From SUNDAY WORLD April 26, WORLD WATCHING, WAITING FOR COPENHAGEN LEADERSHIP

Update: Everything was hanging in the balance in April and, though the House has acted, the Senate’s questionable willingness to act leaves everything hanging in the balance still. Representative Henry Waxman (D-CA), powerful Chair of the House Energy and Commerce Committee and co-author of the House’s energy and climate bill, said in a press conference August 21 that he is confident the Senate will move.

IF that happens, the President can go to Copenhagen with proof of the U.S. commitment to the fight against global climate change. But, meaning no disrespect to Mr. Waxman, that is still a very big IF.

Reports emerging from preliminary U.N. meetings preparatory to the Copenhagen summit suggest that without U.S. leadership, the new global deal is as doubtful as this post suggests.

U.S. to take reins in global climate talks next week
Jeff Mason (w/Deborah Zabarenko and Eric Walsh), 24 April 2009 (Thomson Reuters)
and
Climate talks depend on U.S. law – top envoy
Jeff Mason and Deborah Zabarenko (w/Arshad Mohammed, Sue Pleming, Richard Cowan, John O'Callaghan and Todd Eastham), 23 April 2009 (Thomson Reuters)
and
Industrialised nations’ greenhouse gas emissions rise in 2007
Michael Szabo and Alister Doyle (w/William Hardy), 23 April 2009 (Thomson Reuters)

SUMMARY
The world’s ability to reach agreement on how to move forward in the fight against gobal climate change, it is widely agreed in international diplomatic circles, hinges on U.S. leadership. And U.S. leadership could ring hollow and flail impotently if the U.S. Congress refuses to pass domestic climate change legislation.

The international successor agreement to the 1997 Kyoto treaty (which expires in 2012) is expected to be finalized at a world summit in Copenhagen in December. In the last decade, the world has mapped out the climate change fight despite the Bush administration having kept the U.S. absent without leave. Veterans of the effort believe it will take leadership from the Obama administration to complete a potent battle plan.

The most recent calculations show the industrial world’s cumulative GhG emissions rose 0.9% in 2007. Emissions from signatory nations to the Kyoto agreement were up only 0.1%, mainly from increases in Canada and Japan (which did not meet their reduction commitments). Led by ambitious national standards and a cap&trade system, EU nations cumulatively reduced emissions 1.4%, with Germany’s 2.4% cut leading. Emissions of non-participants in the Kyoto accord (Examples – Turkey, up 12%, the U.S., up 1.4%) were significantly higher.

Todd Stern will be the Obama administration’s lead negotiator on climate matters.

In an effort to get negotiations started and assume a lead role in the process leading to the Copenhagen summit, the Obama administration has called a meeting for April 27-28 in Denmark among the world’s 16 major economies.

The Big Board of emissions trading. (click to enlarge)

Australia, Brazil, Britain, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, South Africa and the United States will attend. Denmark, as host, will also be present.

The 27 member states of the European Union have committed to greenhouse gas emissions (GhGs) reductions of 20% by 2020 and have expressed a willingness to commit to 30% if the U.S. and the emerging economies will commit to reductions.

The obstacle to reaching effective agreement is the willingness of China, India and other emerging nations to take on commitments to GhG reductions that might slow their economies.

The Bush administration was unwilling to commit the U.S. to emissions reductions without a commitment from China and India. Because it did not foresee such a commitment, the Bush administration predicted U.S. GhGs would not stop growing before 2025.

President Obama is pressing Congress to legislate a commitment to a 15% GhG reduction by 2020 through a U.S.-based cap&trade system. The legislation is expected to win approval by a significant majority in the House of Representatives but may not reach the 60-vote threshold to win passage in the Senate.

One possibility is that the Obama adminstration can negotiate with its Republican opponents on the percentage of allowances auctioned or on the exact reductions targets. Its attitude toward such a negotiation was expressed by Secretary of Energy and Nobel laureate Steven Chu when he said it is at present more important to begin the process of reducing emissions than to take a strong position about a few percentage points of anything.

The many markets that trade EUAs. (click to enlarge)

COMMENTARY
At a conference in California on Earth Day, former U.S. President Bill Clinton confided to the audience that he could foresee international negotiations on climate change collapsing into impotence if the U.S. does not take the leadership by passing its own cap&trade legislation and using the resultant leverage to shoulder China into the new agreement.

