February 2010


What really went on at the Copenhagen Climate Change Conference? Was it a ‘fiasco’ or a positive step forward? Those are some of the questions to be addressed by a panel of experts tomorrow at The Australian National University.

The panel discussion – Post Copenhagen: Where do we go now? – will bring together people who experienced the COP15 discussions first hand. They will attempt to shed light on what really happened at the negotiations, what the failure to reach a binding agreement means and what comes next.

The discussion includes Associate Professor Janette Lindesay of the Fenner School of Environment and Society at ANU, Dr Peter Wood of the Resource Management in Asia-Pacific Program and ANU students Jonathan Pickering, Phoebe Howe and Alexei Trundle. The discussion will be moderated by Executive Director of the ANU Climate Change Institute, Professor Will Steffen.

Professor Steffen said although the Copenhagen discussions had been seen as a failure by many, there were still reasons to be optimistic about future negotiations.

“Although the Copenhagen Accord did not go as far as many would like it, it represents a significant progress towards an international agreement,” said Professor Steffen. “The Accord continued to draw on climate change science as underpinning foundation of efforts to stabilise the climate. In particular, the agreement that the rise in global temperature should be limited to two degrees or less is based on a massive body of research on human interference with the climate system.”

The lunchtime discussion will be streamed live at www.livestream.com/anuchannel with an online chat room allowing for viewer interaction and discussion.

Parties associated with the Copenhagen Accord have now submitted their quantified economy-wide emission targets and mitigation actions. These submissions are on the UNFCCC website. The US Climate Action Network has provided a useful table which summarises these submissions.

It is useful to have a ‘schedule’ (such as the chapeau of the accord) in which as many emitters as possible list their targets and commitments. It is also useful to have conditional targets (along with conditions) placed into this schedule. If countries are able to commit to both conditional and unconditional targets, then we have a framework that could lead to countries choosing their targets cooperatively. This has been strongly suggested by research on mechanisms that implement public goods.

Unfortunately the way that these things are done in the accord is far too vague to work. It is hard to say what the accord’s targets imply in terms of actual emissions, because issues such as LULUCF accounting, international trading, carryover of Kyoto AAUs, and definitions of ‘business as usual’ are completely unspecified. Furthermore, the conditions that countries have specified for their conditional targets are completely vague, and it is impossible to be able to tell with much certainty from the accord schedule whether any of these conditions have been met. For example, the EU conditions use words like “comparable emission reductions” and “responsibilities and respective capabilities” without stating what these conditions actually mean.

A global framework for emission reductions should have an accounting framework that converts commitments into actual emissions. When countries make conditions for their commitments, these conditions should be based on this framework. Countries would then know what they would need to do in order for other countries to increase their level of ambition.

If a legally binding treaty is negotiated, it should be designed with these considerations in mind. Unfortunately progress on a legally binding agreement has been difficult: at Copenhagen, Tuvalu proposed to form a Contact Group to discuss legally binding agreements, but this was blocked by China, India, Saudi Arabia, and some other OPEC states.

Australian opposition leader Tony Abbott has launched a new climate policy. The plan states on page one:

Our policy will cost $3.2 billion over 4 years, while the ETS costs $40.6 billion over the first four years.

This is comparing oranges with apples. It is referring to the their policy spending $3.2 billion, and the ETS raising $40.6 billion from sale of permits (much of which will go back to households or polluters), but they are completely different things. And the “cost” of a policy is how much is spent on emission reductions, be it by firms, the government, or whatever. This has nothing to do with the amount of auction revenue in an ETS.

The Coalition does not appear to understand the difference between price and cost. Professor Ross Garnaut spelled out the difference at a public lecture at the ANU in November 2007:

Finally, it is worth differentiating between the price of carbon and its cost to the economy. The cost to the economy is not, as some have suggested, the carbon price set for emission permits. The “price” is not the cost – this has been a fallacy of the Australian discussion to date.

The cost to the economy is the expenditure on substitutes net of existing higher costs imposed through mandatory schemes. While carbon prices will rise over time, the cost of mitigation does not rise at the same rate. It could be more or less depending on expenditure on substitutes such as renewable energy development, increased costs of structural industry adjustment and improving energy efficiency.

But over time, the incremental cost of new energy sources applies to a smaller part of the economy; and continued technological and institutional improvement in supply of the new substitutes for the old high-carbon activities may bring down their cost, even when the carbon price is rising.