Global Warming: Where Do We Go From Copenhagen?

By Thai Phi Stone

As leaders from more than 180 countries gathered for the climate change talks in December 2009 in Copenhagen, Denmark, the mood was tense. It had been 12 years since the Kyoto Protocol was initially adopted. More research had pointed to the devastating effects of global warming, including extreme flooding and drought. Sea levels were rising, scientists argued. Studies continue to stress that increased carbon emissions could threaten the world’s ecosystems. The Copenhagen negotiations were important.

Long before the United Nations (UN) Climate Change Conference 2009, people had hoped the endgame would be a legally binding treaty that establishes climate mitigation efforts beyond 2012, the timeframe agreed upon in Kyoto. Despite the thousands of people convened in Copenhagen and the awareness that climate change was a global issue, all eyes were on the negotiators from China, India, and the United States. Who would make cuts? Would the cuts be enough? Would the countries be willing to make legally binding commitments?

While India ranks fourth among the world’s leading greenhouse gas emitters, China and the United States top the list, accounting for 40 percent of all carbon gas emissions combined. There is no doubt these countries are necessary pieces to solving the ever-growing problem of climate change. From there, however, views diverge on everything from how large the reductions need to be to whether the countries’ actions should be subject to an international monitoring system.

Who’s on First?
Among the major points of contention is which countries should clean up first, often pitting developed against developing countries. “On the one hand, developing countries will say that they did not create this problem and are just in the early stages of their development,” says Kyle W. Danish, an attorney at Van Ness Feldman. “At the same time, there’s just a mathematical reality that without significant action from developing countries, we won’t be able to get there. Developing countries’ emissions have surpassed developed countries’ emissions. Their efforts are needed.”

Since the Kyoto Protocol was negotiated in the late 1990s, however, a problem has arisen that has further complicated the debate. “[Then] there was a very stark distinction between developed countries and developing countries. Developed countries were supposed to do a lot and do it first, and developing countries didn’t have to do anything or would do it a lot later,” says Danish. “It’s become clear [now] that you can’t talk about developing countries as one undifferentiated group.”

And while major developing countries such as Brazil, China, India, Indonesia, Mexico, and South Korea no longer expect to negotiate the same terms as poor nations, they still believe they should do less, with a longer timeframe to allow their economies to grow and catch up to industrialized nations.

“It’s all posturing. The diplomatic process is so much posturing,” says James W. Rubin, a senior attorney at Hunton & Williams LLP. “At the end of the day, China and India are going to recognize that if they want to ensure their economic development and, at the same time, play a role in international politics and decision making, they’re going to have to do more than make that argument.”

Countries Pitch Potential Emission Targets
In the months leading up to Copenhagen, the public waited anxiously to hear if China, India, and the United States would step up with actual numbers for emission cuts. The European Union (EU) had taken the lead in 2008 when it announced carbon reductions of 20 percent by 2020 compared to 1990 levels. If other countries would participate, the EU promised 30 percent cuts.

With the clock ticking down, concern grew. “There are some people in Congress who are saying, ‘I don’t feel that we can comfortably take on an emission limit in this country if China and India haven’t committed to do something.’ And China and India will say, ‘Why should we commit to do something if the United States hasn’t?’” Danish says. “The track the Obama administration would like to avoid is this endless loop of ‘you first’ diplomacy.”

As if on cue and with less than two weeks to go before the delegates met in Denmark, some of the holdouts¬ announced their commitments, increasing the chances of a potential agreement at the climate change talks. On November 25, President Barack Obama offered a U.S. emissions reduction target in the range of 17 percent below 2005 levels by 2020, with a goal to reduce emissions 83 percent by 2050. A day later, China announced its plan to adopt a domestically binding goal of cutting carbon intensity—lowering carbon output relative to its gross domestic product—by 40 to 45 percent from 2005 levels by 2020. Following suit, India’s Environment Minister Jairam Ramesh announced his country’s plan to decrease its ratio of pollution to production by 20 to 25 percent in comparison to 2005 levels.

With real numbers on the table, the question turned to whether the cuts would be enough. Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, acknowledged that the pledges were “not yet where science says they need to be if we’re going to avoid the worst impacts of climate change.”

According to a December 18 report by The Washington Post, an internal UN analysis circulating around the conference noted that despite current cuts on the table, the future global temperature would still increase by more than 5.4 degrees Fahrenheit. The goal is to keep the Earth’s temperature from rising more than 3.6 degrees Fahrenheit above preindustrial levels by 2050.

