I do realize that Copenhagen is still underway, so this is a little like whispering in church (I’ll put it mostly under the fold) … however, it’s a Friday afternoon, and this Gizmodo article on the physics of combat in space was highly distracting. The most interesting bit to me was the observation that in a war between planets, functional trajectories of approach are not unlimited. Launch windows and orbital relations between the planets matter hugely. There are logical places for defense, in other words, even if they shift over time with the planet’s solar orbits, beyond the planetary defensive orbit itself. This means room for strategy in space combat, in other words, and not merely tactics in skirmishing among ships.
I want to interrupt our Copenhagen focus to briefly flag a conversation that’s on-going over at EJIL: Talk! My Temple Law colleague, Jeff Dunoff, along with Joel Trachtman (The Fletcher School) recently put out a new work–Ruling the World? Constitutionalism, International Law and Global Governance (Cambridge, 2009), which is the focus of EJIL’s latest on-line symposium. Here’s a description of the book project in brief:
Ruling the World?: Constitutionalism, International Law, and Global Governance provides an interdisciplinary analysis of the major developments and central questions in debates over international constitutionalism at the UN, EU, WTO, and other sites of global governance. The essays in this volume explore controversial empirical and structural questions, doctrinal and normative issues, and questions of institutional design and positive political theory. Ruling the World? grows out of a three-year research project that brought twelve leading scholars together to create a comprehensive and integrated framework for understanding global constitutionalization. Ruling the World? is the first volume to explore in a cross-cutting way constitutional discourse across international regimes, constitutional pluralism, and relations among transnational and domestic constitutions. The volume examines the core assumptions, basic analytic tools, and key challenges in contemporary debates over international constitutionalization.
The EJIL Talk! symposium has so far featured posts by Dunoff and Trachtman along with one of the contributing authors, Mattias Kumm (New York University/Harvard); two other contributors, Andreas Paulus (Gottingen) and Neil Walker (Edinburgh Law School), are also scheduled to post at some point. Meanwhile, EJIL Talk! brought in some outside commentators with posts so far by David Schneiderman (University of Toronto) and Nico Kirsh (Hertie School of Governance, Berlin); future contributions are anticipated from Robert Howse (New York University) and Gráinne de Búrca (Fordham/NYU). It’s a pretty rigorous and thoroughly thoughtful conversation. So, if you need a break from what’s not happening in Copenhagen, check it out.
The one thing that has become abundantly clear this week at Copenhagen is that there is very distinct lack of trust between developed and developing countries. This came to a head on Monday with the walkout of some of the G77 countries as they believed that developed countries were attempting to scrap the Kyoto Protocol.
A critical element in building trust and securing a deal is climate finance; public and private funding by developed countries for mitigation and adaptation in other developing countries. Some recent progress has been made on this issue. A consensus is emerging among developed countries on significant “Fast Track” funding for the next several years. Also, the recent AWG-LCA Chair’s draft, recognizes that private finance through carbon markets should be included in climate finance arrangements along with public funds. However, there is still no agreement on long-term financing, regulatory and other mechanisms, or governance structures.
The impasse stems from two basic problems: first, the lack to date of credible and substantial developed country commitments on public funding; and second, the absence of institutions and governance structures to ensure both equity and environmental effectiveness in climate finance.
Developing countries—wary from a half-century of often-frustrating experience with official development assistance (ODA)—are rightly skeptical of developed country assurances regarding future climate finance through public funding arrangements. The gap between promises and performance in general ODA, including the problem of the “disappearing donor,” is well known. Developed countries, on the other hand, are generally only willing to spend to spend significant domestic funds on international projects when they can maintain flexibility regarding future spending levels depending on program performance, unforeseen developments, and competing priorities.
At the same time, developing countries are seeking to replace or reform existing donor-dominated multilateral institutions, in favor of new structures that give them significant decision-making power over cost sharing, conditionality, and disbursement and use of funds. Developed countries, on the other hand, are rightly unwilling to commit funds without mechanisms to ensure adequate financial controls and assurances of positive environmental outcomes.
Although Mexico and Norway (among others) have very recently re-proposed a single global fund to collect and disperse all climate-related finance, such an agreement is politically infeasible and unsuited to advance the policy needs of decentralization, innovation and experimentation.
Private Finance Through Carbon Markets
Moreover, there is no way that such a fund could include private finance through carbon markets, which must play a major role in any carbon finance arrangements. Even if a single multilateral fund is established to receive and disburse public funds, such funds will, for a variety of reasons, continue to flow through bilateral and other arrangements. Climate finance will also be provided through a variety of means, including loan guarantees, concessionary debt, insurance, and mechanisms such as George Soros’ proposal to use IMF special drawing rights to leverage climate mitigation. Private capital through carbon markets will also be generated through a variety of channels. The EU, US, and other OECD countries are unilaterally developing domestic or regional cap-and-trade and offset credit systems that will likely become the main vehicle for private climate finance. This will fragment the existing multilateral Clean Development Mechanism (CDM) approach and potentially marginalize developing countries’ role in governance.
