The Copenhagen climate change negotiations went like high school dance.
After the first couple, the United States and China, reluctantly braved the floor, so few of the others overcame their awkwardness and joined in.
The major emitting countries did agree to:
• a maximum global average temperature rise of no more than two degrees;
• support of US$100 billion per year in finance from developed countries to help less developed countries adapt to climate change from 2020; and
• opening to scrutiny the emission-reduction performance of all countries with commitments.
But with current emission-cut targets falling four billion tonnes short of achieving the 25-40 percent emission reductions needed to hold temperature rises to the agreed two degrees, all developed countries, including New Zealand, will have to lift their targets.
At least, for the first time, the US, China, India and Brazil are taking formal responsibilities with the EU also prepared to cut further once the emitting heavyweights make further commitments.
So what happens now?
• Countries will this month table their emission cut commitments and what they will do to mitigate and adapt (with pledges subject to report and verification).
• The US emissions trading scheme law will probably pass the US Senate in the first six months of this year – vital part of securing significant commitments from the major emitting and developing nations.
• A more comprehensive world agreement will be negotiated this year, probably in time to be put before the US Senate for ratification after mid-term elections in November. Alternatively President Obama could get fast-track approval powers, like those given to previous presidents for trade negotiations.
President Obama has been careful to move no further than what the US Senate is likely to support. The House of Representatives’ Waxman and Markey Bill target is only 17 percent below 2005 levels by 2020.
Through all this New Zealand needs to take care not to lose some significant gains made at Copenhagen.
The draft agreement text will deliver us the benefits of flexible land use. This would allow us to harvest trees planted before 1990 and replant on another site without incurring carbon penalty.
Our historical land use flexibility advantage will continue. For example, many meat and wool farmers are finding it more profitable to grow trees at current prices. For others, it will mean switch to dairying or other production, while replanting forests on marginal land. This deal is not potential veto issue at the moment for any of the major players.
So what are the business implications? Consumer awareness of the environmental impact of goods and services through the whole supply chain will grow and there will be huge market in abatement technology to cut emissions in developing economies.
The US is particularly keen on finding the cheapest possible ways of mitigating and cutting emissions and will have reasonably open regime for importing emission reduction offsets from anywhere in the world.
At Copenhagen, the US Secretary of Agriculture said that agriculture, while responsible for seven percent of US emissions, was also potential source of 20 percent of his country’s emission cuts through changes in land use, biosequestration and soil carbon.
The New Zealand initiative for global research partnership to find ways of reducing agricultural emissions offers us the potential for new export industries built around new mitigation and adaptation technologies, like an inoculation to reduce methane produced by ruminant animals.
Clearly transport fuels for aircraft and shipping, important to New Zealand, are going to be part of the new global agreement – and this will result in businesses striving for greater efficiency, using new technology and more environmentally friendly fuels. Skilful marketing will also be needed. In Copenhagen there were protesters calling for the world to stop eating meat because its production is carbon heavy. It highlights the risk that simplistic slogans will be used to frame the debate providing impetus for people to take action themselves even if their governments are slow to act.
However, as result of the new agreement, the clean-economy market will be very large and very profitable.
Ladies and gentlemen, select your partners… M
Peter Neilson is chief executive of the New Zealand Business Council for Sustainable Development. He attended the COP15 climate change talks at Copenhagen as member of the World Business Council for Sustainable Development’s delegation.
