11 Mar 2008 Dublin Lecture no. 6 1

“Gain vs Pain”Political economy of climate

change negotiations

Michael Zammit Cutajar

Ambassador for Climate Change, Malta

11 Mar 2008 Dublin Lecture no. 6 2

Outline

• Political agenda (slides 3-8)

• Players and playing field (9-11)

• Features of negotiation (12-21)

• Political outlook (22-25)

11 Mar 2008 Dublin Lecture no. 6 3

Climate change at 20: a strategic issue

• MET + ENV => Economy => Finance, FA => Heads

• Security impacts:– Water and food; energy – Natural disasters, territorial integrity (SLR)– Population movements

• IPCC messages now widely recognized– “Our understanding has come a long way”

• SG/UN High-level event Sept. 2007

11 Mar 2008 Dublin Lecture no. 6 4

Key messages IPCC AR4, Stern Review

• Human-induced change is unequivocal– Faster than expected

• Impacts generally negative– Compounding poverty, fragility, inequality

• Warming beyond 2°C = “danger” (EU)• Prevention is cheaper than cure (globally)

11 Mar 2008 Dublin Lecture no. 6 5

Pain …

• For fighting chance of “safety” (<2°C)

• Global emissions should peak around 2020 …

• And fall below 50% of 1990 levels by 2050

• ENORMOUS CHALLENGE!

11 Mar 2008 Dublin Lecture no. 6 6

11 Mar 2008 Dublin Lecture no. 6 7

… Gain

• Early action costs less than inaction– Stern: 5 to 20 times less (global estimate)

• Pathway to “safety” will knock <3% off global GDP growth to 2030– <0.12% per annum

11 Mar 2008 Dublin Lecture no. 6 8

Political questions

• Not whether? But …

• What? How much? When?

• BY WHOM?

Top 25 « footprints »(WRI/Pew Center; data for 2004 - LUCF 2000)

Saudi Arabia,Malaysia

Top 25 in CO2 emissions(incl. LUCF)

Top 25 in GDP

USA, China, EU25, Russia, India, Japan, Germany, Brazil, UK, Italy, France, Mexico, Indonesia, Iran, Thailand

Myanmar, D.R.Congo

Canada, Rep. Korea, Australia, S. Africa, Spain, Poland

(Taiwan), Netherlands, Argentina

Turkey

Egypt,Nigeria,Vietnam,Philippines,Bangladesh, Ethiopia, Pakistan

Top 25 in Population

11 Mar 2008 Dublin Lecture no. 6 10

Negotiating framework

• 1988-1992: Convention (UNFCCC, 190+ Parties)– Objective, principles, cooperation, reporting– Aim for developed countries: 2000 = 1990

• 1995-2001: Kyoto Protocol (175+ Parties)– Targets for developed countries (2008-2012)– Market mechanisms => Marrakech rules

• 2005-2009: Montreal & Bali processes– Protocol and Convention tracks– “Bali Action Plan” - “Bali Road Map”

11

Strategic parameters• Aim: avoid “dangerous interference”

– Two prongs: Mitigation + Adaptation• To limit climate change to “safe” (tolerable) levels• So that the challenge of adaptation is manageable• & sustainable devt. and food security not impaired

• Criteria:– Inclusiveness (=> effective, fair)– Solidarity– Urgency

• Question: “safe”, “tolerable”, “manageable” FOR WHOM?

11 Mar 2008 Dublin Lecture no. 6 12

Assessing the problem

1. Negotiations are driven by science Growing confidence in IPCC assessments

Caveat: re “Summary for policy-makers”

2. Motivation to act is highly variable Low spatial correlation between cause and effect• Large variation in capacity to cope Many losers - but some short-term winners

11 Mar 2008 Dublin Lecture no. 6 13

Projected patterns of precipitation changes2090/2099 : 1980/1999

Dec-Feb Jun-Aug

11 Mar 2008 Dublin Lecture no. 6 14

Greenland is melting!

11 Mar 2008 Dublin Lecture no. 6 15

Arctic sea ice Median Sept. Extent

09.09.2007 1979-2000

11 Mar 2008 Dublin Lecture no. 6 16

Shaping the response

3. Mitigation vs Adaptation

Mitigation = division, confrontation Vulnerability = unifying condition Adaptation = unifying message Adaptation first?

