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Business Costs & Regulation

Modest Gains Likely at
Climate Change Meeting

Next week’s meeting won’t be a complete bust, as some had feared, but it’s sure to disappoint environmentalists.

The Copenhagen climate change summit will leave the hardest work undone. Odds are that next week’s conference will produce a framework for a new international climate change agreement. That’s no small thing, given that as recently as a month ago, many observers were preparing to write off the meeting as a complete loss. But it’s far from certain that negotiators will be able to turn that framework into a treaty that all the major participants can accept by late 2010, when the next summit is expected to take place in Mexico City.

“The indication is that they will have a political agreement in Copenhagen,” says Eileen Claussen, president of the Pew Center on Global Climate Change. “What’s needed at end of day is a legally binding agreement on all major economies. The question is how far Copenhagen pushes us.”

Any political agreement would likely include individual emission reduction targets for all developed economies. These countries will be willing to allow emerging markets greater leeway in setting strategies for cutting their own emissions but will insist on greater transparency and verification to make sure that they are doing their fair share.

Richer countries will pledge aid to poorer ones to help the latter purchase green technology, as well as to help them adapt to effects of climate change that may prove irreversible. There will also be language on plans to slash emissions from deforestation and forest degradation, including financial assistance for mitigation efforts and carbon offsets as rewards. Brazil and Indonesia, the two largest sources of emissions from forest destruction, are both on board.

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President Obama’s proposal to cut U.S. emissions to 17% below 2005 levels by 2020 will help prod negotiations forward. So will China’s pledge to cut the intensity of its carbon dioxide emissions to 40%-45% below 2005 levels by 2020. Because of China’s rapid economic growth, that will do little to lower its greenhouse gas output in absolute terms. But it’s the first time Beijing has been willing to attach any hard numbers to its efforts to mitigate climate change. India -- which, like China, has sat on the sidelines up to now -- may soon respond with a serious offer of its own.

The Obama administration, in particular, will have to walk a tightrope. The president’s offer matches the goal set by the cap and trade bill passed by the House in June. Whether he can convince the Senate to agree to a similar benchmark will depend in part on what reductions other major greenhouse gas emitters, particularly large emerging markets, will agree to and on what terms. And Obama will have to balance developing nations’ demands for many billions of dollars’ worth of aid as the price of their cooperation against the certain opposition of congressional deficit hawks.

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