A Global Climate Finance Registry
In order to promote and track compliance with a climate finance deal, we envisage a global climate finance registry (with balanced governance) of funding commitments and actions financed by those funds, including all forms of both private and public finance, and covering both developed and developing countries. Because future climate finance mechanisms will be highly pluralistic, operating through a variety of bilateral, plurilateral, and multilateral arrangements, a single global registry is needed to recognize, track and ensure domestic verification of all of the many different undertakings and programs and present an aggregate accounting.
Recognizing that transparency is necessary for countries to judge the efforts of others, hold them accountable, and draw countries into compliance with their commitments, the global registry would build on current proposals for NAMA registries so as to include both public and private financing commitments (including those taking the form of credit offset programs under domestic ETS) from all relevant countries, as well as the fulfillment of these commitments.
Developing and operating a global finance registry should be the responsibility of an international body enlisting the participation of all nations. The registry would not disburse or spend funds or regulate carbon markets. Those actions would be carried out by an array of different international and domestic authorities.
The Registry would make important contributions by accounting for and reporting on the undertakings and outcomes achieved by these different bodies, serving as a clearing house for best practices for mitigation and adaptation performance assessment methodologies and results-based financial accountability, and promoting harmonization in carbon market credit offset recognition practices by domestic and international regulatory bodies. It should accordingly strive to develop performance metrics for emissions reductions achieved through different modes of financing.
The details of such a registry and other elements of a global regime for climate finance cannot feasibly, or appropriately, be resolved in the short term. But the Copenhagen process must, at a minimum, reach agreement on a comprehensive framework and set of principles for both public and private climate finance as well as an agenda for future elaboration and implementation. Such agreement (which should include credible arrangements for significant adaptation as well as mitigation funding) is essential to winning developing country trust and engagement and providing resources sufficient to curb, and adapt to, anthropogenic climate change. An agreed architecture and correlative set of undertakings for developed and developing country emissions reductions is also indispensible. But without the finance to achieve those reductions, the architecture by itself will be largely a façade.
[Professor Dan Bodansky is continuing his dispatches from the climate change talks. This post is cross-posted at the Smith School of Enterprise and Environment at Oxford.]
Copenhagen, December 17 – With the hours counting down to the end of the Copenhagen conference, real substantive negotiations have yet to begin. Instead, the focus has been almost exclusively on procedure. All week, the Danes have wanted to put forward their own compromise text, which would be negotiated in a smaller group – the approach typically used to hammer out an agreement. But some developing countries – most notably Sudan, Bolivia and Venezuela (apparently with the (at least) tacit support of China) — have rejected this approach, arguing that it lacks transparency and is hence illegitimate. Instead, they have insisted that the only “legitimate negotiating process” is to continue to negotiate on the basis of the heavily bracketed text that emerged over the last two years in the two ad-hoc working groups, in negotiating groups open to participation by all parties. In my view, this process virtually guarantees that the Copenhagen conference will not produce a meaningful agreement, since the texts emerging from the two ad hoc working groups are a mess, with multiple options within options, and negotiating them in an open-ended group, with hundreds of delegations, is a prescription for deadlock.
The refusal by some developing countries to allow the Danes to introduce a text or to negotiate in a smaller group is made in the name of ensuring a legitimate, transparent, democratic process. But another way of understanding it is as a cynical effort by certain countries to use procedural objections to prevent a substantive agreement. Yesterday, after the Danes said they would table new texts, developing countries objected and the formal meetings were suspended for most of the day while the Danes consulted with developing countries about how to proceed. Reportedly, the G-77 (the developing country negotiated group) refused to participate in a smaller group organized by the Danish presidency to have substantive negotiations.
Today, in a desperate effort to move from procedure to substance, the Danes accepted the procedural approach insisted upon by developing countries. They promised not to introduce any new texts, and convened two “contact groups” that are open-ended in participation, to consider the texts forwarded from the ad hoc working groups. Meanwhile, it appears increasingly likely that the conference outcome will be a short political declaration largely devoid of substance, and a procedural decision to continue the “process,” such as it is. The ultimate question, of course, is whether there is a deal to be had that bridges the gap between the US, which wants a common legal framework for developed and developing countries (including common provisions on monitoring, reporting and verification); the major developing country economies, which want to preserve the strong differentiation reflected in Kyoto; and the European Union, which would be willing to commit to another round of Kyoto-like targets, but only if the US is subject to a comparable regime and developing countries are willing to join a new legal agreement that subjects them to stronger commitments.
The Copenhagen process is multilateral, focused on reaching global agreements. But to get to a strong and truly effective global climate regime, bold bilateral initiatives may be needed. The conditions are propitious for a deal between China and the US, the world’s largest and second largest emitters, but that will call for imaginative and committed leadership on both sides as well as much political groundwork. Beijing and Washington could strike a deal under which each would undertake to limit emissions and the US would grant offset credits for reductions in China that could be used by US firms to comply with US domestic cap and trade regulation. The credit offset mechanism would deliver private financing and technology to China through carbon markets, probably through sector-based programs, and could be supplemented by measures for technology cooperation. This deal would bring the world’s two major emitters into an international emissions limitations agreement — something the Copenhagen process on its own may to achieve – and set the stage for a series of similar bilateral deals involving the EU and other developed countries as well as the US on one side, and China, India, Brazil and other major developing countries on the other. Such a web of bilateral deals could provide the foundation for negotiation of a more substantial and effective global climate agreement than Copenhagen or immediately following rounds of UN-global negotiations can now realistically achieve.
