After CopenhagenAfter Copenhagen

Jeffrey FrankelJeffrey Frankel Harpel Professor, Harvard Kennedy SchoolHarpel Professor, Harvard Kennedy School

HUCE, March 2, 2010HUCE, March 2, 2010

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2 Questions2 Questions

1. Copenhagen Accord = Progress?

2. Proposal for a Global Climate Agreement: How to Set Emission Targets by Formula

3. Appendix: Country Emission Targets

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1. Progress?1. Progress? What is the definition?What is the definition?

• It is useless to evaluate negotiations by whether or not they produce a sweeping agreement.– Always keep in mind the Herculean tasks of bridging

• the gap between rich countries & poor,

• the gap between environmental aspirations & economic costs that people are willing to pay,

• the gap between what leaders are willing to say, &what commitments are enforceable and credible.

• Progress ≡ steps toward specific credible commitments by a large number of countries.

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The best recent newsThe best recent news

• 102 countries (81% of global emissions), responded to the Jan.31, 2010, deadline of the Copenhagen Accord by submitting plans for reducing emissions.

• Six big non-Annex I countries named quantitative targets– They didn’t have to.– Of course many, like China, are vague

• about base year and seriousness of commitment• India & China’s 2020 target ≈ BAU.

– But that is not a problem. (It is what I had proposed.)

• It is an important step forward,– suggesting that Pres. Obama’s in-person breakthrough

on the last day of COP15 may indeed lead somewhere.

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Emissions targets taken on under Emissions targets taken on under Copenhagen AccordCopenhagen Accord (Jan 31, 2010 deadline)(Jan 31, 2010 deadline) . Country

Reduction by 2020

Reduction Base Year

Reduction Type

Share of World GHGs1

CO2 Emissions per capita (tCO2eq)1

Australia 5 to 25% 2000 . 1.30% 27.4

Canada 17% 2005 1.86% 24.9

China 40 to

45% N/A 16.64% 5.5

EU27 20% /

30% 1990 11.69% 10.3

India 20% to 25%

2005 4.32% 1.7

Indonesia 26% N/A 4.73% 9.3

Emission Reductions. A target which reduces a country's overall greenhouse gas emissions.

Business As Usual (BAU). A commitment to reduce emissions from the projection of the future if actions were not taken.

Carbon intensity. How much fossil fuels you have to burn to produce an economic unit. Reducing carbon intensity means a country's GDP will continue to rise without carbon emissions rising at the same rate due to greater energy efficiency.

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. Country Reduction by 2020

Reduction Base Year

Reduction Type

Share of World GHGs

Emissions per capita (tCO2eq)

Japan 25% 1990 3.14% 10.6

Mexico 30% N/A 1.58% 6.6

Russia 15 to

25% 1990 4.64% 14.0

South Africa

34% N/A 0.98% 9.0

South Korea

30% N/A 1.3% 11.8

US 17% 2005 . 15.78% 23.1

Emissions targets taken on under Emissions targets taken on under

Copenhagen AccordCopenhagen Accord (Jan 31, 2010 deadline)(Jan 31, 2010 deadline)

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Lessons from CopenhagenLessons from Copenhagen

• Progress is not possible in the UN Framework– Small member countries will obstruct.

• Delays due to walkout;• 6 trouble-maker countries blocked

adoption of “Copenhagen Accord.”

– The UNFCCC Secretariat is not up to it:– Leaving 38,000-44,000 registrees

out in the cold is unforgivable incompetence.

• The important decisions can only be made by a small steering group, like the old G-7.

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• 2009’s good global governance development:

– Big emerging market countries finally have representation,

• now that the G-20 has supplanted the G-8.• Korea chairs the G-20 in 2010,

and may be able to bridge between Annex I & developing countries.

• Big Emitters Forum

• Mexico hosts next climate summit.

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• unlike other approaches based purely on:

– Science (concentration goals),

– Ethics (equal emission rights per capita),

– or Economics (cost-benefit optimization).

• Why the political approach? – Countries will not accept burdens that they view as unfair.– Above certain thresholds for economic costs, they will drop out.

