"Viagra Shot for Carbon Markets"?

A "viagra shot for carbon markets" is how the Financial Times characterized the outcome of the Durban climate conference, which ended yesterday, in a headline that ran across the upper right of its front page today. Having previously aired concerns that a Durban flop might undermine the world's shaky carbon trading systems, and with them green-technology offsets in developing countries, the paper evidently was seeking to put the best face on a mediocre result.

The basis for the FT's take on the conference is this: In return for agreeing to extend the Kyoto commitment period (but apparently without being very specific about what that means), Europe obtained a general pledge to work toward reaching, no later than 2015, a universally binding agreement containing carbon cuts and targets. But that pledge--in contrast to the "supercommittee" mechanism established earlier this year during the U.S. budget crisis--contains no explicit penalties if agreement is not reached by 2015. A meaningful outcome will depend on how much diplomatic power Europe can wield in the next years--and what penalties it can impose on the recalcitrant big carbon emitters if they refuse to get serious.

From that point of view, if you are among those who consider it important to reach a binding world agreement to guard against the risks associated with ongoing climate change, perhaps the really promising development of the last week was what happened in Europe itself, not in South Africa: Of the European Union's 27 members, 26 agreed on treaty revisions that will impose greater fiscal discipline and enable more effective joint fiscal policy. That agreement, which left the UK on the sidelines, has been universally interpreted as a major milestone in the direction of making the EU an entity that can act as a state not only in monetary and now fiscal affairs, but ultimately in diplomatic and military matters as well.

That said, the world coalition consisting basically of Europe and the small countries most immediately threatened by climate change remains weak and outnumbered by those that consider aggressive carbon reduction a threat to economic growth. The smart money is betting, accordingly, that Europe will fail. “The reality is that there is no more agreement on the future of the climate talks than there was when negotiators first convened two weeks ago," Michael A. Levi of the U.S. Council on Foreign Relations told The New York Times. “Europe will continue to insist on a full-blown legally binding agreement; China and India will continue to oppose one; and the United States, while leaving the door open to an agreement that is binding for all, will continue to be unenthusiastic as well. These positions are largely rooted in incompatible views of the future, and there is no reason to believe that more talking will change them.”

Comparing how the results of the Durban conference with the reception the Copenhagen Accord got two years, the contrast is telling. Within hours of the time the Copenhagen agreement was reached, every major environmental organization in the world posted its interpretation of the accord; it was leading news in all the world's major newspapers the next day. Today, the websites maintained by the major environmental organizations were mostly silent about Durban (though NRDC's was an exception). The Durban outcome got no mention whatsoever on the front page of The New York Times.

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