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How do I know China wrecked the Copenhagen deal? I was in the room

As recriminations fly post-Copenhagen, one writer offers a fly-on-the-wall account of how talks failed

A woman listens to Barack Obama's speech at Copenhagen climate change conference 18 December 2009

A woman listens to Barack Obama's speech at the Copenhagen climate change conference on 18 December. Photograph: Axel Schmidt/AFP/Getty Images

Copenhagen was a disaster. That much is agreed. But the truth about what actually happened is in danger of being lost amid the spin and inevitable mutual recriminations. The truth is this: China wrecked the talks, intentionally humiliated Barack Obama, and insisted on an awful “deal” so western leaders would walk away carrying the blame. How do I know this? Because I was in the room and saw it happen.

China's strategy was simple: block the open negotiations for two weeks, and then ensure that the closed-door deal made it look as if the west had failed the world's poor once again. And sure enough, the aid agencies, civil society movements and environmental groups all took the bait. The failure was “the inevitable result of rich countries refusing adequately and fairly to shoulder their overwhelming responsibility”, said Christian Aid. “Rich countries have bullied developing nations,” fumed Friends of the Earth International.

All very predictable, but the complete opposite of the truth. Even George Monbiot, writing in yesterday's Guardian, made the mistake of singly blaming Obama. But I saw Obama fighting desperately to salvage a deal, and the Chinese delegate saying “no”, over and over again. Monbiot even approvingly quoted the Sudanese delegate Lumumba Di-Aping, who denounced the Copenhagen accord as “a suicide pact, an incineration pact, in order to maintain the economic dominance of a few countries”.

Sudan behaves at the talks as a puppet of China; one of a number of countries that relieves the Chinese delegation of having to fight its battles in open sessions. It was a perfect stitch-up. China gutted the deal behind the scenes, and then left its proxies to savage it in public.

Here's what actually went on late last Friday night, as heads of state from two dozen countries met behind closed doors. Obama was at the table for several hours, sitting between Gordon Brown and the Ethiopian prime minister, Meles Zenawi. The Danish prime minister chaired, and on his right sat Ban Ki-moon, secretary-general of the UN. Probably only about 50 or 60 people, including the heads of state, were in the room. I was attached to one of the delegations, whose head of state was also present for most of the time.

What I saw was profoundly shocking. The Chinese premier, Wen Jinbao, did not deign to attend the meetings personally, instead sending a second-tier official in the country's foreign ministry to sit opposite Obama himself. The diplomatic snub was obvious and brutal, as was the practical implication: several times during the session, the world's most powerful heads of state were forced to wait around as the Chinese delegate went off to make telephone calls to his “superiors”.

Shifting the blame

To those who would blame Obama and rich countries in general, know this: it was China's representative who insisted that industrialised country targets, previously agreed as an 80% cut by 2050, be taken out of the deal. “Why can't we even mention our own targets?” demanded a furious Angela Merkel. Australia's prime minister, Kevin Rudd, was annoyed enough to bang his microphone. Brazil's representative too pointed out the illogicality of China's position. Why should rich countries not announce even this unilateral cut? The Chinese delegate said no, and I watched, aghast, as Merkel threw up her hands in despair and conceded the point. Now we know why – because China bet, correctly, that Obama would get the blame for the Copenhagen accord's lack of ambition.

China, backed at times by India, then proceeded to take out all the numbers that mattered. A 2020 peaking year in global emissions, essential to restrain temperatures to 2C, was removed and replaced by woolly language suggesting that emissions should peak “as soon as possible”. The long-term target, of global 50% cuts by 2050, was also excised. No one else, perhaps with the exceptions of India and Saudi Arabia, wanted this to happen. I am certain that had the Chinese not been in the room, we would have left Copenhagen with a deal that had environmentalists popping champagne corks popping in every corner of the world.

Strong position

So how did China manage to pull off this coup? First, it was in an extremely strong negotiating position. China didn't need a deal. As one developing country foreign minister said to me: “The Athenians had nothing to offer to the Spartans.” On the other hand, western leaders in particular – but also presidents Lula of Brazil, Zuma of South Africa, Calderón of Mexico and many others – were desperate for a positive outcome. Obama needed a strong deal perhaps more than anyone. The US had confirmed the offer of $100bn to developing countries for adaptation, put serious cuts on the table for the first time (17% below 2005 levels by 2020), and was obviously prepared to up its offer.

Above all, Obama needed to be able to demonstrate to the Senate that he could deliver China in any global climate regulation framework, so conservative senators could not argue that US carbon cuts would further advantage Chinese industry. With midterm elections looming, Obama and his staff also knew that Copenhagen would be probably their only opportunity to go to climate change talks with a strong mandate. This further strengthened China's negotiating hand, as did the complete lack of civil society political pressure on either China or India. Campaign groups never blame developing countries for failure; this is an iron rule that is never broken. The Indians, in particular, have become past masters at co-opting the language of equity (”equal rights to the atmosphere”) in the service of planetary suicide – and leftish campaigners and commentators are hoist with their own petard.

