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Inconvenient Truths Produce Hard Realities: Notes from Bali

In the compromise road map for future climate change negotiations that was drawn up at Bali, the urgency suggested by science was lost. There are yet positives in that the US remains in the negotiating process and the principle of "common but differentiated responsibilities" of the developing countries has been maintained. India needs to now ask itself if it should hold on to a defensive national stance on climate or if the time is right to develop and implement creative national policies, and then articulate an international negotiating position around these policies.

INSIGHTEconomic & Political Weekly december 29, 200731Inconvenient Truths Produce Hard Realities: Notes from BaliNavroz K DubashThis was the year in which the problem of global climate change emerged near the top of the geo-political agenda. The UN secretary gen-eral BanKi-Moon has said climate change will be his number one priority, as has the German chancellor Angela Merkel. The recent Australian election has been described as the first national election, where a proactive position on climate change was an important factor separat-ing victory from defeat. For the first time, investment ministers and finance minis-ters held dedicated meetings to focus on climate change. And most recently, the formerUS vice president Al Gore and Ra-jendra Pachauri (the latter on behalf of the Intergovernmental Panel on Climate Change) accepted the Nobel Peace Prize for their work on the issue. This was the backdrop to the recently concluded climate change negotiations held at Bali, Indonesia. The negotiations concluded with a consensus document, but only after high drama and a last minute stand-off between the US and most other countries. In some ways, this is busi-ness as usual for climate negotiations. Since 1990, when negotiations over a UN Framework Convention on Climate Change (UNFCCC) began, discussions have been characterised by incremental steps toward addressing the problem, always subject to the multiple constraints of national self-interest. These have included a memorable US statement that the American lifestyle is not for negotia-tion, Canada’s insistence that it needs additional fossil fuels for heating, Saudi Arabia’s demand that it should not be un-fairly penalised for dependence on oil exports, and India’s declarations that its development needs come first. Taken sep-arately, these are all understandable concerns, but collectively it has resulted in an anaemic climate regime.I am grateful to Robert Bradley, Nitin Desai, Shantanu Dixit, Srinivas Krishnaswamy and Smita Nakhooda for discussion and comments. I am solely responsible for any errors that remain and for the opinions expressed in this article.Navroz K Dubash ( is at the Centre for the Study of Law and Govern-ance, Jawaharlal Nehru University, New Delhi. The scientific assessment of climate change, however, suggests that negotia-tions as usual will not deliver the desired results. While the dominant impression at Bali was indeed of negotiations as usual, there were also glimmers of an emerging bloc of nations whose negoti-ating positions are informed by an en-lightened long-term self interest – under-stood as an effective climate convention stimulating urgent action – as much as immediate national considerations. These included the European Union, South Africa, and perhaps even China, but not, as yet, India. The Bali process kicked off two criti-cal years of negotiations. For these nego-tiations to result in meaningful outcomes, countries will have to increasingly blend consideration of long-term collective in-terest related to climate with their imme-diate national considerations. While India met many of its objectives at Bali, its posi-tion was driven far more by national self-interest than by taking climate seriously. In this commentary, I summarise and reflect on the issues before negotiators at Bali before returning to the question of what it all might mean for India.1 The ‘Bali Road Map’The agenda for Bali was negotiation of a “Bali road map” laying out the ground rules for a two-year negotiation to culmi-nate in a new decision for renewed action, by 2009. In the tortuous world of inter-national environmental negotiations, it is considered entirely reasonable to spend two weeks talking about doing some-thing. And indeed, the legal complexities are considerable. In practice, the nego-tiators had to decide how to take forward two separate but connected processes, the Framework Convention on Climate Change (agreed to in Rio in 1992) and the Kyoto Protocol (of 1997).1 Negotiators also had to determine whether and how they should be linked, a decision that had embedded within it all sorts of implica-tions for the likely outcome, as discussed further below. In addition, at stake were the “building blocks” of a Bali road map – mitigation measures, adaptation meas-ures, technology transfer and financing In the compromise road map for future climate change negotiations that was drawn up at Bali, the urgency suggested by science was lost. There are yet positives in that theUS remains in the negotiating process and the principle of “common but differentiated responsibilities” of the developing countries has been maintained. India needs to now ask itself if it should hold on to a defensive national stance on climate or if the time is right to develop and implement creative national policies, and then articulate an international negotiating position around these policies.
