Select Committee on Environmental Audit Fourth Report

A post-2012 framework

71. Academic discussion of future emission-reduction policies has spawned a wealth of different proposals. A recent Pew Centre Report, for example, has listed some 44 different approaches.[61] The discussion has now taken on a new political urgency in the light of the ratification of the Kyoto Protocol and in particular the latest scientific evidence on the impacts of Climate Change. The Protocol requires Parties to begin negotiations on a second commitment period (to follow on after 2012) by the end of 2005, but does not specify in any respect the form any further agreement should take. COP 10 in Buenos Aires initiated discussion on this topic, and—while radically different ideas were put forward—the meeting at least resulted in an agreement to take forward discussions during 2005.

72. We received a wide variety of suggestions over the nature of a post-2012 agreement. Many organisations argued for a Kyoto-plus approach, based closely on the present approach but with more challenging absolute emission targets set for developed countries and perhaps for at least some key rapidly developing countries. Others argued along more radical lines either for a coherent framework which would embrace all nations or for a more flexible multi-faceted approach which put greater reliance on technical and behavioural development. Behind many of these arguments lies the issue of how to bring the US on board, and this generally accounted for significant differences in approach.

The need for complementary action

73. In our view, the threat posed by Climate Change is so huge and potentially catastrophic that action on all fronts is required. Indeed, at the November 2004 Berlin conference on climate change, organised by the UK Government as part of its preparations for chairing the G8 in 2005, the Director of the Tyndall Institute, John Schellnhuber, argued that it is possible for developed countries to make emission reductions of 60% or so by 2050—but only by using to the full all possible policy instruments at our disposal.[62] In his evidence to us, Professor Rayner spoke compellingly about the need for a multi-faceted approach involving far greater levels of investment in technology and the need to generate carbon awareness at all levels of society.[63] Since then, the International Climate Change Task Force has published its interim report and recommended a broad swathe of proposals on similar lines.[64]

74. The challenge of climate change is so great that action is required on all fronts if we are to achieve the scale of emission reductions required. We therefore endorse the broad swathe of proposals suggested by the International Climate Change Task Force. Indeed, we have ourselves emphasised key aspects of those proposals in previous reports—in particular, the need for large increases in government support for renewables and for energy efficiency, and the need to embed environmental and sustainable development objectives in key organisations both nationally and internationally.

75. We do not believe, however, that complementary policies alone will be sufficient. And we are particularly concerned at the continuing reliance which the US and to a lesser extent the UK appear to place on technological development and the removal of market barriers as the main way of combating climate change—as reflected in the Prime Minister's recent speech at Davos.

The second commitment period

76. As we have already seen, the success of the EU ETS entirely depends on the existence of the Kyoto burden sharing targets which member states face: it is only the existence of these absolute emissions targets which will drive forward the scheme in Phase 2. This highlights the central importance of such targets in combating climate change, and of the need to incorporate them in a successor treaty when Kyoto expires in 2012.

77. There has been much discussion of the nature of such an agreement, and attention has increasingly focussed on 'multi-stage' approaches. Indeed, this was one of the central recommendations of the recent report from the International Climate Change Taskforce. Such approaches rely on acknowledging the "differentiated responsibilities" facing less-developed and developing countries by categorising them in different groups which face progressively more demanding objectives and targets. Absolute emissions reduction targets would only apply to developed countries: relative targets might apply to the next group of countries, while other groups might be offered substantial development assistance as targets would be inappropriate.

78. It seems to us that much of the discussion on the future of the Kyoto Protocol fails to address a central question—namely, the basis on which targets should be set for developed and rapidly developing economies. The failure to confront this issue more directly is likely to give rise to a similar process of political bartering which was involved in the original Kyoto negotiations. In such circumstances, we have no confidence that far more demanding targets will in fact be set, and if such targets are to be agreed it seems to us inescapable that they must be based on an agreed set of criteria.

International competitiveness and per capita emissions

79. Moreover, it is quite clear that governments in developed countries are failing to take more radical action to address the climate change challenge due to competitiveness fears, and in particular the threat which they perceive is posed by China and India. The UK Government has regularly highlighted such concerns as a reason for keeping energy prices low and failing to increase fuel duties. In passing the Byrd-Hagel resolution, the United States has gone further by preventing ratification of any international climate change treaty which does not include targets for developing countries.[65]

80. The competitiveness issue is one which we are considering in more detail in the context of our current work on the Treasury's environmental tax policies. But a number of relevant points need to be made here. There may be costs associated with taking action to tackle Climate Change, but failure to take action is likely to result in far greater long-term costs to individuals, industry and the economy as a whole. Moreover, as the WWF and the Environmental Industries Commission have argued, some sectors of industry and trade groups such as the Confederation of British Industry (CBI) have regularly exaggerated the financial costs of environmental regulations.[66] Indeed, higher standards of regulation can promote the development of environmental technologies and generate their own additional economic rewards—and in this respect the UK is already losing out to other countries. While we would not deny that countries such as China and India will indeed provide strong competition and will inevitably gain a far greater market share of world trade, we would see this as an inevitable process of economic redistribution which we need to embrace rather than fight against. We therefore disagree profoundly with the competitive and protectionist attitude displayed by the CBI in its evidence to us.[67]

81. Moreover, although developing countries will overtake the developed world in terms of total emissions by 2020 or soon after, the differences in terms of per capita emissions will remain vast. The table opposite demonstrates that emissions in China will rise to only 4.6 tonnes of CO2 per person by 2025, as against 23.4 tonnes in the US and 11 tonnes in the UK.


