel emissions to a 20 year horizon is a compromise for the U.S., EU and other wealthy countries with far longer emissions histories.  While developed nations must acknowledge some responsibility, this proposed compromise only requires that they do so from the point that climate change emerged as a concern and global negotiations on the issue were underway.

This minilateral compromise within the Major Economies Forum may be the only way to avoid the disasters that lie ahead.  In this deal, all actors must bend to some demands of the other key players in order for their own to be met, as with any true compromise. The MEF can lead us down a new road by exploring this approach.