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The Future of the Climate Regime
in the Aftermath of the
Bonn Agreement
Presentation at the Open Meeting
of the Global Environmental Change Community
Rio de Janeiro, 6 - 8 October 2001
by
Dr. Hermann E. Ott
Director, Climate Policy Division
Wuppertal Institute for Climate, Environment and Energy
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Before talking about the future we
have to ask:
What is the climate regime and is it working?
Sorry, but
this is not an academic question!
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
What have we got?
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Institutionally?
• step-by-step approach
• umbrella convention
– UNFCCC (United Nations Framework Convention on
Climate Change)
• protocol with quantified targets
– Kyoto Protocol to the UNFCCC
• universal regime:
• FCCC: 186 ratifications
• Kyoto Protocol: 39 ratifications, 84 signatures
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
...more on institutions:
• differentiated obligations for industrialised
countries (5.17 % globally)
• modified by Bonn Agreement:
– reduced to 2.49 % by additional LULUCF
activities (Article 3.4)
• negotiations on further commitment periods
scheduled to start in 2005
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
...and even more on institutions:
• a functioning system for inventories
• = reporting and monitoring
• basis for compliance regime in KP,
elaborated in Bonn Agreement
• “Kyoto Mechanisms”
• Emissions Trading, Joint Implementation, Clean
Development Mechanism
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Impacts?
Behavioural Change?
• not really quantifiable or discernible
• considerable reductions in UK and
Germany in anticipation of entry into force
• industry has caught on but is not yet won
• “impacts” so far largely psychological
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Conclusion:
All we’ve got is institutions!
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
This is no small progress, but
difficulties in the process (like
after The Hague) immediately
threaten the regime as such!
...and of course: in troubled waters,
proposals for alternative routes
abound!
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Proposals include:
• abandon Kyoto process altogether!
– 10 years of effort wasted...no alternatives put forward really
• strictly voluntary measures
– unfortunately did not work
• global CO2 tax
– mostly from US scientists - whose Govt fiercely opposes idea
• policies and measures
– great idea, but maybe not solely
• intensity targets
– petrify emission profiles, maybe good for developing countries
• price caps
– interesting, but environmentally flawed
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Something to Remember:
The Challenges of Climate Change
• a most complex problem - diffuse, multi-layered,
dispersed in time and space etc. etc....
• fundamental change in production & consumption
– from the fossil/atomic age to solar age
– from waste/abundance to efficiency/sufficiency
• redistribution of wealth (nations/individuals)
• new systemic body of international law
• ...in a nutshell:
– climate change is at heart of the sustainability agenda...
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
To remember as well: marvellous
institutional novelties!
• establishment of three complex international
market mechanisms
• strongest non-compliance procedure in
international environmental law
• first levy on international market transactions
• first acknowledgement of principle of
contraction and convergence
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
So what might be done???
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
• Kyoto should remain main show in town
– indispensable as global framework
– catalyst of political and industrial action
– forum for creation of new international norms
• let a thousand flowers blossom!
–
–
–
–
why not more regional approaches?
“IRENA”, “EREA” etc. for pushing renewables
liability: is there a case against oil companies?
international aviation fuel tax should be on
agenda, inside or outside climate regime
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
...inside the climate regime:
• short term issues:
– COP 7 is not yet done...
– first priority: ratification asap
– European leadership will have to remain strong
(even after September 11)
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Longer Term Issues
•
•
•
•
improve the regime structure!
co-ordinate PAMs!
address equity!
co-operate with OPEC!
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Improve regime structure:
• reduction of issues
– regime has become overloaded, KISS principle
• reduction of complexity
– majority voting urgently required
– allow for different speeds (Arts 43/44 TEU)
• improve institutional structure
– continuous process of communication required
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Co-ordination of PAMs
• domestic implementation of policies and
measures has been slow in most countries
• fear of comparative disadvantages requires
a co-ordinated approach
• some prime candidates:
–
–
–
–
fiscal policy: co-ordinate carbon/energy taxes
dismantle climate adverse subsidies
harmonise efficiency standards
foster climate friendly public procurement
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Equity: the key
• the challenge: fair and equitable allocation
• simple “grandfathering” will not do
• process as well as substance are important
– substance: a formula for allocation, based on
transparent and sensible criteria
– process: must be non-confrontational, without
undue demands for “meaningful participation”
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Co-operation with OPEC
• oil price fluctuations between $20 and $40 per
barrel severely obstruct rational climate policy
– prices too low: no incentive to save energy
– prices too high: deligitimize energy taxes etc.
• revenues under CO2/energy taxes go exclusively
to Northern governments
• many forms of co-operation possible
– from simple price control to
– producer - consumer cartels
– options should be explored
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
The Sky Trust Idea
(from Peter Barnes: Who Owns the Sky?)
•
•
•
•
carbon emissions cap for country/region
upstream emissions trading (energy comp.)
revenues from permit sales go into trust
trust pays equal annual dividends to all
citizens
• problem: rather nation-based idea, difficult
to implement at global level
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001
Thank you / Obrigado!
For more information go to
http://www.wupperinst.org
or mail to
[email protected]
Hermann E. Ott
Open Meeting,
Rio, Oct. 6 - 8, 2001