Climate Change Conference

Christopher Chope Excerpts

Thursday 18th November 2010 Westminster Hall

[Duncan Hames (Chippenham) (LD)]

I am delighted to have the opportunity to lead a debate on the 2010 climate change conference at Cancun. I thank the Backbench Business Committee for its excellent judgment in allocating time for this debate.

I thank Green Alliance and Christian Aid for answering questions as I researched for the debate. I also thank the many constituents who impressed upon me their concerns and priorities for the Cancun conference, especially the climate activists I met as part of the Big Climate Connection. Their representations were a great encouragement. I do not have to choose between being an advocate for some of the most climate-vulnerable people in the poorest countries and representing my constituents, because the former is exactly what my constituents want me to do.

When applying to the Backbench Business Committee, I said that a third of Members are new and have not yet had an opportunity to debate climate change policy. Some of them are keen to take part in this debate; I particularly look forward to the contribution of the hon. Member for Liverpool, Wavertree (Luciana Berger), who speaks for the Opposition; like me, she joined the House of Commons this year.

I start by acknowledging the leadership of the last Government and the former Prime Minister, and the role played by the current Leader of the Opposition, in achieving a world first with the Climate Change Act 2008. I also acknowledge the contribution made by Members of Parliament from both sides of the House, many of whom are no longer Members, to strengthening that legislation. It is a record of leadership of which they can all be proud, and one that the new Government must build upon, not only with ambition and commitment but, crucially, in terms of delivery.

The Foreign Secretary has described climate change as perhaps the 21st century’s biggest foreign policy challenge. The Cancun conference is critical to the international response to that challenge. Not only has action become increasingly urgent, but disappointment about Copenhagen has led many to question the ability of the international frameworks of the United Nations to address that challenge. Prior to the Copenhagen conference, public expectations had reached fever pitch despite the opaque nature of those negotiations and the difficulty that many had in foreseeing the obstacles—and, for that matter, exactly who was putting those obstacles in the way.

The Foreign Secretary acknowledged in a recent speech in New York that Copenhagen had not delivered on these high expectations because of a “lack of political will”. Sadly, it seems that the easiest lesson to be learned from Copenhagen was how to manage expectations for Cancun. At Cancun, the world needs to make progress in making binding undertakings for mitigation and in funding commitments for adaptation. The best approach to undertakings for mitigation is to bring on board everyone that you can, and to make as much progress as possible, even if some parties are unwilling to come to the table. I hope that continuing progress in engaging the Chinese Government, as exemplified by Ministers in recent weeks, will allow substantial progress in that regard, even if some in the United States Congress continue to set their faces against the country’s global responsibilities.

I am sure that others will want to speak about mitigation and to suggest ways forward. However, in the time available to me I shall focus on climate finance. A report earlier this month by the UN Secretary-General’s High-Level Advisory Group on Climate Change Financing—the AGF—sets out a number of innovative ways to deliver the substantial Copenhagen target of $100 billion of climate finance a year by 2020. I congratulate my right hon. Friend the Secretary of State for Energy and Climate Change on his role on the AGF and his contribution to the report.

The advisory group report called the $100 billion commitment “challenging but feasible”. We must take on that challenge in Cancun, however gloomy the sky that heralds the conference. After all, feasible means achievable: we must not live down to expectations. That finance must be truly additional to aid. Global aid transfers amount to about $120 billion a year. Redirecting the bulk of that money would have disastrous effects on humanitarian provision across the globe.

We cannot fund climate adaptation by diverting and repackaging aid, or by cutting vital funds for urgent programmes such as the fight against malaria. Similarly, initiatives to harness private-sector expertise and finance in tackling climate change are welcome; they are critical to the solution and should be welcomed, but they should not be credited to the developed countries’ accounts. Their task, and their responsibility, is greater than that. What is more, many small-scale climate adaptation projects show no financial return, and remain stubbornly unattractive for private investment. I hope that the Minister will agree that although leveraging private finance is indeed important, public finance remains irreplaceable in meeting the climate needs of the poorest people.

I have already mentioned eye-watering sums. The accountant in me might stray into the sometimes dry subject of financial commitments; instead, I shall illustrate what this climate finance is for, and the difference it can make.