Michael A. Levi, the David M. Rubenstein Senior Fellow for Energy and the Environment and director of the Program on Energy Security and Climate Change at the Council on Foreign Relations (CFR), believes China needs to do more. In an expert brief titled “Assessing China’s Carbon-Cutting Proposal,” he wrote, “These targets, while impressive in some meaningful ways, are disappointing…. The problem with the proposed Chinese carbon intensity cuts is not that they do not result in absolute emissions reductions—it is that they do not represent a significant deviation from current business as usual.”

“Business as usual” doesn’t mean that China, or India for that matter, is doing nothing to mitigate its carbon emissions. “Both countries have come up with what they consider climate policies and programs, which could be significant. What’s lost in the noise here is that China has made a lot of strides in fuel efficiency. They’re beginning to develop coal plant efficiencies. They’re doing their thing,” Rubin says.

In November 2009, Obama and Chinese President Hu Jintao also announced a list of upcoming projects aimed at expanding energy options while limiting emissions. Those projects include the establishment of a U.S.–China Clean Energy Research Center, a renewable energy partnership, an action plan to tackle energy efficiency, and a joint initiative to accelerate the deployment of electric vehicles.

In India, there is a plan to create mandatory fuel efficiency standards by 2011, use cleaner technology in coal-fired power plants, build a solar energy facility by 2022, and improve the energy efficiency of its buildings.

Negotiating a Legally Binding Contract
Perhaps the issue is not whether these nations will do more, but whether they are willing to be bound to more. “Are they willing to make some kind of commitment to it so other countries can feel it’s commensurate?” Rubin asks.

“Some of these countries, they’re very concerned about being incrementally hauled into a clear legal commitment under international law. China, in particular, is very wary of that,” says Stephen Porter, director of the Climate Change Program at the Center for International Environmental Law (CIEL). Danish offers a gloomy forecast as well: “I am pessimistic that we would elicit a binding limit on any of those countries in Copenhagen.”

Danish has a reason for his pessimism. A week into the Copenhagen negotiations, the issue came to a head. Tensions rose between China and the United States as Todd D. Stern, America’s special envoy for climate change, emphasized that carbon reductions were key to an agreement. “If you care about the science—and we do—there is no way to solve this problem by giving the major developing countries a pass,” he told reporters on December 9. “Emissions are emissions.” China’s climate change ambassador, Yu Qingtai, was quick to rebuke the United States’ negotiating stance, telling reporters that America should do “some deep soul-searching.”

“China is unlikely to revise its declared carbon intensity goal in the face of Western opposition,” wrote Levi in his November 30, 2009, expert brief for the CFR. “In announcing its carbon intensity target, China emphasized that its actions were voluntary.”

Throughout the global summit, China stated that it was against the idea of adding its voluntary targets to any international agreement. Ramesh, India’s environment minister, also repeatedly said his country, which ranks fifth in the world for carbon dioxide emissions, would not accept a legally binding emissions reduction target.

Despite this hard-line stance, the United States again emphasized that a global pact could not be reached without commitments from the two countries. By the end of the negotiations, the battle over firm targets went to China and India. The final agreement, which is light on details, does not require specific emissions cuts from any nation. The EU remains the only group of nations with binding emissions reduction targets.

The accord, however, set a January 31, 2010, deadline for industrialized countries to register their climate pledges and for developing nations to present voluntary targets. The deadline came and went with a weak response. The UN confirmed that 55 nations submitted plans, with about 130 countries choosing not to do so yet. The countries with pledges, however, did encompass 78 percent of the world’s greenhouse gas emissions. Both China and the United States formally set the targets they had discussed during the Copenhagen conference. Other nations are expected to send their own plans, despite missing the original “soft” deadline.

Who Pays?
Even if the stars align and all countries agree to caps on their carbon emissions as well as changes to domestic policy to curb global warming, another issue looms: funding. Applying the same rationale they used with carbon cuts, many developing countries argued that industrialized nations should foot the bill.

“One of the problems is that going back to 1990, 1992, developed countries essentially agreed to pay the full agreed cost of mitigation, adaptation for developing countries. At that time, there was a different conception about the severity of the problem and how much it would cost,” Porter says. “So now, we’re kind of stuck with that promise or obligation of the convention, and developing countries are rightly saying, ‘Hey, you agreed to this and you have to pony up.’”

The dynamics of the debate, however, have changed as costs have dramatically increased, Porter adds. At the time of the Kyoto Protocol, less was known about the actual overall implications of climate change. On September 2009, the World Bank released preliminary results of a global study that placed the cost of adaptation to climate change in developing countries at $75 to $100 billion a year for the period 2010 to 2050. Other studies listed higher amounts. In November, the International Energy Agency, an intergovernmental organization that advises 28 member countries on energy policy, said a climate deal could cost trillions of dollars over the next 20 years.

