What’s At Stake in Lima Climate Talks

The U.N. Environmental Program says climate pollution levels must drop to zero during the third quarter of this century if a U.N. goal of limiting warming to 2°C, or roughly 3.6°F, is to be met.  At the rate we’re going, scientists say we will have dumped enough carbon dioxide into the atmosphere in just a few decades from now to warm the planet by far more than that.

Based on decisions reached during previous climate negotiations, the pact that is finalized in Paris next year will call for climate action by all nations, not just the rich ones, and provide funding to help developing countries curb climate change and adapt to it.  Aspects of the next climate pact could eventually touch on everything from forest protection and agriculture to subsidies to support carbon capture and sequestration technology at coal power plants.  Perhaps most importantly, at least from a wonky policy perspective, it will balance out the heavy-handed top-down approach of Kyoto, which tried to imposed uniform emissions reductions on groups of countries, with the flexibility of a bottom-up approach, in which nations decide for themselves how they will contribute in a measurable way to a global climate solution.  Climate negotiators call these commitments INDCs, because it’s less of a mouthful than saying “intended nationally determined contributions.”

The national contributions are due to be announced early next year.  Rules governing how they are laid out and what they will cover, and when, are planned to be decided during the two weeks of Lima talks.

Sketches of what the world’s most polluting countries plan to contribute have emerged in recent months.  China has said it will stabilize or reduce the amount of greenhouse pollution it releases every year after 2030.  It will do that in part by capping its annual use of coal at 4.2 billion metric tons by 2020, which would be 16 percent more coal than it burned last year.  In a joint announcement with China’s president this month, President Obama said the U.S. would produce less than three quarters as much carbon pollution in 2025 than was the case in 2005.  European Union leaders have committed to reducing the amount of climate pollution the bloc releases in 2030 by 40 percent compared with 1990.

Putting the world on track to avoid a 2°C temperature rise would still require a global energy industry revolution that’s well beyond the ambition of current negotiations.  Nonetheless, the announcements have been widely lauded as important starting points in spurring meaningful global climate action.

Harvard University environmental economics professor Rob Stavins, who as director of the Harvard Project on Climate Agreements has been closely involved with the climate talks, described the recent joint China-U.S. announcement as “potentially the most important development in international climate negotiations in the past 5 to 10 years.”  But he cautioned against expecting an agreement in Paris next year that would outright solve the problem of climate change.  Instead, he said the Paris agreement could provide a post-Kyoto framework that finally gets the world on track for an eventual climate fix.  “The way to judge the negotiations coming out of Paris is whether or not the structure is a sound foundation for meaningful long-term reductions,” he said.
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“Allowing for carbon markets and their international linkage is a very important topic for Lima and Paris,” Stavins said.  “Some brief text will likely be included in the Paris agreement, and then this will be elaborated in subsequent talks.”

Stavins and other economists say that pricing carbon – whether through a cap-and-trade system or through a carbon tax – is the best way for nations and regions to achieve pollution reduction goals.  Revenues from carbon fees can be put toward environmental projects or used to reduce income and corporate tax rates.  The idea is growing in popularity, even outside of circles of markets-infatuated academics.  More than 70 nations, which are together responsible for more than half the greenhouse gas pollution produced every year, have joined Royal Dutch Shell, British Airways, China Steel Corporation and more than 1,000 other companies in voicing their support for carbon pricing.  Meanwhile, 39 carbon pricing programs are now up and running in Europe, China, North America and elsewhere.  The Sightline Institute calculated that they collectively put a price on 12 percent of the planet’s greenhouse gas emissions.

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