The clock is ticking. At the time of writing, there are only 54 days left until the opening of the eagerly anticipated climate change summit in Copenhagen, the United Nations Framework Convention on Climate Change's COP 15. Only five of those 54 days will be spent in formal negotiations, from November 2-6, in Barcelona. On the basis of the current state of play, the differences separating the parties involved seem too great to be bridged in that time, and Copenhagen seems likely to disappoint. But a lot can happen in that time to salvage something useful for the climate and the renewable energy industry in general, and wind power specifically.
Are governments willing to make the tough decisions necessary to respond to the increasingly dire warnings from the scientific community about the climate crisis which is upon us? Or will short-term interests of the fossil fuel industry and others derail the global effort needed to stave off the plague of droughts, floods, famine and economic disruption of a hitherto unimaginable scale that are the virtually inevitable result of a failure to act now? We shall see.
For the wind industry in particular, and the renewable energy business in general, the stakes are enormous, even if the effect of these negotiations will not be di- rectly evident until after 2012. Aggressive emissions reduction targets, combined with new and expanded carbon market mechanisms, could continue to drive or even increase the double-digit growth in the sector throughout the next decade and beyond. A sensible technology transfer agreement could drive the deployment and diffusion of wind power throughout the developing world.
The Kyoto effect
The Kyoto Protocol's clean development mechanism - which enables industrialised countries to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries - is already facilitating the development of more than 30 GW of wind projects, primarily in China and India. New and expanded mechanisms could increase that development in the next decade by an order of magnitude at least. They could set us on a path towards a carbon-free electricity sector by the middle of the century, creating new industries in dozens of countries and creating millions of jobs where they are needed most.
As always with these negotiations, you can describe the glass as half full or half empty, depending on your perspective. The four formal negotiating sessions this year have not yielded much in the way of concrete progress on the big issues: industrialised country emission reduction targets; "appropriate actions" from developing countries; money from industrialised countries to facilitate technology, adaptation and mitigation in the developing world; and the legal form of the final agreement.
But it is also the case with these negotiations that "nothing is agreed until everything is agreed", with countries keeping their final negotiating positions in their back pockets until the eleventh hour. So, despite all the pronouncements from pundits about the imminent failure of the post-2012 talks, we will not be able to make that judgement until sometime in the wee hours of Saturday December 19, when the final gavel goes down.
What can be said is that the basic form of a deal that could be done is clearly emerging from the profusion of text that was only slightly pared down at the last session in Bangkok, held from September 28 to October 9. Most industrialised countries have given a conditional indication of the range of their emissions reduction targets. And Norway's announcement during the second week of the Bangkok talks of a 40% emissions reduction target by 2020 against 1990 levels was a welcome addition to the list, along with Japan's announcement of 25% by 2020, using the same metric. However, they are conditional on the US getting into the game, among other things.
It can also be said that some progress has been made on the issues that matter less to the fundamentals of the deal: technology, capacity building and rainforest protection, to name a few. These issues are not unimportant. Indeed, they are fundamentally important to protecting the climate. But they are not the main crunch issues. Strong targets from industrialised countries and serious cash on the table are the fundamentals without which there cannot be an agreement, but countries have yet to show their final cards.
The seemingly arcane matter of the legal form of the final agreement has also risen to the fore in recent weeks, mainly due to the position of the US, which is key to the negotiations. The negotiations have proceeded for the last two years along two tracks: the Kyoto track for basically everyone but the US; and the so-called convention track for everyone including the US. Given the central position of the world's largest economy and its unwillingness to sign up for Kyoto, one solution (advocated by the EU) is to combine the fundamental architectural elements of the Kyoto Protocol with some form of the arrangements for the other issues that have been developed with the US under the convention track.
This would then lead to a new protocol, the basics of which could be agreed in Copenhagen. Naturally, developing countries see this as a way for some developed countries to weasel out of their legally binding emissions reduction obligations, and have vowed to oppose the proposal. However, the alternative - which has the US and developing country obligations in one agreement and the rest of the industrialised world in another, more stringent agreement - is equally unpalatable to most of the rest of the industrialised world. What the parties, and most importantly the US, have to decide, is whether the US, under its supposedly climate-friendly President Barack Obama, is able to join with the rest of the industrialised world in accepting its responsibilities in the form of binding emissions reductions commitments, or whether, through some tacit acknowledgement of "American exceptionalism", the US is treated as a developing country with only voluntary commitments in the international system.
