Recession a setback for climate change talks

Michael Richardson, Straits Times 11 Dec 08;

OFFICIALS from Singapore and 185 other nations involved in trying to craft a new global climate change treaty are taking part in ministerial-level talks this week in Poznan, Poland. They are trying to narrow disagreements on an action plan to cut the more than 30 billion tonnes of global warming gases being spewed into the atmosphere each year.

The current round of talks is part of a process intended to lead to a final international agreement in Copenhagen in December next year. It was never going to be easy to conclude an effective successor pact to the Kyoto Protocol, which expires in 2012. But the difficulty in hammering out an accord among such a large number of countries with such divergent interests has been magnified by the slump in the global economy and the prices of the main fossil fuels - coal, oil and natural gas.

When prices were high for these fuels, it brought them closer to the cost of some renewable energy sources, including wind and solar power. The global recession is expected to reduce the rapid rise in global warming emissions.

But it is likely to be only a temporary respite. The chief concern now is to revive the very same economic growth that is contributing to climate change. Much of this growth will be energy-intensive. It will be based on fossil fuels and involve converting forests to farmland. Energy- related carbon dioxide accounts for 61 per cent of global greenhouse gas emissions, and forest conversion, about 20 per cent.

The longer and deeper the recession, the more difficult it will be to reach a post-Kyoto deal on comprehensive emission control. There is already intense wrangling over how to share the responsibilities and costs of limiting greenhouse gases because they affect competitive advantage among economies. In the worst case, the talks might collapse. Or they may have to be extended beyond the deadline next December.

China's climate change envoy Yu Qingtai said before the Poznan talks started that he was 'fairly pessimistic' about its prospects. Mr Yvo de Boer, the United Nations climate chief, admitted he was also worried about the outlook as governments focused on keeping their economies afloat. 'There's a risk that less public money will be available in the North for cooperation with the South on technology and capacity building,' he said.

Technology transfer is a make-or- break issue for China, which recently overtook the United States as the single biggest source of greenhouse gases. Dr Wan Gang, the Chinese Minister of Science and Technology, has said that developed economies should speed up the transfer of clean energy technologies to China and other developing nations. The International Energy Agency has calculated that an additional investment of US$44 trillion (S$66 trillion) in technologies to curb greenhouse gas emissions will be needed from 2010 to 2050 to ensure a climate-safe future.

Kyoto set no mandatory targets for developing countries. But now that China, India and other developing economies have emerged as major contributors to global emissions, they are under pressure to join a post-Kyoto accord.

Part of the price for doing so will be the transfer of technology and resources from industrialised countries. Yet, the current economic crisis is likely to result in less aid to developing nations. Even in good economic times, this would have been a difficult undertaking. Mr Robert Dixon, chief of the UN's Global Environment Fund, said that while governments can set policies, technology and resources come overwhelmingly from the private sector. As an example, he noted that 86 per cent of worldwide financial flows linked to clean energy technologies come from private business.

The recent sharp falls in the price of fossil fuels tend to reduce the incentive to switch to more expensive sources of alternative energy. But McKinsey & Co thinks that the best hope of slowing climate change in the current crisis is to promote energy conservation schemes. It reckons that emission-cutting measures, such as better building insulation and lower per-kilometre fuel consumption in vehicles, will pay for themselves over time via lower energy bills.

However, the McKinsey researchers found that the most costly projects, such as capturing carbon dioxide from coal-fired power plants and storing it underground, are likely to be casualties of a prolonged recession. Plans to expand nuclear power to generate electricity may also take a hit. These plants emit no carbon dioxide. But they need a lot of capital investment, which is in short supply now.

The writer is an energy and security specialist at the Institute of Southeast Asian Studies.