European negotiators believe a global climate deal to succeed the Kyoto Protocol can be achieved, with Barack Obama’s help

Europe's climate negotiators are hopeful. Barack Obama's election has given them a much needed optimism boost ahead of the 2009 international climate negotiations, which kick off December 1 in Poznań, Poland.

The job of negotiators will be to put some flesh on the bones of an international climate agreement to replace the Kyoto Protocol, when it expires in 2012. The basic elements of the deal were agreed at the previous UN climate conference, in Bali, Indonesia. They are a long-term global carbon dioxide reduction goal of around 50 percent by 2050, extension of carbon markets worldwide, and clean technology and financial transfers from the rich to the poor world. Financial transfers include payments to halt deforestation and infrastructure funds for developing countries to adapt to no-longer-avoidable climate change.

However, since Bali, progress on plotting the details of a post-Kyoto regime has slowed, largely because of US insistence that emerging economies such as China and India should commit to CO2 cuts. Poorer countries see this as an attempt to cap their development and have resisted. Europe now hopes Obama will break the deadlock.

EU experts are encouraged by Obama's support for one of the central pillars of a future deal: carbon trading. UK climate economist Lord Nicholas Stern told ClimateChangeCorp at this week’s European Parliament global warming conference – the first major EU climate event since the US election – that a strong US cap-and-trade bill during 2009 would make a “tremendous difference” to international negotiations.

Cap-and-trade schemes are under development in a number of other countries, such as Australia, New Zealand and Switzerland, and the EU's emissions trading scheme is well entrenched. But the US is the key. Ottmar Edenhofer from the UN's Intergovernmental Panel on Climate Change, speaking at the same event as Stern, said “it is really important to implement a transatlantic carbon market” as a cornerstone of a future global deal.

According to Edenhofer, the future global emissions trading structure will have to find a balance between a top-down approach with appropriate international governance, and a bottom-up approach in which countries and regions are able to manage their own carbon markets. Stern said new international institutions would be needed, such as a World Environment Organisation, to enforce a post-2012 deal. This would not be a “very large, well-armed international policeman,” but a “regulatory, encouraging structure,” backed up by the “court of public opinion,” which would pass judgement on non-complying countries, Stern said.

Carbon markets are also a means of transferring money from the rich world to emerging economies and poor countries, as a stimulus for their sustainable development. The current system for this, the UN Clean Development Mechanism (CDM), awards carbon credits for emissions-reducing investments in developing countries, but is widely seen as open to abuse and questionable in terms of the real emissions reductions it achieves. The CDM may also discourage developing countries from introducing their own emissions reduction policies.

Policy analysts are starting to suggest reforms. The Paris based Institut du Développement Durable et des Relations Internationales (IDDRI) would like to see a move away from project-based awarded credits. One of IDDRI's ideas is to allow industrial sectors in developing countries to take on “no lose” emission caps - if they stay within the caps, they are rewarded with valuable carbon credits that can be sold on the future global market.

But IDDRI recognises this is unlikely to be enough. Governments may not be keen for important sectors to take on targets, while for some sectors, such as agriculture, monitoring will be extremely complex. In addition, sectors need money up front for clean investment, rather than cash as a reward after the reductions have happened. The Institute suggests developing countries could overcome the cash constraints by committing to a sustainable development framework with emissions reductions that are “measureable, reportable and verifiable”. And if they do, rich countries could help pay.

The main focus for such assistance would be green investment and forest protection. Anders Wijkman, a Swedish lawmaker who is the European Parliament's lead negotiator on EU assistance to developing countries for climate change adaptation and mitigation, said up to $100 billion will be needed annually for technology, and $50 billion for forests. Solar power investments in Africa need to be part of the deal, said Wijkman. He added that action “has to be linked to the traditional development agenda,” to ensure buy-in from poor countries.

The amounts sound high but are “peanuts compared to what is at risk,” Wijkman said. For comparison, Britain alone spent $9 billion on international development in 2007/8. And Obama could galvanise the effort. “He understands poor countries because he lived there,” Wijkman said. “He cannot do miracles, but he will hopefully stimulate leadership” as the world tries to conclude a post-Kyoto deal.

This story first appeared on, Ethical Corporation’s online sister publication on business and climate

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