With the deal gutted, the heads of state session concluded with a final battle as the Chinese delegate insisted on removing the 1.5C target so beloved of the small island states and low-lying nations who have most to lose from rising seas. President Nasheed of the Maldives, supported by Brown, fought valiantly to save this crucial number. “How can you ask my country to go extinct?” demanded Nasheed. The Chinese delegate feigned great offence – and the number stayed, but surrounded by language which makes it all but meaningless. The deed was done.

China's game

All this raises the question: what is China's game? Why did China, in the words of a UK-based analyst who also spent hours in heads of state meetings, “not only reject targets for itself, but also refuse to allow any other country to take on binding targets?” The analyst, who has attended climate conferences for more than 15 years, concludes that China wants to weaken the climate regulation regime now “in order to avoid the risk that it might be called on to be more ambitious in a few years' time”.

This does not mean China is not serious about global warming. It is strong in both the wind and solar industries. But China's growth, and growing global political and economic dominance, is based largely on cheap coal. China knows it is becoming an uncontested superpower; indeed its newfound muscular confidence was on striking display in Copenhagen. Its coal-based economy doubles every decade, and its power increases commensurately. Its leadership will not alter this magic formula unless they absolutely have to.

Copenhagen was much worse than just another bad deal, because it illustrated a profound shift in global geopolitics. This is fast becoming China's century, yet its leadership has displayed that multilateral environmental governance is not only not a priority, but is viewed as a hindrance to the new superpower's freedom of action. I left Copenhagen more despondent than I have felt in a long time. After all the hope and all the hype, the mobilisation of thousands, a wave of optimism crashed against the rock of global power politics, fell back, and drained away.

Fuqiang Yang, director of global climate solutions, WWF International

The negotiations in Copenhagen ended without a fair, ambitious or legally binding treaty to reduce greenhouse gas emissions. Despite this, what emerged was an agreement that will, at the very least, cut greenhouse gases, set up an emissions verification system, and reduce deforestation. Given the complexity of the issue, this represents a step forward.

I hasten to add that much of the hard work still lies ahead. The Copenhagen accord, the text that came out of the talks, leaves a long list of issues undecided. Among them are the emissions targets industrialised nations will accept, and how much climate finance they will offer.

The accord essentially allows countries to set their own greenhouse gas emissions reduction goals for 2020.

But I am optimistic, because the talks did achieve $100bn in aid from industrialised countries to poorer nations. China, as well, submitted to an emissions verification system under which all nations will report.

The accord also includes measures to help cut greenhouse gases and reduce deforestation, particularly in heavily forested developing nations such as Brazil and Indonesia.

These are big steps forward, and I think it is important to remember that there were achievements made in Copenhagen. There is still a great deal that needs to be done by China and all other signatories. Specific, binding targets are extremely important and need to be worked out. But we did see a move towards an agreement that could keep atmospheric Co2 levels from rising above dangerous levels.

John Prescott, climate change rapporteur for the Council of Europe

I've read a lot about so-called Brokenhagen and the failure to get a legally binding agreement. Frankly we were never going to get one, just as we didn't get one at Kyoto, when I was negotiating for the EU.

What you need is a statement of principle. At Copenhagen this was a final admission that we cannot let temperature rise 2C above pre-industrial levels.And to get approval from 192 countries on this principle is remarkable, considering Kyoto dealt with only 47 nations.

The details and targets to meet that principle will be settled at COP16 in Mexico in 12 months' time. Until then, countries must show, as Ban Ki-Moon said, greater ambition to turn their backs on the path of least resistance.

Many of the countries have set out their own carbon action plans by 2020. So let's see them put those plans into action and put those figures in the annexes to the Copenhagen accord. The rest of the world will follow.

Copenhagen's achievements are an acceptance of the science (contested at Kyoto), an admission there will be global emission cuts, and an acceptance that there will have to be verification.

Martin Rees, president of the Royal Society, master of Trinity College, professor of cosmology and astrophysics, university of Cambridge

Plainly the outcome of Copenhagen was less than many hoped – but perhaps not substantially less than could be realistically expected. The involvement of India and China was clearly going to be crucial. But the grandstanding by particular nations (and the insistence by some on an unreasonable target of 1.5 degrees) was plainly unhelpful to the negotiations.

We in the UK should surely acclaim the constructive and committed role played by our government, and by Gordon Brown and Ed Miliband in particular, both in the lead-up to Copenhagen and during the frustrating and exhasting negotiations last week.

Next year, one hopes the US internal debate will evolve further, so Obama feels able to play a less muted role. Let's hope also that negotiations within groups of nations are carried forward. There is more hope of something being agreed among a group of up to 20 key nations (provided the group covers developing and developed countries), which others then sign up to.

