Pete Ogden is a Senior Advisor of Rhodium Group (RHG). This article was adapted from a article by the Council on Foreign Relations in August 2014.
On June 2, U.S. President Barack Obama proposed the country’s first-ever federal regulation on greenhouse gas pollution resulting from existing power plants. The rule, intended to cut carbon emissions from the power sector to 30 percent below 2005 levels by 2030, is an indispensable piece of the administration’s climate policy, which it has painstakingly assembled since a comprehensive energy and climate bill collapsed in the Senate in mid-2010.
Predictably, Obama’s proposal set off a firestorm of political hyperbole. The Senate’s top Republican, Mitch McConnell, decried it as a “dagger in the heart of the middle class,” and John Boehner, speaker of the House, called it “a sucker punch for families everywhere.” In fact, there is much about the rule to celebrate, including the notion that for the first time it puts the United States on track to meet its international commitment, made in 2009 as part of the Copenhagen Accord, to reduce greenhouse gas emissions to 17 percent below 2005 levels by 2020.
The Copenhagen climate conference, often remembered more for heated arguments and a chaotic conclusion than for what it achieved, was actually a turning point in international climate talks. For the first time, all major polluting states — developed and developing — agreed to stem their emissions. This was no small victory, and it is far from secure, as China, India, and other major emerging economies remain keen to restore and maximize the differences between their responsibilities and those of developed countries in the climate negotiations.
Fortunately, thanks to the newly proposed pollution rule and other polices, the United States is finally on a path to meeting its own Copenhagen emission reduction commitments. Its increased global credibility comes at the perfect time: At the end of next year, global leaders will convene in Paris to conclude the next major round of climate negotiations, where the United States can use its newfound clout to secure the gains of the Copenhagen agreement and reach a stronger, more durable deal.
A DEEP FREEZE
More than one hundred world leaders and tens of thousands of government officials, environmental activists, and journalists attended the 2009 Copenhagen conference, where they hoped to reach a new international agreement to combat climate change. But when Obama arrived in Copenhagen for the final day of the conference, negotiations were in what U.S. Secretary of State Hillary Clinton would later call a “deep freeze.” It fell to individual leaders to negotiate a deal or be party to a spectacular global failure. And it was not until the final evening, when Obama and Clinton interrupted a strategy session between Wen Jiabao, who was Chinese premier at the time, and the leaders of Brazil, India, and South Africa, that the final breakthrough occurred.
The resulting Copenhagen Accord — which took the form of a pledge rather than a new set of internationally legally binding commitments — was a major disappointment to those who had hoped for a new treaty or protocol. But it was only by departing from a new treaty arrangement that China, India, and all of the world’s major economies could agree, for the first time, to reduce their greenhouse gas pollution.
That accomplishment should not be diminished. It marked a major step forward from previous rounds of negotiations. The 1997 Kyoto Protocol, for example, had divided the world into developed and developing countries — according to classifications in the 1992 UN Framework Convention on Climate Change — with only the former required to reduce emissions. Of course, such a permanent division is untenable for any twenty-first-century agreement aimed at curbing climate change, as countries that were classified as “developing” in the early 1990s are projected to account for roughly 95 percent of future emissions — with China alone expected to make up half that figure. China’s emissions have tripled since 1990; by 2020, it could well emit twice as much as the United States. In Copenhagen, it wasn’t easy to get large developing countries on board, but in the end, they agreed, like their counterparts from developed countries, to cut emissions by a self-determined amount by 2020.
Having secured the deal, it was time for the United States to formally put forth its own target, which required a balancing act. On the one hand, an unrealistically high target would undercut the credibility of the entire accord. On the other, a cautiously low target would undermine the very purpose of reaching an agreement: to substantively alter each country’s emissions trajectory. The Obama administration hoped to thread the needle by selecting as its target the reduction set forth by the energy and climate legislation that was still winding its way through Congress.
