[A2k] TWN Climate Briefings for Bali #1

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Title : TWN Climate Briefings for Bali #1
Date : 04 December 2007

Contents:
TWN CLIMATE BRIEFINGS FOR BALI #1

Third World Network
Visit www.twnside.org. sg for full series

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DEVELOPMENT ISSUES CRUCIAL FOR POST-2012 CLIMATE REGIME

By Martin Khor, Third World Network


The UN General Assembly thematic dialogue on climate change (31 July-2
August 2007) and the =B3Vienna Climate Talks=B2 (27-31 August 2007) under t=
he
umbrella of the UN Convention on Climate Change (UNFCC) have made gradual
headway in clarifying the issues that will be crucial at the Bali meetings
this December which will hopefully launch negotiations  and a roadmap for
global action to combat climate change, especially in the post-2012 period.

At Vienna, participants held a dialogue on the =B3building blocks=B2 requir=
ed
for such global action, and especially for a framework or regime to guide
activities after the expiry in 2012 of the first Kyoto Protocol set of
commitments.  They also held initial discussions on the range of commitment=
s
for developed countries to reduce their Greenhouse Gas emissions by 2020

Key among the present Kyoto commitments is the agreement of most developed
countries to reduce their Greenhouse Gas emissions by 5.2% collectively by
2012 as compared to 1990 levels.  However, a few developed countries,
notably the United States and Australia, have not signed up to the Kyoto
commitments.

At this significant moment in the conceptualization of a climate regime tha=
t
is equitable and fair, it is important to put forward perspectives that
promote the environment and development interests of the developing
countries.

>From this viewpoint, there are at least four important building blocks
towards a post-2012 UNFCCC climate regime =AD science and targets; relation=
s
between developed and developing countries; the need to link development an=
d
environment; and policy coherence.


I:  Science and Targets

First, on science and targets.  Developments in the science of climate
change have progressed recently so that there is broad consensus that the
climate problem is real, serious, and that developing countries will be mos=
t
affected.

There is need to set targets for global action, such as to limit temperatur=
e
rise to 2 degrees centigrade (in fact, well below that), and to prevent
Greenhouse Gas concentration from exceeding 450 parts per million (ppm) of
carbon dioxide equivalent.   Even at these levels, there will be great
damage.  At levels higher than these, scientists inform us that the damage
will be catastrophic.

However, the establishment of such science-based targets has to be linked t=
o
agreement on =B3burden-sharing=B2 principles, particularly as between North=
 and
South.
II:   North-South Relations

Second, therefore, is the crucial building block of fair North-South
relations in a climate agreement.  The UNFCCC and Kyoto principles of
equity, historical responsibility, and common but differentiated
responsibilities have to be re-affirmed and more importantly to be
operationalised in concrete terms and measures to be worked out.

Indeed these principles must be infused into all aspects of the negotiation=
s
and reflected in the agreements to be made.

The implications for developing countries of proposals on global targets
should be more explicitly discussed.  For example, the European Union has
made a proposal for a global emission cut of 50% by 2050 (compared to 1990
levels) and a cut of 60-80% for developed countries.

It is good that the EU has started the ball rolling by putting forward thes=
e
proposals and figures.  Of course it is only a start and the EU and other
developed country parties must be expected to improve on their proposed
commitments.

However, there are also implications for developing countries in such
figures, which have thus to be considered seriously.  If we assume, for
simplicity, that developed and developing countries account 50:50 for total
emissions, then a global 50% cut with 70% developed-country cut implies a
30% emission cut for developing countries.

If developing countries=B9 population doubles in that period (from 1990 to
2050), then the implication is a 65% cut collectively in their emissions pe=
r
capita.

This is a very deep cut, and whether developing countries should or can tak=
e
on such cuts should be openly debated.   It is insufficient to leave these
as implicit targets, as a residue of global and developed countries=B9
targets.

The above is of course only one aspect, though an important one, in the
operationalisation of the principles of equity, common but differentiated
responsibilities, etc.


III:   Integrating Development Concerns with Climate Issues

Third, there needs to be more work the building block of integrating
development with environment.  Addressing climate change as an environmenta=
l
crisis requires simultaneously a development solution.  The development
challenges are enormous, far more than has been generally acknowledged as
yet.

As has been effectively argued, if climate change is not addressed, its
effects would themselves devastate development prospects.  Thus adequately
addressing climate change through mitigation and adaptation is crucial, and
is more cost-effective than adopting a =B3business as usual=B2 attitude.

At the same time, we should also not under-estimate the tremendous efforts
required to switch to new development pathways that match the new
emission-stabilisation pathways required to curb the growth of Greenhouse
Gas emissions.

For example, the Vienna meeting heard presentations that the economic costs
of addressing climate change would be only 0.12% of world Gross National
Product (GNP) per year, up to 2050.


If this is so, then operationalising this would still be an enormous
challenge.  It may imply, for instance, that if developed countries are
growing at 2.12% a year, they would have to make do with 2% and if
developing countries are growing at 6.12%, they would have to make do with
6%.

(Of course if developed countries were to agree to reduce their growth rate=
s
more than this, developing countries will have more space to grow).