A China-US deal makes sense for both sides. China has already embarked on an ambitious energy efficiency drive, which forms the basis for its recent undertaking to reduce emissions intensity by 45%. China has economic, political and environmental reasons for its actions. China has much to gain from nationwide energy efficiency, and for some technologies (e.g. renewable energy and power stations) a large domestic market will also provide a springboard for exporting this technology. A deal with the US could bring in welcome infusion of additional capital and know how as well as markets for many Chinese technologies. Politically, China can benefit from showing leadership on a major global issue, and from maintaining access to markets in countries with emissions controls; and the Chinese government is alert to adverse impacts of climate change in China and the accompanying threat of social unrest and political destabilization. Environmentalism too has rising affirmative salience in Chinese public and governmental thinking.
From the US perspective, bringing China into an international limitations agreement would reduce leakage of investment and jobs as well as securing climate benefits and meeting the domestic US political demand for action by China as a condition for the US to undertake strong regulatory limitations on greenhouse gas emissions.
A China-US deal could overcome a major impasse in the Copenhagen process concerning measuring, review, and verification (MRV) of emissions reductions. China has argued strongly that MRV requirements apply to developed (Annex I) countries but should not apply to China or to any developing countries. But assuming Congress manages to pass legislation adopting a cap and trade greenhouse gas regulatory system, this will likely authorize the US Environmental Protection Agency (EPA) to implement a credit offset program under which some emissions reductions in developing countries generate credits that can be sold into the US market. This is politically plausible because offsets generated by emissions reductions in China would reduce compliance costs to US emitters while at the same time creating business opportunities for US firms. Some equivalent of MRV will be part of any such system administered by the US EPA. So China may see benefits in accepting, at least bilaterally, some kind of MRV to gain access to that market, all the more so if the EU and other emissions trading systems take a similar approach. If such a US system is established, President Obama may well be able to make a deal with China to award credits for its reduction by executive agreement, avoiding the political hazards of a treaty requiring Senate ratification.
Another critical element in climate deals for China will be border carbon adjustments, which the US (or the EU and others) may seek to impose on imports from countries without comparable emissions controls, in order to level the competitive playing field for industry and avoid leakage (migration of production to areas with weak emissions controls) or the undermining of climate objectives. China has sought to get agreement in the Copenhagen process to prohibit such measures. But US Congressional climate legislation is likely to include border carbon measures aimed at imports from major developing countries without emissions limitations, which will provide a further incentive for China to agree at least bilaterally on limitations (the trade measures in the Montreal Protocol seem to have influenced China to limit its production and use of ozone depleting chemicals.)
Bilateralism can be damaging, and those committed solely to achieving a global UN deal will bristle at this prospect. But a global-multilateral approach may not on its own produce enough. And while bilateral negotiations may be seen as a Western ploy to break up the G77+China negotiating group, it is not so clear that this group can necessarily serve the very divergent interests of its members on some key issues, as strains during the Copenhagen negotiations have demonstrated. Vulnerable island and low-lying states have understandably demanded that large emitters among developing as well as developed countries must accept much tougher emissions curbs. African delegates are right to protest that (with the partial exception of REDD for forests) too little is on the table at Copenhagen to address the interests of their peoples, who were and remain low emitters, bear high costs from reducing emissions (e.g. banning charcoal as fuel), have few resources to meet the costs of adapting to drought or other consequences of climate change, often lack electricity or other modern energy sources, and are unjustly beset by poverty and short life expectancies. A bilateral China-U.S. deal would do nothing to address these latter problems, but it might conceivably help open the way for a much stronger global deal with substantial emissions curbs and large financial flows in which adaptation, low-carbon development and even some basic climate justice receive more fundamental attention with rising stakes and more on the table.
One gets a new perspective on climate negotiations when your toes are about to fall off! It took me 8.5 hours of standing in sub-zero temperatures to get registered at the Bella Centre (and this is after I was only about fiftieth in line, showing up at 6.45am). There were thousands of people behind me when I last looked back. Not one official came out to explain what was happening or whether people should simply go home. If this level of mismanagement had occurred in a developing country, at best we would have called for ‘capacity building’; worse, we would have been reading about ‘poor governance’, ‘lack of foresight’, or even ‘disregard for basic human rights’. Seeing this, a potential recipient of climate finance in a developing country might wonder: why should a rich country taxpayer worry about mismanagement in poor countries when their own record does not seem to be much better? But an opponent of public finance for climate change might also ask: why should we believe that the UN or any other international body can handle $100 billion when it can’t manage a conference? Both sides would be right but their questions come from completely different perspectives. This is the fundamental divide in climate negotiations – there seems to be no reason to trust each other.
