GLOBAL CLIMATE DEBATE

Todd Stern: Thank you very much John; I am impressed to see this hardy crew here. I knew that if there was anybody in Washington who was not going to postpone or cancel this event, it was John. John and I are both Chicago natives. I may have just lapsed into that gauzy period in life when you say, “When I was a boy, blah…, blah…, blah…,” but I actually in all of those years of growing up in Chicago winter, I actually never remember there being a snow day from school so I am not surprised that John held this event. Thank you very much.

I am delighted to here as John said CAP is my alma mater. It goes without saying that John and his team here have been consistently far ahead of the curve in recognizing and educating others about the defining role of clean energy and the role it will play in our economic environmental and security landscape in the 21St Century.

So thank you for the invite and let’s turn now to the business of hand regarding what happened in the negotiations last year, where we are now, and where we need to go. 

2009, as you all know was supposed to be a momentous year for climate change with Copenhagen ordained as the locus for a new climate treaty. Things obviously didn’t turn out as planned; though in the end, we did achieve something important.

The truth is that almost as soon as the formal negotiations got underway in March, it became clear that the positions of the parties on key issues were far apart and not getting any closer. The working text developed in a series of lengthy negotiating sessions through the Spring and the Summer accrued over 200 pages and became a smorgasbord of sometimes overlapping, sometimes contradictory proposals, through months of discussion paragraphs, it got moved around, occasionally consolidated, but the main issue is we’re never really joined.

In short, the UN climate process was on the rocks long before anybody arrived in Copenhagen.

What Prime Minister Rasmussen and his team, I think, recognized by the early Fall was that a full-blown treaty was almost surely out of reach, and the Danes thus began exploring the idea of what they called a politically-binding operational agreement that while not a legal treaty would still represent a potent step forward in Copenhagen.

The meeting itself so called CAP15 was a snarling, aggravated, chaotic event, that as we can go into the food, the lines, and all of the rest, just the thing itself.

On the second day, someone unhappy with Denmark’s efforts during the proceeding few weeks to find common ground on the crunch issues among key developed and developing country parties executed a quite effective hit by leaking a draft document that the Danes had supposedly cooked up behind closed doors.

The reaction, some of it real and some of it faint (ph), was one of shock and dismay among developing countries; never mind that at the most important pre-CAP meeting that Denmark Chaired on December 1 and 2, at least as many developing countries as developed took part including some negotiators who later claimed with a straight face, never to have seen the document that they spent two days discussing.

The rabblerousers in Copenhagen broadcast their outrage and Denmark’s credibility as a fair arbiter of COP15 was irreparably damaged. As a result, the Danes repeated efforts to convene a representative Friends of the Chair Group to grapple with the tough issues and search for compromise were rebuffed, and any chance to progress on those issues was consequently blocked.

One day after another was swallowed up by these blocky maneuvers, so that by late on the night of Wednesday, December 16, with leaders descending upon Copenhagen, some of them already there and many more coming the next day, the conference truly did appear to be doomed. But the next two days proved to be truly extraordinary and things significantly turned around.

Secretary Clinton arrived early in the morning of Thursday the 17th, quickly announcing that the United States was prepared to support an effort to raise $100 billion a year for developing countries by 2020, including both public and private funds.

In the context of a strong new agreement, this announcement had a galvanizing effect, especially among vulnerable countries in Africa, the Island States, Asia and, Latin America whose stakes in getting the deal rose sharply.

At 11.30, at night, on Thursday, quite literally the eleventh hour, after a formal dinner of leaders’ hosted by the queen, the Danes finally did manage to get to pull together their Friends of the Chair Group, this time at the leader level.

Prime Minister Rasmussen Chaired, and leaders from the UK, France, Germany, Spain, Mexico, Australia, South Africa, Brazil, Ethiopia, The Maldives, Grenada, Bangladesh, and many others attended.

Ban Ki-moon joined Prime Minister Rasmussen at the head of the table. Secretary Clinton represented the United States until President Obama arrived the next morning. This was a quite remarkable session and a remarkable tableau with leaders negotiating in a rather free-formed unstructured dialog, not at all the kind of thing you usually expect leaders to show up at where results are much more precooked.

A successful outcome was achieved only because leaders refused to accept failure, with notable leadership displayed by Europeans, Merkel, Sarkozy, and Brown as well by Prime Ministers Mellish (ph), Thomas from Grenada, Rod, President Nasheed of the Maldives.

