A view of Glasgow

Strathclyde Business School Strathclyde Business School

COP 21 - the developed world COPs out

By Stuart McIntyre - Posted on 15 January 2016

Following December's UN discussions on climate change, Dr Stuart McIntyre of Strathclyde Business School reflects on the recent climate change agreement on greenhouse gas emissions.

This year has just begun in earnest and from an environmental perspective there appears to be much scope for optimism. The 21st meeting of the Conference of Parties (COP) to the UN Framework on Climate Change (UNFCCC) in Paris concluded in December with a new ‘legally binding’ agreement on the reduction of greenhouse gas (GHG) emissions. Hooray. Or at least that appears to be the de rigueur response.

A more sober assessment calls for much less optimism and much more clarity of thinking and action.

Strathclyde Law academic Dr Francesco Sindico has commented on the legal aspects of the COP21 agreement and in one piece he made a number of important points:
• there was clear evidence of a softening of positions during the negotiations between those focussed on limiting temperature rises to 2.0 degrees and those looking to a tougher 1.5 degree limit
• there was a movement in the evolving text towards legally binding commitments
• there remained three key points for further negotiation and agreement, namely; cooperative mechanism (essentially market based carbon trading frameworks), loss and damage (compensation for those incurring climate related losses and damages), and transparency (monitoring and reporting on country actions to meet their commitments).

The final COP21 text failed to make any real progress on the issue of transparency. For obvious reasons, this creates a significant problem for the success of this agreement, and Francesco commented: “Any legal instrument will be toothless if it does not have a system to check that the obligations provided therein are pursued”.

Making such agreements legally binding appears to be a current fashion. It appears to lend an air of respectability and reinforces a sense of both urgency and commitment but in practice, if there is no monitoring and independent reporting on compliance, and ultimately no practical sanction in place for non-compliance, this kind of ‘legally binding’ agreement is more like a whimsical edict of an omnipotent monarch - easily made and easily ignored.

The other two areas - cooperative mechanisms and loss and damage - were the subject of some negotiation but a ‘landing area’ was found that was agreeable to all.

What strikes me most clearly from the process itself is the extent to which countries arrived at COP21, a forum with the aim of finding a solution to a global problem, and acted at times exclusively (or so it seemed) in their own national self-interest. In some cases, this is perfectly justified. Countries experiencing disasters and significant losses as a result of climate change, which in many cases they have no control over and have contributed almost nothing to, ought to demand to be compensated for their losses. In other cases, though, the rhetoric and the actions of some countries are badly misaligned. How can developed countries argue against robust monitoring and reporting on their compliance with their commitments while demanding that the developing world dramatically curbs its emissions?

If this truly is a global challenge requiring a global solution, what possible argument can there be not to provide a uniform price for GHG emissions, say through a cross-border carbon market, within country groupings such as Developed Country Parties or Developing Country Parties? Why should the same volume of GHG emissions face a different tax in the UK than it does in the US? That it should face a different tax in the UK than that in Malawi would seem clear on equity grounds. However, it seems that even while acknowledging the global nature of the problem, developed countries are focussed on the effects on their indigenous industries and are loathe to weaken their competitiveness against emerging rivals.

Just as taxes on GHGs should be consistent across countries within each group, why should our contribution to solving this global problem be contained within each state’s borders? Why not use our overseas aid money to build cleaner, more reliable, energy infrastructure in the developing world? Climate Financing, a feature of COP discussions and agreements for some time and addressed in Article 9 of the Paris Agreement, has acted as a ‘call to arms' in this area but there is still a lot more that could be done. Developed countries have led the way in renewable energy resources, and they would like nothing more than to be able to sell these technologies to the developing world. The developing world however cannot afford the price demanded for these technologies, yet they offer a potentially huge market and the scope to dramatically reduce GHG emissions, relative to current projections, well into the future - if only we can get them using renewable resources instead of fossil fuels.

The solution here is to stop viewing the ‘market price’ for renewable technologies as the price which developing countries need to face alone. We need to consider how we can bridge the gap between the market price and the ability to pay by developing countries. Of course, we also need to help developing countries meet their share of the costs, and the World Bank has a massive role to play here - with the encouragement of the developed world. But helping developing countries to buy technology from manufacturers in the developed world (and some others, such as China) would open up a massive international market in renewable technologies at precisely a time when many domestic markets are reaching maturity. This proposal also gives the developed world countries the self-interest motivation they seem to constantly be searching for as a call to action.

Domestic governments already subsidise the generation of renewable energy in most developed countries. This has both helped make inroads into global emissions and driven down the cost of renewable technology through increased efficiency, learning and technological progress. The innovation and cost reductions in manufacturing, installation and servicing that opening up these technologies to the developing world would yield would represent a truly global achievement. It would also have the nice side benefit of quantifying, in monetary terms, the contribution of each country in the developed world to global emissions abatement in the developing world, and define it in International Law.

Now, I am no lawyer, but such an unambiguous financial commitment, beyond the welcome and aspirational yet insufficient climate financing provisions in Article 9, would seem to me to be something where the term ‘legally binding’ may actually mean something, and where in the case of a failure to deliver on an agreed amount of investment in emissions abatement, enforcement could meaningfully be undertaken. Such an approach would ensure for the developing world, a concrete and tangible commitment to climate action by the developed world. Now that, truly, would be historic.



Contact details

 Undergraduate admissions
 +44 (0)141 548 4114
 sbs-adviser@strath.ac.uk 

 Postgraduate admissions
 +44(0)141 553 6118 / 6119
 sbs.admissions@strath.ac.uk

Address

Strathclyde Business School
University of Strathclyde
199 Cathedral Street
Glasgow
G4 0QU

Triple accredited

AACSB, AMBA and Equis logos
Winner THE 2016 Business School of the year logo