Much is written these days about the need for building trust. Political scientists and international lawyers offer many solutions: credible commitments to resolve time inconsistencies, contingent and conditionality-based support, procedures for monitoring and verification, reciprocity in actions, and compliance-oriented sanctions. But international negotiations, in general, and climate negotiations, in particular, have shown how difficult it is to either agree on such arrangements or to put them into practice. For instance, the Kyoto Protocol already suffered from an institutional design that postponed fines for non-compliance to future commitment periods. Worse still, if a completely new protocol is negotiated at Copenhagen or afterwards (as is the demand of developed countries), then the credibility of future compliance procedures will also be called into question.
The trust deficit is particularly deep on the question of climate finance. Current negotiations are unlikely to result in a substantive deal, notwithstanding a new Mexican-Norwegian joint proposal. Word in the corridors point more in the direction of a fudge, whereby short-term funding proposals will be made (like the recent EU announcement or the declaration at the Commonwealth summit); long-term institutional and financing questions will remain open for further discussions. But discussions on emissions reductions or low energy intensity targets without thinking about where the money will come from suggest a strategy of putting the cart before the horse. Remember that the Montreal Protocol needed the London Amendments of 1990, which included a financing mechanism, to gain acceptance from developing countries and facilitate effective implementation.
If Copenhagen does not deliver substantive outcomes on climate finance, in the minimum we could start building trust by exposing some of the red herrings that distract attention from in depth discussions.
Public versus private
A common demand from developing countries is for public finance support from rich countries for their mitigation and adaptation projects. A common refrain in developed nations is that big transfers of taxpayer money to poor countries is political infeasible. This is an unhelpful way to frame the climate finance debate. It is now well established that a funding mix is essential. As currently configured, carbon markets will not generate funding to match the actions required. The incremental costs of moving up the technology ladder – R&D, capital costs, intellectual property – imply public financing support. At the same time, public financing that does not facilitate sustainable business models to induce greater flows of private capital would result in cherry-picking technologies and entrenched vested interests in some sectors over others. Political leaders need to be more honest to taxpayers about the purpose of public funds to combat climate change. Treating it as merely development assistance is unhelpful, dishonest and undermines negotiations.
Us versus them
A second worry about any international arrangement on climate finance is the fear that this is a recipe to strengthen one’s competitors. This was implicit in Todd Stern’s comment during the negotiations that he did ‘not envision public funds, certainly not from the US, going to China.’ Yet, climate finance is needed to facilitate cooperation on research, development and deployment of clean energy technologies. In fact, in November China and the United States announced several joint initiatives, on energy efficiency, research on cleaner coal plants, electric vehicles, carbon capture and storage, and renewable energy, among others. Other bilateral and regional initiatives have included Australia, the EU, India and Japan in addition to China and the US. The main problem is that the sums involved are too small compared to the scale of investments needed.
Conditionality versus commitment
A related problem is that, on one hand, rich countries argue that they would not transfer funds unless recipients undertake to fulfil conditions, including clear programmes of action that are monitored and verified. In turn, poor nations want a credible commitment on financing before they promise to undertake actions. This chicken-and-egg debate stems from a long history of unmet funding commitments on the donor side (the record of the G8 on its Gleneagles promises being only the most recent example). Once again, as long as we think about climate finance as purely wealth transfers from rich to poor, the donor-recipient, conditionality-commitment, you-first-me-later morass will only become deeper.
A way forward
In a recent paper, Kevin Watkins and I propose a multilateral Low Carbon Technology and Finance Facility. It would use public funds to cover incremental costs for more efficient technologies. The facility would also adopt flexible modalities to leverage private investment, through concessional finance, loan guarantees, risk insurance, advance payment guarantees, and payment of intellectual property fees. Further, it would give rich and poor countries balanced representation in decision-making and in monitoring and reviewing both project performance and financial flows. It is unlikely that Copenhagen will be the venue for movement along these lines. But a constructive dialogue on governance questions will not begin unless we recognise how current narratives define and distract discussions on climate finance.
Monday, December 14 – The climate negotiations ground to a halt for much of today, as negotiators debated the organization of work for the second and final week of the meeting. The ostensible cause of the breakdown was concern among (some?) developing countries that the Kyoto Protocol (KP) track in the negotiations is moving more slowly, and getting less attention, than the Convention track (the so-called Long-Term Cooperation Action track, or LCA) (although since the LCA track is itself moving very slowly, it is a bit difficult to understand the concern). For many members of the G-77, the differentiation enshrined in the Kyoto Protocol between developed countries (which have quantified emission reduction targets) and developing countries (which do not) is sacred. All last week, developing countries had been emphasizing the importance of continuing the Kyoto Protocol, rather than merging it into a single comprehensive agreement that addresses both developed and developing countries (as the EU, Japan and other industrialized countries would prefer). At the procedural level, this developing country position is reflected in a desire to maintain the complete separation between the two tracks in the negotiations, rather than merging them into a single discussion, as the Danes apparently envisioned.