“To get [developing countries] where we need them to be, they’re going to need some help,” says Rubin, the attorney from Hunton & Williams. “I think there is an obligation on the developed world … to lead by reductions as well as to help pay for them, at least through the building capacity and technology requirements these countries should have. But to just pay them so they do the right thing is not the obligation.”

Stern took it a step further when talking to reporters at Copenhagen, rebuffing arguments that the United States owed a debt to other nations for its emissions over the years. “I actually completely reject the notion of a debt or reparations or anything of the like…. For most of the 200 years since the Industrial Revolution, people were blissfully ignorant of the fact that emissions caused a greenhouse effect.”

Some experts argue that a few of the developing countries are significantly developed and may not need access to public funding. “I think people appreciate that it’s reasonable to turn to China, India, Brazil, Mexico, South Korea, some of the major developing countries, and expect that they take on a commitment that they fund either wholly or significantly on their own,” Danish says.

Rubin agrees: “Some of these countries, like India and China, they’re not economically problematic. They have huge industries, and the hope is that they’ll come up with ways to reduce their national emissions while increasing their environmental output without needing huge cash infusions.”

Placing India or other nations in the same category as China may not be equitable, though. In an interview with CFR staff writer Toni Johnson, Elizabeth C. Economy, a senior fellow and director of Asia Studies at CFR, said China itself may even need to be separated completely from the group of major developing countries.

“China should be put into its own category,” she said. “Other developing countries [that] have far fewer resources should be the primary targets for an international fund…. China is in a better position to stand on its own to contribute to addressing the problem, whereas there are other countries, and I would include India in this group, that are more in need of international resources.”

Protecting the Poor
While even the idea of helping fund mitigation efforts in China or India sparks great controversy in the United States, few people argue that impoverished nations—those whose existence are threatened by rising sea levels, drought, and other global warming effects—should not receive aid. “Some obligations among the developed countries is to take care of countries that cannot by themselves mitigate or adapt to the harms of climate change that were largely caused by developed countries’ emissions over time,” Rubin says.

The Obama administration seemingly agrees. On the second -to-last day of the Copenhagen talks, U.S. Secretary of State Hillary Clinton pledged to help build a $100 billion annual fund by 2020 to pay for adaptation efforts in poor countries. The EU also had previously made the same commitment. However, the final text of the Copenhagen accord, which is not legally binding, only mentions a $30 billion funding over the next three years and describes the $100 billion fund as just a goal. Where the money would come from is up in the air.

Despite the possible financial commitments, a large funding hole remains. To help fill the void, Porter of the CIEL suggests that major developing countries also contribute. “There is a role for the large merging economies to play in all of this both in reducing emissions and providing financial assistance, particularly to their poor cousins, if you will, in the G–77.”

But Porter points out an issue that makes it more difficult for the United States to ask China to help pay for climate change efforts. “If you take any sort of logical approach to it in terms of historical emissions and capacity to pay, we haven’t exactly set a sterling example that would give us the moral high ground to say to China or others, ‘Okay, we’ve done our share. Now you need to step up.’ We haven’t put ourselves in a very good position to be able to make that happen collectively.”

Durwood Zaelke, director of the secretariat of the International Network for Environmental Compliance and Enforcement, believes China has the capacity to provide aid, citing its foreign assistance programs that are helping build roads and improving courts in Asia and Africa. “I think it’s clear that they could do more and the key is that they see the strategic advantage to do it. They’re building themselves into a superpower and this could be part of the superpower obligation to the world,” he says. “Right now, it’s the U.S., EU, and Japan mostly. China could use this to enter into the top ranks of the superpowers and say, ‘We can do more and we will do more.’ That would be a good political move.”

Finding the Funds
The answer to how to pay the hefty price tag for climate change likely lies in a combination of public and private funding, as well as some form of technology cooperation. “To rely on the annual U.S. appropriations process for a significant amount of funds, I think, would be very difficult,” Porter says.

Responding to the need for more aid, several financial mechanisms were established over the years, including the Global Environment Facility (GEF), Adaptation Fund, and Clean Development Mechanism (CDM).

The GEF provides grants to developing countries and countries with economies in transition for projects related to various environmental issues. Since its inception in 1991, it has allocated $8.8 billion for more than 2,400 projects in more than 165 countries. Despite its success, Rubin believes that for the GEF to help contribute to the current financial needs of a new international treaty, its programs will have to be significantly augmented.

