Monday, January 3, 2011

Cancunhagen 3.0: The Green Climate Fund

"It was exhilarating. Intoxicating. Transcendant. Naked apes as a species had stared into the abyss and said, as newly sentient beings, with global awareness, “Whoa, dude, don’t want to go there!” or vocal-chord-vibrating grunts to that effect."

Lord Nicolas Stern
At the UN Climate Summit in Cancún, a “Green Climate Fund” was given over to the World Bank as initial trustee (to Bolivia’s horror and the United States’ relief), but that trusteeship was placed under a 3-year sunset clause. Equally horrifying to international carbon speculators was the way the UN put the trustee on a choke chain, making GCF an “operating entity” of the UNFCCC.  The document says, “The trustee shall administer the assets of the Green Climate Fund only for the purpose of, and in accordance with, the relevant decisions of the Green Climate Fund Board.” The board of directors of the fund is skewed towards those most vulnerable to climate change — those whose sense of urgency is most deeply felt. Of the 40 members of the board, 15 members represent developed countries and 25 members developing countries, with:
  • Seven members from Africa;
  • Seven members from Asia;
  • Seven members from Group of Latin American and Caribbean States;
  • Two members from small island developing States; and
  • Two members from least developed countries.
Dan Kammen
This board is empowered to replace the World Bank with a trustee of its own choosing after 2013. It is useful to remember that the World Bank itself has been evolving. Lord Nicholas Stern, the author of the UK study on the economic impacts of climate change, is now its chief economist. Former IPCC team leader and director of the UC Berkeley Renewable and Appropriate Energy Laboratory Dan Kammen is its energy director.

The fund is not restricted to national tax revenues or UN dues but can employ a variety of revenue streams, with targets based on the Copenhagen Accord: $30 billion fast start to 2015, and $100 billion annually by 2020. Daniel Caperton at the Center for American Progress notes:
Formal discussions on this topic started in Cancun, where a proposal to put a price on the carbon emissions from international transport and shipping was included in early drafts. Some developed countries, including the United States, opposed this idea because of legal concerns, but it should be back on the table in South Africa.
An African delegate checks
 his Blackberry

Indeed, every single source of finance that the U.N. High Level Advisory Group on Climate Change Financing identified in their final report should be part of the negotiation in South Africa, including a financial transactions tax and revenue generated by a putting a price on carbon. Now that the Green Climate Fund has been built, it’s time to think about how to put money into it.
One of the early recipients of fund largesse will be the Climate Technology Center and Network, whose goal will be to construct a global network to match technology suppliers with technology needs. Presidente Calderon pledged that México would build one of the first nodes in this network, a Caribbean Climate and Renewable Technology Center, to rigorously test and modify the latest breakthroughs and deploy them quickly throughout Latin America.

Some of the breakthrough technologies on display in Cancún worth a trip to Wikipedia include: Barefoot College; Energia Geo Rotational; EcoTotality; Ecovative; WorldStove; Freeplay Energy; Morphosis; Solar Electric Light Fund; and some nifty oil paintings hung in on a windy balcony, rattling gently against the wall behind them, making electricity by piezoelectric current.

Another potential revenue stream are “market-based mechanisms” such as carbon capture and storage and aforestation projects using carbon credits under the Clean Development Mechanism (CDM). In this context, there is a small attempt to address the “hot air” issues of Kyoto by offering some special recognition of Central and Eastern European countries and by conceding there are countries at the edge between developed and developing, such as Turkey and Egypt. This also opens the door for expansion of carbon trading regimes and exchanges, and the setting of a price on carbon, often seen as the only way to avoid Jevons’ Paradox when greening energy  or other parts of the economy. There is much devil in future details to be worked out.

So, for instance, Bellona Foundation projected in 2009 that setting a price on carbon would create many wedges that would begin to drop atmospheric concentrations. Here is Bellona’s chart, on display last year in Copenhagen:

Sadly, like the IPCC’s 2007 Assessment, the Bellona Forecast failed to take account for Peak Oil. While crude oil peaked globally in 2006, substitute liquids from deep sea gas, fracking shale gas and tar sands have allowed addicts to keep getting higher, bordering on overdose, but real world EROI is about to alter that chemistry and beginning about 2011 the withdrawal tremens won’t be pretty. Here is the Bellona chart superimposed on the decline slope predicted from the most current International Energy Agency reports, with CCS (a “clean-coal” oxymoron) replaced by a best practice carbon capture (carbon farming, agroforestry, CHP-biochar, etc.), the black wedge:

From this chart it is easy to see how a less-petroleum-dominated future could also be a low-carbon and even carbon-minus future. All of those colored wedges represent economic stimuli — all have vast profit potentials.

