Saturday 19 December 2009

COP15: Copenhagen Accord now released

> Would you like to see a genuine artifact of the COP negotiations? Have a peak at this scanned version of the final text of the Copenhagen Accord. On the same page you can see a copy of the draft text from Friday 5am, as apparently discussed by heads of state on Friday morning. A treat for the history buffs among you.

> One item that stood out: the final text mentions a $100 billion per annum fund by 2020 to address the needs of developing countries; more than expected. It says that the funding will "come from a variety of sources, public and private, bilateral and multilateral, including alternative sources of finance." Sounds a lot like "we'll find the money somehow, by golly".

> On Friday morning the COP15 business delegations issued a strong statement asking for a global agreement. They ended up with "Business, governments and society are intricately linked – climate change solutions will need all three to work together." Absolutely right.

> A window into negotiating tactics: in the early hours of the morning US negotiators inserted brackets at numerous places in the negotiating text for the main strand of the negotiations that includes all countries - the long term action plan. This effectively blocked discussions on this negotiating track. Some observers believe the US wanted to counter moves by developing countries to add their concerns to the text, effectively ensuring that discussions would have to be continued next year.

> COMMENT:   Despite some good detail, the Copenhagen Accord is not a great agreement - nowhere near enough. Even US negotiators have admitted that the Accord won't hold global temperature rises to 2°C; has already projected the deal will, despite the assertions of the deal makers, lead to temp rises of 3.9°C. Last week the Stockholm Environment Institute was telling us that 1.5° and 350ppm are the maximum we can afford. (At least Tuvalu got this on the media agenda.)

But the Accord was never going to be enough; even if we had got a serious deal, the time lag for impacts to be felt would mean we'd miss our short window to get emissions down. Our best short-term hope is to turn mitigation into a profitable activity and hope we can raise enough private debt because of the money to be made over the long term, with a carbon price a nice bonus if and when it happens.

Whatever the Agreement, the conference marks the beginning of a new global discourse of cooperation. The extent to which nations (numbers of Heads of State) are coming together to discuss something hard and real in the full glare of galvanising global civil society activism starts us on a road. COPs will begin to be the new global forum of import, eclipsing the WTO and the G20 (which will now be seen merely as the big nations caucusing ahead of COPs). COP15 may not give us an Agreement that matters that much, but I do think it will provide the mechanism for us to work through the ghastly challenges we're going to face with environmental crisis, migration of peoples, and probably wars.

If we can construct mitigation as a profitable activity (and I believe we can) the Clean Energy race will become the next industrial boom - for those countries choosing to participate (and pity those that don't). It will, eventually, see energy prices drop substantially from where they are now, kicking off further booms. If we can use it to also push through a new generation of energy related productivity improvements, then it will prove a lasting step-up in world economic wealth (technology productivity gains being the primary driver, after cheap energy, of wealth). As long as that wealth can be enjoyed in ways that don't involve cannibalising resources and dirtying our nest, I reckon we have a good chance.

> Back to finance - I've had two exchanges this week with people setting up green fixed-interest investment funds, and two groups planning to issue green or climate bonds. Does two-by-two mean the dance is hotting up?


Ryan Alexander said...

Hi Sean, I saw a quote from you in today's Age about Rudd's performance on climate change - that it is 'too late to rely
purely on market mechanisms
to deliver the harder and faster
emissions targets needed'. I'm happy you have made a pragmatic point about the usefulness of carbon pricing! I am a fan of market mechanisms too but the price signal will take way too long to start impacting on consumer and business behaviours. The only saving grace might be the inability of carbon-intensive businesses to obtain finance for projects and the relative ease with which clean projects will be able to get off the ground. Direct investment and mandatory government measures are the only actions which will reduce emissions in line with IPCC projections.

Sean Kidney said...

I think we're already seeing difficulties with the financing of carbon intensive investment - as per Ian McFarlane's comment on 4Corners that no new coal fired power plant will ever be built in Australia again. Even without a Cop Agreement, financiers are fearful of the uncertainty around carbon prices.

Yes, I agree that direct investment and a variety of mandatory policies are now needed. At least that's our only hope!