Reviews for both the Adaptation Fund and the CDM are mixed. Neither has lived up to expectations, raising much less money than hoped. The Adaptation Fund was supposed to raise money through a tax on carbon credits sold in the UN emissions trading system and through contributions by developed countries. “I think it’s fair to say that the amounts of funding into the existing fund are inadequate for the job,” Porter says.

The CDM was an innovation from the Kyoto Protocol that allowed industrialized nations to invest in emissions-reducing projects in developing countries. In return, the developed countries would receive emission reduction credits to help them meet the targets they agreed to in the protocol. “It’s been effective in the sense that it’s raised money and [helped reduced emissions] but there are concerns about how it’s worked, whether it’s too bureaucratic, whether it’s allowed projects that really don’t qualify,” Rubin says.

“With the economic collapse, that’s affected the price of carbon and probably slowed significantly the pace of CDM projects,” Porter says. “That’s the problem with a market mechanism. If you’re relying on a percentage of transactions and the overall value of transactions is down, your contributions to the Adaptation Fund will go down.”

Among the most talked about funding mechanisms is the cap-and-trade system, already in use by the UN. Through cap-and-trade, the government would set a limit on carbon emissions. Companies or organizations are then given a certain amount of emission permits, representing the amount of carbon they can produce. Businesses that cut their emissions are left with extra permits they can sell to those that need more than their allowance.

In an argument for an emissions trading system, Danish and coauthor Megan Ceronsky, an associate at Van Ness Feldman, stated that the “European Union Emissions Trading System … yielded a $50 billion market in 2008.” Both are proponents of auctioning off allowances and allocating some of the revenue to fund clean energy programs.

“Targeted allocations offer opportunities to address the initial impacts of a new emissions limit,” they wrote in “Carbon Taxes Are Fine, but a Cap-and-Trade Program Is Better.” The article appeared in the March/April 2009 issue of Trends, a bimonthly newsletter of the American Bar Association’s Section of Environment, Energy, and Resources. “These impacts could be severe, for example, for regions that have relied on coal-fired electricity and for companies in internationally competitive markets. Allocations could help ease their transition into a carbon-constrained economy,” they added.

Zaelke, however, questions if cap-and-trade is the most viable option. “Can we afford to continue down a path looking at a cap-and-trade system that is designed to change relative prices over time to save the world from a problem that is moving so fast that we can’t even keep up with the assessment of the problem? The answer is no. That’s not sane to gamble the world on what is still an experiment.”

An alternative to the cap-and-trade system is a carbon tax, an environmental tax on carbon dioxide emissions. Some of the benefits of a carbon tax would be predictability of energy prices, fast implementation, transparency, and simplicity.

“We agree that a carbon tax could offer predictable costs, administrative simplicity, and an opportunity to offset other taxes,” wrote Danish and Ceronsky. “Our point is simply that a cap-and-trade program can do all these things, and more.”

Avoiding Past Mistakes
The bill before the U.S. Senate as of December, the Clean Energy Jobs and American Power Act, would create a cap-and-trade system. Before Copenhagen, people closely watched the progress of the bill and hoped for its passage, knowing that U.S. policy could have a deep impact on global negotiations.

“There’s definitely an interaction between what we do here in the United States and the international policy,” Danish says. “[The Obama administration] wants to show enough commitment and political will to lead and elicit commitments from major trade competitors like China and India, yet not go out so far ahead of Congress that they return to find an angry Senate. It’s a delicate dance.”

In Porter’s view, “They’ve clearly tied their negotiation position in the talks to outcomes of the U.S. legislative process, which is moving, but slowly.” This became apparent in November when the commitments announced by the United States aligned with the numbers in the Senate bill. It was a move likely to avoid the mistakes of previous presidents.

“The United States went into Kyoto and agreed to something without making sure they could do it domestically. It was all done politically,” Rubin says. The Clinton administration made promises it could not keep and was met with a strong rejection from Congress upon its negotiators’ return.

Following Kyoto, the Bush administration chose not to ratify the treaty. “We took ourselves out of the game on a lot of different things on the environment during the Bush administration,” Rubin says. “We lost essentially 10 years of international negotiations and we’re just getting back to it now. We could be much closer to an agreement had we stayed engaged on a more international side.”

Rubin believes that had the United States ratified the treaty, essentially giving itself a seat at the table, some of the funding mechanisms would be stronger today. “The CDM probably would have been better if the United States played a more formative role in running it. We were observers.”