More than half of rural households in India still lack electricity. Fast-start finance funds off-grid, locally managed renewable energy schemes that deliver electricity to rural villages. Kasai village in Madhya Pradesh is not connected to the national grid. Since 2005, a small 10 kW biomass plant has generated electricity for Kasai. The plant provides lighting for houses, streets and the school, power for entertainment, and the electricity to run a flour mill, a milk-chilling unit and a water-pumping system. Kasai has biomass in abundance—wood, crop residues, oil seeds and cattle dung—and it is gathered by villagers. There is a maintenance fee and a user charge, and the scheme is overseen by a village committee of six men and five women.

The benefits of that scheme are manifold. Every house has piped water; far fewer residents migrate; agricultural production has trebled with the availability of water for irrigation; villagers can sell milk that previously went bad in the heat; and the new mill allows people to process wheat and rice and to sell the flour. The urgent need for a reliable energy supply is met, and the use of renewable energy means that growth in carbon emissions is limited. Those double wins are just one example of a fast-start-finance climate project allowing a village to thrive that once was dying.

At Copenhagen, developed countries pledged $30 billion in short-term finance for projects like that between 2010 and 2012. Of that $30 billion, $10 billion was pledged by the European Union, which has so far delivered about $7.8 billion through existing channels such as the World Bank and the EU’s global climate change alliance. When will the Government set out the timing and the delivery mechanisms for allocating the remaining fast-start finance that the Government have pledged? Is the £1.5 billion pledged for fast-start finance in the comprehensive spending review additional to the Government’s overseas development assistance commitments? If not, will the Minister at least assure the House that that is not a reflection of the Government’s attitude to long-term climate finance?

Developed countries can now respond to the progress of the advisory group, and to the menu of recommendations that it has made; they have clear practical choices on how to meet their obligations. This is a key opportunity for the Government to show leadership at Cancun, plotting the road map for mobilising finance and turning these innovative sources into a reality. The advisory group identifies a menu of options—the auctioning of emissions allowances, carbon taxes, levies on international aviation and maritime transport, multilateral development banks, and even a financial transactions tax. Those are realistic options that can generate serious revenue. I invite the Minister to give some indication as to which of the innovative sources of finance, identified by the UN advisory group, are priorities for his Department ahead of Cancun. Will he support a levy on international aviation and shipping? Will the British Government show leadership through the EU in co-ordinating a critical mass of developed countries to make possible a financial transactions tax?

Developing countries suffer more than 90% of the effects of climate change despite having done the least to contribute to its causes. Some 250 million people are directly affected by desertification and 1 billion are at risk. Another 135 million people are at risk of displacement due to the effects of environmental deterioration. Many of those people are the world’s poorest and most vulnerable citizens. Countries such as Malawi, Bangladesh and Sudan are the most vulnerable to the impact of climate change despite having done the least to contribute to rising carbon emissions.

This is all our doing, but it is the most vulnerable people in the world who face the consequences. We have a responsibility to them. That much was acknowledged at Copenhagen. Action on climate finance now is not some kind of vague add-on, something that would be nice to achieve, or even an apology for failing to reaching binding agreements on mitigation. It is an essential component in reaching an internationally just settlement as part of the response to this global challenge.

Our Secretary of State has clearly made good progress with his colleagues on the advisory group in pointing to how climate finance can be delivered. Now the world needs to move forward. We need concrete proposals and the Government to show leadership at these negotiations. We must seek to build international consensus; to co-operate and to get the negotiations back on track. It is too late to stop now.

[Mr Christopher Chope (in the Chair)]

Before calling the next speaker, may I say that it is the wish of the Backbench Business Committee that this debate continues only until 4.30? Therefore, I hope to call the Front Benchers at about 4 o’clock, so that we can give sufficient time to the second debate on our agenda.