When that legislation floundered the following year, however, the United States was left without a clear path toward fulfilling its international pledge. There was still hope, of course: Obama secured major new vehicle efficiency standards and took other steps that limited greenhouse gas emissions, while the natural gas boom displaced emissions from some higher-polluting coal plants. But it wasn’t until 2013’s Climate Action Plan that Obama articulated a clear strategy for reaching the Copenhagen goal. Moreover, it wasn’t until last June, with the announcement of the new regulations on power plants that this critical element of the plan came into focus.
It took a few years, but never before has U.S. domestic and international climate policy been so well aligned. And that too just in time for the final sprint to the Paris climate conference, where countries will seek to finalize a new climate deal to succeed the Copenhagen Accord after 2020.
Although a wide range of agreements may seem possible, the space for a viable deal remains quite limited, and failure is always a possibility. Still, the U.S. administration can maximize its chances of success by executing a strategy focused on securing the gains of the Copenhagen Accord and galvanizing new global action to meet the climate challenge.
THE PARIS PROJECT
First, the Obama administration must insist that all major economies commit to new emissions targets for the post-2020 period. The new deal should be modeled on the Copenhagen Accord, with countries held equally accountable to their targets and with an intensive international review process to encourage compliance. But this is easier said than done, as major developing countries will undoubtedly push for as much of a Kyoto-style firewall as possible between their obligations and those of developed countries.
Meanwhile, the United States must be clear with other countries about its own ability to comply with a new agreement. If the Paris deal takes the form of a legally binding treaty or protocol, for example, Senate ratification would be required for the United States to formally join. The prospects of such a ratification in the immediate future are dim, and the Obama administration should thus only support an agreement that it believes either doesn’t require ratification – as was the case with the Copenhagen Accord – or in which it could meaningfully participate while ratification is pending. Transparency here is key: The United States should not appear to be negotiating in bad faith even if other countries ultimately choose a deal that precludes U.S. participation.
Of course, as in Copenhagen, the dynamic between the United States and China will be critical in shaping any outcome. This time, though, there is some cause for optimism. When President Obama and Chinese President Xi Jinping met in 2013 at the Sunnylands estate in California for their first presidential summit, they agreed to support the use of the 1987 Montreal Protocol to limit the production and consumption of hydrofluorocarbons, a particularly potent greenhouse gas used in air-conditioning units and refrigerators. The agreement signaled that China was open to making climate change a positive and central feature of its bilateral relationship with the United States, something the Obama administration had pursued with intermittent success since 2009. The agreement was also important because it utilized the Montreal Protocol — an international treaty designed to phase out substances responsible for ozone depletion – which has been successful in large part because it does not create the same distinction between developed and developing countries that haunts the international climate negotiations. This may presage a willingness by China to be similarly pragmatic in Paris.
The form the final Paris agreement takes will be of little relevance, however, if it does not include a plan to meaningfully alter the global emissions trajectory. The Copenhagen agreement left it up to each country to define what that would mean in practice, and since it remains infeasible to win consensus on a broad formula to allocate responsibility among countries, the Paris agreement will likely also be comprised of commitments determined nationally. This means that the United States needs to lock down its own target while also pushing countries to set ambitious goals for themselves.
The United States, in setting its target, faces a different challenge now than it did in the run up to Copenhagen. The 2009 energy and climate bill would have put U.S. emissions at roughly 42 percent below 2005 levels by 2030, but that legislation currently has no chance of revival. Obama’s new Climate Action Plan, meanwhile, enumerates only the policies necessary to reach the country’s target for 2020, not a longer-term goal. In the next few months, then, the United States must be willing to set an ambitious yet credible new target for 2025 or 2030 that commits to additional action beyond Obama’s time in office.
Setting a strong target is only part of the challenge that the Obama administration faces. While the United States is the world’s second-largest carbon polluter, it accounts for only about 15 percent of global emissions — and its share is shrinking. A strong agreement, therefore, also requires aggressive action by the other major emitters. The United States, of course, can only influence other nations up to a point, but all goals will inevitably be measured against that of the U.S. target – the implicit benchmark. By sharing a strong target, the United States will affirm the credibility of its commitment to slashing emissions and encourage others to follow suit.
