Tag Archives: Climate

The Political Struggle in Eliminating Coal

By Stephen Zhao

Advancements in renewable energy and natural gas have appeared to make coal a thing of the past, with the costs of solar, wind, and gas generated electricity approaching or even undercutting that of coal power. Yet, while market conditions no longer favour coal, its political importance prevents an easy transition to these other energy sources. As such, successful management of the coal energy transition will need to account for political roadblocks that will arise from a push towards reducing coal use.

Recently, countries such as China, Germany and the United States have backtracked in their efforts to reduce coal consumption. With the cancellation of China’s mining moratoriums, repeals of Obama-era environmental regulations under the Trump administration in the US, and the revival in coal capacity construction in Germany post-2008, these are just some examples of nations  reversing previous political efforts to limit coal, actions which are typically preceded by some form of political backlash or resistance.

Smoke rising from nearby coal-fired power plants in the Shanxi Province, China (Source: NY Times | Kevin Frayer | Getty Images)

A common factor amongst these aforementioned nations is also the trading regime governing their coal market. One key difference between coal and other fossil fuels is that it has much more domestic-oriented market dynamics. Over 90% of coal production and 85% of coal consumption lies within ten countries, of which about 70% of both production and consumption lie within China, India, and the United States alone. Whilst efforts to reducing consumption of oil and gas in one country often hurt producers in another, this is not the case with coal.

Countries with the biggest coal markets (i.e. China, India, Germany and the United States) tend to be both producers and consumers, which severely complicates the politics of reducing coal use within these markets. The presence of both production and consumption activities can generate a strong political coalition in the coal industry’s favour. Since most of the coal produced would be consumed domestically, the industry would be severely resistant to any attempts to reduce the domestic demand for coal. As geographically concentrated sources of employment and economic activity, local communities and political actors tend to work together  in defending the coal industry within the policy making process.

US President Donald Trump signalling his support for coal mining at a rally during the 2016 presidential campaign (Source: CNBC | Dominick Reuter | AFP | Getty Images)

Moreover, supporting for the coal industry’s commercial activities is substantial. In 2016, the United States Bureau of Labour counted approximately 57,000 individuals employed in coal production. However, if these calculations also include those working in supporting services,  the total increases 30% to around 74,000 employees. As an integrated supply chain, the coal industry is also tied to other economic interests such as railways, steel and heavy metal production, and the financial industry. The collapse of coal companies could cause severe disruptions in supply, leading to considerable loss of business or resulting in defaults on loans. All these factors mean that a rapid decline in coal consumption would create substantial dissatisfaction and backlash from a large number of political stakeholders.#

The decline of coal’s competitiveness in the market paradoxically enhances its political voice. In China, the prospect of mass unemployment for the country’s 5.2 million coal miners has made the Communist Party think twice about its broad stroke policies to reduce coal capacity. Disaffected miners in Pennsylvania and Ohio helped propel President Trump’s electoral victory in 2016. After a boom in natural gas, struggling coal-based power companies in Germany have managed to secure lenient provisions in the European Union Emissions Trading Scheme (EU ETS), allowing them to remain competitive. If efforts to reduce coal use are to get anywhere, something must be done to compensate the losers of the energy transition.

Local villagers carrying coal from the local open-cast mine in Jharia, India (Source: Zimbio | Daniel Berehulak |Getty Images AsiaPac)

Moving forward, solutions may need to incorporate compromises with community and commercial coal interests in order to succeed. Germany has recently taken to paying utility companies to shut down their coal plants. Whilst an expensive option, this initiative helps ease the strain on these firms’ bottom line and allows for a smoother wind down of the industry. Such policies, incorporated with a real focus to invest in communities losing out due to  coal industry decline, can help alleviate the political pressure that builds to protect coal.

Unfortunately there is no single, simple path for this energy transition to take, and despite optimism surrounding the market competitiveness of renewables and natural gas, reducing and eliminating coal will be far more complicated than just a matter of simple economics.

This blog post is based on a larger work about trading regimes and coal reduction policy. To read more about the trading regimes and the political economy of coal, click here.