--- Later in debate ---

[Barry Gardiner (Brent North) (Lab)]

Setting out a realistic ambition for the United Nations Framework Convention on Climate Change at Cancun must begin with a clear understanding of what happened at the fifteenth session of the conference of the parties in Copenhagen in December. It also demands humility on the part of the UK and the EU. In the UK we often behave as if we are the acknowledged global leaders on climate change, and as if we believe we punch above our weight. Indeed, that has already been suggested in this debate. It may be worth reminding ourselves that the final negotiations in Denmark took place between the leaders of China, the US, India, Brazil and South Africa. The meeting itself may have been in Europe but Europe was not in the meeting.

Europe has no leader, which means, in summit politics, that it has no voice. To say that EU negotiators played a considerable role in crafting the accord may be true, but in the final frame Europe was not present—never mind the UK. Europe needs to become a player once again. We have certain unique contributions to make to the ongoing debate, but we shall not be able to make them if we cannot agree on a spokesperson who is taken seriously by the leaders of the emerging powers and the USA. The problem may not manifest itself so much at Cancun, because we do not expect the influx of world leaders that went to COP 15. However, the situation is more likely to be a problem in South Africa in 2011 at COP 17, and it certainly will at the Rio plus 20 summit the following year. It needs to be addressed now.

There is no common narrative about Copenhagen. The western media proclaimed COP 15 a failure because it did not deliver a legally binding agreement. Cancun will not deliver a legally binding agreement either. The truth is somewhat more complicated. As the world’s largest emitter of greenhouse gases, the USA is a critical player, but it has refused to ratify the Kyoto protocol because of the concern that it might damage US economic growth. Given the fact that Kyoto places no binding commitment to emission reductions on major developing countries such as China and India, the USA has made it clear that it is unlikely to join any post-2012 framework based on Kyoto. By contrast, developing countries are concerned that annexe 1 countries have failed to live up to the commitment that they took on at Kyoto. They want a second commitment period under the protocol, as that guarantees the important—in their view vital—principle of common but differentiated responsibility, which reflects the greater historic responsibility of the developed nations as well as their greater wealth and capacity to act.

Another group of countries, which includes Japan, Australia, Canada and the EU, believes that it is essential to bind in the United States to any future agreement, and wants the major developing nations to take on commitments of their own. The first commitment period of the Kyoto protocol will conclude in 2012, and most parties are conscious that we must establish a post-2012 settlement that is comprehensive and preferably legally binding. Copenhagen failed to do that. So will Cancun.

In the mean time the Copenhagen accord created a loose, open-architecture structure, which is very much a coalition of the willing. Under the accord, countries put on the table the national actions that they are prepared to take to reduce their emissions—nationally appropriate mitigation actions. They monitor their success in achieving their own targets. Interestingly, although the western press accused China of spiking an agreement at the time, that is precisely the sort of structure that China had already proposed two months before Copenhagen. It has the benefit of preserving sovereignty while maximising commitment. Obama’s insistence on international monitoring of China’s voluntary actions within the Kyoto process, when the USA had not even ratified the Kyoto protocol, was less informed diplomacy than strategic media grandstanding. The world’s press fell for it, but we should not.

President Obama’s political capital has now been expended on a weak health care Act. The cost is his inability to get a climate change Bill through what was the most amenable Congress in decades. The mid-terms have configured a very different Congress, and we in the UK must now consider where future progress on climate change can best be pressed to advantage. One thing is clear: that place is not America.

China’s 12th five-year plan was announced last week. It will be published in detail in the spring, and it makes it clear that China is looking to create an emissions trading scheme. In Europe we have considerable experience, both positive and negative, of the EU ETS and the EU must work with China to help it to learn from the initial mistakes that we made in setting it up. Indeed, those discussions are already going on at a high level.

It is time for the UK and Europe to refocus our efforts away from the United States to form a more strategic alliance with China. Last week I participated in a Global Legislators Organisation for a Balanced Environment forum on climate change in Tianjin—I refer hon. Members to my entry in the Register of Members’ Financial Interests—along with 70 legislators from countries ranging from South Africa to Brazil. Sixteen of the G20 countries were represented, including the US. It is clear to me that a radical programme for climate change would mean the EU joining forces with China, ultimately to create common standards in products, and a joint carbon market establishing an international price for carbon around the globe. That would be a game changer. More than that: it could be a game changer that market makers in the US would suddenly find extremely threatening. America can resist any opposition to its policies. What it cannot take is being sidelined or ignored. Let us imagine that the biggest pressure on President Obama to sort out climate change came not from the liberal left or even from some “blue dog” Democrats in the Senate, but from American industry and Wall Street itself. What if Wall Street were saying to Obama: “Climate change? It’s all about the economy, stupid!”