But whether substantive concerns about the KP’s future fully explain today’s events is open to question The organization of work envisioned by the Danes (as COP president) had apparently received tacit approval at a ministerial meeting held on Sunday. So there is no reason why developing countries that had accepted the work program yesterday should suddenly object today. One possible explanation is that Sunday’s ministerial meeting included only a select group of about forty countries, and today’s work suspension reflected a move by the countries excluded from Sunday’s meeting to reassert themselves. Others speculate that today’s events reflect a reaction by working level negotiators worried that ministers might be too willing to reach agreement. Whatever the explanation, the COP lost the better part of a day, with only two days remaining now before heads of state arrive.
Ultimately, the Danish president convened a ministerial-level group to consider Kyoto Protocol issues, and a series of ministerial-led groups to consider particular issues in the LCA, including: the long-term goal of limiting temperature change (2 degrees, 1 ½ degrees, etc.), the way in which developing country actions are be reflected (a schedule, registry, etc.), and the scale of financial contributions. The other issues in the LCA, not elevated to the ministerial level, will continue to be discussed tonight and tomorrow morning in the various LCA contact groups, with the LCA (in theory) scheduled to wrap up its work tomorrow night and to report back to the COP on Wednesday morning.
Overall the conference is chaotic. Reportedly, some participants spent the better part of the day outside waiting in the registration line. Meanwhile, inside, NGO observers sang songs, strummed the guitar, and organized a “crime scene” with Sherlock Holmes inspecting a chalk drawing on the floor of Africa. With the number of registered participants far exceeding the capacity of the conference, security guards will begin restricting access tomorrow, with each NGO receiving only a limited number of slots.
For too many years American climate change debates were political contests in which scientific evidence took a back seat to political posturing, obfuscation, and ultimately, inaction. Today, the science demonstrating that our world is warming and that humans are a primary cause of this warming is unambiguous. Though there remain a few public voices willing to deny the evidence, the credibility of their objections fades with each new development and the ever-mounting evidence.
Now that the public discourse has accepted the reality of climate change, the discussions have turned to focus on possible responses to the problem and the costs of those responses. Even where there is consensus on the existence of climate change, there is often disagreement about what should be done. The most common objections to action point to the costs that would be involved. For example, critics of the Waxman-Markey cap-and-trade climate change bill have claimed that it would cost the average American household $1,870 per year. There is little evidence to support this figure, but it has entered the political discourse nonetheless. On the other side of the debate, proponents of the bill point to a Congressional Budget Office report suggesting that the bill will cost the average family less than one-tenth of that – just $160 per year.
This debate over the costs of action is critical, but it cannot guide policy by itself. We also have to understand the costs that climate change will impose. What will it cost the United States if the Earth warms?
Professor Jody Freeman and I investigated this question in our recent article, Climate Change and U.S. Interests, published in the Columbia Law Review. We sought to estimate the full cost of climate change on the United States. The article is in part a response to the view, advanced in some fora, that the United States can afford to be passive with respect to emissions reductions. The idea is that the U.S. will suffer very modest economic harms as a result of climate change – indeed, some suggest that the country may enjoy small economic gains – and so has little incentive to bear any costs to reduce global warming.
We dispute this conclusion, which emerges from “integrated assessment models” (IAMs) of the economy. We do not challenge the models themselves or the economists who use them, but we object to how the results of these economic studies have been used in policy debates. The translation of IAMs from academic research to policy-relevant evidence too often overlooks two main points. First, IAMs are systematically biased downward in their estimates because they omit a range of economic harms that will be felt as the earth warms. Second, the assumptions used in the IAMs are often forgotten when the results are considered in policy debates, and results are simplified in ways which aggravate the downward bias of estimates.
Here in Copenhagen, agreeing on some principles of climate finance, at least in very basic form, is at last becoming a priority. Last week, after announcing EU money for a climate change fast start fund, German Chancellor Angela Merkel acknowledged that developing countries would only enter into a climate agreement if sufficient money was committed by developed countries: “This is the biggest headache to me.”
And last Thursday, billionaire George Soros proposed using IMF Special Drawing Rights to leverage over $100bn for mitigation and adaptation in developing countries, with the investments eventually to be recouped by the IMF. This has the attraction that the SDRs are already there – they do not require transfers from taxpayer funds. But this proposal for a fairly radical shift in what the IMF does has not attracted much attention at the COP.
All agree a final political declaration will depend on the developed countries putting some public money on the table. Where the developed governments are starting to make commitments is to the fast start fund, which will fund projects (clean adaptation, clean technology and avoided deforestation projects) immediately and through 2012, when the potential successor to Kyoto would begin. The EU has now pledged €7.2 billion over those three years, although a portion of this is existing promises or will be reallocated from aid budgets, rather than new funding. The US and others expect to provide similar funds too.