President Obama arrived on the morning of Friday 18, and he was extremely effective; pressing, in particular, on the issue of transparency and verification. The day commentated in a fairly dramatic meeting among President Obama, assisted by the Secretary of the State and Chinese Premier Wen Jiabao, Indian Prime Minister Singh, Brazilian President Lula, and South African President Zuma.

The meeting resulted in agreement on two critical issues. First, that all of these countries would list their national mitigation commitments in an attachment to the new accord and second the Developing Country Mitigation actions would be subject to some measure of International review.

After this meeting, the accord was approved in the larger Friends of the Chair session. And then in the wee hours of Saturday, the accord was presented to the full plenary of 192 countries, where it was very broadly supported by representatives of the least developing countries, the African Union, the Island States, and many individual countries. But six, John mentioned a few of them, stridently objected.

So owing to the consensus rules of the COP, the accord not formally adopted as a CAP decision, but was instead taken note of. Now what about the accord itself? It certainly doesn’t do everything. It is, I would say, more sketch than painting, but it shows the way forward in a number of important ways and did this at a moment when failure seemed imminent.

First, it quantifies the ultimate objective of the framework convention to avoid dangerous climate change by saying that the increase in global average temperature should be held at two degree centigrade.

Second it provides for both developed and major developing countries to list the specific actions or targets they will take to cut or limit their emissions.

Third it makes very important progress on transparency by saying that the implementation of developing country actions will be subject to international review, something that already occurs for developed countries.

Fourth, the accord includes landmark financing provisions, for a prompt start financing approaching $30 billion over the three-year period from 2010 to 2012, for a goal that I already alluded to of mobilizing $100 billion a year by 2020, in the context of a meaningful implementation of the agreement, for the establishment of a new global fund, and for the creation of a high-level panel to study different potential sources of revenue. The accord also calls for the establishment of a new technology mechanism and for incentives for forest protection.

The next logical step and the step that we certainly want to see happen should be to start work on the financing transparency and other elements of the accord that need further elaboration. Progress on these issues should also contribute to the fabric of a larger new regime for climate diplomacy. Now because the accord was not adopted by the COP, two preliminary steps needed to be taken.

First, the major economies needed to submit their targets or actions to be included in one of the relevant appendices by January 31; that was as provided in the accord.

Second, countries both large and small need to figuratively sign on to the accord, they don’t actually sign anything, but they need to be sign on in a figurative sense, or in the lingo of the UN to associate themselves with the accord.

The good news is that the major economies did submit their targets or actions on time, not always with crystal clarity, but clear enough for inclusion by the UN in the appendices that it published last week. And over 90 countries have thus far indicated that they do wish to associate themselves with the accord and thus be eligible to take advantage of its benefits.

At the same time, submissions and statements by the so called basic group of countries, China, India, Brazil, and South Africa have been a bit ambiguous. I do believe that they will sign on to the accord, because the consequences of not doing so are so serious; in a word, leaving the accord, still born, contrary to the clearer sense that their leaders gave to the accord in Copenhagen.

So, I do think they will sign up. But statements we have seen from China and the other basic countries do evince a desire to limit the impact of the accord, assuring that it is not treated as an operational document and the negotiations going forward are based solely on the formal negotiating texts as they were left in Copenhagen rather than on the accord except for Hatsworth’s specific provisions of the accord are viewed favorably.

It should some as no surprise to you that we have a quite a different view of what ought to happen going forward. The accord by its terms is an operational document, with landmark provisions and we think it ought to be operationalized. Nor do we think that its provisions can be cherry-picked, since like any meaningful agreement, it represents a fair balance. Not just financing but transparency, not just mitigation by all major economies, but technology, systems, and dissemination for developing countries. 

Moreover, we think that the accord should materially influence further negotiations. This was not after all a casual agreement it was the product of a hands on engagement by a set of representative world leaders that makes no sense to suggest that it should play second fiddle to a negotiator level text that generated wide disagreement in Copenhagen.

Now, let me step back for a few minutes from the events I’ve just discussed, so that we can understand a bit about what was going on last year, what led to the year long stalemate, and the dissonance in Copenhagen, and I think what underlies the mixed signals we are seeing this year.

At bottom, the core issue is a struggle between those who want to continue the fundamentally the Kyoto paradigm of an absolute separation between developed and developing countries with only developed countries shouldering commitments to reduce emissions and those who believe we can only address climate change with all major economies accepting responsibilities. This is the tension that underlies all the angry criticism of the process run by the Danes.