INSIGHTdecember 29, 2007 Economic & Political Weekly32mechanisms – and the mechanisms and modalities for moving forward on each. The Bali discussions were, therefore, primarily about process, and only sec-ondarily, about signalling initial stances on substantive positions. But in the inter-national negotiations, process matters a great deal, and can definitively shape outcomes. There were at least three inter-connected issues at stake on how to design the “Bali road map”. First, how should the progress of industrialised countries (the so-called Annex I countries) who agreed to commitments at Kyoto be reviewed? An effective process required designing a review that would hold Annex I countries accountable for their Kyoto Protocol com-mitments, but not provide them an op-portunity to revisit the formulation of the commitment itself, as sought by the coun-tries such as theUS, Canada and Japan. Second, what should be done about the US, which accounts for about 20 per cent of global emissions, but has failed to rat-ify the Kyoto Protocol? China suggested a separate working group for non-ratifying Annex I parties, as a way to devise a ne-gotiating process that keeps the door open for the US, in anticipation of a future more cooperative government following the 2008 election. Al Gore, to applause from the delegates, explicitly blamed his coun-try for obstructing progress, and called for just such an approach that negotiated around theUS. In the formal negotiations, theUS proposed an integrated future ne-gotiation of the Kyoto Protocol with the Convention, which would have rendered past Kyoto obligations redundant. Developing CountriesThird, should developing countries take on any commitments, and how should they be articulated? The convention ex-plicitly stated that developed and devel-oping countries have “common but dif-ferentiated responsibilities”, implying that the former have a larger obligation to address climate change. Under the Kyoto Protocol, developing countries took on only reporting and no quantitative obliga-tions. However, the US has been particu-larly vociferous that developing country “major emitters”, notably China and India, take on commitments, and has pointed to the absence of such commitments as an unacceptable flaw in the Kyoto Proto-col. Prior to Bali, the prospect of develop-ing country commitments was discussed through an informal “dialogue” process. At Bali, India supported continuation of the dialogue, presumably as a negotiating ploy, while most other countries, including other large developing countries, sought a formalisation of negotiations through a working group under the convention. The danger, however, was that the US, Canada and Japan would use this opening to press for a single process that erased the clear distinction drawn between industrialised and developing country commitments in the Kyoto Protocol. Indeed, the US recal-citrance at Bali was widely seen as a ploy to put off any significant decisions until a “major economies meeting” planned for early 2008, at which precisely such a blurring across developed and developing countries would be attempted using the category of “major emitters”. Ultimately, the negotiators agreed to a formal process rather than an informal dialogue, but critically kept separate the post-Bali negotiations and Annex I com-mitments under the Kyoto Protocol. This kept the US within the process, while also retaining the critical framework of “com-mon but differentiated responsibilities” across developed and developing coun-tries. However, achieving this outcome required give and take on several other components of the final agreement. 2 Science and ScenariosIt is important to keep in mind that the Bali meeting took place in the context of a global political groundswell on climate change in 2007, which in turn was driven by a scientific exclamation mark: “Warm-ing of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level”.2 This language by the studied and careful Intergovernmental Panel on Climate Change(IPCC) in its Fourth As-sessment report signals the most emphatic statement yet about climate change. This language is also significant in the context of the convention, which has as its ultimate objective preventing “dangerous anthropogenic interference” with the climate system. While there is no simple answer to establishing the threshold level of dangerous interference, by looking at “key vulnerabilities” and how they react to different temperature ranges, the IPCC provides an entry point to this question. Because many of the IPCC’s key vulnera-bilities are triggered at around 2o Celsius, this figure has become a benchmark figure in climate talks for “dangerous anthropo-genic interference”.3 TheIPCC notes that in order to restrict global average temper-ature rise to 2.0-2.4oC would require lim-iting concentrations of greenhouse gases to 445-490 ppm (compared to 375 ppm in 2005 and about 280 ppm in pre-industrial times). This, in turn, would require that global emissions of greenhouse gases peak and turn towards a downward trajectory in the next 10-15 years, and be reduced by 50-85 per cent by 2050 compared to the level they were at in 2000. The fact that global emissions have grown by 70 per cent between 1970 and 2004 places