Paying the price of a Durban victory

The trouble with the Durban agreement is that it's based on an economic world order that is unravelling in front of us. Meanwhile, Australia is courageously – and uncomfortably – alone.

The meetings of the UN Framework Convention on Climate Change long ago changed from being a forum to negotiate a solution for global warming to being a spin-fest to hide its failure.

Did this happen at the failed talks in Buenos Aires in 1998, just a year after the Kyoto Protocol was triumphantly signed, or in 2001 in Bonn, when President George W Bush refused either to attend or to sign up?

The latest Conference of the Parties (COP) in Durban over the weekend triumphantly agreed… to put everything off until 2020. Actually, that’s a little unfair: the deal to work towards an agreement that legally binds all nations – including China and India – instead of just the so-called rich countries, was both hard won and significant.

The question remains, as it has since the 'Earth Summit' of 1992 in Rio de Janeiro, whether anything can be achieved at any time that makes any kind of difference to global warming.

There were 194 countries represented in Durban over the weekend. I’d say the only thing that so many different national interests would be able to agree on in a few days is that the sun will rise tomorrow, and even then a few of them would have to be bought off.

The basic problem is that 20 years ago the world was a very different place. Tiananmen Square had just happened and China was 10 years away from joining the World Trade Organisation. It was clearly a poor, developing country, as was India.

As a result, the original 1992 treaty excluded China from the "economies in transition” included in Annex 1. These were mainly the eastern European countries and Baltic States emerging from the USSR. Annex 2 was a sub-set of Annex 1, consisting of what were then the 23 richest countries in the world, including such pillars of economic strength as Greece, Italy, Spain, Portugal, Ireland and Iceland.

It was agreed then that developing countries – which basically meant any outside Annex 1 – would not be required to reduce greenhouse gas emissions unless they were paid to do so by Annex 2 countries.

The 1997 Kyoto Protocol was the legally binding agreement between the 41 Annex 1 countries, foreshadowed in 1992 and five years in the making, to reduce emissions by 6-8 per cent of 1990 levels between the years 2008 and 2012. US President Bill Clinton signed it at the time but Congress refused to ratify.

There were a few unresolved issues to be sorted out the following year in Buenos Aires. Everyone showed up full of hope but hit the first serious brick wall of the UNFCCC process. COP 4, as it was, got nowhere and the issues were put off for two more years.

But two years later, COP 6 in The Hague collapsed in total disarray for two reasons: US intransigence and the first signs of the issue that would become the central one: money. There was total confusion about how and how much to pay the developing countries to even measure their greenhouse gas emissions, let alone reduce them.

And then China joined the WTO and became the greatest manufacturing exporter the world has ever known. Within 10 years it had more or less bankrupted the United States and Europe by maintaining an undervalued currency and helping to keep their interest rates down – not that those rich countries needed much encouragement to spend beyond their means and go into debt.

The result is that China is now rich and Europe and the US are poor. Some European nations are destitute and should definitely not be in Annex 2, and probably not even Annex 1.

China is now the largest greenhouse gas emitter (accounting for 23 per cent of the world’s emissions in 2008 versus 18 per cent for the US and 14 per cent for Europe). However, its per capita emissions are the same as Barbados – around 78th in the world.

The celebrated breakthrough at COP 17 in Durban over the past few days, achieved through 72 hours of continuous argument, is that the next climate change treaty will bind all nations, not just Annex 1 & 2.

China and India only agreed to this because the deal included the establishment of a new fund – the Green Climate Fund – that would mobilise $US100 billion in cash transfers from the developed to the developing countries.

The details of both the new binding treaty and the fund were left for later – much later. The Kyoto Protocol, which only binds rich countries and which has been comprehensively ignored anyway, has been extended to 2020, giving everyone another nine years to talk about the replacement. But at least a 'road map' was agreed yesterday.

It leaves Australia uncomfortably out in front, courageously preparing to introduce a carbon tax on July 1, 2012, and an emissions trading scheme in 2015.

This is well ahead of the COP 17 agreement to get all countries to sign a deal in 2015 that would force them to cut emissions by 2020. Implementing this will be tricky – not because global warming will be less of a problem than it is now, but because the so-called rich countries will be much, much poorer than they have become even in the past three years, and the developing countries – China, Brazil and India – will be much richer.

As time goes on, the idea that Europe, America and Japan can, or should, pay the others $US100 billion a year to help them deal with climate change will seem more and more preposterous.

But at least at COP 18 in Qatar next year, Greg Combet, or whoever has replaced him, will be Action Man, representing the only government who Done Something, and is Ahead Of The Game. This is not necessarily a bad thing – our reliance on brown coal for cheap electricity means we are coming from a long way behind and do need to start early.

The fact that it’s just because Australia is the only country in which the Greens hold the balance of power in parliament, and that the Labor Party won government having promised not to do it, presumably won’t be mentioned.

Follow @AlanKohler on Twitter

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