Developing countries, not all but many were angered by languages the Danes proposed including before and during the Copenhagen conference, because, the Danes recognized this need for all major economies, developed and developing, to cut or limit their emissions and to do so in a transparent manner.

Similarly, the thing that I think unsettles some countries now about the Copenhagen accord is that it represents a breach in the firewall between developed and major developing countries.

It says, in effect, that solving a problem requires commitments by countries responsible for 80% or more of global emissions, not just countries responsible for 45%. Those who insist on a continuation of the Kyoto model with US participation often rely on the framework convention principle of common but differentiated responsibilities and respective capabilities. It’s a mouthful, that’s the phrase, which has been taken over the years by developing countries, to mean that only developed countries can be required to limit their emissions, be subject to transparency measures, and the like. But the truth is that that this phrase has been over read for years.

On its face it stand for the entirely appropriate principle that all countries have common responsibilities to combat climate change and that more should be asked of countries with greater capabilities.

We entirely agree with that concept, but it does not legislate an unbridgeable divide between developed and developing countries; it does not prevent differentiation among developing countries; it does say that China should be treated like Chad, even though its capabilities are closer to or in some cases greater than countries in the OECD; and it does not say that capacities can only be judged by the fixed categories of 1992, rather than being seen to evolve over time.

Most important, it cannot trump the core objective that must guide us - the objective that is indeed enshrined in the framework convention itself that we must act to avoid dangerous climate change.

If we keep our eye on this core objective, the imperative of bringing all major emitters into a regime of climate commitments is clear. There is simply no other way to head off to coming crisis. As I have said before, just do the math.

Developing countries account for about 52% of emissions, now, and are projected to account for some 66% by 2030. They will produce some 97% in the growth of emissions between now and 2030 with some 50% of that growth coming from China alone.

The same understanding of the core objective makes it incumbent upon the United States to take strong domestic action. In the past year, the President took aggressive action on energy and climate from dedicating some $80 billion of our economic stimulus to promoting clean energy, to establish [00:16:03] historic new fuel, economy standards, and leading international efforts toward phasing out fossil fuel subsidies, which is quite an important policy objective. 

Now, Congress needs to pass strong energy and climate legislations this year. This is something we must do for our own good. To contain the gathering storm that threatens to ravage our natural world, damage the health and safety of our children, and undermine our national security, but also to secure a job creating robust economic future.

My favorite comment to this effect in recent weeks comes from the Senator Lindsey Graham who said the following, “Six months ago, my biggest worry was that an emissions deal would make American business less competitive compared to China. Now, my concern is that every day that we delayed trying to find a price for carbon, is a day that China uses to dominate the green economy.”

It was quite powerful front page story in the New York Times just about a week ago on the dynamism that China is putting into exactly that pursuit.

So where does this leave us? It is not clear how climate diplomacy is going to play out this year. We are committed to making progress, to flushing out the Copenhagen accord, and to pursue the effort to construct a broader global regime. We will seek to work with our partners, both developed and developing to this end as has been true, since we’ve put in our formal submission to the Secretariat last April. We support a legally binding regime, provided, of course, that, that regime is symmetrical, imposing legally binding obligations on all major players in a balanced way. 

But let me also say that we cannot allow ourselves to get tied up in the kind of ideological knots that played at the folks back home, wherever home may be; that consumed time and that produced no solutions. Finding solutions must be our watchword. Process and form must always be understood as a means to an end, not something to deify (ph) as an end to itself. It is time now to get down to work, to be guided as I have said many times before both by the dictates of science and the wisdom of pragmatism and to make real progress. Thanks very much. I am happy to take some calls please.

John Podesta: Thank you very much and I think I am going to try to cut his time for a few questions we’ll try to take questions from the press first. But I am going to take the opportunity to ask you one myself, in that process, which is, I made reference somewhat jokingly, somewhat seriously to the six countries that put their block progress at the UNFCC. Where do you think -- we had a real change I think in the diplomacy over the course of the last year? A lot of discussion in the major economies formed key bilateral negotiations at the President, foreign leader level, where do we look for signs of progress or over the course of this year leading up to Mexico? 

Todd Stern: It’s a very good question. The process issues are the subject right now of quite intense discussions among any number of players. I think we are going to see, probably a number of different places where discussion occurs. I certainly think that we will continue the Major Economies Forum, which, I think, was actually enormously useful last year as a forum for a group of countries that indeed do represent 80% of global emissions to be able to discuss things offline, not negotiate, but to have a discussion on important issues, I think that, that would go on.