As we approach Cancun we need to be clear about why the accord is not sufficient and what is required to take the negotiations on a trajectory that may be able to deliver a legally binding agreement. The total emissions reductions pledged so far under the accord by the US, Japan, Europe and the major developing economies fail to match the scientific calculations on targets for stopping dangerous climate change: the accord agreed on a rise of no more than 2º C. The accord makes no enforceable provision for funding of capacity building in developing countries. It creates no binding obligation on developed countries to finance adaptation, or to effect technology transfer. It creates no structure to reduce emissions from deforestation and degradation. I will try to deal with each of those aspects of the matter.

First, as to emissions reductions, currently almost 50% of global emissions come from the developed world, which represents just 20% of the global population. The World Resources Institute estimates that the developed country commitments at Copenhagen would reduce those countries’ emissions by no more than between 13% and 19% below 1990 levels. The IPCC has called for between 25% and 40% reductions. Therefore, the commitments from the developed world fall well below the minimum that the IPCC believes is necessary to avoid dangerous climate change of more than 2° C. Among the major countries, the USA has offered to reduce its emissions by 17% by 2020, but only below 2005 levels, which equates to a reduction of just 3% below 1990 levels.

Let us now look carefully at our own suggested target of at least 80% reductions from 1990 levels by the developed world. Why has that not been welcomed more fully by China and other G77 nations? Let us cash out the numbers. Global emissions in 1990 were 21 gigatonnes—21 million metric tonnes—so the global reduction of 50% required to sustain a 2° C trajectory would give the world a total of just 10.5 million tonnes of emissions annually to play with. In 1990, the developed countries emitted 15 million of those 21 million tonnes, so an 80% reduction would mean that they should emit no more than 3 million tonnes by 2050, or almost 30% of the world’s total annual emissions.

Today, the developed world accounts for just one fifth of the global population, and the proportion is estimated to fall to just one eighth by 2050. Why should we expect China and India to think it fair that one eighth of the world’s people should get 30% of the world’s emissions capacity? It would mean that developed countries would have exactly three times the emissions per person of developing countries, which is hardly the basis for a just and sustainable international settlement.

To date, the mitigation debate has been locked around a failure to agree on emissions reductions targets that will equate to a rise of no more than 2° C. The reason it has always stalled there is that the Chinese and the Indians are good mathematicians and so refuse to lock themselves into what is a manifestly unjust equation.

Let us now turn to finance. At Copenhagen, developed countries under the accord pledged a significant amount of money—$100 billion annually by 2020—as has already been mentioned. There is also fast-start funding approaching $30 billion cumulatively through 2012 for developing country mitigation and adaptation. However, that created new questions on both the sources of that money and the policies that it is supposed to pay for. Those are fundamental issues of trust between developing and developed countries. The accord did not specify how, from where or under what conditions the funding would be transferred, and developing countries urgently need that clarification before they commit themselves to the way in which they will account for how the funding is used.

Developing countries, on the other hand, first seek clarification on how the money they commit will be used. They want a clear system for measurement, reporting and verification—MRV—of the developing country mitigation actions. Understandably, we say that we cannot send our taxpayers’ money to pay for mitigation projects without a clear mechanism for MRV to hold people accountable and show that the money is actually achieving the desired outcome of emissions reduction. That has created a chicken-and-egg problem in the negotiations; developed countries are unable to provide clarity on financing until developing countries provide clarity on their mitigation measures, and vice versa.

How can we break that stalemate? The proposed wording mentioning the Copenhagen accord’s figure of $100 billion has made it into the negotiating text for Cancun, albeit as one of hundreds of phrases and options that are currently in brackets. Some parties have suggested referring to the $100 billion that is otherwise mentioned only in the Copenhagen accord, but not all parties have yet agreed to do so. Potentially, a critical bulldozer to remove the roadblocks is the high-level advisory group on climate change financing, which has already been mentioned, which was created by the UN Secretary-General after Copenhagen. Heads of state and Ministers have been studying sources of revenue for the promised $100 billion a year by 2020. That group has completed a report that will be released just before the negotiations in Cancun, and the sight of money on the table might be what is needed to restore the lost trust between the parties.

