Taking Action on Climate Change: The Forecast for Cancún and Beyond

Negotiators to the 16th Conference of the United Nations Framework Convention on Climate Change (UNFCCC) will meet in Cancun (COP16) November 29 to December 10, 2010. The Mexican hosts have tried hard to avoid the overblown hopes of last year’s meetings in Copenhagen—and expectations remain modest. Instead of striving for a master agreement, delegates in Cancun will look to agree on the building blocks that tackle key issues for global cooperation. Nevertheless, while there is no expectation for a binding international treaty, elements of these individual building blocks remain contentious, and success in negotiating a balanced package of actions therefore remains uncertain.

What to Watch in Cancun

Can the delicate balance achieved under the Copenhagen Accord be maintained? The Copenhagen Accord provided a means for both developing and developing countries to declare emission reductions. This was combined with pledges of significant financial support for developing countries along with the creation of a Copenhagen Green Fund. But the Accord is under pressure because of disagreements, most notably between the United States and China, on the Accord’s provisions for transparency of monitoring, reporting and verification (MRV) and in renewed questions about equitable burden-sharing under an eventual emissions regime. Unless these issues can be resolved, it will be difficult to move toward fulfilling pledges of long-term finance. And, the less contentious and therefore more likely agreements in the areas of forestry, technology and adaptation might be stuck waiting in the wings.

What to Watch Beyond Cancun

  • From Climate Change to Green Growth. Stronger links between climate change and green growth are crucial. Look for the reframing of the climate change challenge toward a positive agenda of energy security, competitiveness and job creation driven by innovation.
  • Innovations in the Carbon Markets. With poor prospects for an extension of the Kyoto Protocol, international regulatory uncertainty is growing. Look to uncoordinated but innovative regional, country and local emission trading schemes, and a debate on pathways for eventual convergence.
  • Delivering on Climate Change Finance. Continued work to design innovative funding sources—many of which will depend on either a carbon tax or emission trading—will be critical. In the United States, policymakers may need to reconsider policies that price carbon as part of its deficit reduction strategy. From all contributing countries, expect a strong focus on resultsand performance-based funding, and new tools to leverage the private sector.
  • Showing the Way in Forestry. Significant progress has been made in defining approaches to reduce emissions from deforestation and land degradation which could show how commitments and funding can be combined on the ground with MRV. And look to an extension of this approach for agriculture and land use as well.
  • Focusing on Innovation. Expect strong momentum in building technology cooperation which focuses on knowledge partnership and innovation networks.
  • Recognizing Adaptation as a Development Challenge. With consequences of a changing climate already impairing developing country growth prospects and impacting the poorest and most vulnerable, expect continued movement toward building climate-resilience and national adaptation plans into core development strategies.

Changing the Conversation

Irrespective of the outcome in Cancun, actions will continue to be taken from the bottom-up by national and local governments and through bilateral and pluri-lateral cooperation, private sector initiatives and civil society. If progress under the UNFCCC continues to be halting, some efforts may shift to other institutions beyond the UNFCCC, such as the G-20, Montreal Protocol and the WTO, to pursue discreet parts of the climate agenda. And expect debate on more radical approaches that might entail moving away from a single treaty toward a suite of sector agreements, or which build on the GATT experience to forge agreements among interested countries on emission reductions and compliance targets. The challenge will be to build on bottom-up initiatives that develop new tools and instruments, but simultaneously balance the need for international goal-setting on climate policy outcomes and burden sharing.