About the Author


Stephan Zhao is a  Researcher at the University of Oxford, and Munk School of Global Affairs, University of Toronto.


Empirical Calibration of Climate Policy using Corporate Solvency

By Ben Caldecott

The fundamental goal of climate policy is to incentivise emissions reductions and the transition to lower carbon processes and technologies. When firms face new costs related to reducing carbon emissions, they may suffer some loss of financial condition as they restructure their businesses.

However, if the firm becomes bankrupt as a result of such policies, not only will this restructuring not occur – possibly causing high-emitting industries to expand in less constrained jurisdictions (carbon leakage) – but social value can also be permanently destroyed in the form of: the dissolution of organisational capital; deadweight losses paid to liquidators; and the incurrence of costs on unemployed workers. Corporate failures, especially if they are unnecessary, add to the social cost of tackling climate change. Reductions in solvency that are less than bankruptcy can also impact the ability of firms to employ people and finance investment.

At present, policymakers do not have a means to accurately and impartially gauge the impact of climate policies on corporate solvency. If they did, policymakers could optimise climate policy so that it delivered the least loss of corporate solvency for any given level of emissions reduction.

In a new paper published in Climate Policy, we propose that existing measures of corporate solvency be used for this purpose. Such measures could act as an objective tool for policymakers. In particular, solvency metrics could be used to empirically calibrate the optimal stringency of climate policies. They could also be used as a way to determine the generosity of any industrial compensation to address losses to corporate solvency.

Financial statistics are currently used in this way to calibrate many other areas of government policy. For instance, policymakers monitor and regulate certain aspects of corporate solvency in the financial industry (such as capital reserve requirements) in order to reduce the risk of bankruptcy while maintaining profitability. Similarly, central banks also consult economic statistics when determining monetary policy.

An ideal solvency trajectory for firms affected by climate change policy would cause corporate solvency to initially decline – approaching but not exceeding ‘distressed’ levels – and then gradually improve to a new ‘steady state’ once the low-carbon transition had been achieved, at which point the carbon-limiting regulation would continue. If any compensation was provided to industry to help offset reductions in solvency, these would also then be gradually phased-out. This sequence is depicted by the U-shaped solvency trajectory below.

An additional advantage of using financial statistics to calibrate environmental policies generally is the fact that this process would be objective. At present, there is considerable potential for industrial outcry and political lobbying to influence policy resulting in negative social consequences. By contrast, a climate change policy partly based on corporate solvency could be adjusted relatively mechanically at each financial reporting period, and would be automatically sensitive to variations in the business cycle.

The question of where the optimal solvency threshold should lie is crucial for the practical application of climate policy calibration. For instance, depending on the regulator’s particular goals the relevant benchmark could be either; (i) an overall average solvency level, (ii) a minimum solvency level for the most financially distressed firm, (iii) or a maximum solvency loss for the most affected firm.

Moreover, the policy goal may not just be solvency for affected firms but also their competitiveness, in which case, depending on the regulations faced by international competitors, the optimal lower bound for solvency may need to be raised in from financial distress to some other higher level. The availability and timeliness of financial data will also influence the optimal threshold. Since the financial position of firms may deteriorate between financial reports, it may be prudent to adjust thresholds upwards to add a margin of safety against rapid solvency losses.

Of course, it would be equally essential to ensure that firms could not ‘game’ their financial statements in order to present an artificially dire picture to sympathetic regulators. It may also be the case that within a given emissions target, it may not be possible to maintain the solvency of all affected firms. In such cases the emissions target may need to take precedence over solvency concerns, but nevertheless the use of policy calibration via solvency could still be an efficient way to minimise the bankruptcy losses that may be necessary in order to achieve a desired emissions goal. Future research could refine this optimal policy threshold.

Our proposals highlight the potential of existing corporate solvency metrics to help policymakers objectively minimise negative social impacts for a given emission reduction target. Failure to take account of (or simply wish away) the social impacts associated with bankruptcy or reductions in corporate solvency resulting from climate policy would be serious mistake. It will increase opposition that could successfully undermine climate action. It would also allow fossil fuel interests to continue misleading policymakers and broader society about how climate action is negatively impacting their businesses. Transparency and objectivity enabled by financial data is already integrated into other areas of policymaking and regulation. It should also be embraced by policymakers concerned with climate change.