And to be positive, the Copenhagen meeting, circus though it was, carried the process forward. For instance, it stimulated pledges of funding from developed nations (albeit, not as firmly as might have been hoped) and made progress on forestry. And it maintained global long-term concerns about climate change on the international agenda.

Bryony Worthington, climate campaigner with sandbag.org, who helped draft the UK climate change bill

Copenhagen was a spectacular failure on many levels. The UN process was stretched to breaking-point, with no consensus on any pressing issues.

The accord that was signed was clearly designed to meet the needs of the US, who always wanted a voluntary “pledge and review later” type agreement with minimum enforcement.

The sums of money agreed to help developing nations adapt to climate change are so low as to be insulting.

The future of the major mechanism driving private capital into solutions, the carbon market, has been left with a question mark over its future, and the long-anticipated agreement on stopping deforestation lacked clarity.

What happens next? The most honest answer would be to accept that under the current arrangements consensus will not be reached.

We have to focus on domestic action in big fossil-fuelled economies: the US, China, and Europe. All three have made pledges about their intentions to act – each has the opportunity to introduce policies which will create huge markets in climate solutions. If they lead, these solutions will become available for use in all parts of the world, with the costs of development having been born by those most able to pay.

That is our best hope.

Gavin Schmidt, climate scientist at Nasa and co-founder of RealClimate.org

Look at the history of environment negotiations – take the ozone ones as the best example. People start off negotiating very hard and the first agreement does nothing but moderate the problem.

While the Montreal protocol was ultimately a huge triumph, it made an infinitesimally small difference at first. It took them four amendments to get from reduction to a ban [on CFCs], a process of 20 years after science identified the problem.

Carbon and climate change are much more complicated, and we're just getting to that 20-year mark now. Anyone expecting a definitive solution to the problem on timescales any shorter than that is extremely optimistic.

It's not an event, it's a process. I guarantee that the decisions we will be making in 2050 will not be the ones made in Copenhagen.

Copenhagen did show some improvement in the process. People are now talking about changes in greenhouse gas emissions that are commensurate with the size of the problem. Before, they weren't.

People are now seeing the problem for the challenge that it really is. But, in seeing that challenge, it makes the process – because that challenge is very large.

Kumi Naidoo, executive director, Greenpeace International

The outcome of the summit was not fair, ambitious or legally binding. This eluded world leaders because they put national economic self-interests, as well as those of climate polluting industries, before protecting the climate.

Even if all countries reach their pledges, our planet will be propelled towards a 4C temperature rise, double what leaders say they must achieve. This will have devastating climate impacts, including crop failures and the disappearance of the Amazon rainforest and the Great Barrier Reef.

With each month of delay in getting a real climate deal, the chances of the world staying below a 2C rise slips further away, and the cost to this and the next generation in tackling climate change increases.

To avoid this, industrialised countries as a group – which bear historic responsibility for the problem – must make the largest emission cuts. They also need to provide at least $140bn a year to help developing countries.

The non-result from Copenhagen calls into question the ability of leaders to deliver what is needed. Citizens around the world will need to elect more ambitious leaders and embrace new, low impact technologies.

Vicky Pope, head of climate change advice at the Met Office

At previous meetings in the runup to Copenhagen, in Barcelona and elsewhere, there was talk about greenhouse gas targets for 2020 and 2050; it is disappointing that those have been lost, but it is good that everyone accepted the scientific reality that climate change is a problem and that we need to limit warming to 2C.

The accord is fairly weak, and we will only know how effective it will be when countries fill in the table that details their targets to reduce emissions (they have until the end of January to do so).

Only when we have those targets and we can add them up to see the scale of cuts will we be able to properly judge what has been achieved. It is a positive thing that finance is included, as that could help to make things happen.

Going forward, the first thing that needs to happen is that the table of targets needs to be filled in. Then the whole agreement needs to be made legally binding.

Nicholas Stern, chair, Grantham research institute on climate change and the environment, London School of Economics and Political Science

The Copenhagen meeting was a disappointment, primarily because it failed to set the basic targets for reducing global annual emissions of greenhouse gases from now up to 2050, and did not secure commitments from countries to meet these targets collectively.

Nevertheless, the road to Copenhagen and the summit itself generated commitments on emissions reductions from many countries, including, for the first time, from the world's two largest emitters, China and the US. The Copenhagen accord also did recognise that a rise in global average temperature should be limited to below 2C.

In addition, the prime minister of Ethiopia, Meles Zenawi, speaking for the African Union, put forward a very important proposal on financial support, much of which is reflected in the Copenhagen accord, including the creation of the Copenhagen green climate fund to administer funding for developing countries.

The current UN framework convention on climate change process has been found wanting over the past few weeks.

One potential way forward is for Mexico, as hosts of COP16 (the next full summit) in 2010, to convene a group of 20 representative nations, as Friends of the Chair, to work on a potential treaty and tackle the outstanding issues and building consensus around strong action. The group should start its work immediately.