But while symbolically important (and potentially a stepping stone to further commitments), the amounts now being discussed by developed country governments are nowhere near what is likely needed to limit warming to 2°C, nor are they commitments that will last beyond 2012. The UN and other respected independent sources estimate that €55-80 billion in additional international financing is needed annually over the period 2012- 2020 to curb emissions in developing countries, and an additional €10-20 billion annually for adaptation, for a total of €65-100 billion annually.
Much of the needed finance—perhaps €50-70 billion annually—will have to come from public sources, including bilateral ODA, domestic emissions allowance auctions, World Bank and other multilateral programs, and international levies on marine and aviation sectors and perhaps a tax on international financial transactions.
Private finance would have to supply the balance: €15-30 billion annually. It will largely be generated through the international carbon markets, in which regulated entities in developed countries purchase emissions reduction credits from verified reducers in developing countries. Up to this point in the negotiations, developing countries had been very hesitant to include private finance in the funding mix. However, the AWG-LCA Chair’s most recent draft text includes recognition that private finance should play some role (and that part of the text is not in square brackets). This is a significant and important shift because AWG-LCA (Ad Hoc Working Group on Long-term Cooperative Action) is where most of the negotiating is happening right now.
There is very little detail yet in the negotiating texts on the institutions necessary to coordinate, deliver, and govern these funds, or on MRV arrangements for donors (which currently seem unlikely to be very robust). Some vital topics, such as finance leveraging, are not even on the table.
Leveraging—achieving more reductions per unit of finance than would be achieved through awarding one credit for every unit of emissions reduction (e.g. for every tonne or carbon equivalent)—is essential if the available funds are ever to be scaled up to the necessary levels of finance to adequately curb emissions without blocking low-carbon development.
Leveraging of public financing can take a number of forms: low-interest loan guarantees or concessionary debt in which loans for low-carbon growth are given to developing countries below commercial rates; developed country funds could be used as collateral to secure developing country loans; provision of investment insurance or export credit provided by domestic or international public agencies, to minimize risk for private investors in developing country mitigation projects; or arrangements to catalyze technology transfers, which may include domestic tax or fiscal incentives to developed country manufacturers/patent holders.
In the case of private funding, leveraging might take new forms. Two likely techniques are:
1. Intermediary carbon banks would purchase reductions in developing countries at prices approximating the marginal costs of producing them. The banks would then sell the reductions at the market price that credit offsets command in developed countries—quite often a large spread—with the difference used to purchase additional reductions for the benefit of the climate system, or development goals.
2. Credit Discounting would require, for example, that 1.25 offset credits have to be surrendered to offset 1 unit of domestic emissions by regulated sources. This mechanism is found in the Waxman-Markey bill that passed the U.S. House.
But as we said above leveraging options, including arrangements that use public and private funds to leverage each other, are not on the table for serious discussion in Copenhagen. Unfortunately, that discussion is dominated by the issue of the magnitude of financing, but some basic approaches to MRV and climate finance institutions are being negotiated. We will write tomorrow on institutions that might overcome the basic lack of trust most developing countries feel in the prospects that adequate finance will actually flow to their domestic mitigation projects or programs.
As the UN Climate Change Conference in Copenhagen enters its crucial week, we will be joined by a few guests who will be blogging about the climate talks, sometimes from Copenhagen itself.
Dan Bodansky of the University of Georgia (and soon to be of Arizona State University) and the author of the book The Art and Craft of International Environmental Law has already sent us a post from Copenhagen (as well as this post and this post from the Barcelona run-up to Copenhagen). We look forward to his further observations.
We are also looking forward to contributions this week from Andrew Guzman of Berkeley Law, co-author (with Jody Freeman) of the recent article Sea Walls are Not Enough: Climate Change and U.S. Interests and author of the forthcoming book Climate Change and the Apocalypse (my kudos on the choice of title). readers may remember that we have previously hosted a book discussion of Andrew’s book How International Law Works. We welcome him back.
Finally, we are pleased to have five contributors from the new book Climate Finance: Regulatory Funding and Strategies for Climate Change and Global Development (NYU Press 2009). The book can be downloaded from the International Climate Finance page of NYU’s Institute for International Law and Justice. The co-editors of the volume Benedict Kingsbury, Richard Stewart, and Bryce Rudyk will all be joining us, as will contributors Arunabha Ghosh and Nathaniel Keohane. I know that at least Benedict and Bryce are at Copenhagen, and I would not be surprised if some of their other colleagues are there as well.
Benedict Kingsbury is Director of the Institute for International Law and Justice at NYU School of Law. He has written extensively on trade-environment disputes, the United Nations, and interstate arbitration and the proliferation of international tribunals.
Richard Stewart directs NYU’s Center on Environmental and Land Use Law and Global Law School Program. He has formerly served as Assistant Attorney General for Environment and Natural Resources, U.S. Department of Justice, and as Chairman of the Environmental Defense Fund.
Bryce Rudyk is Coordinator of the International Climate Finance Project and Research Fellow at the Center for Environmental and Land Use Law at NYU School of Law. His research focuses on financing climate change mitigation and adaptation.