About the Author


Ben Caldecott is the founding Director of the Oxford Sustainable Finance Programme, at the University of Oxford Smith School of Enterprise and the Environment.


Realising Fossil Fuel Subsidy Reform through Trade Agreements

By Cleo Verkuiji, Harro van Asselt and Peter Wooders.

  • When the WTO’s eleventh Ministerial Conference meets in December 2017, Members can make a significant contribution to the 2030 Agenda by calling for new rules to curb fossil fuel subsidies.
  • Fossil fuel subsidy reform could significantly reduce global greenhouse gas emissions and free billions in public funds that could be reallocated to other development priorities.
  • WTO Members have several options to address fossil fuel subsidies, including: providing technical assistance and capacity building; improving transparency; making reform pledges; adopting a political declaration; and including fossil fuel subsidies in the WTO’s list of prohibited subsidies.

With 2017 rapidly drawing to a close, several international summits this year can still significantly advance sustainable development. Hopeful observers will naturally look closely at any progress made at the 23rd UN Climate Conference in Bonn in November, as well as the upcoming UN Environment Assembly in Nairobi in December.

Yet another key summit is likely to receive much less attention in the climate change and sustainable development communities: the World Trade Organization’s (WTO) eleventh Ministerial Conference (MC 11). When meeting in Buenos Aires this December, WTO Members can leave a real mark on the goals of the 2030 Agenda for Sustainable Development and the Paris Agreement by calling for new WTO rules to curb government support to fossil fuels.

Fossil Fuel Subsidies, Sustainable Development and Trade

The benefits of fossil fuel subsidy reform are undeniable. It is a vital piece of the climate change puzzle, estimated to cut greenhouse gas emissions by some 11% by 2020 if implemented in 20 countries. But it can also positively impact other SDGs. Removing the billions of dollars put into fossil fuel consumption and production each year can relieve the burden on the public purse, allowing for the re-channeling of funds to other development priorities, such as health, education and public infrastructure. Moreover, removal of fossil fuel subsidies can help level the playing field, given that subsidies are known to affect the rate and timing of development of new fields or mines.

But while international forums such as the G 20, Asia Pacific Economic Cooperation (APEC), the Organisation for Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF) have begun to take up fossil fuel subsidies, their lack of consideration at the WTO thus far has been conspicuous. Though cases related to more than 10 renewable energy support measures have been filed under the WTO dispute settlement mechanism over the past decade, not one fossil fuel subsidy has been challenged.

With momentum building for the international trade community to engage with this critical sustainable development issue, MC 11 offers a clear opportunity to change course.

Why the WTO?

Skeptics may interject: “Why should the WTO get involved when fossil fuel subsidies are already addressed elsewhere?” While other international organizations have put fossil fuels subsidies on their agendas, the persistence of such subsidies worldwide shows that more still needs to be done. The WTO would not be the only organization addressing the issue, and would need to act in concert with others.

In fact, owing to its wide membership, history of promoting subsidy reform in other sectors, and well-established dispute settlement system, the WTO is one of the most suitable international forums for doing so. The Organization was explicitly established to ensure that economic progress is achieved in accordance with sustainable development. Moreover, the 2030 Agenda recognizes trade as an enabler for achieving the SDGs. SDG 12 (Responsible consumption and production) specifically addresses fossil fuel subsidies.

Precedent for such engagement already exists, as the WTO continues to consider the topic of environmentally harmful subsidies in the fisheries sector – with hopes that rules in this area will be agreed upon at MC 11.

What Can be Done?

In a recent policy brief, we show that WTO Members can address this gap in several ways.

One approach would be for WTO Members to extend the list of prohibited subsidies of the Organization’s Agreement on Subsidies and Countervailing Measures (ASCM) to include certain types of fossil fuel subsidies, for instance those with particularly adverse climate change or trade impacts. A “softer” approach that might be more feasible in the short-term would see Members voluntarily pledge to reduce their fossil fuel subsidies, extending existing commitments and processes under the G20 and APEC. Progress could be tracked through regular reporting and review.

