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A Sticking Point for Climate Diplomacy

by Michael Levi
October 14, 2013

President Obama’s big climate change speech in late June has spurred a lot of optimistic talk about the possibility of concluding an international deal in 2015, the deadline set last year for a new climate agreement. By pursuing new regulations under existing authority, the United States could deliver on its Copenhagen promise of cutting its emissions to 17 percent below 2005 levels by 2020, presumably strengthening its bargaining hand. The draft 2014 U.S. Climate Change Report, released late last month, admirably reinforces the message, modeling a range of plausible policy shifts that could deliver on the 2020 goal.

But all the optimism is ignoring a pretty big problem: the 17 percent pledge isn’t what most other countries appear to really care about. In the run up to Copenhagen, the U.S. promise to cut its emissions to 17 percent below 2005 levels by 2020 was widely met with derision. What really turned the talks in the U.S. favor was a last minute U.S. promise to help mobilize $100 billion dollars a year by 2020 to help poorer countries cut their emissions and adapt to climate change. For most participants in the negotiations, it was the promise of near-term cash, not emissions cuts, which made going along with broader U.S. demands (including commitments from the big developing countries) appealing. Alas no one – not the United States nor any other major country – is close to delivering on financial front. The draft climate change report implicitly suggests as much: unlike the mitigation section, which says a lot about the future, the finance report is focused on the past.

What does this mean for 2015 and the global climate negotiations? One can imagine three possibilities.

The first is some sort of business as usual. The United States and others make big new financial pledges. Most countries are skeptical that the money will be delivered, but enough convince themselves that a decent part of it might be. They thus are motivated to do a global climate deal – and to press others to play ball – in hope that some of the cash might materialize. That leaves the big countries to mostly negotiate emissions cuts.

The second is a radical shift down in the role that financial pledges play in the international negotiations. The simplest way that could happen would be to do it explicitly. The more politically palatable way (for those who have emphasized a central role for climate finance) would be to shift how we define climate finance. In 2009, the $100 billion figure was generally understood to include public flows together with private flows that wouldn’t exist absent regulation or other policy (e.g. carbon offsets). Recently, there have been efforts to redefine the category to include a much broader range of private funds, including monies that would flow even absent encouraging U.S. policy (basically cross-border investment). This is not what developing countries bargained for in 2009. But if those countries want to shift to a different way of doing climate negotiations while finding a face saving way of backing away from the big financial pledges, this could be a way to do it. They would need to be motivated by a desire to unlock the talks and promote progress on climate change mitigation – a good reason to cooperate in principle but one that hasn’t been all that compelling in the past.

The third way would be to shift strongly away from the global negotiations. In Copenhagen and subsequent meetings, climate finance mostly functioned as a way to drum up support from the large mass of less developed countries, including getting them to put pressure on the biggest emitters. (This isn’t to say that climate finance doesn’t also have a substantive value in helping countries cut emissions and adapt to climate change – it does – it’s just that this isn’t usually its primary role in the global talks.) Take the talks away from a global forum and that roadblock is removed. The problem here is twofold: experience suggests that wresting negotiations away from the UNFCCC is impossible; and without pressure from the large mass of developing countries it isn’t clear what the biggest players would do.

It’s tough to tell where this leaves us. But one thing seems certain: if policymakers want to make use of the 2015 talks – or at least not have them blow up and cause damage – they ought to pay attention to the pivotal role of climate finance rather than just focus on U.S. emissions cuts.

P.S. This blog is back from an extended book writing hiatus. Feel free to send me ideas for what you’d like to see.

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