In addition, negotiating sessions since Copenhagen have produced general agreement on a fund that will channel rich countries’ financial contributions to poorer nations’ mitigation actions, and both developing and developed countries have put forward constructive proposals on how that fund could be operationalised. That means that Cancun could see a COP decision officially creating that fund and procedural rules relating to it. In Europe, we should certainly press for that to happen. With more clarity about the money, developing countries might be willing to agree to let the international community measure, report and verify what that money is used for. MRV of mitigation actions in developing countries is, in my view, the essential key to unlocking those funding flows. We should emphasise that point to everyone in the negotiations. What is required at Cancun is a clear decision on how such reporting will take place and possibly some sort of global registry of mitigation actions that can be scrutinised and verified so that funds can begin to flow.

At Cancun, a goal for REDD-plus—a development of the United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries—should be written into the preamble of the decision text. That goal could be to reduce emissions from deforestation by 50% by 2020, for example. The type of activities recognised as part of the REDD-plus decision, however, must be nailed down. The REDD-plus decision text includes references to reducing emissions from deforestation and forest degradation, conservation of forest carbon stocks, sustainable management of forest and enhancement of forest carbon stocks. The accord, however, only mentions the first three goals. To clarify which activities will receive compensation, the definition of what constitutes REDD-plus needs to be made consistent within the UN process.

Another uncertainty relates to the mechanisms used to fund REDD-plus activities. The Copenhagen accord, like the Bali action plan, states that there should be positive financial incentives for countries that take action to reduce deforestation and degradation, but how countries would receive that money is still up in the air. It could be through a carbon market, a dedicated fund or something else. That question needs to be resolved in the REDD-plus decision text.

Industrialised countries expect a market mechanism for REDD, with the exception of Norway, whose Government, commendably, is donating billions to rainforest protection. Rich countries envisage significant participation of the private sector in REDD financing, through market incentives such as the clean development mechanism. On the other hand, developing countries are wary of markets, preferring direct Government-to-Government funding for REDD. Although the current negotiating text contains proposals in brackets that explicitly forbid the use of markets and the creation of offsets for REDD, it also leaves the key phrase “options to use markets” in brackets.

Several parties to the REDD discussions have highlighted in their statements the importance of maintaining the environmental integrity of any market mechanism associated with REDD. That shows that they still consider a market mechanism to be a potential outcome. Outside the negotiations, Governments have created infrastructure for REDD finance but will not necessarily come through with their financing pledges—again, something that was alluded to earlier. Donor members of the REDD-plus partnership—a group of more than 60 nations that have either pledged to fund REDD efforts in developing countries or are slated to receive them—are having trouble making good on their financing promises, and some donations constitute rebranding of previously allocated funds. Our own Government should take note of that.

In contrast, the private sector has shown real interest in REDD credits on the voluntary carbon market, presumably for both marketing and speculative purposes. For instance, the first REDD project is expected to be approved under the voluntary carbon standard this December. In addition, BNP Paribas has set up an option to buy up to $50 million worth of potential forest credits from an African project. If developing countries continue to perceive private sector interest in market mechanisms for their mitigation actions while they are waiting for industrialised Government funding to come through, they may remove barriers to markets in the negotiating text and thus open up the option for business to participate in global emissions reductions through tradeable REDD credits. That is another aim that our Government should pursue at Cancun.

Mr Chope, I seek your guidance on time. I wonder how we are doing.

[Mr Christopher Chope (in the Chair)]

The hon. Gentleman has been speaking for 21 minutes, according to the clock. I know that at least one other Member who has not yet spoken hopes to be able to chip in something to this debate. If the Front-Bench spokesmen take 10 minutes each and push right up to half-past 4, that means that we will have to start the Front-Bench speeches at 10 past 4, but they may want a bit more flexibility to answer some of the points that have been made. I do not know whether the hon. Member for Truro and Falmouth (Sarah Newton) wishes to participate.

