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BW Businessworld

One Question: Two Answers

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As world leaders assemble in Durban to chalk out a pragmatic solution to climate change, two experts from different parts of the world identify the problem, but differ on the philosophy of the solution. BW's Yashodhara Dasgupta spoke to former UNFCCC chief Yvo De Boer, who is KPMG's special global advisor on climate change and sustainability, and R.K. Pachauri, who heads UN climate panel IPCC and the not-for-profit, TERI.

YVO DE BOER, former executive secretary, UN Framework Convention on Climate Change (UNFCCC)

First off, why at all should we be concerned about climate change?
What we need to be worried about in the short term is increased flooding and increased monsoons in areas where we already see a considerable amount of rainfall. Increased drought in areas that are already drought affected. Temperature increase will affect the ability to grow crops in certain parts of the world. Over the longer term, there is the issue of sea level rise, which could affect many of the metropolitan centres around the world.

In Copenhagen and Cancun (climate talks), governments agreed that we should limit the increase in global temperature to 2oC. For now, we have very, very little opportunity of achieving that target given the fact that on the one hand, we still lack a global agreement and, on the other, even though about 80 big countries including emerging economies such as India, Brazil, China and South Africa, have made commitments, they are not enough.
 
Who should make emission cuts - developed countries or the developing ones? Can we discount the historical responsibility?
It is important to differentiate between countries based on historical reasons; more so on grounds of economic ability to cope with the issue. For India and many other developing countries, the over-riding concern is economic growth and poverty eradication. At the same time, it is necessary for countries around the world to act and to engage on the issue of climate change. If we are all serious about moving on a more sustainable growth path, we should see it in our interest to act on this issue rather than resisting on political grounds.

What do you mean by 'acting on' the issue?
Every country should develop a vision on how it can grow its economy in a more sustainable way and put in place policies and strategies to take it towards that goal by using its own resources and also through global cooperation. This is where an international treaty is so important.

But even after 20 years, we are still at loggerheads with each other...
Suppose you have two brothers who are overweight and they know they need to lose weight dramatically. But one brother is refusing to go on a diet because the other one is not going on one. Then, that is a bit like damaging your own health just because someone else is making a foolish mistake. Countries pointing at each other and waiting to take action because the other is not is basically harming their own economic and ecological future. If we are really interested in sustainable growth, it should be all about self-interest.

How important are roles of the US and the BASIC countries (Brazil, South Africa, India and China) in the Durban talks?
The BASIC countries have a very significant role to play in the negotiations. They have demonstrated that they are serious about coming to grips with the issue of climate change. China has a very ambitious plan to tackle the nature of its economic growth. India has formulated a national action plan on climate change with eight missions to help implement the government's strategy. South Africa has stated that 'business as usual' is going out of business. Brazil has made large investments in biofuel. The problem that we have to overcome is the political conundrum where countries are pointing at each other for taking insufficient steps and using that as an excuse.

I hope we can see a step change in Durban. Times are difficult, many western countries are coping with economic crises. We have seen a lack of leadership on part of those who should have shown leadership. But let us not use that as an excuse not to act.

An international agreement can help mobilise the finance, the technology and capacity building initiatives that are going to be critical if it is going to be possible for developing countries. What I would like get out of is this chicken and egg mode where everyone is pointing fingers at everyone else and waiting for the others to act. In the meantime, Rome is burning and as I said the 2 degree temperature goal is pretty much out of reach.

What do you really think will happen at the Durban climate talks?
That is very hard to say. We are heading for a massive confrontation on the future or non-future of the Kyoto Protocol. Europe say they want to extend the target for the protocol if it is in the context of a broader agreement. And Japan, Russia and Canada say they do not see any point in extending it if the US is not part of it. The US will never join the protocol. So, the question is: can you find a way to extend Kyoto in the context of an all-encompassing agreement?

During your time in UNFCCC and the negotiations, what were the primary challenges you faced?
The main challenge was although everyone talked about green growth, many of them didn't fully understand or believe how the green growth story could work for them. Many of the environment ministers and senior officials involved in the process do not have sufficient ammunition to convincingly make the green growth case at home. We need an international approach. And the main stumbling block is a trust deficit.