in con-text the magnitude of the challenge pre-sented to climate negotiators at Bali by the IPCC report.TheIPCC also highlighted the possible adverse impacts of climate change. These impacts include decreased availability of freshwater across Asia and increased water stress, massive flooding in coastal zones, endemic morbidity and mortality from water due to diarrhoeal disease caused by changes in the hydrological cycle, chang-ing distribution of disease vectors, impacts on food availability and health, and risk of up to 30 per cent species extinction. Most unnerving, climate change could lead to impacts that are “abrupt and irreversible” such as melting of ice sheets, and chang-es in ocean currents.4 For a developing nation such as India, already grappling with resource scarcities, and with millions of people deeply vulnerable to shocks, the IPCC warnings are dire. 3 NationalTrajectoriesThe IPCC’s expression of scientific con-sensus – and there is little serious doubt that there is a consensus on the science – boiled down to a battle over numbers at Bali. The EU, long-standing champion of an effective convention, argued strenu-ously for articulation of an emissions goal coming out of Bali consistent with the
INSIGHTEconomic & Political Weekly december 29, 200733IPCC. Specifically, the early drafts of the decision stated that “... global emissions of greenhouse gases need to peak in the next 10 to 15 years and be reduced to very low levels, well below half of levels in 2000 by 2050”. Without explicitly including this global goal, the Europeans argued, the Bali road map would lack urgency and effectiveness. The political problem with including a global goal is that the national implica-tions of that goal vary widely depending on how responsibility for meeting that goal is allocated. The convention calls for “com-mon but differentiated responsibilities” among the industrialised and developing countries on the basis that the industrial-ised world is responsible for about 80 per cent of total cumulative emissions (which is what matters for climate impact).5 India has long held a principled position that the atmosphere (or more correctly its green-house gas absorbing capacity) is a global commons and should be allocated on a per capita basis.6 TheUS argues that, irrespec-tive of historical emissions, all major cur-rent emitters should be required to take on some commitments, and has particularly singled out lack of commitments by China and India as the reason for its failure to ratify the Kyoto Protocol.European Proposal Recognising that efforts to slice up the global ecological pie have a long and con-voluted history, the EU also sought to re-assure developing countries by inserting an explicit statement that the industrial-ised countries would have to take the lead by making steep early cuts of 25-40 per cent from their 1990 levels of emissions by 2020. Developing countries, including India, were willing to countenance the global goal only if it was paired with this early reduction target for the industrial-ised world. Predictably, theUS sought to remove both the global goal and the An-nex I target for 2020 arguing that it need-lessly prejudged issues to be dealt with in negotiations. Some developing countries, such as Malaysia, also argued, that even if the industrialised world took the lead and met 70-80 per cent of the global 2050 reduction target, developing countries would still end up with substantially lower per capita emissions than industrialised countries in 2050 due to their much lower starting point.7 Hard RealityHowever, a closer look at the proposed glo-bal target suggests a hard reality that lies beneath this continued squabbling over dividing up the global pie. Assume, for ex-ample, that industrialised countries take on ambitious 90 per cent reductions from their 1990 levels by 2050, and start their reductions immediately. Under this sce-nario, in order to stay within the proposed Bali global cap of 50 per cent reductions from 2000 levels by 2050, non-Annex I countries (roughly speaking the develop-ing world) would only be able to increase emissions for about 12 years before it had to start on a downward trajectory.8 In other words, under even highly optimistic assumptions about industrialised country action, developing countries as a group have only until 2020 to turn their econo-mies in a less carbon intensive direction, in order to have any chance of staying within the 2oC warming threshold.9 The point is reinforced by another sce-nario. Assume that the developing world took on no climate commitments and con-tinued with a business as usual trajectory. Under these circumstances, by 2030 emis-sions in the developing world alone would equal the total level of emissions allow-able worldwide in order to meet the 50 per cent reduction target (from 1990 levels) by 2050.10 Of course, these examples putall non-Annex 1 countries in the same category, and in practice, the post-Bali negotiations may witness efforts to draw distinctions between different developing countries.11 The result suggests two hard realities that both industrialised and developing countries need to grapple with. Given his-torical emission patterns, fairness dictates that industrialised countries reduce their