Market News

 February 19, 2007
G8 + 5 agree to post-Kyoto targets

 Washington, D.C., USA - A group of political delegates representing the G8 nations plus five developing countries have agreed that all counties should meet targets for cutting greenhouse gas emissions and pledged to have a post-Kyoto framework in place by 2009.

More than 100 legislators and officials from the G8 (Canada, the United States, France, Germany, Italy, Japan, Russia, and the United Kingdom) and leading developing nations Brazil, China, India, Mexico and South Africa gathered in Washington DC to debate the future of international climate policy. Together, the assembled nations account for around 85% of global greenhouse gas emissions.

The statement (PDF) issued by the group, known as the G8+5 Climate Change Dialogue, makes a significant yet unbinding commitment to establishing global emissions reduction targets beyond 2012. Countries agreed that "the evidence that man is changing climate is now beyond doubt", and urged the countries to develop the key elements of a post-2012 plan and conclude negotiations on the framework by 2009.

The "suggested" elements of the post-Kyoto approach include:

  • Long term targets for developed countries
  • 'Appropriate targets' for developing countries
  • Incentives for measures to reduce deforestation
  • Incentives sustainable development in developing countries
  • Adaptation assistance for the most vulnerable developing countries

The statement included a recognition that the costs of action are less than those of inaction, and said that achieving a goal of stabilizing atmospheric GHG concentrations between 450 to 550 parts per million will require a "binding UN framework signed up to by all the major economies", as well as other initiatives and partnerships. The United Nations Intergovernmental Panel on Climate Change has suggested that stabilization in the lower end of this range could avoid temperature increases above 2 degrees Celsius; in 2005, atmospheric levels were 379 ppm.

Technology development and innovation were cited as vital to these efforts, particularly those which 'decarbonise' fossil fuels through carbon capture and sequestration, along with renewable energy, energy efficiency, and biofuels.

Importantly, the statement also acknowledged that the most effective method for stimulating development in these areas is to establish a market value for greenhouse gas emissions, or a global carbon price. The preferred method for doing so appears to be an emissions trading system, and the creation of a global carbon market expanded into all sectors is endorsed.

The G8+5 Climate Change Dialogue was launched in February 2006, spearheaded by British Prime Minister Tony Blair in an effort to build consensus among the world's leading greenhouse gas emitters for the period following the expiration of the Kyoto Protocol in 2012. Canadian participants at the Legislators Forum on Climate Change in Washington included Liberal, NDP, and Conservative MPs; for the first time, the government paid for travel expenses, as up until now MPs had been required to fund their own attendance at the meetings.

What this means for 2012

The statement endorsed by the countries present in Washington is non-binding, and does not require action from any country or commit to any emissions reduction targets. However, it is significant because it sets a timeline for developing a post-2012 global framework, a goal which was cast in doubt following a failure to set timeframe at the meeting of the United Nations Framework Convention on Climate Change (UNFCCC) in Nairobi in 2006.

It is now up to the countries to follow through on their pledge at the G8 summit in Heiligendamm, Germany in June 2007. German Chancellor Angela Merkel holds the current G8 presidency, and has made climate change and energy security two of her top priorities.

Countries are urged to agree on the elements of the post-2012 framework at Heiligendamm, and to begin negotiations on the plan at the November 2007 meeting of the UNFCCC in Bali.

Should that conference result in clearly defined emissions targets that include countries such as China, India, and the United States, it would be a landmark achievement. Those three countries have previously resisted any talks of hard emissions caps, and reaching a consensus on acceptable targets for those nations will require serious negotiations as well as a change in political will.

Many national leaders were not present at the meeting in Washington, so maintaining those commitments when they are present in Heiligendamm will be a challenge, although powerful politicians from the United States strongly endorsed the statement. Political, public, and business attitudes towards climate change are shifting, with this latest pledge for action a representation of the growing awareness of the imperative for immediate action.