The most recent (2007) emissions data, Part 1. (click to enlarge)

The organization of 16 major economies to work out climate change issues was the invention of the Bush administration. It was viewed in the international community, as used under Mr. Bush, to be a way around substantive climate change negotiations. Bush administration representatives continue to assert their commitment to the process was real. UN diplomats are hopeful the Obama administration will use the upcoming meetings of the 16 major economies to make real progress toward Copenhagen.

U.S. conservatives have ignorantly attacked the market-based cap&trade concept. Instead of making an effort to understand it, they have labeled it the biggest government giveaway in U.S. history, the biggest, most complicated tax in U.S. history, corporate welfare, Wall Street welfare and just plain welfare.

Carefully nurtured since 2005 by the EU in its Emissions Trading Scheme (ETS), cap&trade puts a limit (cap) on GhGs allowed to power companies, utilities and industries. Allowances to emit (European Union Allowances, EUAs) are auctioned to them. A market (the ETS) facilitates the sale of the EUAs by companies that can do business below their capped emissions (through the use of New Energy and Energy Efficiency) and the purchase of EUAs to companies that exceed their caps. Investors can also speculate in the market.

The most recent (2007) emissions data, Part 2. (click to enlarge)

Although a cap&trade system does drive power prices up, the auction of allowances also generates revenues that are returned to utility ratepayers in the form of tax cuts and other benefits to offset their expenses. Another portion of the auction revenues goes toward the building of New Energy and Energy Efficiency infrastructure. The result is a shift of the cost for GhGs to the major emitters.

In Al Gore’s recent testimony to Congress, he said that China’s position with regard to GhGs is significantly different than India’s position. China recently became the biggest GhG emitter in the world, has already made a strong domestic commitment to emissions reductions and the building of New Energy and has begun to do so. India’s emissions remain relatively small and its willingness to commit to reductions or New Energy targets remains tentative but bringing it into the international agreement right now is not so urgent.

Their roles in the climate treaty negotiation will therefore be significantly different. Gore says he firmly believes China will participate if the U.S. demonstrates leadership.

The most recent (2007) emissions data, Part 3. (click to enlarge)

QUOTES
- Todd Stern, U.S. Special Envoy for Climate Change: "We are going to fundamentally be guided by what happens in our own legislative process…I don't think [getting climate change legislation through the Senate is] too insurmountable…"
- Stern, on EU and U.S. emissions reductions targets: "The EU puts out a number that is an overall target for everything that contributes to emissions reductions, so there may be other things that contribute to emissions reductions in the United States that aren't part of that ... bill…"
- Stern, on the major economies meeting: "The Bush administration obviously had a completely different approach to this issue than we do…They were not fundamentally looking for an international agreement…We are looking for an international agreement and we're looking for cooperation at a significant, we hope, transformative level."
- James Connaughton, former top environmental adviser, Bush administration: "The point of [the meetings of the 16 major economies] was to be able to inform and help accelerate progress in the UN…"
- David Bookbinder, chief climate counsel, Sierra Club: "Nobody took him seriously because he spent eight years pretending climate change didn't exist…Obama, on the other hand, obviously is taking climate change very, very seriously and wants, reasonably enough, to talk to everyone about what to do ahead of Copenhagen."
- Annie Petsonk, international counsel, Environmental Defense Fund. "The presence of the major economies forum increases our chances of success for getting an agreement at Copenhagen…The more that those countries can come together around a framework, the greater likelihood that they can pour that into a larger agreement."

Paranoiac spew of fear of cap&trade from the conservative side. From climatebrad via YouTube.

- Stern, on his attitude toward the emerging economies: "The major developing countries need to do significant things, need to make real commitments…There is no other way to solve this problem…What we want to do is to invigorate this forum and to infuse it with a mission and with substance…We cannot any longer be in a position where there is ... a notion that the major developing countries don't need to make commitments in the context of an international treaty…They do."
- Kim Carstensen, head, WWF Global Climate Initiative: "We do not see the most vulnerable countries included in these discussions and that is what we would like to see…"
- Stern, on the role of China in the upcoming negotiations: "I actually think that the Chinese are very serious about it. They are doing a lot. They're not doing enough, but they're doing a lot…Their emissions trajectory is huge and at an unsustainable level…"
- Knut Alfsen, research director, Centre for International Climate and Environmental Research: "The numbers are ... a bit depressing…It shows that we are not able to de-link economic growth from emissions."
- Barry Brook, climate change professor, University of Adelaide: "The Chinese and Indian economies, for instance, are not contracting -- they're just not growing as fast. It would take a massive and sustained global recession to noticeably curb emissions growth without directed energy policy…"