Market News

 May 26, 2009
Climate change: "World's destiny at stake"

 Paris, France -- Ministers from economies accounting for 80 per cent of the globe's greenhouse gases met Monday to warnings that "the world's destiny" may lie in the outcome of a mooted pact on climate change.

The so-called Major Economies Forum (MEF) met in Paris ahead of a new round of UN talks aimed at culminating in a sweeping global treaty in Copenhagen in December.

"The world's destiny will probably be at stake in Copenhagen," French Ecology Minister Jean-Louis Borloo said as he opened the two-day meeting in Paris.

He spoke out against skeptics who predict the accord will cripple the world's economy.

"Copenhagen is not a retrograde vision, it's not the start of negative growth, but a new start for strong, sustainable, sober carbon development," he said.

The 192-nation process under the UN Framework Convention on Climate Change (UNFCCC) aims at securing cuts in emissions of heat-trapping carbon gases and building defences for poor countries most exposed to changing weather patterns.

It would take effect after 2012, when the current provisions of the convention's Kyoto Protocol run out.

But the negotiations -- due to resume in Bonn on Monday -- are extremely complex and have been hampered by many differences.

The MEF's role is to try to identify common ground among the world's biggest emitters and then hand this consensus back to the UNFCCC for approval.

The Paris meeting will cover financing and the transfer of clean technology, Borloo said.

In Copenhagen, European Commission President Jose Manuel Barroso admitted the climate negotiations would be "extremely difficult" but argued momentum was building.

"There is now a new situation that would have been unthinkable just a few weeks ago," he said, referring to commitments signalled by China and the United States.

"Some of our partners who a few years ago denied the existence of the climate change problem are now discussing the texts for a possible agreement."

One of the stumbling blocks is a demand by developing countries that rich economies, which are chiefly to blame for today's warming, pledge deep cuts in future carbon emissions.

China has demanded reductions of at least 40 per cent by 2020, as compared to a benchmark of 1990.

Supporters say a cut of this order will encourage the big developing countries -- led by China, now the world's number-one emitter by some estimates -- to give ground.

But the only advanced economy making concessions on such a scale is the European Union, which is unilaterally targeting a 20 per cent cut by 2020 over 1990 levels, and offering 30 per cent if other advanced economies follow suit.

By comparison, U.S. President Barack Obama has proposed reducing America's greenhouse gas emissions by 14 per cent by 2020 compared to their 2005 level. Analysts say this roughly translates to a three per cent cut from 1990 levels.

U.S. climate envoy Todd Stern told AFP on Sunday that China's demand of 40 per cent "is not realistic" and cautioned that domestic US politics meant the Obama administration could only go so far with its concessions.

"We are jumping as high as the political system will tolerate," he added.

At a press conference on Monday, Borloo said "there can't be any compromise over assuring others that we will do" a 25-to-40 per cent reduction.

The essential thing was to "work in a very imaginative fashion" to achieve a consensus among rich countries so that a 25-to-40 package was put on the table, he said.

"We can have flexibility between us, some of us will do more, more quickly, and others a bit later... there could be commitments that take effect two, three years later, there could be other commitments in other areas," he said.

He spoke of the possibility of "sectoral" agreements in industries that are big carbon emitters, such as electricity or steel.

The MEF was launched by Obama last month on the back of a similar initiative by his predecessor, George W. Bush.

Its participants include Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, South Africa and the United States, as well as the 27-nation European Union.

Source: Canwest News Service