However, not all options need to come in the form of new rules or commitments. Members could begin by offering technical guidance and capacity-building support on how to reform fossil fuel subsidies. Given existing shortfalls in the Organization’s subsidy notification system, governments could also agree to take steps to improve the transparency of fossil fuel subsidies. This option underlines a key role for any international organization in addressing fossil fuel subsidies: sharing information on the extent to which these subsidies are used.

Concerns can be raised about the impacts of subsidy reform on energy prices and energy access for the poor. Although it should be noted that in many cases fossil fuel subsidies benefit the richer parts of society, it would be important for rules and guidance to factor in such development concerns, for example by including an exemption for subsidies that are proven to target the poor.

“The time is ripe for progressive countries to take the first small steps to help achieve a “win-win-win” situation for sustainable development, climate change and trade at the eleventh WTO Ministerial Conference in December 2017.”

Agreeing on the most suitable option – or combination of options – to pursue will take time. But at MC 11, a first important step would be for Members to signal their willingness to take up fossil fuel subsidy reform in the WTO’s work. This could be done, for instance, through a political declaration reaffirming the commitments made in the SDGs and the Paris Agreement, or recognizing the general need for new rules in this area.

Importantly, this effort need not be taken up by all WTO Members simultaneously. A coalition of the willing could decide to lead the way. The time is ripe for progressive countries to take the first small steps to help achieve a “win-win-win” situation for sustainable development, climate change and trade at MC 11.

This blog was originally posted on the IISD SDG Knowledge Hub blog.

About the Authors


Cleo Verkuijl is Research Fellow of Climate Change Policy at the Stockholm Environment Institute (SEI).



Harro van Asselt is Senior Research Fellow at the Stockholm Environment Institute (SEI).



Peter Wooders is Group Director of Energy at the International Institute for Sustainable Development (IISD).

What if Negative Emissions Fail at Scale?

By Alice Larkin (University of Manchester, Tyndall Centre for Climate Change Research)

It is recognised in the climate science community that literature and research informing the Intergovernmental Panel on Climate Change (IPCC) and relevant policymakers is heavily weighted towards Integrated Assessment Modelling (IAM) work. This prioritises emission-cutting solutions that can be more easily characterised and quantified over those that are challenging to evaluate precisely, such as how society may respond to a major policy shift.

Yet putting options into the ‘too difficult to quantify’ box, is a huge mistake, as my co-authors and I argue in a recent paper published in Climate Policy. Coupled with our desire to precisely quantify, and communicate, numbers, it is important to recognise that there appears to be an optimistic bias that assumes future technologies will solve present-day social and environmental problems.

Perhaps in most wealthy people’s minds, this would be the ideal – no need to disrupt ‘normalised’ lifestyles that include frequent flying, high levels of material consumption, an ability to have what we want, when we want. It is then easy to see why Negative Emissions Technologies (NETs) fit neatly into the climate mitigation discourse. They could lead to net negative emissions in future, avoiding a need to invest political capital in more unpalatable areas such as lifestyle change, and reducing consumption.

But what if NETs fail at scale – what then? Our article argues that they are being so heavily relied upon to inform policymakers, that we are losing sight of alternatives. Furthermore, delaying meaningful debate on the demand-side of the equation is at odds with what the climate science is telling us. There is a finite carbon budget for avoiding 2°C, so the sooner emissions are cut, new habits and behaviours established, and infrastructures to support low-carbon lifestyles put in place, the lower the risk of devastating climate change impacts.

It is not uncommon for humans to be optimistic about what technology can deliver and by when. Carbon capture and storage – even without biomass– is a good example. And with most modelling work being done by those of us in privileged positions in terms of wealth, it is unsurprising that lifestyle change is low down our priority list.

My problem with this optimistic techno-centric approach is that we (wealthy people in high emitting countries calling the shots on climate change) are not only choosing climate change futures on behalf of ourselves, but we are making choices on behalf of others. Whilst we may well be able to adapt to early climate impacts by making marginal adjustments to our everyday living, by installing more air conditioning, moving away from low-lying coastlines, paying insurance companies to repair our homes after floods etc., that isn’t a luxury that most people in the world will have.

