Where to from here on climate change…

As the UN Climate chief, Yvo do Boer raises concerns for the
future of the accord reached at Copenhagen, the CPD team has been thinking
there has to be a better way.

The three page Copenhagen Accord, authored by China, India, Brazil, South
America (tagged the BASIC countries) and the US, was "noted" at
Copenhagen’s final plenary session and we will have very little idea how many
countries are willing to support it until they each submit their individual
plans for reducing emissions, which they may or may not do by 31 January.
China, India, Brazil and South Africa, meet in New Delhi this week for further
talks. 

We are not the first to think the process is a dog’s breakfast. This week Professor
Ross Garnaut said "I hope the Copenhagen meeting finally led to the
realisation complex decisions cannot be made through open forums requiring
unanimous support from all nations." The UN process, where Venezuela,
Kiribati, the US and China all have the same voting rights (and an effective
veto) is very poorly adapted for addressing the global ‘prisoners’ dilemma’
problem that climate change presents. 

Game theorists, like Axelrod and Schelling, have learnt a lot about how to
achieve optimal outcomes from a prisoners’ dilemma – where there are
disadvantages for early movers and rewards for late movers.  We need to
break the impasse by starting with a smaller group of significant players, get
agreement among them, and let the rest follow in time. Its a process of seeding
cooperation and letting it spread. It is not unlike the problem of dismantling
trade protectionism, and the Bretton Woods process provides a model.

Perhaps the accord authors – the US and the BASIC clique – are this small group – between them they represent
nearly 60% of climate change emissions. If we could then draw in the rest of
the 15 biggest emitters, we’d be close to controlling 85% of emissions. The big
emitters are:

When we get these countries to the table we also have to change the dynamic
- Copenhagen was all about countries digging in to hard positions. As Obama, a
graduate of Harvard Law School would know, this is a lousy way to start
negotiations.  We should try the Harvard model of principle-based
negotiation – start with an exploration of interests, and then move to some
agreement on principles. The insipid accord may be a good starting point for
coming to some set of agreed principles. 

Does it matter if we leave out Pakistan or Argentina? They can’t do much
damage. Carbon pricing in the EU has not seen a great flight of dirty
industries to Azerbaijan or Columbia, and isn’t likely to. In any event, if any
small countries started offering CO2 havens, they could be brought to heel with
sanctions. 

We are not arguing against multilateralism – the smaller countries cannot
be ignored – but most of them are the victims, not the perpetrators. It
wouldn’t matter if they doubled their emissions, but it will matter if we do
not quickly come to agreement and start helping them adjust. If we take a long
term view, any deal which holds back whole groups in poverty is going to harm
the planet, for the ultimate driver of our ecological load is population, and
poverty is a key determinant in population growth.

Garnaut this week suggested another way to break down the impasse – by
establishing regional emissions trading schemes, for example between Australia,
New Zealand, PNG and Indonesia, then drawing in countries from South East and
Eastern Asia. 

Alternatively, there may be some benefit in starting with a binding
international treaty on coal, for that’s where the main problem is. Oil can
wait; as it shoots up through $100 and higher price rises resulting from
scarcity are going to do more than a carbon tax could do. But coal is plentiful
and there are no upward pressures on its price.  That puts the burden
squarely on Australia as the world’s biggest coal exporter and China as the
world’s biggest coal producer and user. (USA, India, Indonesia and Russia are
also big actors in coal.)  Coal is a problem which can possibly be solved
by a handful of countries.

Cooperation starts among a few and then spreads – particularly if they are
the right few and the few get it right. But as Garnaut said, "an imperfect
scheme is better than delay".