Talks about talks

The Durban climate summit produced a surprise (or at least a surprise for natural pessimists like me…). A consensus agreement has been reached to open a new phase of negotiations, to be finished by 2015 at the latest, with targets for all countries kicking in from 2020. Given initial positions of the most powerful actors, this outcome looks  impressive, and is indeed a testament to the diplomatic skills and stamina of those pushing for a deal. Although the international climate negotiating process would have re-started at some point, what is surprising is that it has come so soon, when we are looking at recession in much of the OECD and slower growth in the emerging economies (throughout the talks, the headlines have been about the Euro crisis, not the climate talks).

But take a look again, and the glass begins to look half empty. First, as many commentators point out, this agreement pushes legally binding action to reduce emissions so far into the future that it may well be too late to prevent warming of 3-4C. Second,  it’s important to remember that Durban was talks about talks, in which the only commitment made was to keep the international process alive. This is a bit like the opening of the Doha Round of trade negotiations in 2001, which are still shuffling forward, zombie-like, 10 years later. We do not know what will happen over the course of these new climate negotiations (which in the US could mostly happen under a Republican administration). Third, Scott Barrett’s classic analysis suggests that if a new agreement has the same structure of the Kyoto Protocol, it is likely to be too weak to be effective, but there is every reason to think that the focus will continue to be on targets, rather than incentives or enforcement (although see below). Last, a new agreement will have to be implemented, and especially if it has weak enforcement mechanisms, whether it can be enforced will depend heavily on domestic politics.

The interesting question at this stage is why agreement to negotiate a new agreement was reached, and especially why the two key players, China and the US, came on board. Clearly, the EU, G77 and AOSIS were the prime movers, but there would have been no meaningful deal without the big 2, and so far the climate imperative has not been powerful enough for them to overcome other forces. Of course part of the answer is that this agreement doesn’t require much of anyone. There are no emissions reductions targets, and no enforcement mechanisms. The US and China (and anyone else) could walk away from negotiations at any point (and they may well yet do that). But at least one important new principle lies at the heart of the new agreement – that new negotiations will lead to targets that will apply to all countries, and not just the current Annex 1 group, even if it is still ambiguous as to whether those targets will be legally binding. This is what the US wanted, so it is perhaps not hard to understand in the end why Todd Stern signed. But why did China agree, since it, along with India, has been the strongest voice against this principle?

The answer may lie in the possibility that the incentives in the collective action problem are slowly but surely shifting. In most accounts of the climate collective action problem, including Barrett’s, the incentives are to free-ride, because there are up-front costs to reducing emissions, while benefits are distant in time and uncertain. However, it is clear that for China at least, the incentives may now be changing. China has sunk considerable effort and cost into developing clean energy industries (and jobs), from wind and solar to electric vehicles, and it is even now beginning to show a bit of interest in carbon capture. To get a pay-off from this investment, China will need secure markets for these technologies abroad, so it does need the rest of the world, and especially OECD countries, to adopt sufficiently credible targets to drive those markets, which in the end means a meaningful international agreement. This will come at a domestic cost, because to achieve it (and especially America’s commitment), China will also have to sign up to binding targets. But China’s leaders may well see this as an acceptable cost, especially since reducing emissions can also offer energy security and local polllution co-benefits.

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Filed under China, Durban, US

2 responses to “Talks about talks

  1. Matthew, the reason why US and China agreed to the strengthened Durban package with only legally binding options – when they had in plenary both supported the package with a non- legally binding option – was because of the pressure supplied by the EU, AOSIS, LDCs and progressive Latin American countries in the room. It was a good example of immediate politics of the moment outweighing “structural factors” to push people further than they wanted to go. It could not have happened in a G20 type setting where the most vulnerable countries are excluded and thus is one of the reasons we need to keep climate deals in a UN setting. Of course, what the conclusion of the talks will be in 2015 nobody knows – not least because the Chinese leadership which will take that decision are not in place. However, the outcome will have little to do with Barrett’s game theory analysis which is based on lots of similar small countries negotiating not a core agreement consisting of a few big countries with a long tail of small ones.

    What many commentators have failed to point out was that if Durban had failed then we would be locked into over 4C and the EU would have been finished as a climate leader. We came very close to that outcome on Sunday night. I do not think we would have recovered from that set back – there was no political energy left in the EUs tank. Now we have an opportunity to build the politics of a 2C agreement in 2015. Who knows if we will succeed but at least we now have a chance! The priorities for the next four years are action on the ground to build examples of a low carbon economy and mobilization of political will and cooperation.

    Nick Mabey E3G

  2. Hi Nick – thanks for visiting the blog and for the comment. I agree the Durban Platform gives a renewed chance for a multilateral process, which is good news, although I don’t agree that the counterfactual would necessarily have meant a lock in to 4C.
    Also appreciate that negotiation is an art and the politics of the moment count, but as we know from previous examples, the moment has to be sold back home, long after it has ended. Incentive structures don’t disappear. And that’s where I think Barrett is still relevant, regardless of the number or size of actors. As I see it, the most fundamental point he makes is that a successful treaty needs first to create a net gain. On climate, the gains are weak, which is why it has been so difficult so far. I don’t see that has changed much since 1997, and don’t see it changing much by 2015, except, as I argued, maybe for China.

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