emissions enormously, by 80-90 per cent at minimum, in order to leave ecological space for developing countries.12 On the other hand, the science and current pro-jections dictate that developing countries too need to urgently shift to less carbon-intensive growth trajectories. Unfortu-nately, in the final compromise text, the urgency suggested by the science was lost. The IPCC-linked global target for 2050 was removed from the text, and relegated to a footnote reference, and the short-term target of steep reductions by industrialised countries by 2020 was removed entirely. While the deletion is the understandable outcome of negotiation realpolitik, the Bali road map is substantially weakened by this outcome.4 Climate MitigationThe battle over global targets was a back-drop to the more concrete issue to be de-bated over the next two years: the articu-lation of mitigation commitments for both industrialised and developing countries. Although negotiations over specific miti-gation targets were explicitly not on the table at Bali, as discussed above, they were never far from the minds of negotiators. The need for strong mitigation meas-ures is punctuated by an increase in global emissions by 24 per cent between 1990, when climate negotiations began, and 2004, as reported by the IPCC. Industrial-ised countries have also struggled to meet their Kyoto Protocol target of 5 per cent collective reduction from 1990 levels by the period 2008-12. Some countries such as Canada have increased their emissions by 26 per cent over 1990 levels by 2004, as compared to their share of the Kyoto target, a 3.3 per cent reduction.13 Over-all, the Annex I countries are likely only to meet their collective target because the former Soviet bloc countries, or “econo-mies in transition,” had a collective eco-nomic meltdown in the 1990s, leading to huge decreases in emission levels on the order of 35 per cent. There are recent signs of progress in the form of new legislation in several indus-trialised countries, although most efforts fall short of what is required from indus-trialised countries in order to meet the global target. The UK recently became the first country to pass new climate legisla-tion that will reduce emissions between 26 and 32 per cent, leading to 60 per cent cuts by 2050.14 Germany adopted a climate package to reduce emissions by 40 per cent from 1990 levels by 2020.15 Even in theUS, draft climate legislation emerged from a Senate Committee, marking the greatest progress yet toward legal commitments in theUS, mandating 18-25 per cent re-ductions below 2005 levels by 2020.16 Al-though well short of other countries, this
INSIGHTdecember 29, 2007 Economic & Political Weekly34effort nonetheless signals some degree of movement in the US, although notably not by the Bush administration.Against this background, developed countries agreed to “Measurable, report-able and verifiable nationally appropri-ate mitigation commitments or actions, including quantified emission limitation and reduction objectives, by all developed country parties, while ensuring the com-parability of efforts among them, taking into account differences in their national circumstances.”17 There are several impor-tant code phrases in this text. For example, “comparability of efforts” is a hookto en-sure that theUS does not get off too lightly. “Taking into account national circum-stances” is a phrase that Canada,US and Japan insist on, and reflects, for example, Canada’s insistence that their emission needs are greater due to a cold climate.Shift in PositionPerhaps the single most contentious issue was whether and how developing coun-tries would articulate any commitments. Several large developing countries, in-cluding China, South Africa and Mexico, expressed their willingness to commit to greenhouse gas reduction policies at home, that would also promote sustain-able development, and even, perhaps, to targets for particular critical sectors. This was a major shift from previous nego-tiations, and seemed to reflect a growing consensus around so-called “sustain-able development policies and measures” (SD-PAMs) as an appropriate articulation of developing country commitments. The question was whether this articulation would be sufficiently strong to persuade the US, in particular, to stay within the negotiation process. At one point, the US sought to emphasise its view that it con-sidered SD-PAMs inadequate by noting that these were not negotiations on a sus-tainable development convention! The final text stated consideration of “Nationally appropriate mitigation actions by developing country Parties in the context of sustainable development, sup-ported and enabled by technology, finan-cing and capacity-building, in a measura-ble, reportable and verifiable manner”. Note that developing countries are required to consider “actions” as compared to “quantified emission limitations and reduc-tion objectives” (QELROs) for industrial-ised countries. Moreover, the linkage be-tween developing country actions and both sustainable development and financing represents a positive for developing coun-tries. Notably, the phrase “measurable, re-portable and verifiable” as used here could be read as applying equally to technology and financing support