-----

Resources



Market News

 October 29, 2009
Why Success in Copenhagen is a Political Must

 Deutsche Bank Research has prepared a short but informative report that provides one of the clearest perspectives on the key issues that will be on the table in Copenhagen.  

GLOBE-Net -At the start of December Copenhagen will host the 15th Conference of the Parties to the United Nations Framework Convention on Climate Change. This conference is one of the most important and most complex in the history of climate policy negotiations.  

As noted by Deutche Bank, the objective is to form a treaty as a successor for the Kyoto Protocol. To enable a breakthrough on climate policy to be made in Copenhagen particularly vigorous efforts should be made to reach agreement on the following key issues:

Set a target for reducing global emissions of greenhouse gases. A long-term target for reducing greenhouse gases should be set. Interim medium-term targets must then be added. The goal has to be to reduce global emissions by around 80% by 2050. To achieve this, the industrial nations will have to set themselves more exacting targets than poorer countries. The minimum target should be to agree to limit the global increase in the average temperature to 2°C. 

Bolster emissions trading. Emissions trading is a promising instrument in international climate change policy. Existing trading systems need to be harmonised and lessons must be learned from the mistakes made with EU emissions trading. It is economically and ecologically reasonable to extend the instrument to as many countries and other sectors as possible. 

Speed up the transfer of technology and funding. This is a particularly contentious issue. The position of the developing countries and emerging markets is clear: without assistance from developed countries they will not agree to any treaty. Under discussion are transfers from the rich to the poor countries totalling USD 100-150 bn per year - more than the combined development aid expenditures of all OECD countries. 

Pay greater attention to emissions from agriculture and forestry. They account for about 30% of global greenhouse gas emissions. Financial incentives to curtail the destruction of the tropical rainforests or to support afforestation measures could make a significant contribution to tackling climate change.

Commence adaptation measures. The negative consequences of climate change will become increasingly apparent over the coming years. Attention in Copenhagen therefore needs to be focused not only on mitigation measures but also on appropriate adaptation measures and their financing.

Scepticism warranted.

The Report’s author, Eric Heymann, of Deutsche Bank Research, notes that given the huge fundamental challenges and the questions of detail it is difficult to be optimistic about the prospects for Copenhagen. The economic crisis has reduced the political scope for negotiation.

Since governments in most countries are being closely observed by a growing number of -climate-sensitive? voters, however, a failure in Copenhagen can hardly be communicated well politically.

Therefore, he notes, governments will fight to avoid such an outcome. Negotiations in Copenhagen could deliver a compromise that can be interpreted as a step in the right direction. Whether the step will, however, also be bold enough ecologically or lead to timely further steps is debatable as things stand today.

This short but informative report by Deutsche Bank Research provides one of the clearest perspectives on the key issues that will be on the table in Copenhagen. It is well worth the read. It is available for download here.

For More Information: Deutsche Bank