published on 27 March 2012 in air

Rio and the Conventions

The history of climate negotiations
In the past years we have heard  and read a lot about climate change. The Kyoto Protocol, the Summits in Copenhagen, Cancun and Durban, are references of climate negotiations  that have recently appeared in the press, entering our houses and awakening our curiosity on the problem of climate change. But the history of the commitment of the international community  for climate change began various decades ago.
In 1979, the first World Climate Conference that was held in Geneva led to the creation in 1988 of IPCC the Intergovernmental Panel on Climate Change. IPCC is the international scientific panel that is in charge of collecting, analyzing and synthesizing the latest results of climate research, published in an Assessment Report that is published  more or less every 5 years. The first Assessment Report was published in 1990. Today we are awaiting the firth report which should be issued in 2014.
Both the first IPCC report and the second World Climate Conference in 1990 urgently requested an international climate treaty, for which a pressing negotiation process was begun among the developed countries,  the emerging economies and the developing countries.
After a series of intermediate negotiation meetings, it was in Rio, in 1992, that UNFCCC, a framework convention on climate change  was born, together with two other “sister” conventions, on biodiversity and desertification.
The scope of the international climate treaty was to study and to implement cooperation mechanisms to limit the increase in the average global temperature and to face the inevitable impacts of climate change that were already taking place, bearing in mind the social and economic vulnerability and the historical responsibilities regarding the amount of greenhouse gas emissions in the atmosphere produced by the countries signing the treaty, that varied depending on the level of development of their economies.
The Convention was enforced in 1994.
In the following years, annual conferences were held on a regular basis, by the countries signing the Convention, the so-called COP – Conferences of the Parties to the Convention (the first was held in Berlin in 1995), these were alternated and accompanied by numerous technical work group meetings and by the scientific work of IPCC.
An undoubtedly significant passage  in the negotiations response to the climate changes, was the adoption of the well known Kyoto Protocol, that was formally adopted in 1997, and was enforced in 2005, even though it was never ratified by the United States, the largest producer of emissions, among the industrialized countries.
The Kyoto Protocol obtained the legal commitment of the developed countries, to reach specific goals in reducing the emissions of gas, that are considered responsible for the greenhouse effect, for an initial  period of time, 2008-2012, which reaches its natural termination this year.
The Kyoto Protocol also designed the international economic instruments in order to make the obtainment of these goals less expensive and more effective from an environmental point of view:   Emission trading , ET – and investment mechanisms in projects to reduce emissions produced in the industrialized countries, in the developing countries and in the emerging economies respectively –  Clean Development Mechanism, CDM  and Joint Implementation JI.
Another important step in the history of the negotiations was surely marked by the publication, in 2007, of the IPCC Fourth Assessment Report– 4AR, that provides greater scientific evidence on the current climate changes , on their acceleration, caused mainly by the rapid increase in the emissions of anthropic origin in the atmosphere and on their severe impact. IPCC’s 4AR in fact has had the merit of accelerating the negotiating process, which on the occasion of COP in Bali, in December 2007,  led to the adoption of the Bali Road Map, in which both the developed countries and the developing countries decided to increase and speed up their efforts to fight the climate changes  through a series of decisions. The Bali Road Map planned to focus the work of the scientific community and the negotiations on crucial themes such as technology, finance, adaptation  and   Reduction of Emissions from Deforestation and Forest Degradation (REDD), launching a formal process of negotiations on long-term cooperative actions , also aimed at designing the Kyoto Protocol’s successor.
Due to the growing credibility of international scientific knowledge on climate changes, and the worrying proportions of the phenomenon, the more recent COPs have strongly  requested urgent and incisive actions, and these have aroused much greater interest in the press, compared to the past.
Starting from the COP in Copenhagen in 2009,  which was marked by the  United States’ non compliance with the commitment to ratify a binding agreement to reduce the emissions, at the COP in Cancun in 2010,  and at the last COP in Durban in 2011, some progress was made on crucial themes. First of all, with regard to the design of a future global agreement on climate – with the declaration of the commitment of a voluntary reduction of the emissions also by the emerging economies of the poor countries,  such as China, India and Brazil – and secondarily with regard to climate finance, that is crucial in order to carry out effective actions to reduce the emissions and the adaptation to climate changes.