Strong country-by-country pledges will remain the backbone of the agreement, but the United States should also work with other major economies to identify collective milestones such as the current goal to limit global warming to less than two degrees Celsius above pre-industrial levels. In the past, collective targets have been hampered by the familiar conflict between developed and developing countries. But if all nations are putting new commitments on the table, the timing may be right to build a new layer of international commitments on top. Countries could jointly set a date by which global emissions should peak and begin declining, for example. Or they might set a date by which they must double the use of renewable energy, or a clear timeframe for cutting global fossil fuel subsidies in half. Putting deadlines to these challenges brings them sharply into focus and helps to force countries to confront them while there is still time.
MONEY ON THE TABLE
In addition to helping set the goals, the United States has another job to do: It must help provide monetary assistance to developing countries that are trying to reduce emissions while responding to the adverse effects of climate change. Financial support, while justifiable in and of itself, will also go a long way toward building support for a broader agreement. Given that the climate conference has operated by consensus — meaning that any of the nearly 200 countries could try to block an outcome — a financial incentive would place significant pressure on China, India, Brazil, and other major emitters to reach an agreement. Failure to do so, after all, could cost poorer countries billions of dollars.
This dynamic was on display in Copenhagen. With negotiations stalled on the penultimate day of the conference, Clinton announced that richer countries would agree to mobilize an annual $100 billion of climate finance, from a mix of public and private sources, by 2020. The money, Clinton said, would be provided “in the context of a strong accord in which all major economies stand behind meaningful mitigation actions and provide full transparency as to their implementation.” With money on the table for poorer countries, China, India, and the other major economies had a new incentive to reach an agreement.
Meeting that $100 billion goal, however, has been a challenge — one that became even harder with the collapse of the U.S. energy and climate bill, which could have generated large amounts of climate assistance. The bill would have allowed U.S. companies to meet a portion of their greenhouse gas reduction obligations by investing in lower-cost reduction opportunities in developing countries, which alone could have generated more than $10 billion annually in green investments.
Despite the absence of such legislation, the Obama administration still managed to quadruple U.S. public climate assistance to $2.7 billion in 2013. But there is only so much more public money that Congress will appropriate for this purpose, and other donor countries are similarly constrained.
In this environment of fiscal austerity, donor countries should thus focus public money on helping vulnerable countries cope with the effects of climate change, while encouraging private sources to finance clean energy and energy efficiency. One notable success in the latter category has been the U.S. Overseas Private Investment Corporation (OPIC), which has supported U.S. private investment in renewable energy projects in developing countries. OPIC increased its support for clean energy from $8.9 million in 2008 to a record-breaking $1.2 billion in 2013. Government agencies are now working to find and cultivate new opportunities for U.S. clean energy investment around the globe.
Meanwhile, instead of simply making new, larger financial pledges, donor countries should instead direct resources toward addressing key climate needs. For one, donor countries should find creative strategies to help developing countries reduce fossil fuel subsidies, which amount to more than $500 billion a year and drain resources that could be put to better use. One idea might be for donor countries to work with the World Bank to issue bonds to developing countries willing to repay them through money saved from eliminating subsidies. To help developing countries cope with an increase in extreme weather and natural disasters fueled by climate change, richer countries could also expand tools such as the Caribbean Catastrophe Risk Insurance Facility, which pools risk and provides rapid payout in the event of a tragedy.
Of course, the United States cannot simply impose its will in the famously fraught arena of international climate negotiations. Copenhagen showed how difficult climate talks can be. Still, it also demonstrated how much effort the United States and others are willing to invest in an agreement. Six years later, with climate change on the rise, the stakes have only intensified.
Just before leaving Copenhagen, Obama said to the press, “I believe what we have achieved in Copenhagen will not be the end but rather the beginning — the beginning of a new era of international action.” A successful outcome in Paris next year could help to prove him right.