as to developing country mitigation actions. This language was won through an intervention by India that shifted the phrase “measurable, re-portable and verifiable” from the beginning of the sentence, which would have unam-biguously tied it only to developing coun-try actions, to the end of the sentence, thereby creating ambiguity about whether it applies to actions or to financing or to both. At the last minute the US agreed to proceed with a Bali road map using this language for developing country actions.The impact of this developing coun-try commitment depends heavily on the frameworks developed in the next two years to measure and verify national actions. However, with this statement, developing countries have agreed in prin-ciple to include climate considerations as a part of their national policymaking, consistent with their sustainable develop-ment objectives. Within the climate pro-cess, this approach has come to be known as “Sustainable Development Policies and Measures” (SD-PAMs).Distribution MaintainedAt the same time, developing countries maintained the distinction between how commitments are articulated for industr-ialised versus developing countries – the principle of “common but differentiated responsibilities” that is the bedrock of the Framework Convention. This point was critical for the Indian negotiating position. For much of the negotiation, the US, along with Canada and Japan, sought to create a category of “major emitters” which would have erased the clear distinction between industrialised and developing countries and their respective commitments en-shrined in the convention. That this dis-tinction was maintained and yet a road map was agreed to represents one of the major positives emerging from Bali. Yet, it is hard to shake a sense that the urgency of the situation signalled by the science failed to completely pervade the final Bali text on mitigation commitments.5 Deforestation and DegradationBali marked an important landmark in a long-running discussion over a sub-set of mitigation efforts, reducing emis-sions from deforestation and degradation (REDD). The IPCC recently concluded that this category of emissions accounts for 20 per cent of global emissions, making atten-tion to reduced deforestation particularly important as part of a mitigation package. While there are several other mechanisms within the convention process to address forests, they do an inadequate job of pro-viding incentives to preserve standing for-est in developing countries. For example, under the Clean Development Mechanism (CDM), only project-based activities lim-ited to afforestation and reforestation are allowed. These projects are subject to both measurement problems and “leakage” – the risk that reduced deforestation in one place simply emerges elsewhere as greater deforestation.The discussions in Bali centred on cre-ating a national level mechanism where-by countries would receive incentives to preserve standing forests. A national ap-proach, it was felt, would limit the prob-lem of leakage and limit transaction costs of project by project approaches.While there was broad agreement on this issue, the approach was stalled for a number of days due to an Indian pro-posal to broaden the ambit to include conservation efforts and sustainable for-est management within theREDD dis-cussion. The Indian delegates argued that prior efforts to restrict deforestation and encourage sustainable management should also be recognised and financially rewarded. Those opposed to this exten-sion suggested there was a distinction between such activities, which belonged underCDM, and an appropriate focus on deforestation through theREDD mecha-nism. Ultimately, the final text blurs the issue, by urging countries to “explore a range of actions … with a view to reducing emissions from deforestation and forest degradation and thus enhancing forest carbon stocks due to sustainable manage-ment of forests.”18
INSIGHTEconomic & Political Weekly december 29, 200735The second item for the Bali road map, measures for adaptation, was relatively uncontroversial. In one sense, this is re-assuring, but in another, it is worrying. Delegates have already acknowledged that human society is highly unlikely to completely dodge climate impacts, and needs to start preparing for them. At Bali, delegates converged quite rapidly on establishment of an “Adapta-tion Fund” to assist developing country parties that are “particularly vulnerable” to climate change to help meet the costs of adaptation.19 The Adaptation Fund would be financed through a share of the proceeds generated through the CDM (the means through which certified emission reductions can be generated through projects in developing coun-tries). The main issuesintheAdapta-tion Fund discussion revolved around its governance. The negotiators agreed to a relatively balanced governance board comprising different regions, Annex I and non-Annex I parties, and particu-larly,vulnerablenations. The Global En-vironment Facility was invited to be the interimsecretariatand the World Bank the interim trustee.6 From Rhetoric to Action?Harmony was notably absent in discussion of the third substantive element of the road map – technology transfer. Indeed, this area marked the first