In Copenhagen in particular, the international community undertook to limit the increase in temperature within + 2° Celsius compared to the pre-industrial era: a goal that, as we will see in greater detail later, is probably not very realistic.
The decisions that were made in Copenhagen and in Cancun were formalized in the Copenhagen, Cancun and Durban Agreements respectively, last December, the negotiations made progress with regard to their implementation.
In Durban there were some unexpected results,  in the agreement on  a second phase of the commitment to reduce the emissions of the developed countries,  in the context of the Kyoto Protocol,  from January 1, 2013 to the end of 2017 or 2020 (to be decided soon), and in promoting a process with the endpoint of defining a new legal instrument to control the emissions in all the developed and the developing countries by 2015, to be implemented in 2020. Therefore in Durban important results were obtained in view of a global agreement and in support of the market mechanisms to reduce emissions, both factors are considered crucial to generate adequate resources  for climate finance.
The next COP, the 18th, will be held in Qatar at the end of 2012. 2012 therefore is an important year in the development of the negotiating process on climate, from the point of view of  a global agreement and from the point of view of finance: what will happen after 2012, the year of the end of the first period of commitments of the Kyoto Protocol, and the assessments regarding the capacity to generate adequate financial resources for the climate, continues to be the main subject of the present negotiations. And also 2012 coincides with the awaited appointment in Rio, where the commitments of the Governments regarding sustainability will be discussed again, and it will not be possible to elude the challenge of climate change.

The differences between the goals of the future policies and scenarios
The course of the negotiations that we have illustrated followed the development of research on the climate, from the point of view of physical science and economic research, and the interactions of the same.
The problem of climate change is often identified  with the greenhouse effect. But what is it more exactly? In what measure do human activities influence the greenhouse effect, and what are the implications for the economy and for society? The climate system is extremely complex, but in short it can be described  as being determined by the thermo-hydro-dynamic interactions of the energy from the sun, the atmosphere, the oceans and  lake and river water, the clouds, the Earth’s surface, the snow covering, the ice and the biosphere. The greenhouse effect is, in itself, a natural effect, that is dictated by the absorption by some of the atmospheric greenhouse gases (carbon dioxide, methane and water vapour) of a part of the heat that is emitted by the Earth’s surface that is heated by the sun. Most of the immense energy of the sun in the climate system, in fact, is absorbed by oceans and the mainland, and then is partly returned into space in the form of heat, i.e. infrared radiations. The greenhouse gases present in the atmosphere re-emit the energy that was absorbed in every direction, further heating the Earth. The greenhouse effect we hear of often refers to the amplification of the natural greenhouse effect, and is due to the increase in the concentrations, in the atmosphere, of carbon dioxide (CO2) and other greenhouse gases, that trap more infrared radiation than what would occur naturally. The additional heat that derives from this further heats the atmosphere and the Earth’s surface, disturbing the equilibriums  of the climatic system with effects on the entire ecosystem. In the last two centuries, the anthropic activities have experienced an exponential growth of greenhouse gas emissions in the atmosphere, with consequent impacts on the climatic system and on life on Earth.
A picture of the greenhouse gas emissions flow in 2010 (data WRI-World Resource Institute) shows that the global greenhouse gas emissions originated as follows: 47.9% from the energy sector – of which 13.5% from transportation and 24.6% from the production of electricity and heat – 3.4% from the industrial processes,  18.2% from activities tied to land use change – such as afforestation and deforestation activities – 13.5% from agriculture and 3.6% from waste. Greenhouse gases produced from these sectors consisted of 77% carbon dioxide, 14% methane and 8% nitrous oxide. Therefore CO2 is the main greenhouse gas and the sectors of energy, agriculture and forests play a key role in the production of emissions. Even though  climate science is permeated with uncertainties, particularly with regard to the times and dynamics of the response of the complex climate system to the increase in the concentration of greenhouse gases in the atmosphere and the consequent impacts on the economy and on society,  scientific research offers some estimates and prudential suggestions for the policies.
The aforesaid IPCC report of 2007, 4AR, proposes a series of estimates of the probabilities of an increase in the average global temperature in relation to the increase in the concentrations of greenhouse gases in the atmosphere.