Furthermore, with globalised social media, those who will be most impacted by climate change are able to observe us continue as is, while they struggle to adapt, fund and cope with changes in their climates. Global social media lifts the lid on inequalities we are not prepared to address, as this paper highlights.

If big emitting countries, and the big emitters within those countries, are prepared to put in place stringent polices aiming to significantly reduce absolute fossil fuel consumption, even for a few years while establishing low-carbon infrastructure, there would be a much better chance of achieving the 2°C goal. While many industrialising nations will be trying to transition their own energy systems away from fossil fuels, and may well put more industrialised countries to shame in terms of the pace of change, they will still need space for economic growth, and therefore a near-term rise in emissions, to improve standards of well-being.

A meaningful, deep and an equally large body of work focusing on how to build systemic change around energy demand and material consumption is urgently needed. As long as IAMs dominate climate literature, a more balanced perspective of opportunities on the demand side will be overlooked, and time is running out.

Air travel is an example that brings this clearly into view. As academics, we are not prepared to look at the evidence that air travel is one of the most difficult sectors to decarbonise, with constraints on demand needed here more than anywhere (see also my paper All Adrift: Aviation, shipping and climate change policy, also published in Climate Policy). Yet I doubt the number of flights attributable to climate change research activity is declining. The reality of taking a carbon budget perspective, is that one flight taken by me this year, removes a chunk of the budget available for someone in a developing country to heat or cool their home. We are all part of the system – my behaviour here changes the climate impacts others experience elsewhere.

I have a background in climate science, and climate modelling, and I’m certainly not against modelling contributions, but it is essential that we are not blinded by precise quantification to the extent that we overlook the full possibility space. This is particularly important when basing decisions on models that combine the laws of physics with the ‘understandings’ (and certainly not laws) of economics. Not everything can be quantified in a way that is appropriate and useful for policymakers. Other ways of looking at the world are essential and need to contribute to the debate. If we don’t start to make a concerted effort to do that soon, we may well have missed our chance to demonstrate real intelligence in tackling climate change.

About the Author


Alice Larkin is Head of the School of Mechanical, Aerospace and Civil Engineering and a Professor of Climate Science and Energy Policy in the Tyndall Centre for Climate Change Research, University of Manchester.


Fairness in the Eyes of Parties to the Paris Agreement. What Explains Divergences?

By Håkon Sælen (CICERO) and Vegard Tørstad (EUI, Florence) 

The question of how to differentiate efforts fairly has always been central and controversial in UN climate negotiations. The UN Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol, and the Paris Agreement include different formulations and compromises relating to the distribution of efforts between parties.

In a new study published in Climate Policy, we show how disagreement over fairness principles prevailed in the discussions leading up to the Paris Agreement, and suggest an explanation for why the parties have been unable to reach consensus on the question of fairness.

Broadly, three different understandings of how mitigation burdens should be distributed fairly have been frequently invoked in debates in the climate negotiations:

  1. The principle of Responsibility demands that climate change should be solved by those who have caused it. In other words: the polluters must pay.
  2. The Capability principle emphasises that all those who have the capacity to mitigate climate change have an imperative to do so.
  3. The Rights (needs) principle suggests that an actor is either entitled by right to emit a given amount of greenhouse gases, or that it needs to be exempted from undertaking provisions.

There has been considerable disagreement among parties in the negotiations on how to interpret and weight these principles in discussions of burden sharing. In our research, we were interested in two questions:

  1. Which parties support each of the three fairness principles?
  2. What explains variation in fairness conceptions across countries?

To answer the first question, we used content analysis to count the frequency with which the principles appear in parties’ negotiation documents over a three-year period in the negotiations leading up to Paris. We found that fairness conceptions among key actors in the negotiations are polarised. On one extreme of the fairness spectrum are Australia, Canada, the United States, and Russia, who all refer to Capability in more than 75% of their fairness references. On the other are Brazil, China, India, Saudi Arabia, and certain Latin American countries, who devote the majority of their references to Responsibility.

