Countdown to Copenhagen

The climate change negotiations in Copenhagen in December 2009 will be the most important since the Kyoto Summit in 1997. Approximately, 190 countries are participating in an effort to reach an agreement to reduce the greenhouse gases. The negotiations and their outcome will have far-reaching impact on economies and businesses. But like all multi-party negotiations, these too are complex and intricate. Yet understanding them is critical for the future of your business. Here’s a primer.

What are the Copenhagen talks about and why are they important?
Countries across the world are working on an ambitious climate change deal, as a follow-up to the first phase of Kyoto Protocol. This deal will fix the commitments that developed countries will make towards cutting their greenhouse gas emissions after 2012. In the first commitment period from 2008-2012, the developed countries (known as Annex I countries in Kyoto) were supposed to cut their combined emissions by 5.2 per cent from the base year of 1990. That hasn’t happened for the most part.

What is at stake?
Well, quite simply, the global environment. Greenhouse gases have already caused a significant melting of the polar ice caps, aberrant and destructive weather patterns such as cyclones and drought, all of which have devastating consequences. Without an accord on reducing CO2 levels, an environmental disaster lurks in the not-too-distant future. Any climate change deal will have far-reaching impact on the immediate and longterm business plans of India Inc.

What will the conference try and accomplish?
According to the Inter-governmental Panel for Climate Change (IPCC), India is at the forefront of limiting the adverse effects of climate change, so it concerns India enormously when the world gets together to reach a consensus on how to do this. Second, the Copenhagen conference will aim for clarity on the nationally appropriate mitigation actions that developing countries could undertake. Third, the conference will try and define stable and predictable financing to help the developing world reduce greenhouse gas emissions. And finally, it will try and identify institutions that will allow technology and finance to be deployed. These actions will have significant bearing on India’s path to development.

What is India’s position? Who is aligned with and against it?
A: India will not exceed the per capita emissions of the developed world. However, India believes that climate change is a global challenge that requires a global response. Hence, no ambitious action on climate change is possible without developed economies bearing their fair share of the burden. In the meantime, India says it will do as much as it can as per the National Action Plan on Climate Change.

Since over 700 million people are likely to be affected in the country, India has a stake in doing its bit on climate change but with only 5 per cent of global CO2 emissions at 1.2 tonnes per capita per annum, India says it is hardly in a position to cut its emissions. Most developing countries who expect their emissions to rise from very low levels as they traverse the development path are aligned with India’s position. Even countries like China who are, in absolute terms, high emitters, are allied with it, so far. However, developed countries, notably the United States, which has in the past eight years done little to fulfill its Kyoto commitments, believe that unless countries like India and China also make binding commitments, no sensible action on climate change will happen.

Has the commitment to limit climate change within the 2-degree band diluted India’s position?
In real terms, there is no dilution. However, since India has, for a long time, stayed away from making any commitments on cutting its emissions, many have inferred this statement to be a subtle reneging on commitments. Multilateral negotiations are complex and need to take into account the concerns of various parties. This statement proves that India intends to do what it can on climate change, but it cannot be construed as a commitment to cut emissions.

What does it hope to achieve from the talks?
India expects a robust framework that forces developed countries to take on more stringent commitments towards reducing emissions. It also expects a framework which will outline funding and technology transfers to developing countries to help them adopt green solutions.

What are the possible outcomes? What is the worst case scenario and its consequences?
There are three possible outcomes— a breakthrough climate change deal, a complete failure of talks where developed countries do not make any commitments to the post-2012 period, or a more plausible interim solution where some issues are worked out. Copenhagen is unlikely to be the endpoint as far as climate change talks are concerned. While the second scenario could possibly be the worst case scenario, with the Obama administration in power in the US, the world is quite hopeful that something constructive will come out of the talks.