Dr Myles Allen, head of climate dynamics group in the atmospheric, oceanic and planetary physics department, University of Oxford

On one level, it could be argued it is quite a good outcome.

There is a goal to limit global temperature rise to 2C and an acknowledgement that current commitments are not enough to meet that goal. It is good that China recognises the 2C goal and that emissions reductions are the way to go.

I am glad they did not make serious progress towards a legally binding treaty, because the current thinking that nationally negotiated emissions targets and a system of carbon trading will solve this problem is flawed. I'm very sceptical about that whole approach.

A legally binding regime based on that principle would lock us into that process, and it could take 20 or 30 years before it became sufficiently obvious it was not working. Once set up, there is enormous investment in a system like that and it becomes difficult to change. So something close to success in Copenhagen based on what the politicians were aiming for could have been counterproductive.

It's depressing that governments appear to have walked away from Copenhagen only to say they are going to spend the next year fighting for the legally binding treaty they wanted it to produce, rather than use the time to consider some radical alternatives.

One way we have suggested is to target producers rather than emitters. A mandatory requirement on fossil fuel companies to capture and store carbon emissions, to clean up after themselves, could solve a big part of the problem without complex international negotiations.

Bernarditas de Castro Muller, former lead negotiator for the G77 plus China group of developing countries

What was achieved in Copenhagen? The Copenhagen accord contains what was possibly the most that the leaders of the world's biggest countries could give in terms of actions to address climate change.

However, there are problems with the document as it stands. The main one is the process pursued to reach this agreement, which completely undermined the cardinal rule of multilateralism in international negotiations, and that is transparency and inclusiveness.

The final session and the mishandling of the process by the Danish presidency delivered the knockout blow to any meaningful agreement. That this travesty should take place before the eyes of the main guardian of multilateralism, the UN secretary-general, only added to the irony of the tragic situation.

But the worth of the “deal” (I actually prefer the word “accord”; “deal” sounds like some sleazy business plot) lies in laying out clearly what each of the major countries could live with in terms of addressing climate change. In my opinion, it is still inadequate insofar as developed countries' commitments to reduce emissions are concerned. However, we are always told to take into account the “political realities” of rich countries. I revolt against this, but have to live with it, and put aside our own political realities in the developing world, which have to do with basic necessities and even survival itself.

Where do we go from here? We could take the accord as some kind of political guidance from the leaders of major countries. We are now clear on where the major groups stand. It is now up to negotiators to come up with universally agreed next steps.

Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change

I think there are three major achievements that could be listed at Copenhagen:
• The acceptance of a 2C limit for temperature increase, and reference to the scientific basis for doing so. This indicates that science has finally had an influence on negotiators defining what would represent dangerous anthropogenic interference with the climate system.
• An agreement was reached between the so-called Basic countries [Brazil, South Africa, China and India] and the US on a tricky issue, which had become a bone of contention particularly between the US and China.
• A sum of $30bn has been included in the agreement for funding developing countries' actions during the period 2010 to 12.

Is the agreement worth anything? The accord would be worth something only if we build on it with a sense of urgency and take it forward towards a binding agreement by the end of next year.

The next step is that the negotiators, and particularly the leaders of major countries, must now get into action to see that we come up with an inclusive agreement involving all the countries of the world. This would require early convening of some meetings under the Conference of the Parties, and a timetable for specific outcomes to be achieved before Mexico.

I came home from Copenhagen and picked up the newspapers. The headlines read: “Talks end in failure”; “Deadlock”; “Copenhagen fails the test”.

The “test” for many journalists and NGOs was whether there'd be a legal agreement, which was never a possibility, just as we didn't get one at Kyoto. No. The real headline is that Copenhagen has become the first global agreement on climate change. The Copenhagen accord reaffirms the science that we shouldn't allow the temperature to rise more than two degrees, establishes a green climate fund providing $30bn from 1 January and a new form of verification.

This isn't failure. It's not as good as it should have been but as Ban Ki-moon said, it's another important step to control climate change.

And it's certainly not “genocide” as the Sudanese delegate said. Perhaps he should try to tackle genocide at home first before preaching to the rest of world.

My five days at Copenhagen reminded me so much of Kyoto. In 1997, when I was negotiating for the EU, I coined a phrase. When journalists followed me between meetings trying to get updates, I'd say: “I'm walking and talking.” Twelve years on in Copenhagen and I've been doing the same, this time for the Council of Europe as its rapporteur on climate change. We've been calling for a fairer deal for developing nations based on social justice. China may be becoming the world's biggest emitter, but if you look at CO² emissions per person, each American emits 20 tonnes a year, a Chinese person just six and an African less than one.

