Over the past two weeks, negotiators in Cancun, Mexico, hammered out details of the tools to help the nations of the world reach the greenhouse gas reduction commitments pledged in Copenhagen at last year’s meeting of the United Nations Framework Convention on Climate Change. The Cancun Agreements alone will not solve climate change, nor will the Copenhagen Accord, but together they now represent a process to get the world moving toward agreement on how to stop climate change.
The 33-page Cancun Agreements represent the input of nearly 200 countries over the last year. All of this input is invaluable, and all of the issues raised are incredibly important. For the United States, the focus was on forestry, finance, and the monitoring of carbon reductions. Here’s a description of how these issues were dealt with in Cancun and why the outcomes are important.
Across the world, there are as many greenhouse gas emissions from deforestation each year as there are from transportation. The Cancun Agreements build an international system to reduce deforestation, an important development after developed countries pledged billions of dollars in financial support to fight deforestation last year in Copenhagen. This issue is commonly referred to as “REDD,” which stands for reducing emissions from deforestation and forest degradation.
Even though reducing emissions from deforestation is one of the easiest ways to start addressing climate change, implementing global deforestation programs is not without controversy. Developing countries have legitimate development needs that sometimes conflict with forest preservation, and indigenous peoples in developing countries have unique relationships with forests that must also be considered. Ultimately, though, the Cancun Agreements create a path forward for more permanent funding of forest protection efforts.
The agreements specifically allow for market-based mechanisms, such as letting reduced deforestation count as an offset in a cap-and-trade system through which companies can off set their carbon footprint by purchasing carbon-reduction credits. It also specifically recognizes the rights of indigenous peoples to participate in forest management.
When negotiators meet next year in Durban, South Africa, they will need to add more substance to the Cancun Agreements, including establishing a global market for reducing deforestation—similar to existing offset markets—that builds on the principles agreed to in Cancun.
Last year in Copenhagen, developed countries committed to mobilizing $100 billion annually in financing for climate change mitigation and adaptation in developing countries, starting in 2020. The Cancun Agreements build a structure for a “Green Climate Fund,” which will manage this very large amount of money.
The most important issue in designing the fund is giving operational control of it to a body with significant financial expertise, and identifying a financial caretaker for the fund that has the institutional capability to handle hundreds of billions of dollars. The agreement includes the latter of these goals, but the former is less certain.
Reports are that the United States insisted on making the World Bank the “trustee” of the fund. The agreement specifies the role of the trustee, including managing the financial assets of the fund, maintaining appropriate financial records, and preparing financial statements. Naming the World Bank the initial trustee ensures that a skilled financial leader will manage the fund.
Unfortunately, the agreement also states that the fund is “accountable to and functions under the guidance of the Conference of the Parties,” which means that U.N. climate negotiators will have direct oversight of the fund, and establishes it as an “operating entity” of the UNFCCC, which is the U.N. body responsible for addressing global climate change. The UNFCCC process has not demonstrated an ability to work quickly or nimbly. Nor does the UNFCCC have any internal capacity for overseeing an extremely large financial fund. We have to hope that the UNFCCC exercises a minimal level of day-to-day control over the fund, and instead leaves as much management as possible to the trustee.
Moving forward, the next step in building the Green Climate Fund is identifying sources for the $100 billion commitment. Formal discussions on this topic started in Cancun, where a proposal to put a price on the carbon emissions from international transport and shipping was included in early drafts. Some developed countries, including the United States, opposed this idea because of legal concerns, but it should be back on the table in South Africa.
Indeed, every single source of finance that the U.N. High Level Advisory Group on Climate Change Financing identified in their final report should be part of the negotiation in South Africa, including a financial transactions tax and revenue generated by a putting a price on carbon. Now that the Green Climate Fund has been built, it’s time to think about how to put money into it.
Underlying the entire Cancun Agreements is the issue of making sure that countries are actually doing what they commit to do. In the parlance of climate negotiations, this is known as “measurement, reporting, and verification.”
There are two significant tensions in building a system for monitoring. First, the system needs to be sufficiently uniform to make comparisons between countries meaningful while also recognizing the significant differences among countries. Second, the system needs to be strong enough to be meaningful while also being broad enough so that monitoring isn’t punitive. The Cancun Agreements strikes a balance on both of these tensions, representing significant compromise from all negotiators.
Both developed and developing countries are charged with creating systems for measurement of emissions reductions. In developing countries, though, only reductions that are supported by international efforts (such as reductions that are financed by the Green Climate Fund) are subject to international measurement and verification.
There are different mechanisms for ensuring the integrity of the measurement processes in developed and developing countries. Developing countries are subject to international consultation and analysis of their carbon reduction efforts, but only in ways that are “non-intrusive, non-punitive, and respectful of national sovereignty.” In contrast, developed countries are to jointly establish a process for international review of their emissions reductions but are not subject to the same international consultation and analysis process.
The fact that the process for developed countries does not allow for the same level of outside review is a significant flaw in the Cancun Agreements but is hopefully offset by outside involvement in the design of measurement systems. Now that the structures for building measurement systems are in place, it’s time for countries to move forward and start to determine exactly how reductions will be counted and monitored.
Building systems as a way of building agreement
Clearly, climate change will not be stopped because of today’s agreement in Cancun. Yet this agreement puts the systems and structures in place that will eventually contribute to stopping climate change. For too long, the world has believed that the only way to deal with the effects of greenhouse gases is to have an agreement in which every country commits to reducing their greenhouse gas emissions, even though this strategy has been ineffective. What happened over the last two weeks in Cancun takes the world down a new path in which we build the framework for actually reducing harmful carbon dioxide pollution first and then commit to legally binding quantitative reductions in the future.
This meeting is a significant achievement for the United States’ negotiating team. Because of the U.S. Senate’s inability to pass a comprehensive climate bill, the U.S. team came into this meeting knowing that they would be unable to commit to an emissions reduction target beyond the Copenhagen Accord. They had to instead spend much of the meeting convincing other countries that state actions, U.S. Environmental Protection Agency actions, and clean energy incentives would help the United States meet its Copenhagen commitment. Without the ability to credibly commit to new reductions, and without legislative backing for any commitment, the U.S. negotiators had very little to offer in negotiations.
Yet, the United States successfully led efforts to craft an agreement that lays the groundwork for making new commitments in the future. Case in point: since the United States cannot make large-scale contributions to a climate fund right now, the negotiators focused on setting up a fund that our nation will be able to contribute to in the future. They did the same thing with forestry and verification issues.
Many observers will say that the Cancun Agreements simply punted real decisions to next year’s meeting in Durban, South Africa. This is only partly true. The fight against climate change was never going to be won in Cancun, and it will not be won next year in South Africa, not will it be won in 2012 or 2013. The fight against climate change will be won over the next several decades, and it will involve the commitment of every nation of the world. The Cancun Agreements are an important step in designing a system that will work for many years, and will involve nearly 200 countries. This is no small feat.
Looking forward, countries now have to deliver on the commitments to the systems they’ve designed. With the structure of a climate fund decided, the next step is figuring out how the fund will operate, and where its money will come from. With the rules for monitoring carbon emissions reductions in place, the next step is to move forward with deciding how much emissions need to be reduced to make the world safe for future generations.
The Cancun Agreements contain some of what is needed to stop climate change. The world needs to build on this agreement next year.
Richard W. Caperton is a Policy Analyst with the Energy Opportunity team at American Progress.
For more on the Cancun climate summit, see:
- The Cancun Compromise by Andrew Light
Richard W. Caperton
Managing Director, Energy