The report assesses that in order to limit the increase in the temperature  to less than 2°C compared to the pre-industrial era – a goal that was agreed on in Cancun – with a 50% probability, the concentrations of greenhouse gas in the atmosphere must settle below a threshold of 450 particles per million (ppm) of  CO2 equivalents.
The unit of measure in  CO2 equivalents translates the contribution of all the greenhouse gases to the heating of the atmosphere into a single unit ; in fact even though their heating potential is different, besides the carbon dioxide and the methane, also other gases produced by human activities are classified as gases that are considered to be responsible for the greenhouse effect: nitrous oxide, sulphur hexafluoride, chlorofluorocarbons and perfluoroethane.
The 450 ppm of CO2 equivalents threshold, when compared with the present state and the future scenarios of growth of the emissions, immediately tells us that the goals of the climate policies are  very ambitious!     .
In fact recent studies show that  if there are no policies to reduce the emissions in the tendential scenarios that threshold  will be reached  between now and 2015, and between 2040 and 2060  a concentration of 650 ppm of CO2eq will be reached – this level is compatible with a + 3° increase in the temperature with an exponential growth at the end of the century.
Instead, in order to reach the goal of +2°  in the more ambitious scenarios, the fourth IPCC report indicates that the increase in global emissions must be halved in the following 10-15 years and that  global emissions must be decreased dramatically by 50% compared to the levels in 1990, by 2050.
The results of the negotiations, compared with the commitment for a decrease, are still far from this goal:  if the Kyoto Protocol contemplates a commitment  to decrease the emissions in the industrialized countries for the period 2008-2012 by 5%, on a global scale compared to the levels in 1990, in Cancun, even though on a voluntary basis, the developed countries undertook to decrease the emissions by an amount varying from 20 to 40% compared to the emissions in 1990, by 2020.

The costs of the climate changes: equity and efficiency
What prevents a more serious and incisive commitment  by the Governments?
The big problem is how to subdivide the cost of the decrease in the emissions, among the countries that have reached a different level of economic and technological development. The poorer countries and the emerging economies, have minimum historical responsibilities for the increase in the emissions of greenhouse gases in the atmosphere, but they  have growth and development  requirements that need a large and growing amount of energy consumption and an increased use of the land, also in view of a strong demographic growth. In Rio, in 1992, when the UNFCCC was born, the global emissions of China were less than half those of the USA. Five years later, when the Kyoto Protocol was signed, the proportion was still slightly more than half. In the ten years that followed, the scenario changed completely. Today China accounts for the greatest amount of emissions in the world,  with emissions that are 10% more than those of the USA, and future projections indicate a growing gap.
The pro capita data offer  a very different view. If in 1992, an average Chinese citizen  emitted 10% of the emissions produced by an average American citizen, notwithstanding the rapid economic growth and the stability of the population today the pro capita emissions in China are slightly more than a quarter of those of the USA. The projections  indicate that this difference will be relevant also in the future decades, and they give an idea of how difficult it is to involve a Country like China in an agreement that is binding on a global scale. To reduce emissions without slowing the growth in fact involves costs that translate essentially in investments for  energy efficiency and new technologies.
Often the poor Countries are also most vulnerable to the impacts that are expected with climate change, such as desertification, the rise in the sea water level – just think of the small islands in the Pacific – or extreme events such as floods or draughts. The greater  environmental, social and economic vulnerability of these Countries involves higher costs for adapting, and North-South transfers to sponsor emergency interventions and local preventive adaptation action.
What are the costs of climate change?
Economic research on this topic states that the costs of the strategies to reduce the emissions – known as mitigation costs –  that are necessary to reach the  2° goal, are estimated to be equal to a loss of  the global GNP (Gross National Product) – i.e. the value of riches produced worldwide – ranging between 4 and 7%, and this amount varies, depending on the choice of the scenario and  bank rate used. In order to quantify these costs, in monetary terms, as absolute values and  at a particular  stage in time, in one of the possible courses towards stabilization of the emissions to contain the increase in temperature within 2°, the costs in 2020 would amount to approximately 94 billion US$. The market instruments contemplated  in the Kyoto Protocol have been designed in order to guarantee greater efficiency, and therefore  reach the goal of  the reduction with minor costs, however, in order to be effective, they must  succeed in involving all the great producers of emissions of the present and of the future. Besides the mitigation costs, to evaluate the overall costs connected with climate changes, it is necessary to also quantify the value of the damage of the impacts of the changes in climate and the adaptation costs. From a methodological point of view, the economic assessment of the overall costs is not simple because mitigation and adaptation have different dimensions in time and space: in fact the mitigation actions  have effects that are distant in time, with global benefits, while the adaptation actions are typically local and immediate. In the presence of limited financial resources and uncertainty, the decision makers must choose which actions to privilege, giving a greater value to any synergies.