Is it possible to combat climate change without unilateral trade measures?
It would be a disappointment if we slip into protectionism when we fail to reach a global agreement. The fundamental challenge we need to focus on is to integrate the cost of GHG into the prices of products and the consumer should be paying for the pollution of what he consumes. Given the fact that per capita emission in industrialised countries is much more than that in developing countries, they should be paying for it.

Your views on the EU bringing in aviation into the emissions trading scheme.
First of all, the EU would not argue that this is a trade measure. They would say this is an environmental measure and that they seek to subject all airlines flying to Europe to pay the cost for the GHG they emit. The more important point would be that, for decades, we have been asking the International Civil Aviation Organization and the International Maritime Organisation to deal with emissions and what Europe is doing is a sign of frustration given the lack of progress at the international level.

How do you bridge the gap between the ways things are perceived?
Through conversation and dialogue but above all by using Durban to come to a global to approach that makes these regional measures unnecessary.

About $100 billion has been promised to developing countries to support climate change mitigation (by 2020). But technology transfer and intellectual property rights are the key issues here.
The bulk of technology transfer happens through investments that are made. Very few companies in the business of transferring technology are doing so for the sake of it. Rather, it is done in the context of an investment that is made in another country and in another company. The key opportunity for technology transfer is in the context of the global carbon market.

For instance, if a renewable energy project in India receives pre-finance via (the UN's) clean development mechanism (CDM), it is much more attractive for the domestic project owners to carry out the project. That said, there are ways to bring down the cost of generic technology. We can take an example of that in what was successfully done in the case of HIV-AIDS, where anti-retrovirals were made available at significantly lowered costs. It is a very different story, but the point is whether we can make generic renewable technology such as wind and solar more cheaply available for developing countries.

There's a lot of controversy about the carbon market. It was built however, to reduce GHGs. Do you think the mechanism has been successful in doing that?
The carbon market has a dual objective. On the one hand, it's intended to allow industrialised countries to achieve their emission reduction targets at a lower cost than if they had done it at home. The second purpose was to stimulate sustainable growth and clean development in developing countries. It's not to get out of a problem as cheaply as you can. It's also about stimulating greener growth in developing countries. I would argue that the clean development mechanism has been quite significant. There is now a multi-billion dollar carbon market. Durban will have to provide whether that market can continue and how it can continue but I very strongly believe that market based mechanisms need to be part of an international response to climate change.

What do you have to say to those who believe climate change is not a problem and we should not be doing anything?
It reminds me of a rather horrible experiment where if you drop a frog in boiling water, it is very quick to jump out. But if you cook it slowly, it will remain there till boiling point is reached and it dies. To ignore the issue (of climate change) is very dangerous.
The broad scientific consensus is that we are confronted with a huge challenge, which we need to get a control very quickly. If we fail to get it under control quickly, the consequences will be catastrophic. But that aside, if you look at the pressures we face in terms of energy security, resource scarcity and food scarcity, even if climate change is not an issue, we would have at least half a dozen other reasons to reform the way we exploit the planet.

What should a good climate policy look like? Can you cite some examples?
They include reducing the amount of fossil fuel used in the energy mix and switching more to renewable sources of energy. They also include improving industrial energy efficiency to get rid of highly inefficient and polluting small and medium enterprises (SMEs). Thirdly, in transportation, we should move towards vehicles that have low emissions or even to electric and hybrid ones. Given the rapid pace of urbanisation, a stronger focus is needed on building cities that are more sustainable, have sustainable infrastructure and in part generate their own power.

A number of Nordic countries already have  ambitious policies in place or is in the process of doing so. There are also examples in Asia. For example, China used the 2008 economic crisis to focus more on renewable energy. China is closing down large numbers of highly inefficient SMEs. It is building state-of-the-art, coal-fired power plants. It is moving towards sustainable cities. China is making a fundamental shift in the direction of economic growth. Korea is another good example of this.
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R.K. Pachauri, chairman, IPCC

Why should we be concerned about human-induced climate change?
Firstly, climate change has a whole range of impacts that extend to human health, agriculture, forests and biodiversity. There are also extreme events such as floods and droughts, extreme precipitation and events such as sea level rise. During the 20th century, sea level rose by about 17 cm on an average.