major conflagra-tion of the event during the opening days of the negotiation. At issue was whether discussion of technology transfer should be limited to the “Subsidiary Body on Scientific and Technical Advice” where it had long been housed or whether it should also be discussed under the second body, the “Subsidiary Body on Implementation” (SBI). The G-77 and China argued that de-spite commitments to promote technology transfer, little action had occurred, and since it was an implementation issue, it should also be taken up by the SBI. A bitter battle followed, in which the US andCanada sought to remove technology transfer fromSBI and the G-77 and China accused these countries of bad faith, and seeking to retract on a decision already made.Although seemingly arcane, this argu-ment signals a united intentionby deve-loping countries to demand heightened attention to technology transfer, and indeed, to elevate commitments in this area to the levels equivalent to mitigation commitments. Commitments on techno-logy transfer are poised, therefore, to become an important bargaining issue in the next two years.In its initial position, the G-77 and China sought, among other things, crea-tion of a “new and additional multilateral technology cooperation fund,” the pur-chase of licences to support the transfer of low carbon technologies (a point particu-larly emphasised by India), and perform-ance indicators against which to measure compliance of the technology transfer commitments of the developed world. Negotiations on this issue were among the stormiest of the meeting. The final text decides that funding is required for a range of technology transfer issues without calling for a new fund, includes licences of low-carbon technologies as among the items that require funding without committing to do so, and commits to developing indicators for developed country progress.Notably, the final text of the “Bali Road Map” links developing country actions to technology and financing support, and also includes the phrase “measurable, re-portable and verifiable” in a manner that could be interpreted as applying to tech-nology and financing. Technology transfer is poised, therefore, to become a key issue in the coming two years. The extent to which real progress is made depends in large part on how well prepared developing country negotiators are with concrete examples of technolo-gies, concrete mechanisms through which transfer would occur, and specific sugges-tions for measurement of developed coun-try progress in meeting technology trans-fer commitments.7 What Does Bali Mean for India?In India, climate change continues to be a relatively low profile issue for at least three reasons. First, for poor Indians and those who claim to represent their wel-fare, climate change, which operates on a decadal time scale, is crowded out by pressing short-term development issues of adequate livelihood, nutrition, and health. Second, for rich Indians, getting a piece of an economy growing at 9 per cent is the immediate priority; since the richer you are, the better you can manage dis-ruptions such as those caused by climate change, economic growth should continue to be the highest priority. Third, it is large-ly true to say it is a problem caused by the industrialised countries, and it is only rea-sonable they be asked to clean it up. These perspectives, presumably inform the cur-rent and long-standing Indian position on climate change negotiation, insist that the west act first; demand that the global eco-logical pie be divided equally; refuse to constrain our growth and development in any manner; and only offer to take domes-tic measures if the west pays for them. In Bali, a number of Indian concerns consistent with this negotiating stance were successfully safeguarded. Most important, challenges to the principle of common but differentiated responsibility were successfully staved off. In addition, the importance of technology transfer was raised to a new high, possible new and ad-ditional sources of money were opened through the adaptation fund and contin-ued discussion of financial assistance for mitigation, and the door was held open to payment for conservation under the REDD mechanism. These are important achieve-ments given that the negotiations operate in a world of realpolitik where the US re-mains the single biggest obstacle to global progress on climate change. Narrow Conception This doggedly defensive stance may in-deed have been necessary and strategic in the early years of climate negotiations. However, at Bali, driven by the science, the willingness of a growing number of countries to tie their national interests to an effective climate regime was striking. In this context, the Indian position sig-nalled the continuation of a policy of safe-guarding a narrow conception of national interest over a broader conception of the national interest that takes climate change seriously and promotes global collective action. That a long-promised Indian na-tional action plan on climate change was not finalised prior to Bali contributed to a perception that the Indian government had adopted a defensive posture in the ab-sence of creative new ideas and a political
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