The crucial topics of the debate: mitigation, adaptation and finance, in detail

In the context of climate change, mitigation is defined by the United Nations as a human intervention to reduce the sources, or to increase the absorption of greenhouse gases and therefore  reduce the concentrations of greenhouse gases in the atmosphere. Let us imagine that  the atmosphere is like a bath tub: a part of the emissions that  are emitted every year in the atmosphere flows out, due to absorption by the oceans and the Earth’s biosphere. A part, however, remains. Today it is estimated that in one year approximately 30 billion tons of CO2 produced  by the combustion of fossil fuels  enter the atmosphere, and out of these 30 billion tons, about 8 billion tons are absorbed  by the oceans, and 7 billion tons are absorbed by the forests. The 15 billion tons of CO2 that remain every year, are added to the Earth’s atmosphere.  The pro capita emissions amount to approximately 4 tons of CO2 per year, calculated as a global average. In order to have an idea of what consumption these amounts of emissions can generate, imagine that they are equal to a little more than a flight from Milan to San Francisco and back, or from Milan to Tokyo, or the average annual consumption of fuel of a car that travels 24,000 km per year, with an average consumption of 5 litres per 100 km. Therefore these consumptions can easily be exceeded by an average citizen living in the rich part of the world.
Due to the evidence provided on the increase in the concentrations of greenhouse gases in the atmosphere, and the estimates regarding the climate response offered by the scientific community, as illustrated previously the international political community has set itself a number of urgent goals to stabilize the emissions, and mitigation is absolutely inevitable. According to UNFCCC all the Countries must make efforts to stabilize the greenhouse gases in the atmosphere, at levels that will prevent harmful human interference with the climate system, even though these shall be made on the basis of the principle of “common but differentiated responsibilities”, that authorizes the developing Countries to take up different commitments from the industrialized Countries.
The global mitigation action, in the near future, shall also foresee a revision of the targets for the reduction of the emissions for the industrialized countries, and also mitigation actions by the developing countries and the emerging economies, supported by adequate technologies, financing and capacity-building activities. Incentives for the development of low carbon content technologies will be provided,  highlighting the really crucial role in the revolution that is necessary in the energy sector in order to face the climate challenge.
Some practical examples of mitigation include: a more efficient use of fossil fuels for industrial processes or for generation of electric energy, the substitution of fossil fuel sources with renewable energy sources (energy from the sun and wind),   increased insulation  in the buildings, the expansion of forests and other absorption basins in order to remove large quantities of CO2 from the atmosphere, and at the same time a decrease in the deforestation, that  is estimated to be responsible for about 20% of the global emissions of CO2. Efficiency and energy saving, renewable energies, new technologies for absorption –  such as geological sequestration –  and nuclear energy are the options  which have been studied by the scientific community and are being  evaluated by the decision makers.
Therefore mitigation is inevitable, but also adaptation: as, in fact, it has been extensively discussed,  a world  with an increase in temperature under the limit of 2° is now quite improbable. But what is adaptation more exactly?
Adaptation is defined by IPCC in the third assessment report of 2001, as the “Adjustment in ecological, social or economic systems, in response to actual or expected climatic stimuli, and their effects or impacts  […]  refers to changes in processes, practices or structures  to moderate or offset potential damages or to take advantage of  opportunities associated with changes in climate.” IPCC distinguishes between : Autonomous adaptation – i.e. the natural automatic response to a “shock”; also social and economic systems partially react autonomously, through the possibility of replacements  dictated by price signals or scarcity. And planned adaptation – i.e. the set of strategies that are suited to alleviate the damage – after it has materialized – through adequate modifications in the social, economical and environmental system  subjected to the impacts. Planned adaptation is typically used by actors in the public sector.