September was "climate month", with a series of high-level political events held up and down the US East Coast and around the world. These were a meeting of the Major Economies Forum in Washington; then the Greenland dialogue hosted by Danish Climate and Energy Minister Connie Hedegaard; UN Secretary General Ban Ki-Moon's climate summit at the opening of the UN General Assembly on September 22; the G20 finance ministers' meeting in Pittsburgh; and then the last but one round of climate negotiations in Bangkok. These high-level events were designed to inject some momentum into the formal climate negotiations. This was badly needed, considering how very little progress has been made in the nearly four years since negotiations began on a second commitment period for the Kyoto Protocol at the end of 2005, and 22 months since the historic agreement in Bali in December 2007 (see below).
However, after the negotiations in Bangkok, one has to conclude that the fine words and polished speeches of leaders have had no appreciable impact on the instructions they have given their negotiators. There is a fundamental disconnect between the public messaging of national leaders and the posture of their civil servants in the negotiations themselves. As one veteran negotiator said to me halfway through the first week: "They don't want a deal." Could this be true?
The basic premise of the climate change negotiations have been the dire warnings in the Intergovernmental Panel on Climate Change's fourth assessment report (AR4), published in 2007. The scientific findings indicated that industrialised countries need to reduce their emissions by 25-40% below 1990 levels by 2020 to give us a 50/50 chance of staying below the nearly universally adopted limit of two degrees celsius above pre-industrial temperatures.
In the two years since the publication of the AR4, new science has indicated that those ambition levels may not be enough. A recent assessment by the UN Environment Programme documents escalating climate impacts across the globe that were hitherto not expected to be seen until two or three decades from now. Combined with new evidence about the dynamics of the climate system, this shows that industrialised country emissions reductions will need to be at least 40%, if not more.
The Bali Action Plan agreed at COP 13 in December 2007 had four basic pillars: mitigation, adaptation, finance and technology. A successful outcome in Copenhagen will need to address all these issues, as well as settle the difficult question of establishing the legal basis under which the agreement is carried forward.
The most critical issue (not least for the wind industry) concerns the level of commitment from some industrialised countries, which have not yet committed to deliver the deep cuts in emissions needed. These countries are now under pressure to agree to targets which are in a similar range of those put forward by the EU (20-30% reductions from 1990 levels), Norway (40% reductions by 2020) and now also Japan (25%). Secondly, the Bali agreement laid out the need for a global action plan for adapting to the impacts of climate change that are already happening, in particular to support the least developed countries and small island developing states which are feeling the effects of climate change first, and worst.
Thirdly, industrialised countries need to commit substantial resources to help finance green growth and climate change adaptation in poor developing countries. Fourthly, there needs to be an agreement on technology development, deployment and diffusion, both to facilitate the maximum uptake of existing technology, as well as research and development for the technologies of the future. The problem, as ever, is a lack of leadership from politicians - governments that are trying to appease powerful domestic players with huge economic interests in the status quo and are afraid that taking the risk of leadership will not give them any direct competitive advantage.
The biggest single problem, though, is the US. Accommodating the US's allergy to the Kyoto Protocol is the reason we have this complex two-track negotiation in the first place. The new US administration has brought with it a change in attitude towards climate change. However, the stark reality is that the US Congress holds the strings, and what can or cannot be achieved in the negotiations prior to Copenhagen will be substantially contingent upon developments on Capitol Hill in Washington in the coming weeks and months. Nobody is going to move much without the world's largest economy, and the US administration cannot move without Congress.
So there we are - the negotiations are in limbo and time is running out. In the end, much hinges on how far that bright young man from Chicago is willing to go. President Barack Obama has a clear invitation to earn his Nobel Peace Prize after the fact by showing the kind of leadership in Copenhagen that has made him such a powerful icon internationally in a very short time. Will he do it? We will find out on December 19.