Doubts over Durban

28th November 2011

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Europe must overcome dedication to cap-and-trade if a global approach to climate change is to be agreed on at Durban, argues the EEF's Susanne Baker.

As representatives from the world’s governments once again convene (this time in Durban) to try and forge a collective route to tackling climate change, the expectations of a multilateral agreement are markedly less than they have been in the past.

Negotiating a new global deal on climate change has proved to be one of the most complex international processes in recent history. Hope has been replaced with wariness and suspicion.

On the one hand there are countries who want to forge a new legally-binding agreement which includes both developed and rapidly developing countries, and on the other there is another swathe of the world which wants to resurrect the Kyoto Protocol to hold developed countries to account.

But a global agreement is still urgently needed. Moving beyond this seemingly insurmountable deadlock will require fresh thinking and a fresh approach.

The EEF believes that to overcome this deadlock the EU must be open to the world adopting a range of different approaches to tackling climate change. What is important is getting a global agreement which represents equivalent effort.

In reality, this means the EU must consider a broader approach than just cap-and-trade measures. The world simply isn’t ready yet to bank on cap and trade. While we might have taken a leadership position on climate change, no other country has opted to follow us. Why? Because they recognise the inequality faced by industry operating in this isolated and complex scheme. Cap and trade is, ultimately, seen as a cap on growth.

What countries are seeking is an agreement that guides the world in reducing greenhouse-gases (GHG) emissions in a way which does not economically disadvantage any region over another.

In the UK we have some evidence of the impact of unilateral action on investment decisions. According to a recent EEF survey, two-thirds of UK manufacturers see the low-carbon economy as an opportunity, yet only one in eight view the UK as a favourable place to invest in this area. The increased costs and uncertainty resulting from the UK’s unique climate change policy are sited as the cause.

A level-playing field must be established for companies to compete on the world stage; unilateral sanctions are clearly not tolerable.

The EU should look to other tools in order to get buy-in from those critical countries not ratified to a global agreement, such as China, the US, India and Brazil. Policy levers must be able to achieve international consensus.

Carbon intensity targets, as adopted by China, have the potential to deliver GHG reductions, as demonstrated by the UK’s successful Climate Change Agreements (CCAs). CCAs are attractive because they take into account expected growth and can stimulate innovation, drive behavioural change through supply chains, while ensuring resources are used in the most economically efficient way.

Global sector agreements, meanwhile, can create common goals for competitors regardless of their location. Such an approach has the potential to broaden participation in tackling emissions to include developing economies in an equitable and comparable way. It would also allow the unique problems faced by particular sectors, such as cement or steel, to be taken into account.

In addition, there should be more emphasis on international collaboration in the creation of new technologies. There is a need for measures that will help to foster collaborative research, development and deployment of low-carbon technologies. This requires significant private and public sector funding for research, as well as investment in general infrastructure and conditions for a wide range of technologies.

The technology mechanism agreed in Cancun provides a framework for sharing the funding, development and advantages of environmental technologies as well as best practice. Putting that mechanism into operation will be essential in kick-starting greater international cooperation and clearer funding channels are needed to ensure it has the impact needed to stimulate wide technological change.

It is only with these tools that any meaningful global GHG reductions can be made.

Susanne Baker is senior climate and environment adviser at the EEF.


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