When I launched the Council of Europe's New Earth Deal campaign, which rejected the EU's limited proposals, I predicted three things. First, there wouldn't be a legally binding agreement. That will come later. Second, that Copenhagen would be 10 times more difficult than Kyoto. In 1997, we were trying to find agreement among 47 developed countries. Copenhagen needed consensus from 192. And finally, the deal would come down to the G2 – China and the US. It's at the conference when you really get that chance to press home the message. I lobbied John Kerry, Al Gore and the Chinese environment minister Xie Zhenhua, telling them they had to “wriggle more” to get a deal. The translator fell silent, but when I mimed a wriggle to Xie, he smiled and understood what I meant.

But the atmosphere was soured by the US, first by its climate change special envoy, Todd Stern, who said emissions “isn't a matter of politics or morality or anything else, it's just maths”, which completely ignored the per capita argument. President Obama's speech blaming China didn't help either.

The US has pushed the Chinese hard on emissions cuts. Fine when you've had your industrial revolution. But China and the other developing countries need that growth. Understandable when more than half of the planet is living on less than $2 a day.

But one world leader stands out for me. Gordon Brown, who made a brilliant speech, has shown once again real leadership in finding global solutions to global problems, just as he did at the G20 on finance. He was the first leader to commit to go to Copenhagen, successfully lobbied for others to join him and got the fast-track fund off the ground. Yet again, he's proved he's a big man for a big job. So let's keep walking and talking to the UN climate talks in Bonn in May and the next COP in Mexico in December. That's when the fine detail will be hammered out, just like we did after Kyoto.

• John Prescott is the Council of Europe's rapporteur on climate change

After Copenhagen

As the dust settles on the Copenhagen climate talks, we've taken a step back to ask what was achieved at the summit, whether the deal is worth anything and consider who was to blame for the final unambitious text known as the 'Copenhagen accord'. Mark Lynas, who was with the Maldives delegation, tells the inside story of the last minute dealings between China and other heads of state. But for the big picture, head to our Copenhagen page for more comment, photos, audio, videos and news on how the last dramatic moments of the conference played out.

• Low targets, goals dropped: Copenhagen ends in failure
• How do I know China wrecked the Copenhagen deal? I was in the room
• Copenhagen climate deal: Spectacular failure - or a few important steps?
• Jailed Copenhagen protesters face Christmas behind bars
• If you want to know who's to blame for Copenhagen, look to the US Senate
• Copenhagen treaty was 'held to ransom', says Gordon Brown
• Beyond Copenhagen: Dialogue, not diktat

Energy

The lack of a strong deal at Copenhagen also had ramifications for the carbon trading market. In Europe, the carbon price fell by 10% in one day, causing experts to warn the low price could discourage investment in new clean power.
• Biofuels: can they fuel our lifestyle without taking food from the poor?
• Falling carbon price could result in higher bills, energy firms warn
• Has peak theory reached its tipping point?

Multimedia


The Bosavi Woolly Rat had no fear of humans when it was discovered. Photograph: Jonny Keeling/BBC

• In pictures – 2009's bizarre wildlife stories
• Video: My day as a zoo keeper at Whipsnade
• The best reader photos of 2009
• Copenhagen climate change conference in pictures: Protests and results
• Video: Copenhagen: climate of denied opportunity
• In pictures: The week in wildlife
As 2009 draws to a close, we've taken a retrospective look at some of the wackiest wildlife stories of the year - from albino dolphins to giant wooly rats - and rounded up the best photos by environmentguardian.co.uk readers. We also have some great videos and photos of the closing moments of the climate talks in Copenhagen - watch John Vidal as he examines what went wrong.

Green living


Alok Jha puts in a low-energy lightbulb. Photograph: Felix Clay

For those cyclists still braving the icy roads, this week's bike blog features an account by Homa Khaleeli on cycle training and a post by Ben Thomas asking why motorists are so opposed to 20mph zones. Meanwhile Leo Hickman is looking for your tips on efficient heating and Lucy Siegle pre-empts Christmas day disappointments with a look at re-gifting.

• How can I make my heating system more efficient?
• British Gas wants you to Pay As You Save
• Do cyclists need restricting?
• How cycling lessons transformed me from a cautious to a confident rider
• Is it green to re-gift?

… And finally


Storybook Wolf. Photograph: José Luis Rodriguez

• Loan wolf? Prizewinning photographer faces fakery claims
Was it wild or was it staged? Click the link and see what you think.

More People Around The World Get Their News Online From Google

Well, Rupert Murdoch is going to love this. More people around the world get their news online from Google News than from CNN …

In White Folks News: Steven Tyler of Aerosmith Goes to Rehab

In White Folks News, News. December 23rd. Posted by Bossip Staff. Comments 13 Comments |2 Views. Steven Tyler has entered a rehabilitation facility due to an addiction to rocks painkillers: Steven Tyler has entered a rehabilitation …

The business model for news is and always has been broken and

Murdoch said: “In the new business model, we will be charging consumers for the news we provide on our Internet sites. The critics say people won't pay. I believe they will, but only if we give them something of good and useful value. …

Head of California's Cap and Trade Offsets Program: Cap and Trade Won't Work for Climate, It's a Scam

 

Paul Krugman argues that cap and trade worked to reduce sulfur dioxide and stop acid rain, and so it will work to reduce C02.