Arunabha Ghosh is Oxford-Princeton Global Leaders Fellow at the Woodrow Wilson School of Public & International Affairs, Princeton; Associate at the Global Economic Governance Programme, Oxford (see this resource guide to climate change governance issues); and Faculty Associate at the Smith School of Enterprise and the Environment, Oxford. He previously worked as Policy Specialist at UNDP’s Human Development Report Office in New York, where he authored the 2006 HDR and co-authored the 2005 and 2004 editions.
Nathaniel Keohane is Director of Economic Policy and Analysis at the Environmental Defense Fund, and Adjunct Professor at NYU School of Law. He has published articles on environmental economics in numerous academic journals, and is the co-author of Markets and the Environment.
Their Climate Finance project provides some much-welcome “brass tacks” considerations on the financing and regulatory issues of climate change governance. Here’s the short description:
Preventing risks of severe damage from climate change not only requires deep cuts in developed country greenhouse gas emissions, but enormous amounts of public and private investment to limit emissions while promoting green growth in developing countries. While attention has focused on emissions limitations commitments and architectures, the crucial issue of what must be done to mobilize and govern the necessary financial resources has received too little consideration. In Climate Finance, a leading group of policy experts and scholars show how effective mitigation of climate change will depend on a complex mix of public funds, private investment though carbon markets, and structured incentives that leave room for developing country innovations. This requires sophisticated national and global regulation of cap-and-trade and offset markets, forest and energy policy, international development funding, international trade law, and coordinated tax policy.
Thirty-six targeted policy essays present a succinct overview of the emerging field of climate finance, defining the issues, setting the stakes, and making new and comprehensive proposals for financial, regulatory, and governance mechanisms that will enrich political and policy debate for many years to come. The complex challenges of climate finance will continue to demand fresh insights and creative approaches. The ideas in this volume mark out starting points for essential institutional and policy innovations.
Remember, you can download the book free of charge from here.
We at Opinio Juris are excited that such a distinguished and varied group of experts will be with us over the next week. We encourage our readers to weigh-in with questions and comments.
One of my favorite issues of the New York Times Magazine is its “year in ideas” issue, which comes annually in December. Because OJ is a repository of things related to battlefield robotics and law and ethics, I wanted to flag for your attention the item by Dara Kerr, “Guilty Robots.”
[I]magine robots that obey injunctions like Immanuel Kant’s categorical imperative — acting rationally and with a sense of moral duty. This July, the roboticist Ronald Arkin of Georgia Tech finished a three-year project with the U.S. Army designing prototype software for autonomous ethical robots. He maintains that in limited situations, like countersniper operations or storming buildings, the software will actually allow robots to outperform humans from an ethical perspective.
“I believe these systems will have more information available to them than any human soldier could possibly process and manage at a given point in time and thus be able to make better informed decisions,” he says.
The software consists of what Arkin calls “ethical architecture,” which is based on international laws of war and rules of engagement.
The “guilty” part comes from a feature of Professor Arkin’s ethical architecture, in which certain parameters cause the robot to become more “worried” about the rising calculations of collateral damage and other such factors.
After considering several moral emotions like remorse, compassion and shame, Arkin decided to focus on modeling guilt because it can be used to condemn specific behavior and generate constructive change. While fighting, his robots assess battlefield damage and then use algorithms to calculate the appropriate level of guilt. If the damage includes noncombatant casualties or harm to civilian property, for instance, their guilt level increases. As the level grows, the robots may choose weapons with less risk of collateral damage or may refuse to fight altogether.
As I have said several times on this blog, and in various talks and presentations, I am agnostic as to whether at some point in the future, robots might prove to be ethically superior to humans in making decisions about firing weapons on the battlefield. When I say agnostic, I mean genuinely agnostic – it seems to me an open question of where technology goes, and in, say, a hundred years, who can say? For thing, I do fully imagine that roboticized medicine, surgery and operations, will very possibly have reached the point where it might well be presumptive malpractice for the human doctor to override the machine. It is not impossible for me to imagine – far from it – a time in which it would be a presumptive war crime for the human soldier to override the ethical decisions of the machine.
But maybe not. Although I am strongly in favor of the kinds of research programs that Professor Arkin is undertaking, I think the ethical and legal issues, whether the categorical rules or the proportionality rules, of warfare involve questions that humans have not managed to answer at the conceptual level. Proportionality and what it means when seeking to weigh up radically incommensurable goods – military necessity and harm to civilians, for example – to start with. One reason I am excited by Professor Arkin’s attempts to perform these functions in machine terms, however, is that the detailed, step by step, project forces us to think through difficult conceptual issues regarding human ethics at the granular level that we might otherwise skip over with some quick assumptions. Programming does not allow one to do that quite so easily.
And it is open to Professor Arkin to reply to the concern that humans don’t have a fully articulated framework, even at the basic conceptual level, for the ethics of warfare: “Well, in order to develop a machine, I don’t actually have to address those questions or solve those problems. The robot doesn’t have to have more ethical answers than you humans – it just has to be able to do as well, even with the gaps and holes.”