I think the Mexicans are taking their role as the President of CAP 16 which will be held in Mexico, next December, very seriously. I had a number of discussions with them already and they are moving around right now. I think that they will be looking to pull countries together in the probably and relatively near term. I would expect some time this spring to have discussions intended to advance the vow regarding CAP 16.

I think that the UN as distinguished from the UNFCC is also exploring. I think they haven’t made decisions yet, but I think they are exploring what role they might have with respect to certain core elements of the Copenhagen accord.

So the short answer is there is not absolute clarity on this, but I think there’s going to be a number of different places where discussions will occur. Of course, there will also be the formal negotiating process itself, but we came in last year at reason that we picked up the country group, I mean that President Bush had created and try to give it a new and integrated mission was because we had a lot of conviction that you couldn’t simply rely on the formal negotiating process to have the kind of dialogue and discussion that you need to made progress. I think if anything that insight was made quite vivid in Copenhagen, so I think offline groups will continue to be important.

John Podesta: I am inclined to ask a followup about the US strategic and economic dialogue with China, but I’m going to turn it over to my friends in the press first, please.

Lisa Friedman: Hi, thanks for doing this. I’m Lisa Friedman from ClimateWire. I know a lot has been made about the five countries that locked acknowledgement or locked the adoption of the accord. I think you could speak what influence the US’ inability, last year, to pass the Climate Bill had on the negations and going forward if the US can’t, if the Senate can’t pass a Climate Bill this year, how do see the negotiations playing out? I mean we’ve asked countries to take targets, we don’t like what they came up with, but they don’t like ours, we’ve asked them to take transparency measures, what more did you diplomatically can ask of other countries right now, until the Senate passes the Bill?

Todd Stern: Thanks Lisa. Interestingly, I don’t think that our situation was a kind of core problem if you will, last year. Certainly, I mean I’ve said repeatedly that -- and I said just a few minutes ago that I think it’s critical of the United States to move forward on the domestic front and the more and the sooner that can done the better it is for us. It certainly provides and is a foundation of both leverage and creditability, so I wouldn’t underestimate that at all.

I think that countries recognized the kind of short timeframe that we had, the negotiation was put on two year track in Bali, but it was only ten months from the time a President was inaugurated and recognized the complexity of the domestic undertaking and by and large were accepting of the kind of commitment that we put in last year.

So I don’t think that was kind of the key issue. This year, look, I’m not going to speculate about happens if, if, if -- I think that it is as I said hugely important. It will be hugely important if there was no international negotiation. I mean United States is the largest historical emitter; it is the second largest emitter now. It has an obvious leadership role in the world on this issue and so many other issues and it matters a whole lot that the US put a strong domestic program in place. So I am a firm believer in that, and I am not going to speculate about what happens if not.

Margaret Ryan: Thank you Margaret Ryan with CleanSkies News. President Obama and other world leaders took as you noted an unprecedented role in these negations; do you see the world leaders including the President continuing that role going forward or does it really fall back on the shoulders that diplomats now.

Todd Stern: If by continuing that role you mean continued active engagement on the issue, yes; if you mean all reassembling every year in December, I doubt it; I certainly hope not.

Male Speaker: Thank you again, [indistinct], Dow Jones. Just to expand upon something that John initiated in terms of the appropriate forum. You wrote a letter to the presidential candidates suggesting at an E8, is there for an article? It’s an open letter, I believe -- whatever --

Todd Stern: I was -- it may have been pub -- I can’t remember how it was published, I didn’t publish it as a letter, but it was an article, yeah, anyway go ahead.

Male Speaker: The content of the letter to whomever it was, suggested an E8; I’m wondering do you think that there should be a new forum and is that the line of thinking that you think that the UN has distinguished from the UNFCC? Is that the pathway you are looking?

Todd Stern: Well, look I think to a very significant degree The Major Economies Forum is the E8. Now it is -- the article that you referenced envisioned a group that had a broader remit than climate change just obviously quite broad in an of itself but was meant to be a leader level, a small leader level group that would focus on the, kind of, existential environmental issues that face the world more broadly. So not just climate change, but oceans and other critical issues; but I think we’ve made a significant start on that if you sort of look at countries that we outlined in the E8, they are significantly the same countries that are in the MEF probably a few more in the MEF, but the E8 only counted Europe as one.

So I think it’s very important, I think whether it makes sense over time to extend that to other issues is an interesting question, but I think we have made a good start on that.

Male Speaker: There was perhaps over optimism, initially for Copenhagen, I’m thinking little on --

John Podesta: Glass half full..