However, two EPA lawyers with more than 40 years of cumulative experience - including the guy who has been head of California's cap and trade offset programs for more than 20 years - say that sulfur dioxide was different, and that cap and trade for climate is a scam which only benefits the financial players.

Specifically, they point out that:

  • Cap and trade was tried in Europe, but ended up raising energy prices, creating volatility, produced few greenhouse gas reductions, but made billions for the financial players
  • Even the guy who invented the cap and trade concept doesn't think it will work in regards to climate change (see this and this)
  • Carbon offsets - which are part of the cap and trade plan - increase pollution
  • One reason that offsets lead to more pollution is that investors fight to keep toxic chemicals legal, so they can make more money off of trading the offsets
  • Like subprime mortgages and other creative financial instruments which brought us the economic crisis, carbon offsets lack integrity and don't work (see this)

New HV-HD Hard Drive Camcorder, JVC Everio GZ-HD620 : Akihabara

New HV-HD Hard Drive Camcorder, JVC Everio GZ-HD620.

Worldchanging: Bright Green: Climate News Roundup

An online magazine covering tools, models, and ideas for building a better future.

Woods' mother-in-law hospitalized, is stable - Golf- nbcsports

BREAKING NEWS. updated 12:16 p.m. ET Dec. 8, 2009. WINDERMERE, Fla. - Emergency crews were summoned to Tiger Woods' Orlando-area mansion for the second time in less than two weeks Tuesday, this time because his mother-in-law was having …

Just when you think the fictional economy cannot get any worse, we get this. The Cap & Trade is based on a new derivatives market. Oh gee! Just what the nation needs, yet another fictional mathematics market so a few traders can put the entire global economy at risk!

The banks are preparing to do with carbon what they’ve done before: design and market derivatives contracts that will help client companies hedge their price risk over the long term. They’re also ready to sell carbon-related financial products to outside investors.

Masters says banks must be allowed to lead the way if a mandatory carbon-trading system is going to help save the planet at the lowest possible cost. And derivatives related to carbon must be part of the mix, she says. Derivatives are securities whose value is derived from the value of an underlying commodity — in this case, CO2 and other greenhouse gases.

Guess what this altruistic market value is? Between $300 billion to $2 trillion. We noted earlier the plan to create a new derivatives market with Cap & Trade. This post has many details, including legislation on what's going on under the guise of helping the environment.

Meanwhile, Naked Capitalism is plain calling Cap & Trade a Scam.

Gets better. Zero Hedge has an alarming post,

Righties never betray their own principles, because they don’t have any principles. The closest thing they’ve got to a principle is the knee-jerk, Pavlovian opposition to anything that can be labeled “liberal,” “progressive” or “democratic,” either capitalized or not.

I bring this up because Paul Krugman writes,

The truth is that conservatives who predict economic doom if we try to fight climate change are betraying their own principles. They claim to believe that capitalism is infinitely adaptable, that the magic of the marketplace can deal with any problem. But for some reason they insist that cap and trade — a system specifically designed to bring the power of market incentives to bear on environmental problems — can’t work.

You know that the teabagbots who wave “down with cap and tax” signs at town hall meetings couldn’t explain what the “cap and trade” program is even if you gave them the Cliff’s notes and a half hour to study them. The truth is that the cap and trade model is probably the most conservative (in the dictionary sense of the word) and business-friendly means anyone has come up with to bring down carbon emissions. It challenges industries to come up with their own solutions and then rewards innovation and results.

As I see it, the alternatives are (1) doing nothing, or (2) what Paul Bledsoe of the National Commission on Energy Policy calls “command and control through the existing Clean Air Act,” which in the current political climate is about as likely to happen as Holsteins climbing trees. In fact, some on the Left are opposed to cap and trade because it is too business friendly. They charge that it will turn into another way for the financial sector to make a lot of money while screwing the rest of us.

But our captains of industry prefer Option 1, not doing anything. I suspect they plan to pull an Auto Industry — keep on as if there’s no problem and hope the crash doesn’t come until they’ve retired. And then government can bail out whatever poor sucker is running the company when that happens.

However, Juliet Eilperin writes for the Washington Post that the

Obama administration will formally declare Monday that carbon dioxide and other greenhouse gas emissions pose a danger to the public’s health and welfare, a move that lays the groundwork for an economy-wide carbon cap even if Congress fails to enact climate legislation, sources familiar with the process said. …

…It could trigger a series of federal regulations affecting polluters, from vehicles to coal-fired power plants.