[Sarah Newton (Truro and Falmouth) (Con)]

indicated dissent.

[Mr Christopher Chope (in the Chair)]

That is the score, so the hon. Gentleman can make his own judgment.

[Barry Gardiner]

I am grateful to you, Mr Chope. In that case, I will not pursue my remarks on land use, land-use change and forestry—LULUCF—because I believe that the Department is already familiar with what I would say. I understand that it is looking carefully at ensuring that there will not be half a gigatonne of free credits in any post-2012 LULUCF settlement, the fear that has been expressed by many.

Perhaps the most difficult question for this conference of the parties is whether it is possible to move forward on all of the issues without first dealing with the elephant in the room: the stalemate about the overall form of the agreement. The US has contended that all the elements of a global deal should be pursued simultaneously, and it objects to an approach that it says cherry-picks—that takes areas where we think progress may be likely, such as, for example, REDD-plus. However, if negotiators continue to pursue the so-called American balance package, they may spend so much time and effort discussing the form of an agreement after 2012 that they fail to take even relatively easy decisions that could achieve real progress.

Over the past two years, GLOBE legislators—legislators participating in the Global Legislators Organisation for a Balanced Environment—in 16 of the G20 countries have been discussing the architecture of a post-2012 deal. They have put forward a proposal that suggests a way forward that might be politically acceptable to the major economies. Negotiations under the Bali action plan are currently taking place on two separate tracks. The first is the Kyoto track—those who support Kyoto—whereby Kyoto parties are considering further targets for a second commitment period beyond 2012. There is also the convention track, where long-term co-operative action involving all parties including the US and major developing economies is considering how to strengthen action taken under the convention.

Based on those discussions over the past two years with more than 100 legislators in different countries, we believe that certain elements could be part of a politically acceptable deal: first, agreement on the overall level of ambition that has already been stated in the Copenhagen Accord to hold the increase in global temperatures below 2^oC; secondly, a decision under the Kyoto track that commits annexe I Kyoto parties—the developed countries—to a second commitment period, 2013-17, and involves quantified, economy-wide emissions reductions targets and the associated commitments of finance and technology, subject to addressing satisfactorily the issues of hot air and the rules for accounting for forestry emissions; and, thirdly, either a new parallel treaty under the convention track or a set of COP decisions under the convention track that place comparable commitments on the US without its having to join the Kyoto protocol. Such commitments could include an economy-wide emissions reduction target and a commitment to provide financial and technological assistance to developing countries, and formalising the actions of the major developing countries—for example, on carbon or energy intensity targets, renewables targets, efficiency targets, sustainable forestry targets and other central policies—with a commitment to increased transparency through national communications under the United Nations Framework Convention on Climate Change. We believe that that could be achieved through the recognition of national legislation and the role of Parliaments in monitoring, reporting and verification.

Hon. Members have alluded to many other aspects: air and sea bunkers, the EU position and whether we should have a more or less robust position in the negotiations. It is clear that Europe is split at the Commission level on European targets. They were offered at 30% if others participated and came in with further commitments before Copenhagen, and repackaged afterwards by Commissioner Hedegaard in such a way as to imply that they were good for our industry anyway, and we should just get on with it.

I met both Commissioner Hedegaard and Commissioner Oettinger the other day. In the morning, Commissioner Hedegaard told me that it was absolutely vital that we proceeded to reduce emissions by 30% by 2020. In the afternoon, Commissioner Oettinger told me that it was absolutely impossible to do so. The Commission is irrevocably riven on the subject, and there is clearly no desire to adopt a more robust position at Cancun and going forward.

I believe that we are not looking for a legally binding agreement at Cancun but for small stages of progress that can take us forward to Johannesburg in the following year, and to Rio plus 20 in 2012. However, we need to adopt a much more radical approach in the alliances that we form. We need to look across the globe to China and other BASIC countries—Brazil, South Africa, India and China—to see how we can develop common standards and frighten American business and industry into realising that they are being left behind, and that they need to come into a common framework under the UNFCC.