Deal or No Deal
The 192 countries flocking to Copenhagen next month won't reach consensus on climate change. That won't stop them from acting alone.
It was time to get creative. In 2006, a head of government had signed a law requiring that greenhouse gases be cut 20 percent below 1990 levels by 2020 and 80 percent by 2050. The cuts will be carried out through a cap-and-trade system, like the one passed by the House of Representatives and introduced in the Senate, due to start in 2012. In an effort to reduce the cost of those greenhouse cuts, the executive reached out to his counterparts in Brazil and Indonesia, which have more than half of the world's remaining tropical forests. Because reducing deforestation is the cheapest way to mitigate climate change in the short term, he wanted utilities and other greenhouse emitters to be able to pay state governments in Brazil and Indonesia to preserve their forests, which ranchers and loggers keep whacking, yielding the same net gain for the atmosphere as reducing their own emissions of carbon dioxide. The details—how to measure the CO2 cuts, how much to pay for preserving forests—will be worked out in the next few months, in time to set the rules for cap-and-trade.
The official is Gov. Arnold Schwarzenegger of California, and his bilateral agreements with counterparts from Amazonas, Papua, and six other states in Brazil and Indonesia with millions of hectares of tropical forests illustrate why the impending failure to reach a new global climate accord isn't the disaster it might have been. Think "subnational." Although the 192 countries set to meet in Copenhagen next month will not reach a legally binding treaty setting out targets for greenhouse-gas reductions starting in 2012 (sources close to the negotiators say they have given up hope for that), cities, states, and provinces are on track to cut greenhouse gases. They see it as a way to retool their economies, draw high-paying jobs, and establish the industries of tomorrow, leapfrogging the sclerotic global talks. California's partnerships, for instance, will be the first time tropical forests are corralled into an international agreement. Not even the 1997 Kyoto climate treaty, which requires wealthy countries to reduce their emissions of six greenhouse gases 5.2 percent from 1990 levels, does that. "We will definitely keep moving ahead," says Anthony Brunello, California's deputy secretary for climate and energy.
That's the promise not only from states and provinces but also from businesses, especially those placing big bets on renewable energy and technologies to boost energy efficiency. Which raises a question that makes climate activists uneasy: why, exactly, was the Copenhagen meeting painted as the do-or-die moment—"the most important meeting since the end of the second world war," one green group called it—for averting calamitous climate change?
Seeing the failure of Copenhagen as something short of Armageddon is not contrarianism for contrarianism's sake. Just to be clear, if the world had agreed on what quantity of greenhouse-gas emissions to cut by when—on "targets and timetables," in the prevailing argot—it would have launched us down a path that could keep global warming below 2 degrees Celsius, relative to pre-industrial levels, which many climate scientists see as a point of no return. The meltdown of global climate talks is therefore a setback to efforts to avert the worst consequences of global warming. For instance, scientists foresee a massive rise in sea levels that would inundate coastal megalopolises from Shanghai to New York, more frequent droughts and floods, a loss of glaciers that provide fresh water to tens of millions of people in India and China, lethal heat waves, and climate shifts that are as dangerous to farming as loss of sea ice is to polar bears. Already, yields of wheat in northern India have fallen due to climate change—not a good thing in a country that is currently importing grain to feed itself.
But for months there have been ample warning signs that the Copenhagen meeting was headed for a cliff. The Senate wasn't going to pass climate legislation in time, so other countries, getting déjà vu all over again, had no reason to believe the U.S. would abide by any emissions cuts the U.S. pledged in Copenhagen. Remember, the U.S. signed but never ratified the Kyoto climate treaty; to the rest of the world, America's climate promises aren't credible even with Obama in office. "The rest of the world has been asking, 'Why should we go ahead with this when the richest emitter hasn't stepped up to the plate?' " says Annie Petsonk of the Environmental Defense Fund, a veteran of climate negotiations. In addition, developing countries are demanding that wealthy nations cough up about $100 billion a year to help them switch from fossil fuels like coal to energy sources that do not emit carbon dioxide, such as wind and solar. China and India (the largest and fifth-largest greenhouse-gas emitters) refuse to even consider abiding by any globally agreed reductions, arguing that their per capita emissions remain a tiny fraction of America's. (India emits one ton of greenhouse gases per capita, compared with 20 in the U.S.) But the Senate would never have ratified a pact that exempted major developing countries such as China and India from mandatory greenhouse-gas cuts. That exemption made the Kyoto treaty such a nonstarter that President Clinton never even sent it to the Senate for ratification. So it wasn't that negotiations broke down. They'd never been on track in the first place.
