Energy Outlook
Wednesday, December 03, 2008
  The Road to Copenhagen
The road to Copenhagen goes through Poland. If you know what that geographically-dubious statement refers to, then you must follow the news relating to climate change pretty closely. This week and next, the UN Framework Convention on Climate Change (UNFCCC) is holding its fourteenth Conference of the Parties (COP-14) in Poznan, Poland. Along with conducting the ongoing business of the UNFCCC, the main goal of the meeting is to table a first draft of the replacement for the Kyoto Protocol, which expires in 2012. A new agreement is meant to be finalized in a year's time, at COP-15 in Copenhagen, Denmark. While this is all consistent with the "road map" agreed at last year's conference in Bali, the current conference is taking place in a remarkably different context, with financial uncertainties that were never contemplated in Bali.

Two changes, in particular, will affect the effort to develop a new set of international commitments on the emissions contributing to climate change, and for addressing the consequences of further warming. The election of a US President with a very different approach to climate change alters the negotiating dynamic, even though he has not yet taken office. The official US delegation is accompanied by a Congressional delegation headed by Senator John Kerry (D-MA.) Although Sen. Kerry does not officially represent the President-Elect, he certainly brings a point of view much closer to that of the incoming US administration than to the outgoing one, reflecting a shift back toward greater harmony with the positions of the EU members, Japan and other countries that adopted the Kyoto targets. Considering the views on climate change of Senator McCain, however, this change since Bali is not nearly as surprising as the one that ultimately may overwhelm it: the evolution of a US housing slump and already-nascent recession into a global financial and economic crisis.

We don't know what lies ahead, but we can make some reasonable guesses. Unemployment will continue to increase in the US and EU, and even if the recession in Asia proves less severe than the one in the late 1990s, as a recent article in the Economist suggested, China and India will face the prospect of millions of people falling back into poverty, after having risen close to middle class status. That will make it harder for their governments to devote resources to reducing CO2 or to be seen to sacrifice future economic growth to slow emissions. Nor will it be easy for Western governments to agree to terms on delayed targets and generous technology transfers benefiting countries that many of their citizens worry are competing for their jobs.

It was always going to be tricky for the delegates following the Bali road map to design an agreement that would reconcile the divergent emissions histories and economic growth rates of the developed and developing countries in a way that left all parties feeling fairly-treated, while still making meaningful progress on stabilizing and ultimately reducing global greenhouse gas emissions. Attempting this against the backdrop of a major global recession complicates matters greatly, going beyond the question of whether economic priorities will trump environmental challenges for the next few years. Depending on the ultimate duration of the current crisis and the manner in which it is resolved, the future mechanisms of our international system might look quite different, and the scope for a global response to climate change could alter significantly. Simply put, the delegates to Poznan cannot assume that the world in which a Copenhagen Protocol would be implemented will resemble the one in which the process for negotiating its terms was outlined a year ago.

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Useful information and discussion about energy, including oil and gas, peak oil, hydrogen, alternative energy, ethanol and other biofuels, climate change, and geopolitics, from an experienced industry professional. A service of GSW Strategy Group, LLC, providing foresight and insight in an uncertain world. Content Copyright 2004, 2005, 2006, 2007, 2008, 2009 by Geoffrey S.W. Styles. All rights reserved. The views expressed in these postings are solely those of the author.

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Name: Geoffrey Styles
Location: Virginia, United States

Geoffrey Styles is Managing Director of GSW Strategy Group, LLC, an energy and environmental strategy consulting firm. Since 2002 he has served as a consultant, advisor and communicator, helping organizations and executives address systems-level policy. His industry experience includes leadership roles at Texaco Inc. in strategy development and scenario planning, alliance management, and energy trading, at both the corporate center and with business units involved in global oil refining & marketing, transportation, and alternative energy. He has an MBA and a BS in Chemical Engineering.



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