This polarization of fairness conceptions is bad news for the climate negotiations, because agreements that are based on a common notion of fairness are largely thought to be more effective and durable than those that are not. It is analytically interesting, therefore, to understand what explains these large differences in parties’ fairness conceptions.

The literature often suggests that fairness conceptions in negotiations are determined by parties’ self-interest. However, our regression analysis of more than 160 parties in the climate negotiations showed that several factors often regarded as important to parties’ interests – such as historical emissions and capacity to pay – are not the primary determinants of fairness conceptions in these negotiations. Instead, whether a country is listed in ‘Annex I’ of the UN Framework Convention on Climate Change–—that is, whether it is classified as a ‘developed’ country—is the single strongest predictor.

While the dominance of this variable may seem somewhat surprising, it is nevertheless compatible with an interest-based perspective. The binary Annex-division between ‘developed’ and ‘developing’ countries was the basis for differentiating obligations under the UNFCCC and the Kyoto Protocol. Only ‘developed’ were assigned individual obligations to reduce emissions under the Kyoto Protocol. Therefore, countries classified as ‘developing’–—such as China and India–—benefit from the Annex scheme’s continuation, while ‘developed’ countries–—such as Australia, Russia and the United States–—from its removal.

In this light, it is notable that the Paris Agreement omits any reference to Annex I of the UNFCCC, using instead less clearly defined terms such as ‘developed’ and ‘developing’ or ‘other’ countries. The lack of strict differentiation in the Paris Agreement suggests, firstly, that the Agreement is more favourable than previous agreements towards ‘developed’ countries, such as the United States, and less so towards rising economies such as China and India, which were previously classified as ‘developing’. It is therefore paradoxical that the United States is the only country that has decided to pull out, citing the unfairness of the Agreement as a reason.

Secondly, the lack of reference to the Annex is significant because it affects the fundamental tension over effort-sharing in the negotiations. By removing the Annexes, the dominant variable in explaining past divergences in fairness conceptions has been rendered less relevant. This development may improve parties’ chances for reaching compromise and agreement. However, ongoing negotiations on implementation of the Agreement have already encountered ‘roadblocks’ that partially derive from how the Agreement resolved the issue of differentiation between ‘developed’ and ‘developing’ countries. It therefore appears that negotiators will have to continue to deal with this issue, even though it may take on a new dynamic now that the Annex I division has less force. In doing so, our paper suggests that looking for pragmatic solutions tailored to each substantive agenda point will be more fruitful than discussions at the level of fairness principles aiming for one overarching solution.

The question of fairness in effort-sharing will continue to be relevant also in the future cycle established by the agreement. Parties are obliged to submit nationally determined contributions (NDCs) every five years and are requested to justify their own contribution as ‘fair and ambitious’ – a process sometimes termed ‘self-differentiation’. What is more, a ‘global stocktake’ will assess collective progress every five years, ‘in light of equity’, and shall inform future NDCs. To achieve meaningful self-differentiation, the stocktake (as well as informal assessments by civil society) might be linked to parties’ own fairness conceptions as presented in their negotiation documents, such as NDCs and submissions. For this purpose, stakeholders may find overviews of fairness conceptions – like presented in our new paper – of use.

About the Authors


Håkon Sælen is a Senior Researcher at the Center for International Climate Research (CICERO).



Vegard Tørstad is a PhD Researcher at the Department of Political and Social Sciences, European University Institute (EUI)

Global Climate Policy Conference (GCPC) 2014: Summary and Reflections

By Heleen de Coninck, with contributions from Climate Strategies and CDKN teams

What can researchers contribute to the current efforts to break the logjam at the international climate change negotiations? Over 80 participants representing various groups of stakeholders gathered at ODI in London on the 7th and 8th of May 2014, to take part in the first Global Climate Policy Conference (GCPC). The organisers – Climate Strategies and CDKN – wanted to provide a space for discussing new ideas provided by researchers in a variety of climate fields, that could push climate negotiations forward and contribute to breaking the deadlock. Issues and perspectives seem to come and go in the negotiations in what can seem to external stakeholders like confusion and isolation.

