The Bonn climate talks ended last Friday with little to show by way of results.  However the deadline for agreement is December 2009 and in such negotiations, at this stage, we consider it progress if countries agree on what they disagree about.  This seems to have happened and differences were consolidated into a form that allows the negotiation to move forward. 

These climate negotiations are important because what comes out will affect the global economy far more than, say, the Doha Round outcome.  Not that this is unwelcome.  The risks of global warming are very real, the impact on low latitude countries like India is particularly adverse and the time available for course correction is running out.  But the purpose of this column is not to explain the science and the economics of climate change risks but to provide an overview of  the politics of the negotiating process that will determine how the cost of this externality are going to be shared.

The main game in town is the UN Framework Convention on Climate Change (UNFCCC) which is based on a clear distinction between the responsibilities of the industrialized countries (collectively referred to as Annex I parties) and the role of the developing countries.  This distinction is embodied in three key fairness principles in the UNFCCC: the principle of common but differentiated responsibility, the role of historic culpability for cumulative emissions and the recognition of the development imperative for poor countries.  That is why the central element in India’s negotiating stance is that the UNFCCC is not up for renegotiation.

The UNFCCC did include the goal of a return to 1990 levels of emission by 2000 by the Annex I countries.  But binding quantitative commitments were negotiated later in the Kyoto Protocol (KP) which specifies emission targets for Annex I countries in the form of reductions on a 1990 base to be achieved by 2012.   The Protocol was deformed from the start as USA, which accepted KP under Clinton administration, failed to ratify and has maintained its rejection of KP even under the new Obama administration.

With rapid growth in China and India the principle of differential treatment for developing countries is being questioned and there are demands for these countries to be brought into the framework of emission control commitments.

These concerns were reflected in the Bali Action Plan (BAP) which asked for Nationally Appropriate Mitigation Actions (NAMA) by developing countries.  But this was tied to the provision of finance and technology. At the same time, in order to bring the USA into the tent, the obligation on Annex I countries was diluted a little by asking these countries for “commitment or actions” on emission reduction.

The negotiations going on now involve two related processes-one dealing with a programme for long term cooperation which is looking at obligations on all countries and another on commitments by Annex I countries for the second commitment period under the Kyoto Protocol.  There is an attempt to merge the two processes, a move that would in effect dilute the principle of common but differentiated responsibility.

The word “responsibility” could be interpreted as “duty” and China and India have clearly indicated their willingness to do what they see as their duty to address this global problem.  The word “responsibility” also means “culpability”; but the developed world seems to be weaseling out of any willingness to recognise their historic responsibility for the problem. 

The developed countries would stand a better chance of securing cooperation China, India and others like them if they were willing to do more. But the fact is that most European countries, Japan and Canada will not meet their Kyoto commitments.  As for the USA, its emissions in 2007 were a billion tonnes higher than in 1990.    Russia and some Eastern bloc countries show a significant decline because the combination of a pre-collapse 1990 base and inordinately large emission quotas meant that Kyoto targets were no longer an effective constraint. 

The offers on the table for the next commitment period are also inadequate. The IPCC has suggested a 25-40% reduction on the 1990 level by 2020 for these countries.  What is on offer is a 20-30 %  reduction by Europe, a 8% reduction by Japan and a US offer to keep the 2020 emissions to the 1990 level.  There is no offer from the Russia which got a hugely generous deal in the Kyoto protocol.

There are some new elements in the current negotiating process.  The BAP talks of a long term goal on emission reduction.  India has correctly argued that any such long term goal must also include an agreement on how available environmental space should be shared.  It has announced its unilateral commitment to ensure that its per capita emissions never exceed the average for the developed countries and has suggested convergence to equal per capita emissions, say by 2050, as a principle for sharing available space.   But this has not yet been accepted by the industrial countries even though the offer lets bygones be bygones.  It is about fairness in future emissions, which can hardly be denied. 

Another new element is the proposed the sectoral approach.  The fear here is that differences in factor endowments would be ignored and global sectoral standards could become an excuse for protection.  The inclusion of forest protection as part of the commitment framework is an important advance for developing countries; but it will require the crossing of some really difficult methodological hurdles.

Over the next six months the pressures will mount and the rhetoric will become increasingly strident.  The GOI must demonstrate its commitment to act by spelling out the programmes and policies to implement the eight missions in the National Action Plan on Climate Change (NAPCC).  Instead of reading out lectures on how sustainable our culture and way of life is, we should demonstrate how the NAPCC will lower emissions below a business-as-usual level. The new articulate and dynamic Minister for Environment must become more visible in the global arena.  The message that must get across is that we are ready to accept obligations which do not conflict with the principles of fairness contained in the UNFCCC.  Hence the onus for failure at Copenhagen will rest with the developed countries who, so far, have failed to commit emission reductions or offer compensatory financing and technology transfer at the scale required.