As mentioned before, adaptation is now an urgent policy, due to the impacts of the change in climate that are already present and that are expected, with increasing intensity during the course of this century. It is highly probable that the climate changes shall determine an increasing number of episodes of draught and floods, extreme events and a rise in the sea level, with dramatic consequences for the economy and for society. The countries that are most vulnerable to these impacts are the poorer countries and in particular the small islands in the area of the Pacific, which will necessarily have to implement adaptation actions.
UNFCCC has made all the Countries undertake to implement National Adaptation Programmes of Action (NAPA). For the developing countries the layout of these plans, helped by the Nairobi five-year plan (Nairobi Work Programme on impacts, vulnerability and adaptation to climate change –  Understanding vulnerability, fostering adaptation), should help to identify adaptation projects that are worthy of the financial aid and support of the international community. In this context it shall be of crucial importance to be able to guarantee some additional funds besides the funds that have already been paid for development (ODA, Official Development Assistance) for the adaptation.
The Kyoto Protocol has created an Adaptation Fund to finance adaptation projects in the developing countries under UNFCCC, which is fed with 2% of the proceeds from the CDM projects. It is estimated that the amount of the fund will reach 80-300 million US$ for the entire period 2008-2012. Furthermore, in Durban this year,  the Green Climate Fund, was launched, it is a financial operative mechanism of the Convention that will focus on catalyzing financial resources not only for mitigation but also for adaptation.
Climate finance is one of the crucial topics of the negotiations because the size of the problem requires large financial efforts, with a contribution from both public and private finance.
In Durban, some progress was made in the sector of public finance.
In fact, the GCF (Green Climate Fund) has been officially launched. Its creation was decided in Cancun, and it is recognized as the operative body of the financial mechanism of the Convention, and it is fully operative starting from this year. The GCF will finance projects, programmes and policies for mitigation and adaptation activities in the developing countries. Even though a plan for capitalization of the fund has not yet been decided, in Durban a general outline of its architecture was approved. Besides the GCF, inside the financial mechanism of the Convention there are other special funds that operate synergically with other bilateral, regional and multilateral finance channels: the Special Climate Change Fund (SCCF) and the Least Developed Countries Fund (LDCF) – which are both managed by the Global Environment Facility Fund (GEF) – and the  Adaptation Fund (AF) which has been already mentioned, which was born from the Kyoto Protocol.
Besides launching the GCF, in Durban, the Governments decided to sign a work programme, for 2012, for long term climate finance, (the so-called long-term finance), with the aim to multiply financial resources for the climate after 2012. In fact, in the Cancun agreements, the commitment declared in Copenhagen was newly expressed , to allocate immediate resources (fast-start finance) for the climate,  amounting to 30 billion US$ by 2010-2012, and then to succeed in the longer period, in generating 100 billion US$  per year, by 2020 (long-term finance).  The long term finance programme  intends to analyze the real financial requirements of the developing countries, tied to changes in the climate, based in particular on the results of the project,  NEEDS – developed ad hoc by the United Nations – and intends to evaluate different options for the mobilization of financial resources from different sources including bilateral and multilateral  public and private sources. All the updates, the data and the documentation regarding climate finance  are available on the UNFCCC finance portal.
While public climate finance is getting organized, private finance is already moving. Recent studies show that private finance is much more than the public funds allocated for climate, even if it is catalyzed by investments in interventions for mitigation, primarily in the renewable energies sector, and not necessarily aimed at protecting  the climate. A partnership between public and private sponsors, that guarantees a correct equilibrium of the investments for mitigation and adaptation, even through bilateral channels, would be greatly welcome.
Overall the following are however important: the creation of a business climate that is favourable for investments, by eliminating the existing barriers, in particular in the poor countries;  the use of public funds, specially to help in the initial stages of project financing in the poor countries, to then open the road for further private investments; the development of innovative instruments that can attract and channel private capital; the promotion of investments also in areas that are different from the renewable energies – such as for example land use and change of land use and forestation activities – and for adaptation.

Written by Alessandra Goria

Eni S.p.A. - P.IVA 00905811006