My guess is that if they thought the Obama Administration might really hit them with stringent regulations, the captains of industry will suddenly decide cap and trade isn’t so bad.

Right wing propaganda to the contrary, cap and trade is proving to be a success in Europe. Krugman also says,

The acid rain controversy of the 1980s was in many respects a dress rehearsal for today’s fight over climate change. Then as now, right-wing ideologues denied the science. Then as now, industry groups claimed that any attempt to limit emissions would inflict grievous economic harm.

But in 1990 the United States went ahead anyway with a cap-and-trade system for sulfur dioxide. And guess what. It worked, delivering a sharp reduction in pollution at lower-than-predicted cost.

Like Paul Krugman, I am puzzled by James Hansen’s piece in the NYT attacking cap and trade. Hansen writes:

Because cap and trade is enforced through the selling and trading of permits, it actually perpetuates the pollution it is supposed to eliminate. If every polluter’s emissions fell below the incrementally lowered cap, then the price of pollution credits would collapse and the economic rationale to keep reducing pollution would disappear.

Eh? If the system succeeded so well that emissions came in below the cap, that would be a problem? If cutting emissions is the goal, I can think of worse. And in that case, anyway, couldn’t you just lower the cap?

Hansen explains his objection in even simpler terms:

Still need more convincing? Consider the perverse effect cap and trade has on altruistic actions. Say you decide to buy a small, high-efficiency car. That reduces your emissions, but not your country’s. Instead it allows somebody else to buy a bigger S.U.V. — because the total emissions are set by the cap.

Or consider the salutary effect cap and trade has on selfish actions. Say you decide to buy a big SUV. That increases your emissions, but not your country’s. Instead it obliges somebody else to buy a small high-efficiency car–because the total emissions are set by the cap.

Cap and trade, as Krugman points out, makes the price outcome uncertain (if it is allowed to bind). The carbon tax that Hansen appears to prefer makes the quantity of emissions uncertain. That is why those calling for strong action on greenhouse gases usually prefer cap and trade. Perhaps Hansen’s distaste for a market in emissions–somebody might make some money off this–is confusing him. But a tax would be mediated through a market too, obviously.

I’m for a carbon tax, because I would rather set the price than the quantity. It has other advantages too: it is harder to game and makes international co-operation on climate change easier to arrange. Cap and trade with a price collar, as proposed in the Senate bill, combines desirable elements of both, and might be the best way forward, on economic as well as political grounds.

But Hansen’s article makes no sense at all. Paraphrasing Wegman on the hockey stick, Bad reasoning + Correct Answer = Bad Economics.

December 8, 2009 6:19pm in Current Affairs, Economics, US Politics | Comment

The Story of Cap and Trade

Media, Policy & Legislation, Politics

Published
December 01, 2009 @ 06:29PM PT

Several months back I posted about the Waxman-Markey climate bill and how it was being gutted by the fossil fuels industry and its allies in Congress. I was generally supportive of cap-and-trade as the best chance we had of getting a mechanism in place to drastically lower our carbon emissions, as climate science demands we must. Someone took me to task for my support of cap-and-trade in the comments of that post, and a vigorous debate ensued. Today, on the veritable eve of Copenhagen, it is perhaps worth revisiting that debate.

For a nice, animated argument against cap-and-trade, check out the newly released “The Story of Cap & Trade,” a video by Annie Leonard, who also made the much-loved video “The Story of Stuff.” In her new video, Leonard criticizes cap-and-trade as a product of the same thinking that got us into the climate crisis in the first place — creating and exploiting economic markets instead of safeguarding the environment outright. In other words, while she's all for the “cap,” she's not so down with the “trade” because of how easy such markets can be to manipulate.

I think this argument has a lot of merit, and, as Leonard points out, so do a “growing movement of scientists, students, farmers, and forward-thinking business people.” But I'm still not totally convinced that cap-and-trade isn't the best mechanism for lowering carbon emissions that we're likely to get in place in time to make a difference, if only because America needs to take the lead on stopping global warming if we're to stand a chance, and anything perceived to interfere with unfettered capitalism is unlikely to fly in the good ol' US of A.

I am not seeking to be an apologist for cap-and-trade, nor am I trying to lower anyone's expectations of what's possible. Perhaps I'm just being a bit too jaded, and other solutions that have been proposed are equally viable.

What are some alternatives to cap-and-trade? There's always the option of imposing a straight-up tax on carbon pollution, of course. A carbon tax would be simple and effective, but it would never make it out of the American Congress alive.

Another idea is so-called “tax shifting” — lowering income taxes while raising taxes on environmentally destructive activities like purchasing gasoline. (Lester Brown discusses tax shifting in his book, Plan B 4.0: Mobilizing to Save Civilization. You can read an excerpt from the book dealing with tax shifting here.) I think this is a very interesting idea and probably the most viable solution other than cap-and-trade.

