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Igor Makarov

PhD in Economics, Associate Professor of the World Economy Department, Academic Head of the World Economy Undergraduate Program at HSE- University, RIAC expert

The 42nd session of the Subsidiary Bodies of the UN Framework Convention on Climate Change took place in Bonn in early June 2015. The aim of the session was to prepare a climate agreement that could be signed in Paris in December 2015. The meeting failed to make any substantial progress. Participant countries found it difficult to achieve compromises on a number of fundamental issues, and negotiators still have much to do to meet the deadline of the Paris meeting.

The 42nd session of the Subsidiary Bodies of the UN Framework Convention on Climate Change took place in Bonn in early June 2015. The aim of the session was to prepare a climate agreement that could be signed in Paris in December 2015. The meeting failed to make any substantial progress. Participant countries found it difficult to achieve compromises on a number of fundamental issues, and negotiators still have much to do to meet the deadline of the Paris meeting.

A brief history of international climate regulation

The international document defining the basic principles of international cooperation on climate change is the United Nations Framework Convention on Climate Change (UNFCCC), which was signed in 1992. The Convention declares, in particular, countries’ orientation towards the reduction of greenhouse gas emissions. An important provision of the UNFCCC is the principle of common but differentiated responsibilities, whereby the primary responsibility for combating climate change (hence, the main emission reduction commitments) falls on developed countries and economies in transition.

The Kyoto Protocol signed in 1997 specifies the provisions of the UNFCCC. Both developed countries and economies in transition have made specific quantitative commitments to reduce their greenhouse gas emissions over the term of the Protocol, that is, from 2008 to 2012.

An important provision of the UNFCCC is the principle of common but differentiated responsibilities, whereby the primary responsibility for combating climate change falls on developed countries and economies in transition.

However, long before the end of this time period, it became clear that the Kyoto Protocol was not able to act a serious tool to help avert the climate threat. The reason for this has been rapid economic growth in major developing countries. While the countries that made quantitative commitments under the Protocol did reduce emissions in 1990-2012 by slightly more than 10% in total, China in the same period tripled its emissions while India doubled its own. In the 2000s, China became the leader and India ranked third in the world in terms of greenhouse gas emissions, due to predominance of dirty coal in their energy balance.

This necessitated the development of a new agreement to bind developing countries to reduce greenhouse gas emissions as well. The Copenhagen conference, convened in 2009, was expected to play a key role in working out such an agreement. Although the Conference gained international attention and was attended by more than 120 heads of state and government, it failed to reach a consensus on a new agreement. A few years later, the second period of the Kyoto Protocol was declared, which runs until 2020. However, a number of developed countries and economies in transition (including Russia) were frustrated by the failure of the negotiations and refused to participate in this second period. As a consequence, only the EU, Australia and several small nations, which collectively account for less than 15% of global emissions, currently abide by emission reduction commitments.

While the countries that made quantitative commitments under the Protocol did reduce emissions in 1990-2012 by slightly more than 10% in total, China in the same period tripled its emissions while India doubled its own.

In December 2015, a new climate agreement replacing the Kyoto Protocol in 2020 is to be signed. To date, its main provisions are already clear. First, all major emitters of greenhouse gases will be party to it. Second, it will be based on a bottom-up principle: the estimated amount of emission reductions will be determined by the countries themselves as they see fit, rather than having it prescribed by a centralized sharing of the total amount of tolerable emissions. Third, the assumed volumes of reduction will not become official commitments. Chances are that they will not be specified in the agreement at all, and will be included only in the informational appendix, with the latter not being legally binding. These national targets will not be called “obligations,” but rather “contributions.” Fourth, the agreement provides for delivering “climate assistance” to the poorest countries of the world, the annual size of which is supposed to amount to 100 billion dollars by 2020.

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The Conference of the Parties to the UNFCCC in Lima in December 2014, as well as an additional session in Geneva in February 2015 succeeded in developing an 89-page text, which presents various options for the wording of all disputed issues. It was assumed that most of these formulations will be agreed upon and the text will be significantly reduced at the conference in Bonn and the negotiation sessions to follow.

Disagreements between the negotiating parties over three main issues are hindering reaching a consensus and further progress.

The first concerns the mention in the document of the principle of common but differentiated responsibilities. The developed countries are insisting on putting an end to the use of this term, since throughout the history of the climate regulation, its use has drawn a dividing line between developed and developing countries which is currently becoming less and less relevant. Developing countries, by contrast, continue to demand a special approach, emphasizing their unwillingness to sacrifice economic growth for emission reductions.

Notwithstanding the modest results of the talks in Bonn, there is little doubt that the agreement will eventually be signed in Paris.

The common goal of joint action, as expressed in the quantities of emission reductions by 2050, is the second issue of disagreement. The leading emitters prefer abstract wording (“significant emission reductions by 2050”), while the most vulnerable countries (especially the small island states) insist on specific and very ambitious goals (up to emission reductions amounting to 70-95% by 2050 as compared to 2010 levels).

The third stumbling block deals with the financial adaptations in the least developed countries. Prospective recipients would like to see the volume of assistance in the document (at least 100 billion dollars per year by 2020), as well as the elaboration of funding mechanisms. Developed countries, as the major donors, are reluctant to do so, largely due to the fact that the sources of this funding are not yet clear.

Voluntary involvement seems to be the only way to ensure the universal character of the document.

The negotiations in Bonn have failed to reach a compromise on any of these issues. As a result, the length of the document has been reduced by only 4 pages. The retrenchment is so insignificant that many experts are expressing serious doubts over the possibility of being able to prepare the final text for the conference in Paris. The UNFCCC staff has recognized these difficulties as well. An unprecedented decision was made on the last day of the talks: a special group consisting of several dozen negotiators will continue to work on the text in order to submit it at the next session, which is due in late July 2015.

Future prospects

Notwithstanding the modest results of the talks in Bonn, there is little doubt that the agreement will eventually be signed in Paris. In contrast to the Copenhagen conference, which by that time did not have a single version of the text to discuss, now the leading countries have already agreed on the main provisions of the document, while the disagreements center on details, no matter how important.

2014 became the first year in history when global economic growth was not accompanied by increased emissions of greenhouse gases.

The framework and non-binding nature of the new agreement should not make observers uneasy either. After the failure in Copenhagen, anything more substantial could hardly be expected. As of today, voluntary involvement seems to be the only way to ensure the universal character of the document. By submitting information on national contributions, all states will set their own climate goals and introduce national regulatory mechanisms to meet them: this appears to be much more important than a mandatory status. It is no less important that the agreement gives attention not only to emission reductions, but also to adaptation, which is becoming increasingly significant as climate change gains momentum.

As for emission reductions, the bottom-up principle makes the forthcoming climate agreement more of a benchmark than an imperative. Specific measures are being implemented at the national, regional and corporate levels. At the time of the negotiation session in Bonn, G7 leaders declared plans at the Summit in Bavaria to decarbonize their economies by the end of the century. The heads of six largest European oil and gas companies sent an open letter to governments and the UN, in which they called for the introduction of widespread and effective carbon pricing. Climatic regulation is developing in many countries, including China, at a rapid pace. 2014 became the first year in history when global economic growth was not accompanied by increased emissions of greenhouse gases.

This is obviously not enough to prevent a rise in temperatures above the acceptable level. But all of these developments have taken place irrespective of the progress of negotiations reached within the UN framework. The significance of the diplomatic dialogue on climate debate should not be underestimated, but the main determinant of emission dynamics lies in the real economy and constitutes the correlation of costs of energy generated from clean and dirty sources and the underlying technological progress.

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