Many OJ readers will by now be familiar with Peter W. Singer’s widely noticed Wired for War. But I would suggest following it up with Professor Arkin’s own new book, Governing Lethal Behavior in Autonomous Robots, particularly now that Amazon has dropped the price from $60 to $40.
I guess I should also add that this discussion is about battlefield robotics in the sense of “autonomous” firing systems – not the current robotics question of human controlled, but remote platform unmanned combat vehicles, Predators and drones. I will try to put up a post soon noting several new papers on the targeted killing and UCV-drone issues in international law, including new papers on SSRN by Mary Ellen O’Connell, Jordan Paust, and others – I’ll try to do a roundup of recent papers on the subject (once past grading my corporate finance and IBT finals, that is).
President Obama’s Nobel Prize speech yesterday made reference to the moral authority, under the ethics of the just war, for armed humanitarian intervention in some situations. It is a topic that has been debated and discussed as a matter of international law for, well, a long time, but which gained particular urgency following on Bosnia, Rwanda, and Kosovo in the 1990s. It continues to be debated and argued as a matter of law, morality, and policy. The Council on Foreign Relations has just issued a new report, Intervention to Stop Genocide and Mass Atrocities, authored by Columbia law professor and former Bush administration official Matthew Waxman, looking for ways to move the discussion forward. It is a terrific report, coherently organized and thought-out as to substance, I strongly recommend it to anyone thinking through mass atrocities and “R2P.”
Professor Waxman’s report starts from the premise that the US favors robust practical measures to stop and prevent genocide and mass atrocities. He then turns to the legal regimes in international law and asks what prevents robust responses from taking place:
A[n] important part of this debate concerns the international legal system governing the use of force in situations of actual or potential atrocities. In this Council Special Report, Matthew C. Waxman asks whether this legal regime is effective in preventing and stopping such crimes. The report notes that international legal practices constrain swift action and require extensive consultation, especially in the United Nations Security Council, before particular steps can be taken. Waxman, though, argues that the system has certain benefits: it can confer legitimacy and help actors coordinate both military and nonmilitary efforts to prevent or stop atrocities. He also contends that different arrangements of the kind some have proposed would be unlikely to prove more effective.
He therefore opposes wholesale reforms but recommends more modest steps the United States could take to improve the current legal regime. These measures include expressing strong but nuanced support for the responsibility to protect and working with other permanent members of the UN Security Council to discourage the use of vetoes in clear cases of mass atrocities. But the report also argues that the United States must be prepared to act alone or with others in urgent cases without Security Council approval.
I would add, as my own view, however, that R2P gets harder and harder to pull off in a genuinely multipolar world; a multipolar world, as the ever-astute David Rieff has noted, is a competitive, not cooperative, one. In the jockeying for position around many things ranging from commercial advantage to energy to markets to regional security to lots more besides, many more actors can find many more reasons, and many more reasons not obviously related to the atrocities at hand and many reasons not even of any obvious importance, for preventing R2P from taking place.
The intervention that did take place – Kosovo – depended, not upon the United Nations or the collective security of international organizations, but upon the rough and ready security hegemony of the United States. This was one of the crucial tenets of President Obama’s Nobel speech – an acknowledgment of the US as the provider since WWII of the basics of global security as a global public good. The interventions that did not take place, Rwanda and Bosnia (at least not until late in the day), did not because they depended upon the collective security mechanisms of the UN. What the international system did instead was punt, so to speak, to the future and promise an emerging system of international criminal law that would address these things post hoc (I am skeptical about the post hoc move, unsurprisingly, and say so here in the EJIL). The US acts (as President Obama recognized), not merely as the biggest player (still) in the international system of law and organizations, but as a parallel player, acting from outside the structure of liberal internationalism, in effect offering an extra-UN-system guarantee to the system. That’s one reason why the UN has not simply imploded as a system of collective security; words are there, but security is underwritten by an actor outside of the system and its ineradicable collective action failures.
However, despite the admirable activities of legal academics and policy experts to try to put flesh on the bones of R2P, it seems to me that the concept has been in retreat. At the broadest level, this is on account of the rise of multipolarity – or at least its perception – and the resurgence of the “electoral authoritarians,” particularly Putin’s Russia, which saw Kosovo as something of a watershed (Macedonia a little bit too, for that matter, remember it?), and all in the wrong direction. After all, the Kosovo war was not put to the Security Council by the NATO coalition, for the reason that Russia, and perhaps China, would have vetoed it. And, on the other hand, R2P has already been invoked by Russia as a ground for its adventures in Georgia; in bad faith, of course, but even bad faith invocations can undermine the concept in real life.
This palpable dislike of R2P found expression in the language of the 2005 Final Outcome Document of the UN General Assembly reform conference in 2005 – under the ever-malign influence of the General Assembly, the final language mentioned R2P, but cabined it under the authorization of the Security Council. Under the terms of the 2005 document, the Kosovo war would have had to go to the Security Council, with predictable results. Note, too, that this runs directly against President Obama’s assertion yesterday that there would be times when the US, sometimes alone and sometimes with friends, would act – outside of the UN system. The world as it is, as it were.