On the other side of the picture, the problem with human-induced climate change is that concentration of GHG has gone up significantly in the past 150 years. Before industrialisation, carbon dioxide (CO2) concentration levels were at 280 ppm (parts per million). It is now inching up to 400 ppm. What we really need to do is stabilise the concentration of these gases in the Earth's atmosphere. That means we have to reduce emissions of these gases. That is the only way to bring down concentration levels. But this would require some major changes in improving efficient use of fossil fuels. One reason for the increase of these gases is deforestation. We could also move away from those fuels which are intensive in carbon content. That means we need to move to renewable sources of energy. For instance, if we're using coal, we should move towards greater use of natural gas.

If we were to do all this, there would be a large number of co-benefits. Firstly, if we reduce emissions of these gases, we also reduce pollution at local levels, yielding health benefits. Secondly, If we reduce the use of fossil fuels by increased use of renewable energy, we create higher energy security worldwide. Thirdly, the farm sector benefits because climate change often reduces yields, affecting food security. Countries like India that often depend on rain-fed agriculture, get severly impacted by climate changes.

Now for Durban climate talks, my own plea to everyone would be to look at the science of climate change because it is only on that basis that we see the benefits of taking action. As it happens, climate change will continue for several decades even if we were to freeze our emissions at present levels. So we have to adapt to some level of climate change in any case. What you really need is mitigation as well as adaptation.



When it comes to binding emission reduction targets, is it fair to overlook historical responsibility? Or is it time for everyone to make those commitments?

That is a very complex issue. We have different paths and different solutions. But we have to visualise this as a global problem. There are some who would be much more vulnerable to the impacts of climate change than others. Keeping that in view, there is a certain sense of urgency to see that we are able to either avoid or delay some of the more serious impacts of climate change. And Durban or any other conference of the parties must be driven by the scientific understanding of climate change. We need action at the global level, at the national level and most importantly, at the local level.
 
There are differences over the mandatory emission caps. How can we resolve them?
There has to be a spirit of give and take. There are certain ethical dimensions to the problem. There are certainly issues of the capacity to bear these impacts; some of the poorest countries in the world are going to be most impacted. For example, we (the UN's Intergovernmental Panel on Climate Change or IPCC) have made an estimate that in Africa, as early as 2020, you will have 75-250 million people living in a state of water stress due to climate change. We need to be concerned about what this would do to those societies and what happens to our own responsibility in taking action to prevent this. It is a complex issue. I do not think one can come up with a clear cut formula on who should do what. But if there is the force of scientific evidence on the subject and if there is a certain level of ethical action on the part of different countries, we can find a solution without too much bickering.

What role do western nations as well as India have to play in the Durban talks?
It is very difficult to outline those roles, but they are clearly specified in the UN Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol. Now the protocol is coming to an end in 2012 and, as it happens, a number of countries are not going to meet the commitments they had accepted. But the treaty, which was signed and ratified by such a large number of countries, should not be treated like a mere piece of paper. And countries that are coming together must decide what must be done in terms of unfilled commitments and how they are going to be met. I really do not have the answer, but it is absolutely crucial that we do not spend two weeks getting into short-term political debates. But typically, the way the conference is structured, you only get into short-term political issues and narrow, myopic situations in setting positions on the part of each country.

What do you think will happen at the Durban talks?
Unless human society understands the reality of climate change and does something about it both in terms of adaptation and mitigation, we would not succeed. We have brought out very clearly that if we delay action then costs over a period of time will go up and impacts will progressively become more serious. So I hope the countries can come up with some agreement and they can come up with a framework that protects the interests of all living species and that minimises the risk society will have to bear if we don't take steps.

So, how can the talks be made successful?
At every stage of the talks, you have to inject the knowledge that has come out of the scientific assessments on climate change so that people are aware (of the issue). You would be surprised at how little people are aware - even among those who are supposed to be responsible for detailed discussions on agreements that are being proposed. This has to be a knowledge-driven approach. I am afraid we are, probably, not doing enough of knowledge dissemination - of providing the scientific rationale by which action should be taken - and this clearly has to be a continuous stream that has to flow through the entire discussion.