This may be a relatively small price to pay to address climate change and
still enable relatively good growth.  But it would be a tremendous challeng=
e
indeed for developing countries to be able to grow economically at 6% a yea=
r
and also be able simultaneously to reduce their per capita emissions by 65%
by 2050.

Perhaps it can be done.  However, many in-depth studies must be undertaken
to show how this tremendous transformation can be undertaken, or it would
remain at this stage only a vision.

On the issue of finance, there should not be an impression that the sums ar=
e
small and that the private sector will take care of most of the costs.

The UNFCCC Secretariat paper on investments needed to address climate chang=
e
(presented at Vienna) has done a good job of stimulating discussions on a
complex issue. It has given estimates of an extra investment and financial
flow of US$200-210 billion required in 2030 for mitigation and =B3tens of
billions of dollars=B2 for adaptation.

The enormous costs of mitigation and adaptation should be realistically
spelt out, and national studies (such as the one presented by India on the
immense costs of emission-reducing reforms in industry) and examples of
costs of addressing real-life climate-related events, would be illustrative=
.

For example, in the newspaper USA Today (dated 29 August 2007) it was
reported that the 2005 Hurricane Katrina caused US$150 billion damage and
the costs of reconstruction include US$116 billion allocated by the US
Congress as well as many more billions of dollars to be met by private
financing including insurance.

The 2004 tsunami would also have cost many billions of dollars in
rehabilitation and reconstruction.

Mitigation and adaptation measures would help prevent or reduce such
expensive costs of disaster-related reconstruction.  The high costs of
damage and reconstruction also have to be addressed.

At the least, there is need for a large publicly-financed and operated fund
to address adaptation.  Private finance can only be a supplement, especiall=
y
since it is difficult for poorer countries to access these funds and on
affordable terms.  A fund to address costs of damage may also need to be
looked into, especially since climate-related damage is already taking
place.

On technology transfer, the challenge is also enormous.  A key question is
the treatment of intellectual property rights (IPRs) over climate-friendly
technologies.  IPRs confer monopoly rights, and can curb affordable access
through higher prices (that usually include monopoly profits) as well as be
a barrier to the introduction or upgrading of technology by private industr=
y
or public-sector agencies in developing countries.

The lower the cost and the greater the ability of developing countries=B9
enterprises to make use of or to make existing or new climate-friendly
technologies, the faster would be the developing countries=B9 ability to
switch to more climate-friendly technologies and to the new
emission-stabilisation pathways as well as new development pathways.

If there is insistence on the =B3full protection of intellectual property=
=B2 in
relation to climate-friendly technology, it would be a barrier to technolog=
y
transfer.  The example of how Indian companies were hindered from
introducing a new chemical that is not harmful to the ozone layer as a
substitute to chlorofluorocarbons (CFCs), because of patents on that
chemical, is illustrative.

Thus, a post-2012 regime has to deal with this thorny issue of IPRs and
developing countries=B9 access to technology (existing and new technologies=
,
for mitigation, adaptation and reconstruction).

On new development pathways, there should be more discussion and work done.
Stabilisation pathways (aimed at greater energy efficiency and emission
reduction) are an important component.

However, there are other key components if developing countries are to
explore new ways of looking at economic and social development strategies
that meet the requirements of emission-stabilisation pathways.

The pathway of moving from primary production and commodity-based sectors t=
o
commodity processing and first-stage manufacturing and services to more
mature industrialisation and services, the pathways of addressing
sustainable development in agriculture, industry, commercial and social
services, the pathway of trade policy, investment policy, financial policy,
technology policy, social policy, have to be thought through.  These are
massive challenges.

IV:  Need for Policy Coherence

Fourth, there should be policy coherence at national and international
levels.  If climate change is indeed the most pressing challenge of our
times, then policies made in other areas and in other fora have to be looke=
d
at through the fresh lens of addressing climate change, and made consistent
with the aims and measures that we are trying to implement in combating
climate change.

For example, at the World Trade Organisation (WTO), there are proposals to
consider as a non-tariff barrier (which should be removed) the imposition o=
f
higher taxes on cars with a higher engine capacity, or the lack of
government action to facilitate financing of consumers=B9 purchase of
motor-cars.

Also at the WTO, some developed countries are also pushing developing
countries to drastically reduce their tariffs on food products, so that
their highly subsidised farm products can penetrate the poorer countries=B9
markets, and at the same time they are insisting that the developing
countries=B9 markets for industrial products also be opened up very
significantly.

Developing countries that take measures, consistent with the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS), to provide
cheaper generic medicines for their population, are being condemned or
punished by the major developed countries like the US or the EU, as the
recent case of Thailand and its compulsory licenses on three types of
medicines shows.

If some of the proposals at the WTO were to be adopted, they would make it
far more difficult for developing countries to switch to an
emission-stabilisation pathway and a sustainable development pathway.

Similarly, reviews should be made of the provisions of bilateral and
regional free trade agreements, and of loan and aid conditionalities facing
countries dependent on the international financial institutions and on aid
donors.

These are some of the issues that at present could be stumbling blocks that
have to be transformed into building blocks towards new goals, frameworks
and structures in the cooperative efforts to combat climate change.

Note:  This is partly based on the author=B9s presentation on behalf of the
Third World Network at the UNFCCC meeting in Vienna on 27-31 August.


 Author :
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