Rhein on Energy and Climate

The G8+5 meeting in l`Aquila was disappointing for all those who had hoped the main green house gas emitter countries, which account for 80 percent of global C02 emissions, would pave the way for a successful outcome of the crucial Copenhagen climate Conference in December.

Unfortunately, the gulf between developed and emerging countries remains wider than ever; and President Obama who had chaired the meeting had to admit that it would be no small task to bridge the differences.

Developed countries are caught in domestic political constraints, with lobbies resisting more audacious emission cuts and politicians lacking the courage to be more demanding.

Even the EU has lacked boldness in its December 2008 package, though it is shining golden compared to the latest Japanese and American proposals from the House of Representatives, let alone the signals coming from Australia or Canada, not to mention the obstinate refusal by Russia to envisage any serious commitments.

Emerging countries remain reticent to commit to any quantifiable action to lower the pace of their future emission growth, say from 3 to 2 per cent per year. They insist on

· developed countries bearing the brunt of the reductions to be made in the next decades,

· generous access to Western energy technology,

· substantial financial transfers to finance their huge investments in low-carbon infrastructure, from power plants to subways.

So what might a compromise in Copenhagen look like?

First, developed countries will have to take robust mid-term commitments by which they underscore their political resolve to seriously tackle climate change.

The G8 has stated that they “will undertake robust mid-term reductions” consistent with their ambitious long-term objective (of 80 percent global reduction of their emissions by 2050). 2030 represents the mid-term between 2010 and 2050: They should therefore commit to at least 40 percent reduction by 2030. This would be consistent with the provisions of the American Climate and Energy Security Bill and with EU policy stance. It should be possible, though difficult, to take all G8 parties, with the exception of Russia, on board.

But the G8 will also have to take commitments for 2020, even if the time-horizon is too short to substantially change the inputs lying on the table. It is technically next to impossible to reach a 40 percent reduction, as asked for by climate scientists. But a 15-20 percent reduction objective on the basis of 1990 or 2005 might just be enough to keep G8 countries on track for an 80 percent reduction by 2050.

Second, the G8 have to react to the demand by China and India for intellectual property rights to be relaxed. This demand is bizarre. Even the Chinese and Indian governments have no authority to intervene with intellectual property rights, which are in the hands of private business.

Moreover, China lacks credibility in the protection of property rights. That is why European and American companies are wary allowing their most advanced technologies getting into the country.

Finally, China and India have demonstrated their capacity to catch up with the technological advance of Western companies: China’s solar PV industry has become the world’s number one; it has more wind power companies than any other; and India hosts one of the leading wind power companies.

The G8 should therefore reject the Chinese and Indian demand for free use of patent rights. G8 governments do not have the means to buy property rights in view of transferring them to Indian or Chinese companies. The mere attempt would provoke vehement criticism.

But G8 companies should indicate their full willingness to cooperate with Indian or Chinese firms on new technologies. It is up to each of them to weigh the pros and cons of such cooperation, in particular under the aspect of counterfeiting.

As to finance, the G8 have declared ready to make available additional funding for financing if other major emitters join that effort. But there is no point putting the cart before the horse. Economically sound energy programmes will obtain financing from bilateral and multilateral sources. At this stage it would suffice to substantially enhance the funding capacity of the World Bank and prepare appropriate investment programmes/projects in low-carbon energy.

The focus of the international climate debate must rapidly shift away from illusory targets based on variable reference years – 1990 vs. 2005- to hands-on policies and actions.

This concerns first and foremost G8 countries. They must openly discuss their energy and climate policies among each other and allow them to be subject to peer review, under the authority of the International Energy Agency, which should also undertake regular performance checks. Progressively, major emerging countries (G4) should be drawn into this process.

In the final analysis, the outcome of Copenhagen will hinge exclusively on the willingness of the G8+5 to strike effective and balanced compromises. Their leaders have to learn the inconvenient truth that climate policy is too serious a matter to be left to diplomats scoring negotiating points. It must become their permanent concern. To succeed they will have to meet twice a year to discuss nothing but climate change and effective policies to cope with it.

The single most important decision to be taken at Copenhagen should be to make G8+5 leaders collectively accountable for future climate change, even if that seems very far-fetched.

Brussels 12.07.09 Eberhard Rhein

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