Is the Kyoto Protocol enough?
There are more than one path and people should be enlightened enough to evaluate all that is possible and come up with something that is agreed upon. It is for negotiators to come up with something fair, effective and equitable. I would not specify any single outcome. You can evaluate the Kyoto Protocol against the assessment we came up with, that is, if we have to limit temperature increase to 2.0-2.4 degrees celsius and if we want to do that along the least cost pathway, then CO2 should peak no later than 2015. Therefore, I think the world has to do much more.


Environment minister Jayanthi Natarajan has taken a firm stand on unilateral trade measures. But a measure taken to combat climate change could be perceived as a discriminatory trade barrier by developing countries. How do you look at it?
As far as I know, even the World Trade Organization (WTO) does not permit these non-tariff barriers. And if some countries are doing it, it seems they are doing so against the spirit of the WTO. I suppose what you are saying fits in with the existing global treaty. But that is what negotiations are about. One would like to believe that as rational human beings we can arrive at an agreement that reconciles the differences.
 
What are your views on the EU bringing in aviation under the emission trading scheme?
The IPCC has clearly stated in our fourth assessment report that there has to be a price on carbon. And if any country wants to put a price or tax on carbon, it is well within their jurisdiction to take such a step. I do not know the legality of the situation, but in keeping with the assessment, a price on carbon is, perhaps, one of the most effective ways of bringing about efficiency in the use of fossil fuels and a reduction in emissions. And if it fits in here with this particular principle, it is all right.

Looking at the situation of technology transfer and financial aid, is it then fair to ask for commitments when you are not meeting your own? And how do you protect R&D in clean technology, while ensuring it is available to developing countries?
You have an analogy in the case of drugs meant for pandemics such as HIV-AIDS. Some of those principles can be applied here as well. If you have a very poor country that cannot afford to buy technologies that benefit them as well as others, then that is what development assistance is for. You could use principles of that nature in the specific instance of money that is going to be made available for some of these mitigation measures in those countries.

How successful do you think the carbon market has been in achieving what it was meant for that is, reducing GHGs?
The carbon market is operating and would be considered successful or unsuccessful depending on how much it is going to limit GHGs on a global basis. And this is only a part of the whole. You can't really flog carbon markets if you don't have any means to create larger and healthier markets. The reality is we have not done enough. And this is only a part of the larger process.

What do you have to say to those who don't believe climate change is a problem at all?
The truth is that whenever there is a new body of knowledge, there is a certain inertia in accepting it. But I want to reiterate something we said in the fourth assessment report when we looked at energy supply and key mitigation practices that are currently commercially available and policies and measures and instruments shown to be environmentally effective. We had listed three constraints for these actions, and we have said that (one of the three constraints would be) resistance by vested interests, which may make it difficult to implement (climate change policies).

It is in the interests of business and industry to understand these issues because the losses from weather-related events - there is data on this largely in the developed countries - has varied from nothing in 1980 to about $200 billion in 2005. Why $200 billion in 2005? Because that was the year when Hurricane Katrina hit New Orleans. So businesses have a direct interest in seeing that something is done to help mitigate the effects of GHGs and adapt to the impact of climate change. There are also opportunities. If the world is going to move towards low-carbon technologies, there are markets that are going to grow and those companies that invest in these technologies at the earliest will reap the most benefits.

What should be the salient features of a good climate policy?
There is a whole range of policies, but the one that is really going to be the most useful at least for mitigation is to place a price on carbon. Those energy sources that are most intensive in carbon necessarily should carry a higher price. So pricing measures can make a huge difference. We need government policies that provide incentives for the development of renewable energy resources, for promoting energy efficiency and to prevent deforestation in certain parts of the world.

If you look at the countries that are at the same income level - even in per capita terms - some of them are able to produce those incomes with very low inputs of energy. At the same time, other countries produce them with much higher inputs of energy. So, there is clearly a distinction in the technologies they use, the infrastructure they have established and, most importantly, even in their lifestyles. In the ultimate analysis, what would make a difference - particularly in democratic societies - is creating awareness of the reality and the science of climate change among people.

An abridged version of this interview appears in the print issue dated 05-12-2011

(This story was published in Businessworld Issue Dated 05-12-2011)