Another good example put forward through side events was that of Germany’s climate and energy policy framework consisting of eco-taxes, feed-in tariffs, an emissions trading scheme (ETS), and other measures to drive production of renewables and increase efficiency. Germany’s ETS funds both domestic renewables projects and aid projects through its International Climate Initiative. Countries with progressive vision are starting to see a first-mover advantage in low-carbon technology regardless of climate negotiations or international carbon trading schemes.

Ultimately, the Cancún Agreements embraced the notion — from South Korea, Germany and other self-starters — that there is a solution to the climate problem that involves economic hope and opportunity. The Agreements set aside, for now, the gloomy vista painted by India, The South Center and ALBA — of deprivations, imposed sacrifice, and penalties for historic wrongs.

By 3 AM on Saturday, when the final Agreements came up for a plenary vote, Cuba, Nicaragua, Venezuela and most of ALBA’s opposition evaporated (the result of Calderon’s skills as a diplomat) and Bolivia was left standing on “procedural irregularities” in a final attempt to derail consensus. “Consensus does not mean giving the right of veto to one country,” said the delegate from Colombia.

“Consensus does not mean unanimity,” echoed COP President Patricia Espinoza. “We regret that Bolivia chose not to participate in the drafting of the document, but they cannot be permitted to block the will of all the other parties now… Of course I do note your opinion and I will be more than happy to make sure it is reflected in the records of the conference. And if there is no other opinion, this text is approved.” The gavel fell. The cheers erupted. Cancún was a done deal.

Humans as a species may be slow to change, and much of our genetic heritage works to slow our recognition of intangible threats, but in Cancún a big shift in our awareness could be felt. Governments that had hemmed and hawed, thrown up obstructions and excuses, and denied that any alternative to business as usual was even possible, were seen coming to grips with the existential issues of the day. Whether shocked by cascading weather events, embarassed by the Copenhagen debacle or enticed by the green economy, they stood together at the final dawn and applauded a change in direction.

It was exhilarating. Intoxicating. Transcendant. Naked apes as a species had stared into the abyss and said, as newly sentient beings, with global awareness, “Whoa, dude, don’t want to go there!” or vocal-chord-vibrating grunts to that effect, and had decided to actually do something different. Something radically different. Already science had come together with something exponentially more difficult than the moon shot and had found consensus. Now world diplomats, finally, did the same.

While a legal treaty might have been better, it more likely would have been worse. Politicians are neither scientists nor diplomats. In many ways they are an order lower on the evolutionary chain from members of the general public, who seem to be better read. No binding climate treaty is likely to pass the US Senate, which, when fully in the hands of the Democratic Party was unable to pass a weak, watered-down carbon credits bill. Even if it were ratified by enough countries to go into effect, the result could well be like Kyoto — failed efforts to meet pledges by most, and economic penalties accruing to those who performed with honor.

PHOTO by Willy Sousa, Mexico en tus Sentidos
Without the legal form now, the route to emissions reductions becomes a private competition. Those who develop and deploy the technology first (and can stay ahead of the crashing fireball and toxic dust cloud of the American Industrial Empire) will be the big winners. Greening your economy means staying in the game. Brown loses and is ejected. This is not a bad outcome.
What the Cancún Agreements did was set up and fund the arena, hand out uniforms, and lay down some beginning rules for fair play. Durban, Seoul and later contests on the UNFCCC circuit will refine those rules after seeing them in practice. It is clear that some of the players don’t yet get this, and are still stuck in older dialectics. Too bad for them. They will be slow off the bench and will probably eat a lot of dust before they find themselves playing catch up.

Next: Cancún and Four Degrees


No comments:




The Great Change is published whenever the spirit moves me. Writings on this site are purely the opinion of Albert Bates and are subject to a Creative Commons Attribution Non-Commercial Share-Alike 3.0 "unported" copyright. People are free to share (i.e, to copy, distribute and transmit this work) and to build upon and adapt this work – under the following conditions of attribution, n on-commercial use, and share alike: Attribution (BY): You must attribute the work in the manner specified by the author or licensor (but not in any way that suggests that they endorse you or your use of the work). Non-Commercial (NC): You may not use this work for commercial purposes. Share Alike (SA): If you alter, transform, or build upon this work, you may distribute the resulting work only under the same or similar license to this one. Nothing in this license is intended to reduce, limit, or restrict any rights arising from fair use or other limitations on the exclusive rights of the copyright owner under copyright law or other applicable laws. Therefore, the content of
this publication may be quoted or cited as per fair use rights. Any of the conditions of this license can be waived if you get permission from the copyright holder (i.e., the Author). Where the work or any of its elements is in the public domain under applicable law, that status is in no way affected by the license. For the complete Creative Commons legal code affecting this publication, see here. Writings on this site do not constitute legal or financial advice, and do not reflect the views of any other firm, employer, or organization. Information on this site is not classified and is not otherwise subject to confidentiality or non-disclosure.