Male Speaker: I'm taking that line. Are you confident that a binding agreement, a legally binding agreement will be signed this year?

Todd Stern: Look, I think what is important is that strong progress be made. As I said, we are fully supported of a legally binding agreement; but if it’s a legally binding agreement it would need to be symmetrical in the ways that I’ve talked about. I also agree with you that expectations were quite elevated beyond what was going on, on the ground. That was evident for actually quite a few months before Copenhagen.

I think that we just need to really focus on taking significant pragmatic steps forward as ambitious as they can possibly be. If we can get a legally binding agreement done in the way that I’ve outlined, I think that would be great. If that’s not in the cards by the end of this year we should be pushing this forward strongly. There’s really important stuff in the Copenhagen accord. I mean you’ve got like major provisions for financing, major stuff for technology, major stuff for transparency, we’ve got to carry that forward and that ought to be our focus.

So I hope that we can get a full legal treaty in December, but I am not going to make any predictions one way or another and I’m also not going to fall in to the trap of saying it is not that, we’ve got a failure because I do not believe that.

John Broder: Hi Todd, John Broder with the New York Times. In recent months, some questions have been raised about the creditability of IPCC, the science underlying its reports, including some by its own admission that were poorly sourced, if at all. To what extent do you think that’s going to be an impediment to passage of domestic legislation and the negotiations going forward?

Todd Stern: I think that the point that bears remembering at any time that we are considering the science is that the fundamental science of this issue is quite clear and the mounting evidence on the ground of what’s actually happening in the growing sophistication of the modeling goes way beyond any particular set of data or any particular problems that occurred with respect to East Anglia or IPCC mistakes.

I think that a scientific inquiry should be fully open, I think that some of the emails are, you know, it’s -- there should be open dialogue, anybody’s view should be heard and considered, and it’s obviously not useful when the stakes are made, but the overwhelming body of evidence is not at all disturbed by those events.

As far as whether it’s going to have any impact on, kind of, the politics of the issue, it shouldn’t. I mean I can’t tell you what’s going to happen in that regard or not, but I think, again, that proponents moving forward on this issue need to make the case that -- again, there is overwhelming evidence pointing in this direction. I mean this is often used analogy, but people would not dream of failing to ensure their homes or their cars or their possessions for risks to those things that are probably 50 times lower than the risk that we all face from climate change and its effects.

So, it is nothing, sort of, crazy for us to be putting our heads in the sand and failing to take the kind of the action that’s required, and it’s doubly crazy for us to do this when we as Senator Graham was essentially saying that, “Risk losing out on what --” one article I read recently, and I think it may be in The Times referred to as the next great game of energy in the 21St Century. I mean we have got to move forward.

John Podesta: Last question.

Chris Hawley: Chris Hawley, with the Energy Daily. Mr. Stern you’ve spent a lot of time with the Chinese last year, your peers. I wonder when you read the submissions that China and other basic countries quoted in the -- inscribed in the Annexes, why do you think China thinks it’s in its best interest, for example, to lessen the influence of the accord in favor of the LCA and Kyoto Protocol trails? Why is it in their interest to do that?

Todd Stern: I’m not inside of the minds of any of the folks in China, so I’m not going to quite speculate about that. But look, let me, again, just repeat what I think is the underlying tension that exists here.

There is a basic way things have been done for the last 17 years up until this year, which involves a bright line separation between developed and developing countries; all developing countries, no exceptions whether you are big or whatever and developed countries And that separation implied that only developed countries would have any obligations and you need to take targets or commit to actions to limit or reduce their emissions; that’s the way things have been done.

You cannot solve the problem on that basis going forward. If you are going forward you can’t do it substantively; obviously, it wouldn’t work, politically eight, but it’s the substance that’s really the core here.

Everything that we worked on this year was intended to move toward a new world where major economies of any strike, again those who are responsible for the 80% or 85% of emissions going forward play a role, because you just can’t solve the problem without them.

I think the Copenhagen Accord recognizes that in its provisions and its provisions reflect that, and I think that there are many developing countries who are made very uncomfortable by that, and would prefer essentially a Kyoto redux for a newer regime. I’m not saying that, that’s -- I’m not ascribing that to any particular country, I’m just saying I think that there is that concern and there is that tension, but I think a lot of progress was made.

I applaud the basic countries and others for going ahead on a green to the Accord and for making their submissions. So, I think this was difficult, I do not blame them for having some anxiety about that, but that’s where we have to move forward; that is the future, we can’t go backward. 

John Podesta: I want to thank Todd very much for his presentation.