11 Mar 2008 Dublin Lecture no. 6 17

Mitigation strategy: responsibilities

4. Responsibility “common but differentiated

responsibilities” historical responsibility (equity) responsibility for the future NB. national circumstances,“respective

capabilities” NB. burdens or opportunities

Effectiveness, fairness, responsibility, potential (Data for 2000, 6 KP gases - except 1950-2000)

Source: WRI/CAIT

% World emissions

Tons per cap(tCO2e)

1950-2000 cumulative CO2 - % world + T/cap

Intensity Kt/M$GDP

ExclLUCF

InclLUCF

ExclLUCF

InclLUCF

Energy EnergyPlus LUC

ExclLUCF

USA 19.2 24.3 0.70

EU 25 13.2 10.5 0.46

Annex I 48.4 39.3 14.1 13.9 73.8%456 T/cap

52.6%457 T/cap

0.64

World 5.9 7.2122 T/cap 171 T/cap 0.80

Non-Annex I

43.7 54.2 3.3 4.9 27.1%42 T/cap

47.6%103 T/cap

0.91

China 13.6 3.9 0.98

India 4.5 1.6 0.67

19Dublin Lecture no. 611 Mar 2008

Effectiveness, fairness, responsibility, potential (Data for 2000, 6 KP gases - except 1950-2000)

Source: WRI/CAIT

% World emissions

Tons per cap(tCO2e)

1950-2000 cumulative CO2 - % world + T/cap

Intensity Kt/M$GDP

ExclLUCF

InclLUCF

ExclLUCF

InclLUCF

Energy EnergyPlus LUC

ExclLUCF

USA 19.2 24.3 0.70

EU 25 13.2 10.5 0.46

Russian Fed. 5.3 13.0 1.86

Japan 3.8 10.8 0.41

Annex I 48.4 39.3 14.1 13.9 73.8%456 T/cap

52.6%457 T/cap

0.64

Non-Annex I 43.7 54.2 3.3 4.9 27.1%42 T/cap

47.6%103 T/cap

0.91

China 13.6 3.9 0.98

India 4.5 1.6 0.67

Brazil 2.7 5.3 5.5 13.4 0.76

Indonesia 1.4 7.0 2.4 14.9 0.84

11 Mar 2008 Dublin Lecture no. 6 20

Mitigation strategy:options

5. Targets National OR sectoral Absolute OR intensity

6. Policies Market-based (top-down) OR Technology-driven (bottom-up)

7. Vision Low-hanging fruit (energy efficiency, reducing

deforestation) OR Low-carbon “future technologies”

11 Mar 2008 Dublin Lecture no. 6 21

11 Mar 2008 Dublin Lecture no. 6 22

Signs of promise

• EU: CC & Energy package• USA: States, Business, Congress, Candidates• G.8/ “Major Economies”: 2050 reduction goal• Developing country plans & programmes

• China, 11th 5-year plan + CC programme• Mexico, 1st. National CC Strategy => Devt.

Plan• Brazil, Indonesia: reducing deforestation• India: CC programme in preparation

11 Mar 2008 Dublin Lecture no. 6 23

Bali Action Plan

• Inclusive and comprehensive– Mitigation + Adaptation– Enabled by Technology + Finance

• Framed by “shared vision”• Demanding political judgement

– Verifying and comparing national efforts

• Open as to form of “agreed outcome”• Ambitious (2009 deadline)

11 Mar 2008 Dublin Lecture no. 6 24

Shared vision … differentiated future

• Long-term mitigation goal (50:50)• Low-carbon future: technology, markets and

finance– 2020 peak with current technologies (efficiency)– New technologies: market share or shared

remedies? (IPRs)– Market incentives vital but not enough– Need for green FDI and more public finance

• Differentiated commitments in common framework of accountability

11 Mar 2008 Dublin Lecture no. 6 25

War on two fronts

• Fight both CC and poverty– Energy access for bottom billion(s)

• Integrate climate change and sustainable development– Don’t ignore climate change losers– Don’t subsidize development winners

11 Mar 2008 Dublin Lecture no. 6 26

Contacts

• www.unfccc.int• www.ipcc.ch

• www.cait.wri.org• http://nsidc.org/index.html

• mzc@waldonet.net.mt