Speak Softly and Carry a Big Stick
Despite its shaky history on climate change efforts and unwillingness to ratify the Kyoto Protocol, the United States played a key role in creating the compliance and enforcement mechanism that came out of Kyoto. “The U.S. was very involved in the design of the Kyoto regime, if not the primary architect,” Porter says.

The enforcement and compliance regime created then now serves as the building blocks for a potential post-Copenhagen system, including monitoring, reporting, and verification. Whether countries should be held accountable under the system was an issue that stalled the December talks, with Secretary of State Clinton saying that an agreement would not be reached if China refused to submit to a verification process to ensure transparency of its actions. Chinese Premier Wen Jiabao countered that his country would honor its word with “real action.”

“Compliance is always the difficult part of any kind of area of international law,” Danish says. “It’s always this combination of carrot and sticks, and usually some greater reliance on carrots.”

Most treaties incorporate compliance factors, but typically involve helping countries comply or provide money or technical assistance. “There aren’t really any sticks out there. The [World Trade Organization] has a stick, but it’s a communal stick,” Rubin says. “Countries all agree to essentially abide by the same rules, and if you don’t abide by the other country’s rules, then they raise tariffs on you. It’s not an enforcement issue as much as it allows countries to take, essentially, revenge.

“At the end of the day, it doesn’t look like the United States’ model of enforcement. You don’t have an international [Environmental Protection Agency] or court system to deal with this kind of stuff. There are almost no examples of strong, hard compliance in the international environment arena.”

So what are the possible options on the table to enforce climate change commitments? Trade sanctions are likely a top candidate, already used in other treaties such as the Montreal Protocol, which targets reductions in ozone-depleting chemicals. While Zaelke believes trade sanctions are useful, he thinks compliance should be dominantly facilitative. “Let’s help countries solve the problem. Then for those who aren’t with the program? We’re going to use trade sanctions. That’s our big hammer in international law,” he adds.

The United States’ first climate bill—the American Clean Energy and Security Act of 2009, which the U.S. House of Representatives narrowly passed on June 26—carries a provision that imposes border taxes or tariffs on energy-intensive imports from countries that do not actively seek to cap their carbon emissions. Obama has called on Congress to remove the tariff clause.

“This is something that is very offensive to some of the other countries, but obviously, it would be a pretty powerful lever by invoking trade,” Danish says. Punishing violations with border taxes or other methods presents new issues. “Any punishment delivered in international law tends to harm you,” Danish adds. “Utilizing tariffs or border taxes can be powerful, but so powerful that it creates a trade war and hurts us.”

And who determines which countries are noncompliant? The likelihood of one large bureaucracy overseeing an entire compliance process is slim, leaving much of the responsibility to individual nations. “It’s usual under international law that there’s kind of a domestic obligation to whatever extent the national system provides for domestic enforcement,” Porter says.

Porter, however, sees a potential problem: While the U.S. legal system is strong enough to enforce the commitments, other countries may have a more difficult time. “Corruption may be an issue where there just are no tools for communities and other affected folks to hold their governments accountable. What do you do then in the absence of an international regime to ensure compliance?” he asks.

It was a key issue before the negotiators at Copenhagen, and one that will not be resolved any time soon. While the U.S.-backed accord, finalized on the last day of the global meeting, includes language about implementing a reporting and verification system, it lacks information on how the pledges would actually be monitored. It only specifies that both developed and developing countries would list their plans to address climate change and report their progress. There is a goal to subject participating countries to international review, but little else.

Rubin, who worked on setting up the compliance enforcement mechanism for the Kyoto Protocol, says, “In Kyoto, it was determined there would be a compliance mechanism, but it took years and years and years to come up with one.”

The lengthy time it took to establish Kyoto’s compliance system underscores the entire process of creating an international climate treaty itself. Even the timeframe to create a legally binding international pact was up for debate in Copenhagen, which resulted in the removal of the 2010 deadline.

“These international agreements, they just take years to put together. When we look at fully elaborated international regimes like the World Trade Organization, those really came together over a couple decades,” Danish says. “The difficulty is that there’s this disconnect between the timing of the problem and the timing of the ability of international negotiations and governance. You keep trying to push to create ambitious commitments and hope you get part of the way there.”

Time, however, is just one more thing needed to make a dent in the climate change dilemma. Even as scientists say that the world should have begun fixing the problem years ago, the debate continues its slow trudge through the international negotiation process. Next stop: Mexico City in November 2010.

D.C. Bar staff writer Thai Phi Stone wrote about lockstep compensation at law firms in the January issue of Washington Lawyer.