Business NZ's John Carnegie Reports on Progress at Cancun

1 December 2010
It’s a year since the Copenhagen international conference on climate change.

This year the conference is happening in Cancun, Mexico, and there’s an entirely different feeling this time round.

While the Copenhagen conference wound up with only modest progress, it started with very high hopes.

This time last year Copenhagen was electric with expectation - delegates and observers were moving quickly between meetings in animated conversation.

The opposite is true of Cancun.

Delegates are walking slowly, conducting discussions in moderate tones and even at this early stage of the conference the agenda is already hours over time.

Instead of talking about completing workstreams while at Cancun, many are expecting completion in a year’s time, at the next global meeting in Durban, South Africa.

There are two main workstreams – one made up of countries that signed up to binding emission reduction targets under the Kyoto Protocol (Annex 1 countries) and another of countries that didn’t.

Adrian Macey, New Zealand’s former Climate Change Ambassador, is co-chair of the Kyoto Protocol negotiating stream and will act as facilitator on land-use change (forestry related) rules, and emissions markets.

Tim Groser, New Zealand’s Minister for International Climate Change Negotiations has the key task of facilitating negotiations on mitigation, monitoring, reporting and verification for the Annex 1 workstream.

These are important international workstreams and both men will be seeking to achieve consensus across the widest range of countries; other than obliquely, they won’t be able to do much to advance or protect New Zealand’s position.

However, it’s not clear that this would be required in any case, given the deadlock that has carried over from last year’s negotiations.

Annex 1 countries are still firm on their position that all countries must play a part in emissions reduction, depending on their capabilities, while a large number of developing nations still want developed nations to do the lion’s share of reductions.

Given the big divide between those groups, New Zealand’s position is both positive and sensible – basically, seeking flexible solutions while supporting market mechanisms such as emissions trading.

The conference is informally divided into negotiating blocs.

Among developed countries, the biggest grouping is the EU Bloc.

Having decided on a target emissions reduction of 20%, the EU countries have relatively firm views on acceptable targets and acceptable trading units for emissions trading.

The other grouping of developed nations is the Umbrella Group, made up of countries that are open to more flexible means of achieving emissions reductions.

This group includes New Zealand, Australia, US, Canada, Norway and Japan.

Another major bloc is the Group of 77 – a coalition of developing nations that are making their presence felt in no uncertain terms.

The Group of 77 wants bigger cuts in emissions by developed countries, a second Kyoto commitment period and more financial support for developing countries to reduce their emissions.

Yesterday the Group of 77 complained that market mechanisms such as emissions trading are simply a way for developed countries to ‘evade their responsibilities’.

This and other related sticking points are leading to serious questions being asked about whether an overall consensus agreement to replace the Kyoto Protocol is even possible.

Japan, for example, has refused point blank to agree to any arrangement that has the merest implication of a second commitment period.

Perhaps a series of bilateral and regional agreements is more achievable in the medium term.

A ‘bottom up’ series of bilateral and regional arrangements - negotiated under their own terms and conditions and incorporating issues like energy security and industrial innovation as much as climate change - within a ‘top down’ international framework, is seeming more likely.

Yesterday the Umbrella Group, including New Zealand, pledged ‘to achieve the best outcome we can’ in search of a balanced and flexible outcome.

In light of the increasingly unrealistic expectations of the developing countries, such a goal is perhaps as realistic as one could expect.

John Carnegie
BusinessNZ

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