The conference agenda was based on solid contributions from researchers taking some of these issues and subjecting them to rigorous analysis. Does “green growth” really offer a new narrative for achieving climate progress? Are the notions of equity behind the original UNFCCC treaty changing? Are aspirations for effective levels of public and private financing at all realistic? Does the idea of “clubs” of countries cooperating on adaptation, mitigation or both, hold promise or will it undermine the chances of a global solution? These and other questions were tested by presenters and an invited audience, mainly pf experts in their field, with enough time to hold the issues and positions up to the light and debate them fully.

In the opening session chaired by Mattia Romani of GGGI, the conference started with changes in economic thinking bearing on sustainability. Carlo Jaeger and Michael Grubb presented their ideas on sustainable development and green growth and whether this was a “new focus or an optical illusion”. Carlo Jaeger emphasized that the green growth idea could be helpful but that the narratives behind it need development. One such story was told by Michael Grubb, whose book “Planetary Economics”, based on over 20 years of policymaking and academic experience, observed that for transformative change, it is not helpful to argue over whether standards and regulation, markets and pricing or strategic investment (in infrastructure, knowledge or innovation) would deliver the best result. As contexts differ, we need experimentation and implementation in all of these policy pillars. Focusing on only one will lead to disappointing results, as all have shortcomings. For a global agreement, the lessons learned in the Planetary Economics approach contain useful lessons, for instance for NAMAs, the Technology Mechanism and carbon markets. Respondent Radhika Perrot, from South Africa confirmed that all three pillars were recognized as important, but not consistently observed, in her country’s strategy for green growth.

In a session chaired by Ambuj Sagar of IIT, on how mitigation and adaptation packages could secure finance, Jose Garibaldi explained how current initiatives between like-minded countries in Latin America and the Caribbean were succeeding in “cross-subsidisation” of local mitigation policies through adaptation mainstreaming and country to country cooperation. Adaptation, over time, was a bigger cost for most countries than mitigation, and the case for support in adaptation was improved if action on mitigation could be demonstrated. Progress could be made if language was changed to emphasise differentiated but ambitions action by all, a “small is beautiful” approach, the availability of support, and the benefits of crossing the boundaries of the traditional negotiating groups.

A conclusion from these two sessions was that cooperation in clubs, or coalitions of the willing, could be a useful complement to UN-based systems. Examples like the Quisqueya case that Jose Garibaldi introduced could be formed by clubs of countries where cost of climate change exceeded their mitigation costs. Michael Grubb argued that coalitions of countries that depend on fossil fuel imports could work for agreeing on mitigation. In the consensus-based UNFCCC negotiations, countries who do not share such interests could block such deals. Tom Brewer argued that such clubs could be helpful by forming coalitions that further efforts, but also highlighted risks of exclusion and regulatory capture. The idea of clubs (covered more extensively in the last session) could be also risky, as boundaries in the negotiations are often deep-rooted in history, emotions and tactics – argued Michael Cutajar, who went on to chair the next session on CBDR.

Common but differentiated responsibilities and respective capabilities (CBDR/RC) is a term that almost defines the UN Convention on Climate Change, but could use a rethink, argued both Xiaohua Zhang from the perspective of China, and Christoph Schwarte from an international legal perspective. Xiaohua Zhang argued that the term remains highly relevant, but more differentiation than Annex I/ non-Annex I is now needed. He introduced a grouping of developing countries with high capabilities to implement low-carbon growth strategies: “Capable DCs”. Christoph Schwarte ran through the recommendations of the recently-completed work of the International Law Association. He argued that in the spirit of the Convention, the distinction between developed and developing countries should to some degree be maintained but that more differentiation is needed, and mentioned a “spectrum of States’ commitments” and making a framework more flexible in order to manage the remaining atmospheric space as a common natural resource. The implication of this latter suggestion would need to be further investigated.