Another alternative to cap-and-trade, “climate debt,” was recently discussed by Naomi Klein in an article she wrote for Rolling Stone. The idea of “climate debt” is to make rich countries pay poor countries for the damage being done to them by climate change, a problem created almost entirely by rich countries.

Klein makes a persuasive case when she argues that the UN climate summit in Copenhagen “represents a chance to seize the political terrain back from business-friendly half-measures, such as carbon offsets and emissions trading, and introduce some effective, common-sense proposals — ideas that have less to do with creating complex new markets for pollution and more to do with keeping coal and oil in the ground.” When she writes about “complex new markets for pollution” she is of course referring to the carbon market that would be created by a cap-and-trade scheme. But how likely is it that we'd ever get developed countries to agree to this scheme? And how likely is it that we can overcome the incredible influence of an inordinately wealthy fossil fuels industry that is hell-bent on ripping those fossil fuels out of the ground without creating some incentive for them not to do so (perverse as that situation may be)?

I have always believed that a markets-based solution was not preferable, for many of the same reasons as Annie Leonard, in addition to an inherent mistrust of capitalist institutions in general. But like it or not, I've always kinda felt like there was no other viable option. And the bottom line is that we need to do something NOW. Creating a carbon market is by no means doomed to failure: The European carbon market got off to a rocky start, but now seems to be working, for instance.

Tax shifting makes a hell of a lot of sense, but it rarely even enters the debate. Of course rich countries paying their climate debt would be the morally righteous thing to do, but given that most developed countries won't even discuss ambitious emissions targets, it's hard to imagine them agreeing to pay reparations to developing nations.

What do y'all think?

Highlights social injustice of proposed climate change policies

 

The Congress of Racial Equality (CORE) announced today that they have joined the No Cap and Trade Coalition in the fight against cap-and-trade legislation and the proposed Copenhagen climate treaty. The coalition is comprised of over 30 state and federal public policy groups and think tanks and maintains a website at www.NoCapAndTrade.com.

Niger Innis, national spokesperson for CORE, will become a spokesperson for the No Cap-and Trade Coalition, helping to spread the message that this dangerous public policy will impede social justice, transfer wealth from the United States to foreign countries and potentially strip the United States of its sovereignty.

“CORE is committed to the coalition’s efforts to stop cap-and-trade as well as the Copenhagen treaty,” said Niger Innis. “This endeavor is a continuation of an almost three year effort that CORE has made in its national energy campaign – CORE believes that access to affordable energy is a civil and human right and will work with the No Cap-and-Trade Coalition to spread this message.”

“The No Cap-and-Trade Coalition is very excited about working with CORE and having Niger Innis as a spokesperson,” said Jeff Davis of Minnesota Majority, the coalition’s organizer. “We believe his message that cap-and-trade schemes will be devastating to all Americans, but with a disproportionate impact on the poor in this country, will resonate with all people, regardless of politics.”

On December 7, 2009, the United Nations Framework Convention on Climate Change (UNFCCC) will begin a conference in Copenhagen, Denmark where President Obama intends to consent to an operational agreement with immediate effect if the proposed treaty can’t be agreed upon. The treaty, or any similar executive agreements, could result in a massive transfer of wealth from the United States to third world countries, tax hikes, price inflation, job losses and more damage to the faltering American economy. A draft of the treaty includes establishing a new world government along with a world energy tax. Were such a treaty ratified, it could be a threat to the sovereignty of the United States.

If domestic cap-and-trade legislation were passed, it could result in a loss of 1.9 million American jobs in 2012 and 2.5 million American jobs by 2025. From 2012-2019, the CBO estimates direct government spending at $822 billion with revenue at $845 billion from taxes on energy producers.

The No Cap-and-Trade Coalition has launched a petition on its website at www.NoCapAndTrade.com and through it, has transmitted over 150,000 citizen messages to the president and Congress in opposition to cap and trade schemes. Member organizations have been independently working in the fight against cap-and-trade and the Copenhagen treaty and some are running advertisements to educate the public.

CORE plans to help the No Cap-and-Trade Coalition work with lawmakers to understand that only through the free-market development of technology and the refinement of conservation endeavors, can the United States achieve a sustainable energy policy for this generation and generations to come.

Visit NoCapAndTrade.com for more information.

This entry was posted on Monday, December 7th, 2009 at 1:03 pm and is filed under Bad Policy, CO2, Cap and Trade, Copenhagen Treaty, Economics, Public Policy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

European Cap-And-Trade Example

Europe was the first to do carbon cap-and-trade, four years ago.

(Photo courtesy of NASA)

Congress is haggling over a climate
bill that includes a carbon cap-and-
trade system. In many ways, it's
similar to the one the European Union
put in place several years ago. Liam
Moriarty looks at what
the European experience has been and
what the lessons for the US might be:

Info from the European Union

Wikipedia's page on the European system

Producer: Liam Moriarty
Release Date: December 8, 2009
Running Time: 3:36