US United States

International climate agreements? There must be a better way

With the release Friday of the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report of the state of climate science, the message has never been clearer: we have to do something to get…

Maybe reducing the number of participants would help bring agreement. Andrea Lawardi

With the release Friday of the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report of the state of climate science, the message has never been clearer: we have to do something to get the world’s greenhouse gas emissions down. But the international legal framework for addressing the climate change problem - the United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol – has not worked.

At Doha late last year, Kyoto parties determined that a second “commitment period” would start at the beginning of 2013 and end at the end of December 2020.

This second commitment period will cover barely 15% of global emissions. It will include no major emitter. Targets may not increase; we won’t know until the end of the year, perhaps even later.

At Durban in 2011, a non-binding “agreement to agree” on the development of “a protocol, another legal instrument or an agreed outcome with legal force” under the UNFCCC and applicable to all parties – both developed and developing – was launched. It will take effect from 2020.

It now appears that an end of 2015 “deal” for implementation in 2020 may not be possible.

It is a classic collective action problem.

As Lawrence Summers, a former US Treasury Secretary and Harvard President has said, “considerable imagination will be required as to how agreements can be made attractive to the major developing countries or made to be effective without their participation.”

Sub-national action: more substance, less form

Is there a better way?

A survey of climate change law and policy at the national, sub-national and city levels reveals there is a lot of significant bottom-up action happening outside the top-down UNFCCC framework. This is in addition to well-known emissions trading schemes in the EU, New Zealand and (at least for the present) Australia.

  • China has emissions trading pilot programs in five cities (including Beijing and Shanghai) and two provinces. It aims to establish a national trading scheme in the period 2016-2020. It also aims to reduce CO2 per unit of GDP by 40-45% relative to 2005.

  • India has an ETS-like “Perform Achieve and Trade” initiative. It is testing intensity-based energy targets. It also has a renewable energy certificate trading system.

  • Kazakhstan’s ETS is in pilot phase. This will be the first Asian state with an economy-wide cap.

  • South Korea’s ETS begins in 2015 with three phases out to 2026, and with caps for facilities covering 60% of its emissions.

  • The Brazilian Development Bank has apparently signed an agreement with the state of Rio de Janeiro to stimulate “the development of a market for environmental assets”.

  • California, the world’s ninth-largest economy, has a cap-and-trade ETS which sets a limit on sources responsible for 85% of its emissions. They’re trying to return to 1990 levels of greenhouse gas emissions by 2020 and achieve an 80% reduction on 1990 levels by 2050. The US Regional Greenhouse Gas Initiative (RGGI) comprises nine Northeastern and Mid-Atlantic state-level emissions trading schemes.

  • Quebec has a cap-and-trade program (which will link with California’s scheme from January next year). Alberta has an emissions-intensity based Specified Gas Emitters Regulation covering 45% of total emissions.

  • Tokyo, Norway and Switzerland also have emissions trading systems.

The range and the significance of state-based global action on climate change is confirmed by the Climate Commission. And the US-based Climate Policy Initiative charts the acceleration of national climate policy around the world: they say “The climate policy world of today is national and sub-national rather than global”.

The CEO of Australia’s Carbon Market Institute reports that carbon pricing now covers about 21% of global emissions. That figure rises to 50% if states which have instituted or are contemplating carbon pricing between now and 2020 are included.

A little more cautiously, the Chair of Energy and Climate Policy at the Cambridge Centre for Climate Change Mitigation Research states that 10% of global emissions are covered by a carbon price, with 15% being covered by 2015 with the advent of the Chinese and Korean emissions trading schemes.

Is Kyoto’s ‘grand plan' dead?

Some say the UN is not the right place for serious diplomacy. Smaller forums are proposed, a shift in focus to what is really achievable, and a shift in talks to dealing with the reality that lots of climate change is inevitable.

The US has proposed states abandon Kyoto and set their own emissions reduction plans.

The 1987 Montreal Protocol, has successfully prohibited chemicals that destroy the ozone layer, and enjoys much greater state participation than Kyoto. It might provide a guide for action in this regard.

In June the United States and China agreed to use the Montreal Protocol to control the use of hydrofluorocarbons. The Protocol includes a unique adjustment provision that enables parties to respond quickly to new scientific information and agree to accelerate reductions required on chemicals already covered by the Protocol.

It’s argued that any new climate agreement could also be based on economic sectors or specific gases.

Indeed, it’s possible that increasing cooperation between China and the US on carbon emissions could lead towards voluntary national policy, “garnering wider support than that achieved by failed efforts in the past to corral all countries into a binding treaty.”

Think globally, act locally

Recent research in Nature Climate Change shows bottom-up approaches, where parties create institutions locally that punish free riders, promote widespread cooperation. Global institutions at best provide “marginal improvements regarding overall cooperation”.

An approach that is polycentric with multiple institutions “is more effective than that associated with a single, global one”. A scenario in which all states meet in one group to set binding long-term goals and commitments – the UNFCCC/Kyoto approach – “is known to be detrimental to cooperation.”

Such a conclusion is confirmed by the late Nobel laureate, Elinor Ostrom. As she argues,

[t]he likelihood of developing an effective, efficient, and fair system to reduce greenhouse gas emissions that can be rapidly initiated at the global level appear to be very low. Given the severity of the threat, simply waiting for resolution of these issues at a global level, without trying out policies at multiple scales because they lack a global scale, is not a reasonable stance.

This is the first of a three-part series looking at alternatives for reaching climate agreements. Read more IPCC analysis here.