In Sonja Klinsky’s presentation at the session on equity and fairness, chaired by Daniel Klein of UNFCCC, socio-psychological viewpoints of what people perceive as fair played a crucial role. She argued that there was not a single concept of equity, and often what is fair cannot be easily expressed in words or argued. Sometimes, something just is not fair. The ultimate injustice done to people or groups occurs in situations of war. Still, some communities succeed in overcoming the aftermath of war; peace and reconciliation processes can provide useful lessons. To agree on a way forward after injustice, perpetrators need limited liability; a limit to the claim that can be put on them. Victims need a new deal, or a structural change that convinces them that things will get better. This was summarized as ‘backward-looking justice and forward-looking peace’. It was also noted that compensation payments can undermine such an approach, and that it is important for all participants to have a sense that there is procedural justice. A conclusion could be that future narratives about a climate-resilient future that are credibly implemented (forward-looking peace) could be accompanied by gradually phasing out the rhetoric of historical responsibility (backward-looking justice).

Ari Huhtala of CDKN chaired the session on private climate finance, where Christa Clapp spoke about growing investor interest in green bonds, renewable energy in China and divestment campaigns. While more investment from the private sector should be encouraged, governments, researchers and UNFCCC have lots to do to create an enabling environment and to reach a scale that could make a difference. Problems along the way include adequate definitions or certification of “green” , to avoid the re-badging of BAU, achieving sufficient liquidity in the green bond market, persuading Governments to engage in de-risking (there were examples from developing countries, but the financial crisis has made all governments nervous about putting their balance sheet at risk), and persuading more investors that “green” is not just a synonym for “poor returns”. Different views were expressed about the importance of disclosure of risks and green activity by companies.

The last session, chaired by Heleen de Coninck, focused on clubs. Carlos Rossi presented a proposal by Peru for COP20 in Lima. The key was technology integration approaches, with a new focus on regional technology centres, producing technology that can be widely shared in a global pool. Globalization of technology, regionalization of application and diffusion, respect for capabilities and trade implications all played a role in the Peruvian proposals. Tom Brewer highlighted an area where such integration of technology could be furthered by developing the “club” approach: reducing methane leakages from LNG transport and processing, where emissions are increasing as a consequence of booming LNG trade globally. Such an agreement could develop general rules for methane leakage, certify exporters, importers and shippers, and verify whether agreed leakage rates are not exceeded. However, the incentives on clubs to achieve real reductions, and the possibility of undermining the international approach to a global problem, needed to be watched carefully.

Simon Maxwell of CDKN brought the conference issues together. Climate policy would not make progress unless it was grounded in research, linked to theory, multidisciplinary to reflect the “wicked” nature of the problem, alive to the changing structure of the world economy, and connected to the intellectual trends that moved today’s politicians, the public, and other stakeholders. The conference could not find all the answers, but asking the right questions was a major advance; it should never be forgotten that even policy research had to follow the basic rules of research: generate testable propositions and, for each of them, do the work necessary to assemble the evidence and refine the hypothesis.

Looking back over the event, other participants raised issues about effective and acceptable developing country participation and agenda-setting, capturing and accelerating the signs of positive momentum in the areas of finance, clean technology and donor initiatives, how technology can be developed for all and not just for the elites, and how to educate the public, generate a social movement and allow and help individuals across the world to look beyond their personal self-interest.

What happens next

The conference proceedings are being made available on video, accessible from the CDKN and Climate Strategies websites. A summary will be presented in a UNFCCC side-event in the Bonn Negotiations in June, featuring some of the papers presented to the conference. The full presentations will be assembled in a peer-reviewed publication which will appear later in the year. And Climate Strategies will be picking the most suitable issues and ideas from among those presented to turn into substantive research projects.

The general reaction to the conference so far has been very favourable; if this continues a further conference in the run-up to the UNFCCC Paris negotiations in 2015 will be considered, perhaps in a form that allows a multidisciplinary “laboratory approach” to some of the most intractable issues.

Climate Strategies and CDKN wish to thank all presenters, chairs, respondents and participants for a though-provoking event, and express their hope that such questions, and many others, may get addressed at the Global Climate Policy Conference 2015 – which – we hope – will become an annual event. Please let us know your interest in participation by emailing: info@climatestrategies.org

Presentations as well as the video from GCPC 2014 are already available on Climate Strategies website.

Conference contributions by the speakers along with the summary of the discussions will be published in late August / early September 2014 in a professionally edited volume. Please check Climate Strategies and CDKN websites for announcement (www.climatestrategies.org and www.cdkn.org)