There is good reason, then, to push the reset button and get it right rather than get it fast. By "right," I mean something that both reflects the important new science on greenhouse gases and makes political sense. Two international climate meetings are scheduled for 2010, when the world can try again to negotiate a binding pact. In the interim, negotiators can learn from the innovative steps that companies and subnationals are taking to reduce their greenhouse emissions. "There is enormous interest and commitment to greenhouse reductions at the subnational level," says Petsonk. "So the message to business is clear: carbon constraints are coming."
That's why businesses from Coca-Cola to Dow Chemical to Siemens are plunging ahead with "sustainability" programs, though each has a different reason. For biofuel companies, averting climate change is only one selling point, and arguably not the strongest one. Breaking free of dependence on foreign oil and creating jobs that can't be exported (it's cheaper to produce biofuel near its source and near where it will be used) are arguably more important. "Copenhagen is important, but it's probably not all that important," says CEO William Roe of Coskata, Inc., a biofuel company in Illinois. "It won't impinge significantly on what we're doing to try to develop next-generation biofuels. Energy security and competitiveness with oil will drive this industry."
For other businesses selling green tech, the market for their wares remains strong thanks to regional and state laws, such as Europe's requirements for greenhouse-gas reductions under the Kyoto treaty, which runs through 2012, and the rules in 29 U.S. states that say some percentage of electricity must be generated by zero-carbon fuels. "Whatever the outcome of Copenhagen, Siemens [the Germany-based electronics giant] will follow the path of green growth," says CEO Peter Löscher. In the last fiscal year, Siemens' green sales topped $34 billion (€23 billion), making it the world's biggest green company. And Coca-Cola still plans to phase out hydrofluorocarbons, greenhouse gases used as refrigerants, and to cut its greenhouse-gas emissions from manufacturing in developed countries 5 percent from 2004 levels by 2015. Copenhagen "won't really change anything," says Coke environment czar Jeff Seabright. "We're assuming a price on carbon is coming, but even without that we think we can increase energy efficiency 20 percent and still get a return of 20 percent."
Still, business wants clarity so it can assess which investments make financial sense. Chemical giants such as DuPont and Dow are developing next-generation ethanol (made from cellulose and other waste biomass, not corn, and in Dow's case using algae to turn carbon dioxide into ethanol) and solar-power roof shingles, for instance, and will keep at it. But they want to know how big the market will be, which depends on whether or not carbon emissions will be taxed heavily and therefore how much customers will pay for energy efficiency and other ways to avoid that cost.
Utilities in particular need to know if carbon will be priced, through either a tax or cap-and-trade. Enel, for instance, is Europe's second-biggest utility by installed capacity, with hydro, geothermal, wind, solar, and biomass facilities in Europe as well as the Americas. It is also Europe's largest provider of power from geothermal energy. The company had hoped for an agreement in Copenhagen so business would know the rules going forward; the financial appeal of, say, a geothermal facility depends on whether power plants that spew carbon dioxide will have to pay for the privilege of polluting, says Giuseppe Deodati, Enel's head of carbon strategy. "We would like to see a stable and reliable regulatory framework, which would act to stabilize the price of carbon in the long run," he says. "But even if Copenhagen produces only a general political commitment to greenhouse reductions, many countries will move forward with regional schemes, including [those in] Europe, to address climate change." Enel's own renewables projects, including the innovative Archimedes solar facility in Sicily that will harness the sun's power with giant mirrors, "will move on independently of Copenhagen."
The fact that progress on addressing climate change will not come to a screeching halt once the delegates depart Copenhagen doesn't mean we're home free. Not even Schwarzenegger, with the pacts he's negotiating with governors of tropical states, can hold back the rising seas and defuse killer storms, droughts, and floods by himself. To meet the nonbinding pledge that the G8 made in July to keep global warming below 2 degrees Celsius, these wealthy nations have to cut their greenhouse emissions 25 to 40 percent below 1990 levels by 2020, calculates the Intergovernmental Panel on Climate Change. Based on the cuts pledged so far, they will actually emit only 14 percent less.
