How do we get the institutions right on climate change?

May 20, 2009

     By Duncan Green     

Normally, I find the use of scenarios to think through policy issues pretty shallow and unhelpful. But a new paper on the institutional architecture for climate change, by Alex Evans and David Steven, has a horribly plausible and thought-provoking scenario among its three possible futures. A slightly truncated version follows in a couple of paras time.

Evans and Steven argue that while all the attention on climate change has so far been on the science (c/o the IPCC) and the economics (c/o Nicholas Stern), it will be ‘getting the institutions right’ to manage the use of carbon that will determine our collective fate. Read the paper to find out how far they get on filling that void (my view, a good start, but not much more than that), but here’s their first (and not even grimmest) scenario:

Scenario 1: The Age of the Climatocracy
‘After talks continued without a break for almost 24 hours at the climax of the Copenhagen summit, negotiators emerged from their exhausting marathon of plenary and breakout sessions to tell the waiting world: the talks had ended in triumph. Kyoto 2 had been agreed.

Developed countries would take on binding targets from 2012 to 2020. Major financial commitments on adaptation, technology transfer and avoided deforestation had been made, while a pilot sectoral approach for the global cement industry was in prospect. Best of all, the agreement stated that emerging economies would consider binding targets in the next Commitment Period.

True, it was regrettable that Canada and Russia had declined to sign, while NGOs were critical that the targets amounted to an aggregate developed country reduction of only 16% below 1990 levels, rather than the 25-40% they had hoped for. But most observers agreed that Kyoto 2 was a bold step in the right direction.

The problems started not long afterwards. Which of the BRICs and middle income countries would take on targets, and when? This question turned toxic in the bruising ratification battle that was fought in most of the rich countries. As the global economic slump led to steadily increasing protectionism, almost every country became convinced it hadn’t got a fair deal.

Even so, there was jubilation in 2014 when the Copenhagen treaty finally came into force (albeit with Australia opting out once more, and a two-year break having decimated fragile carbon markets). Governments proclaimed that emissions – already constrained by economic slowdown – would finally begin to come down.

Sure enough, with the treaty in force, funds for adaptation and technology transfer began to flow, with a hodgepodge of competing multilateral agencies, bilateral donors and developed country environment ministries fighting to control them. The attempt to stitch together a global carbon market also hit obstacles, but at least the European market was up and running, with a US market not far away. Then it would simply be a matter of integrating them with each other, and with the reformed Clean Development Mechanism, in order for a global carbon price to be (more or less) established.

In retrospect, the Paris Declaration of February 2015 reads like something of a tame document. At the time, however, it was both a bombshell and a tipping point. Five hundred scientists came together to denounce in coruscating terms both the ‘creeping politicisation’ of the IPCC and the failure to finalise a fifth assessment report. The world was losing its grip on the problem, they claimed. Implementation of the leaky ‘solution’ was now a joke.

Suddenly, it was open season on what one commentator dubbed the ‘global climatocracy’. Soon the world’s media was leading on climate corruption. One President of a low income country, it turned out, had used carbon funds to buy a fleet of private planes. And the US carbon market had been rigged by investors – four of whom were sentenced to 65 – yes, 65 – years in jail.

Something had to be done. And something was, after a while at least. In 2017, a world summit was convened in New York to try to retrofit a strategy onto climate’s increasingly creaky institutional structure. The dynamics at the summit were acrimonious. Rich countries wanted more regulation of climate funds. Poor countries wanted more action by those developed countries who were off-track on their targets.

The one outcome that all countries did prove able to agree on, though, was a timehonoured one: to set up a new UN agency, in this case a World Environmental Organisation, bringing together the UN Environment Programme, the Commission for Sustainable Development, and a number of multilateral environmental agreement treaty secretariats.

Environment ministers provided less clarity on what the new WEO would actually do, however – and in any case, the agencies involved in the merger spent most of the next two years working out the logistics of transferring their operations to a new home in Nairobi.

There wasn’t much appetite for Kyoto 3, but a review summit was held in Luanda in 2020. Scientists pointed out that emissions were still far from peaking and that radical action would be needed to stabilize concentrations even at 650ppm. The problem was that richer countries had already emitted the lion’s share of the amount of carbon available to meet that target. The implication: there weren’t that many emissions left for a deal to carve up.

But that didn’t stop progress towards another agreement – this time focused on support for clean technologies, rather than binding targets or carbon prices. But as critics noted, policymakers seemed to have fallen into the trap of throwing money at the problem rather than trying to start a ‘race out of carbon’.

In 2025, the unthinkable happened: methane hydrates, hitherto frozen safely at the bottom of the ocean, began to thaw and escape into the atmosphere, adding massive quantities of a potent greenhouse gas into the air. Emergency sessions of the Security Council and the G13 were convened, but the scope for action was minimal. By 2030, the Climatocracy had clearly failed to deliver. Geo-engineering projects looked like the last remaining option. Whether or not they would work remained to be seen…’

Let’s hope you didn’t read it here first…..

May 20, 2009
Duncan Green