Per capita emissions

Region/Country 2001 2025 2001 2025 2001 2025
Industrialized Countries
North America 6,613 9,659417 51415.9 18.8
United States 5,692 8,142286 34819.9 23.4
Canada 569830 3136 18.423.1
Mexico 352687 100130 3.55.3
Western Europe 3,465 4,022391 3978.9 10.1
United Kingdom 563692 5963 9.511.0
France 396412 6064 6.66.4
Germany 819969 8282 10.011.8
Italy. 445540 5753 7.810.2
Netherlands 248286 1617 15.516.8
Other Western Europe 9941,123 117117 8.59.6
Industrialized Asia 1,556 1,962150 15110.4 13.0
Japan 1,1581,356 127123 9.111.0
Australia/New Zealand 398605 2328 17.321.6
Total Industrialized 11,634 15,643 959 1,061 12.1 14.7
Former Soviet Union 2,399 3,393289 2728.3 12.5
Russia 1,6142,186 145124 11.117.6
Other FSU 7851,207 144148 5.58.2
Eastern Europe 748920 121115 6.28.0
Total EE/FSU 3,148 4,313 410 387 7.7 11.1
Developing Countries
Developing Asia. 6,012 11,8013,288 4,168 1.82.8
China 3,0506,666 1,285 1,4452.4 4.6
India. 9171,834 1,033 1,3690.9 1.3
South Korea. 443720 4750 9.414.4
Other Asia 1,602 2,581923 1,304 1.72.0
Middle East 1,299 2,110247 3755.3 5.6
Turkey 184340 6989 2.73.8
Other Middle East 1,115 1,770178 2866.3 6.2
Africa. . 8431,413 8141,292 1.01.1
Central and South America 9641,845 428557 2.33.3
Brazil 347720 174216 2.03.3
Other Central/South America 6171,125 254341 2.43.3
Total Developing 9,118 17,168 4,777 6,392 1.9 2.7
Total World 23,899 37,124 6,145 7,841 3.9 4.7

Source: US DoE and EAC analysis

82. It is particularly interesting to consider these figures in relation to the scale of the emissions reductions required. We noted above that emissions will need to peak in the next two decades and then fall to 11,000 million tonnes of CO2 by 2100. Yet on the basis of the likely population in 2025 that figure would imply a world per capita emission level of 1.4 tonnes per person. Of all the countries and regions in the table only Africa and India are likely to remain below that level by 2025: all other countries would be above it and would need to reduce their emissions if the target is to be met.

Contraction and Convergence

83. Such calculations provide an interesting and important perspective on the context in which negotiations on a post-2012 framework should take place. The Global Commons Institute (GCI) has been promoting the concept of equal per capita emission allocations since its foundation in 1990, and it has coined the term "Contraction and Convergence" (C&C) to describe its approach. C&C involves two distinct stages—firstly defining the level to which global emissions need to be reduced to avoid dangerous climate change, and secondly allocating this level of emissions to countries on an equal per capita basis.

84. The C&C model put forward by the GCI does not in itself define the mechanisms by which emission reductions are to be achieved—whether through emissions trading, international taxes, or regulatory approaches. Nor does it stipulate the actual level at which emissions should be stabilised, or indeed the timescales over which the targets should be set. It does, however, graphically illustrate the consequences of varying these parameters, and provides a useful framework within which to set targets and frame policy responses. The real strength of the model, however, arises from the manner in which the concept of equity underpins it.

85. Given the scale of the reductions which are needed, there is now a growing awareness of the need for a 'full-term' framework such as the one C&C provides. Indeed, it is difficult to argue with the fundamental principle of equal per capita allocations, and various witnesses—including the Under-Secretary of State of the Foreign Office and the Director-General of the CBI—acknowledged the viability of the model.[68] This is also reflected in the joint memorandum submitted by DEFRA and the FCO, [69] and in the recent report from the International Climate Change Taskforce which explicitly accepted that equal per capita emissions allowances should form the basis for a long-term solution.[70] While, in their memorandum to us, Barclays Capital set out a vision of an all-embracing international ETS involving 60 year targets determined by a C&C approach.[71]

86. Any framework which involves radical emission reductions would in practice resemble the Contraction and Convergence approach advocated by the Global Commons Institute. Indeed, in terms of domestic policy aims, the UK Government has already implicitly accepted this approach in adopting the 60% carbon reduction target for 2050; and it is therefore inconsistent not to adopt such an approach internationally. We do not see any credible alternative and none was suggested in evidence to our inquiry. We therefore recommend that the UK Government should formally adopt and promote Contraction and Convergence as the basis for future international agreements to reduce emissions.

61   Pew Centre for Global Climate Change, Efforts beyond 2012: a survey of approaches, December 2004 Back

62   The conference took place on 3 November 2004. The EAC was formally represented by Mr Colin Challen MP Back

63   Ev 142 ff Back

64   International Climate Change Taskforce, Meeting the Climate Challenge, January 2004 Back

65   The Byrd-Hagel resolution was passed by the US Senate in July 1997 with a majority of 95-0.It expressed the view of the Senate that the US should not become a signatory to any international agreement on limiting greenhouse gases unless developing countries also took on emissions targets Back

66   WWF, Cry Wolf, April 2004.See also oral evidence from the Environmental Industries Commission taken before the EAC on 26 January 2005 Back

67   Ev 175ff Back

68   Q554, QQ481-482 Back

69   Ev 190 Back

70   International Climate Change Taskforce, Meeting the Climate Challenge, January 2005 Back

71   Ev 148ff Back

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