Developing countries, led by China and India, pose the greatest threat over the next few decades. They have collectively pledged to cut emissions 4 percent from what they would otherwise be in 2020. That's a drop in the carbon bucket compared with the 15 to 30 percent cut needed to stabilize warming at 2 degrees, calculate scientists led by Joeri Rogelj of Germany's Potsdam Institute for Climate Impacts Research. China is widely lauded for blanketing the countryside with wind turbines, but they still provide just 0.4 percent of its electricity, in part because bottlenecks have prevented many of the turbines from being connected to the electricity grid. And authorities in Beijing have taken aim at "backward production capacity," forcing the closure of several small, polluting power plants as well as inefficient steel mills, cement factories, and coke-producing facilities, for a total of 166 million tons of carbon-dioxide emissions avoided. China's goal is to get 15 percent of its electricity from renewables by 2020. But since the remaining 85 percent of its power will come from the combustion of fossil fuels (mostly coal), and since that 85 percent will be a percentage of a much bigger pie due to the growth in China's economy and therefore energy use, its emissions will soar.
That would swamp even deep cuts by the developed world, the Potsdam scientists show in a 2009 paper in Nature, sending global industrial emissions in 2050 a disastrous two thirds above those of 2000. That's why the U.S. refused to agree to what one official calls the "asymmetry" of legally binding cuts for developed countries and pretty-please-won't-you-reduce-emissions for China and India.
By the 2010 climate meetings, the irresistible force of a U.S. demand that China and India be bound by any climate pact will still be battering the immovable object of those countries' refusal to sign on to mandatory greenhouse-gas cuts. But some of this is posturing. China and India, says one climate veteran, "are willing to do more than they're agreeing to." That is, they're standing on the principle that since wealthy nations caused the climate crisis—they're responsible for 75 percent of the man-made greenhouse gases currently in the atmosphere—then wealthy nations should fix it. But both countries are well aware that they are particularly vulnerable to climate change. Global warming could weaken the monsoons, which are crucial to agriculture, for instance.
Failure at Copenhagen might weaken the irresistible force and nudge the immovable object. As things now stand, countries will determine what greenhouse cuts they're willing to make on their own. With that, "President Obama can go back to the Senate and say, 'Look, every other country is willing to step up,' " says Ned Helme, president of the Center for Clean Air Policy. In fact, with no legally binding agreement in Copenhagen, "it makes it easier for the Senate to take up the [climate] issue," says Rep. Edward Markey, cosponsor of the House climate bill. "There will be national goals on greenhouse cuts announced by different countries, creating a very positive climate." If that moves the Senate, it might in turn persuade India and China to sign on the dotted line.
Postponing serious negotiations to 2010 will also buy time to incorporate into a treaty innovative, and potentially cheaper, ways to cut greenhouse gases. Restoring grazing lands that have been chomped bare could suck up billions of tons of carbon (8.5 billion tons are being emitted each year), for instance. Landowners aren't going to do that out of sheer altruism, however, but paying them to sequester carbon might move the needle. Adding charcoal from plant waste, called biochar, to soil similarly has the potential to sequester "a significant fraction of the CO2 … we add annually" to the atmosphere, biologist Thomas Lovejoy of the Heinz Center for Science, Economics, and the Environment and colleagues argued in an essay last month in the International Herald Tribune. Nothing like this is in the draft of the Copenhagen treaty.
There might be another silver lining in the Copenhagen implosion. Emerging science is showing that greenhouse gases other than carbon dioxide play a greater role than had been thought in trapping heat and thus altering climate. Short-lived pollutants such as black carbon (soot from burning diesel and wood) account for more than half the warming and heat trapping yet stay aloft for only days, not the decades that carbon dioxide does. That suggests crafting a separate treaty to cut these non-CO2 emissions, something the failure of Copenhagen gives the world a chance to do, buying time for the tougher task of cutting emissions from burning fossil fuels. So there may indeed be a silver lining in the Copenhagen collapse. Let's hope it isn't fool's gold.