Though there are only 50 days to go before the last round of climate change talks begins in Copenhagen on December 7, the deadlock on the issues of emission cuts, financing and technology transfer continues.
The Intergovernmental Panel on Climate Change (IPCC) has estimated that industrialised countries need to reduce emissions by 25-40% below 1990 baseline by 2020 and global emissions need to be reduced by at least 50% by 2050 to avoid the worst impacts of climate change. The offers till now add up to only 11-15% below the 1990 baseline.
Referring to the recent round of climate change talks held in Bangkok, United Nations Framework Convention on Climate Change (UNFCCC) said, Negotiations result in more clarity on bricks and mortar of Copenhagen agreed outcome, but decisions on finance and mid-term targets remain outstanding.
Leading emitters have already stated their positions. US president Barack Obama is in favour of reducing countrys emissions by 80% below 1990 baseline by 2050, which amounts to a drop of 14% by 2020 below a baseline of 2007, but he has yet to get the clearance from the Senate. The US is also particular to have other large emitters like China and India on board.
The European Union has committed to reduce emissions by 20% below 1990 baseline by 2020 and by another 10% if other countries reciprocate. They are calling upon developing countries to reduce their emissions by 15-30% below their business as usual baseline by 2020. They estimate that fighting climate change would cost developing countries about $150 billion annually by 2020. In the interim period of 2010-2012, they favour financing of up to $10 billion annually.
China has announced that it would increase the share of its renewables to 15% of its total primary energy use by 2020 and reduce notably its carbon dioxide emissions for every dollar of economic output. But it wants industrialised counties to reduce greenhouse gas (GHG) emissions by at least 40% below 1990 baseline by 2020, offer finances and transfer clean technologies to developing countries.
India has declared that its emissions per capita will never surpass those of industrialised countries and is willing to measure its emission cuts, but is against any internationally binding targets. India has called upon industrialised countries to reduce emissions by at least 40% below 1990 baseline by 2020. India also wants deforestation and afforestation to be included in the agreement.
One of the major reasons for the differences on reducing emissions is the cost involved. UNFCCC has estimated the cost of fighting climate change at $250 billion annually by 2020, but says that it would be a good beginning if rich countries put $10 billion on the table. The money available as of now is well short of the estimated requirement. UNFCCCs Adaptation Fund has a total of $ 120 million, which has come by levying 2% on carbon markets. The World Banks climate investment funds have pledges worth $6 billion from industrialised countries to fight climate change in developing countries. While Germany is issuing pollution permits to industry to raise $180 million to fund developing countries to fight climate change, Norway is offering $500 million annually to stop deforestation.
Besides, there are numerous financing proposals on the table. Norway has proposed allocation of GHG quotas to industrialised countries and sale of 2% of the permits to raise $15-25 billion annually. Mexico is in favour of a global fund run on contributions from all countries, depending upon their historical responsibility for causing climate change, prosperity and population. The European Union has proposed broadening of carbon markets to offset emissions in industrialised countries by funding for emission cuts in developing countries to raise up to $56 billion. The least developed countries have suggested imposition of levy on aviation industry to raise $28 billion per year.
With so many broader issues yet to be sorted out, the chances of a robust climate change agreement look difficult, say climate change negotiators. The situation can be reversed only if global political leadership takes a proactive position. Georg Kell, executive director, UN Global Compact, says, Clearly, political will has to be mobilised now and in the end it will be in the hands of governments to demonstrate leadership. Copenhagen will certainly not mark an end point.
Saying that lack of appreciable progress does not mean that businesses should rest easy, he adds, Climate change is also about business competitiveness. With scientific certainty, climate and related issues will become dominant market drivers. It will impact not only energy issues but the entire value chain and social behaviour. It is a real game changer. Early movers stand to benefit.
Chetan Kumaar Maini, deputy chairman & CTO, Reva Electric Car Company, says,”It is vital that business leaders everywhere take a personal interest and responsibility for their actions. Businesses should have in place their own carbon accounting initiatives. India has a central role to play and we should lead by example and business leaders must be at the forefront to meet climate change challenges.”
Adds Venkittu Sundaram, managing director, Epuron Renewable Energy, “The implications for Indian business are huge. As we are all aware that our processes are not the most energy efficient, all our businesses will be required to modify and adapt to the low carbon technologies in whatever possible manner.”
In fact, the argument was made some time back even by UNFCCCs executive secretary Yvo de Boer in a paper for Teri. Noting that Indian businesses have benefited from clean development mechanism, he called upon India to put forward proposals to expand carbon market mechanisms. India’s business community must persistently point to what its needs are and what it would like to see put in place as part of the agreement, he added. It seems to be the time for Indian businesses to take a proactive role not only domestically, but also globally.
Source: The Financial Express
Published on 20 October 2009