Rich-Poor Climate Divide Threatens Prospects for New Deal – Bloomberg

Two weeks of debate on how to limit carbon pollution across the globe ended with a deal that failed to resolve the toughest debate: how to narrow the divide between industrialized countries and poor ones that believe they need fossil fuels to help expand their economies.

Diplomats at the United Nations talks in Peru agreed on the data they’ll provide in the first quarter to support emissions goals for a pact to be signed in Paris next December. The discussions that finished in early hours of Sunday ran more than 30 hours overtime as nations fought about how to differentiate between those who’ve become rich on the back of burning fossil fuels and those who say they need cheap energy to develop.

“The fact that it was so tough to deliver some modest procedural steps is a taste of how difficult a substantive deal will be next year,” Elliot Diringer, executive vice president of the Center for Climate and Energy Solutions, said in an interview as the discussions finished in Lima. “It keeps us on track for Paris but signals a tough year ahead.”

Next year’s goal is to bring all nations, rich and poor alike, into a deal that will limit pollution everywhere for the first time. The meeting in Lima, which began with a sense of momentum after the U.S. and China jointly announced emission limits in November, failed to lock in binding requirements to make transparent the actions that countries such as India, the third largest polluter, will take to restrict fossil fuel use.

May vs Shall

The five-page decision only describes the elements nations “may” report to demonstrate their commitment to limit emissions. An earlier version of the text used the word “shall,” which suggested more bite to the rules.

The Lima decision also emphasized the “common, but differentiated responsibilities” of countries, a phrase that dates back to the 1992 convention that governs the talks. Nations such as China and India interpret it as placing the burden to act on the rich, while industrial countries say it’s being used by the developing ones as an excuse not to act.

“This is a good starting point for Paris,” Indian Environment Minister Prakash Javadekar said in an interview as he left the closing meeting in Lima. “All have accommodated each other. This needs to be taken further. Differentiation has come.”

Efforts at Lima to install a system for reviewing those pledges and pushing for more ambitious cuts were stripped out of the final document. That opened new questions about whether the UN will be able use government agreements to reach climate goals that have been identified by scientists.

‘Show and Tell’

“This whole show-and-tell process that we’ve created here is still an optional arrangement,” Ian Fry, an envoy for the tiny Pacific island nation of Tuvalu, said in an interview. “Countries can just pick and choose what they want to report on.”

Tuvalu and other low-lying island nations want all the biggest polluters, developed and developing alike, to rapidly reduce emissions. They’re alarmed global warming will boost sea levels and swamp their atolls.

“The thing that we’re not seeing in here and that we’re not seeing at the highest levels of government is the commitment we saw mobilized when we wanted to save the global financial system,” Samantha Smith, who follows the talks for the environmental group WWF, said in Lima. “If we don’t get stronger actions, we will get very dangerous climate change.”

Paris Elements

The decision adopted in Lima also references a separate 37-page document that incorporates “elements” of a deal that will morph into the Paris agreement. They set themselves a deadline of May to produce a first draft of the Paris text. In a third paper dealing with finance, richer countries reiterated a goal to provide $100 billion a year in climate aid by 2020.

“Finance is absolutely critical,” Winnie Byanyima, executive director of the development charity Oxfam, said in an interview in Lima. “Without resources being committed to support developing countries to adapt to climate change and to move onto a low carbon path, there can be no agreement.”

The talks are part of a process begun three years ago to apply pollution limits on all nations, not just the industrial countries covered by the Kyoto Protocol. Since that treaty was signed in 1997, China surpassed the U.S. as the world’s biggest emitter, and India jumped to third. Both are classified as developing countries exempt from restrictions. Kyoto’s limits expire in 2020 and will be replaced by the Paris deal.

American View

“The idea you would shape the form and content of a new agreement based on who was in which boat in 1992 is completely indefensible,” Todd Stern, the U.S. envoy in Lima, told reporters after the meeting. “That has to change and what we did today was a good step, but this issue was contentious. It will need to be worked through all the way to Paris.”

Stern said he’s confident countries will come forward with enough detail to judge their promises, despite the compromises in the final agreement.

The Lima meeting came as Exxon Mobil Corp., Chevron Corp., Peabody Energy Corp. and Glencore Plc have increasingly taken to portraying themselves as champions of the world’s poor. Billions of people in developing countries, they say, need access to cheap oil, natural gas and coal to pull themselves out of poverty and into the middle class.

Even so, “the major multinational oil companies will gradually continue to diversify in their rational response to increasingly stringent CO2 policies,” Robert Stavins, director of the environmental economics program at Harvard University, said in an e-mailed reply to questions. That includes rolling back pricier projects, pushing into renewables and further developing technology to capture emissions and pump them underground for permanent storage, he said.

EU Reaction

Miguel Arias Canete, the European Union’s climate and energy commissioner, agreed that the results weren’t what he was seeking, though he insisted the route to Paris is continuing.

“Although the EU wanted a more ambitious outcome from Lima, we believe we are on track to agree a global deal in Paris next year,” Canete said after the Lima decision was reached.

While Kyoto’s limits were legally binding, it now covers just 15 percent of the global total.

Temperatures are on track to rise 3.6 degrees Celsius by the end of the century, according to the International Energy Agency. A shift of that magnitude would be faster than the one that ended the last ice age and scientists say it will melt glaciers, trigger more violent storms and raise sea levels.

‘More Games’

“We can’t afford more games next year as leaders are going to show what side of history they want to be on,” Jake Schmidt, director of climate policy at the Natural Resources Defense Council, said in Lima.

The current UN goal is to keep temperature increases to 2 degrees Celsius by the end of the century. One option suggested in Lima: zero out fossil-fuel emissions by 2100, or reduce them 50 percent by 2050.

Climate scientists last month estimated the world can burn oil, coal and natural gas at current rates for no more than two decades before they risk causing irreparable planetary damage.

“There is a growing consensus that Paris has to have a long-term goal of reducing if not eliminating fossil-fuel emissions,” said Alden Meyer, who has been attending the talks for more than two decades for the Union of Concerned Scientists. “That is a real difference from a year ago.”

Climate Losses

Also included in the Lima text was a reference to a loss and damage mechanism created last year to help the most vulnerable nations cope with the effects of climate change. Islands nations, including the Philippines after its battering by a typhoon last week, want that provision to turn into another funding stream.

Richer nations are concerned about writing a blank check for disasters abroad and say any notion of compensation is a “red line” in the negotiations.

Thorny issues up for debate next year include how legally binding the new agreement will be and how developed countries can reassure poorer ones that finance will be provided to help them cut emissions and adapt to the effects of climate change, U.K. Energy Secretary Ed Davey said. The toughest issue of all, he said, will be breaking down the so-called firewall between industrialized and developing nations.

“That’s where the battle will be in Paris,” he said. “It’s what the history of climate change negotiations has bequeathed to us.”

To contact the reporters on this story: Alex Morales in Lima at amorales2@bloomberg.net; Alex Nussbaum in Lima at anussbaum1@bloomberg.net; Ewa Krukowska in Lima at ekrukowska@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net Reed Landberg

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