2. Proposal: formulas for pragmatic targets, based on what emission paths are possible politically:

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• Stage 2:Stage 2: When the time comes for developing country cuts, When the time comes for developing country cuts, targets are determined by a formula incorporating targets are determined by a formula incorporating 3 elements, designed so each is asked only to take 3 elements, designed so each is asked only to take actions analogous to those already taken by others:actions analogous to those already taken by others:

– a Progressive Reduction Factor,– a Latecomer Catch-up Factor, and

– a Gradual Equalization Factor.

• Stage 1: • Annex I countries commit to the post-2012 targets that their leaders have already announced.• Others commit immediately not to exceed BAU.

Proposal

1111

World Industrial Carbon Emissions

0

5

10

15

20

25

GtC

bau

SimulatedEmissions

Global peak Global peak date ≈ 2035date ≈ 2035

◙ ◙ Constraints are satisfied:Constraints are satisfied: -- No country in any one period suffers -- No country in any one period suffers a loss as large as 5% of GDP by participating.a loss as large as 5% of GDP by participating. -- Present Discounted Value of loss < 1% GDP. -- Present Discounted Value of loss < 1% GDP.

◙ ◙ In one version, concentrations level off at 500 ppm In one version, concentrations level off at 500 ppm

in the latter part of the century.in the latter part of the century.

Co-author: V.Bosetti

Paper:Paper: http://ksghome.harvard.edu/~jfrankel/SpecificTargetsHPICA2009.dochttp://ksghome.harvard.edu/~jfrankel/SpecificTargetsHPICA2009.docAvailable at: http://ksghome.harvard.edu/~jfrankel/currentpubsspeeches.htm#On%20Climate%20ChangeAvailable at: http://ksghome.harvard.edu/~jfrankel/currentpubsspeeches.htm#On%20Climate%20Change

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AppendicesAppendices

The targeted reductions The targeted reductions from BAUfrom BAU agreed to at Kyoto agreed to at Kyoto

in 1997 were progressive with respect to income.in 1997 were progressive with respect to income.

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

2.699 3.699 4.699

Per

cen

t re

du

ctio

n f

rom

2010 b

usi

nes

s-as-

usu

al

.

500 1,000 2,000 5,000 10,000 20,000 50,000

1996 GDP per capita (1987 US dollars, ratio scale)

Cuts ↑

Incomes →This is how we set the parameter in the Progressive Reductions Factor

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The numbers submitted by countries, The numbers submitted by countries, Jan. 31, 2010,Jan. 31, 2010, under the Copenhagen Accord,under the Copenhagen Accord,

were also progressivewere also progressive

0%

20%

40%

60%

80%

100%

120%

0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000

Series1

Linear (Series1)

USA

Canada

S. KoreaMexico

India

China

Russia

Australia

EU

Japan

Income per capita

Emissions targets for 2020expressed

vs. BAU(WITCH model)

Cuts ↓

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OECD Emissions

0

1

2

3

4

5

6

7

GtC

BAU

Simulated Emissions

CAP

Emissions path for rich countriesEmissions path for rich countries Fig. 2bFig. 2b

Predicted actual Predicted actual emissions exceed emissions exceed caps, by permit caps, by permit purchases.purchases.

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NON OECD Emissions

0

7

13

20

GtC

BAU

Simulated Emissions

CAP

Emissions path for poor countriesEmissions path for poor countriesFig. 4bFig. 4b

Predicted actual Predicted actual emissions fall emissions fall below caps, by below caps, by permit sales.permit sales.

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Price of Carbon Dioxide Price of Carbon Dioxide

Fig. 6bFig. 6b Price of Carbon Permits

0

200

400

600

800

1000

2005 2020 2035 2050 2065 2080 2095

$/tC

O2

e

FRANKELArchitecture

Zoom on Price of Carbon Permits

020406080

100120140160180

2005 2015 2025 2035 2045

$/tC

O2e

FRANKELArchitecture

rises slowly over 50 rises slowly over 50 years, then rapidly.years, then rapidly.

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Concentrations stay below 500 ppm goalConcentrations stay below 500 ppm goalFig. 7bFig. 7b

Carbon Concentrations (CO2 only)

300

350

400

450

500

550

600

650

700

750

800

pp

mv

bau

FRANKELArchitecture