Davos Annual Meeting 2010 - From Copenhagen to Mexico: What's Next?

Timothy E. Wirth, President, United Nations Foundation, Washington DC; Global
Agenda Council on Climate Change:
Thank you all very much for coming. My name is Timothy Wirth; I am President of the United
Nations Foundation and it's my privilege to help to moderate this very, very important
panel. The topic today is, and let me read from the agenda to remind us all, 'The UN
Climate Change Conference in Copenhagen did not lead to a definitive global solution on
carbon emissions. What immediate steps should governments, businesses and civil society
take towards a long-term climate path that is both environmentally effective and economically
efficient?' This session is part of an ongoing effort by the World Economic Forum to help
improve international cooperation by surfacing the best ideas and triggering new practices
in the governance of most important challenges. Davos should serve as a thread for feedback
on ideas and proposals that the Global Agenda Councils are working at under the framework
of redesign.
As we talk about climate change, let me divert for just a minute for those of you who may
not watch this all in great detail and just give you a little bit of definition so that
some of the words that may be, or terms that may be unfamiliar, we can all share. First,
the Framework Convention is the climate treaty. It's called the Framework Convention, it was
negotiated in Rio in 1992, and the operative words were, to quote, 'avoid dangerous anthropogenic
interference in the climate system'. Kyoto, which came five years after the Climate Convention
was ratified by 180 some-odd countries, so the United States was the sixth country to
ratify the basic climate treaty. Kyoto was the first implementation protocol to the treaty,
that was 1997 and it was at Kyoto that a distinction was developed between specifically what the
responsibilities of developed countries were going to be, those were so-called Annex 1
countries, and what developing countries, everybody else, should do, the so-called non-Annex
1 countries. Copenhagen was the third major convening that just occurred in December.
Copenhagen's initial purpose was to design a treaty in which nations all around he world
could come together in agreement about what a global strategy should be related to climate
change.
When you hear reference to COPs, it has nothing to do with policemen. COP means the Conference
of the Parties. The Conference of the Parties are all of the countries who ratified the
treaty. They are members of the COP. What occurred in Copenhagen was the 15th Conference
of the Parties, the 15th year since the treaty was ratified in 1992, and Mexico will be the
host of the next COP this year in 2010, so President Calderón has a very, very important
function and what we're talking about today is the time between and what we do between
COP15, Copenhagen, and COP16 which will occur in Mexico.
Final definition, the IPCC is the Intergovernmental Panel on Climate Change. That is the scientific
group that came together in the late 1980s, sponsored by the UN's World Meteorological
Organization and the United Nations Environment Programme. More than 2,000 scientists from
all over the world who have developed the consensus science upon which all of the climate
negotiations have occurred. That's the IPCC.
We're talking here about the way forward and that clearly will be led by President Calderón.
As we agreed this morning with his forbearance, we're going to spend a few minutes first on
where we've been, what happened in Copenhagen. If we did a cloud analysis of discussions
at Davos this week, I think that no doubt Copenhagen would appear in very large, bold
letters. While some have very, very strong views, most people are still trying to figure
out exactly what did happen in Copenhagen and where we go to from here, our topic this
morning. This is by no means clear and there is by no means a consensus. Those with a very
positive interpretation of Copenhagen will most often cite the fact that leaders in Copenhagen,
going into Copenhagen, had to learn their brief, nations developed consensus on the
seriousness of this issue, it was the first international meeting based upon international
consensus science, despite efforts of the climate doubters and deniers to undermine
the science, and despite some unhappy and sloppy science and science writing, the evidence
is incontrovertible that the globe is warming and that man is largely responsible. There
was consensus on a target, that we should shoot to have no higher than a 2°C increase
or 450 parts per million of carbon in the atmosphere and should move toward a low-carbon
economy by 2050 and the developed and developing world both make commitments, a breakthrough
away from the stark line that had existed between Annex 1/non-Annex 1 countries, developed
countries/non-developed countries. That line had been very troublesome and is now beginning
to merge and change in some very interesting ways. Finally, out of Copenhagen, the developed
countries agreed to a $10 billion package of assistance moving to a $100 billion package
by the year 2050 – 2020.
That's the positive view and there are many positive elements of Copenhagen. The negative
is that there was total chaos in the negotiations and that venue really reflects the lack of
capacity of the UN to undertake such negotiations, would say the critics. No agreement was reached;
in fact there are now greater divisions between North and South, Annex 1 and non-Annex 1 countries
remain far apart, the urgency is much greater than negotiations would suggest and we have
to now find a new venue and a new approach. So there's a very broad split and many, many
shades of difference in between.
To start the morning, we've asked Yvo de Boer, the Executive Secretary of the Framework Convention
on Climate Change to set the scene as to what does he, from the perspective of the Conference
of the Parties and the UN, believe was the result of Copenhagen. We've then asked Shyam
Saran, the former Foreign Secretary of India and now special envoy of the Prime Minister
for the India perspective about what happened, some very interesting and different negotiations
occurred in Copenhagen. And then Congressman Ed Markey, the co-author of the important
Waxman-Markey legislation in the House, long-time member of the Congress, to respond from the
perspective of the developed world as to what happened.
After these short remarks, we will then turn it over to President Calderón who has the
responsibility for guiding us into the next year of these negotiations for a more lengthy
discussion. We'll then ask two industry people, Caio Koch-Weser, vice-president of Deutsche
Bank, Carlos Ghosn, the chairman and CEO of Renault and Nissan, both deeply involved with
World Economic Forum activities, to talk about their perspective on next steps, especially
important since the private sector is now playing a larger and larger role, was in my
view practically invisible in Copenhagen, but now must be brought much more to the fore.
Then we'll have a discussion among ourselves, back and forth. We'll save the final 20 minutes
for questions from the audience. So, with that as introduction, Yvo, do you want to
kick us off, and over to you? Thank you.
Yvo De Boer, Executive Secretary, United Nations Framework Convention on Climate Change (UNFCCC),
Bonn; Global Agenda Council on Climate Change:
Well, thank you, Tim, and good morning, everyone. I think I'd like to begin by talking about
what Copenhagen wasn't. Copenhagen did not deliver agreement on a second target period
under the Kyoto Protocol. Copenhagen did not deliver agreement on a new, legally binding
instrument under the Climate Change Convention. Copenhagen did not deliver legally binding
targets for individual industrialized countries. But actually, it wasn't really supposed to
do that. Copenhagen is, in a sense, a step on a longer journey to come to that long-term
response to climate change. You talked about 15 Conferences of Parties. More important
is what Copenhagen did deliver, and what Copenhagen did deliver is, for me, first of all an incredibly
important political statement. Part of the chaos that we saw there was because 120 heads
of state and government came to Copenhagen. 120 heads of state and government expressed
their concern about this issue and the fact that they see it being at the heart of economic
recovery, that they see it being part of an agenda in moving forward. The second thing
that Copenhagen delivered was a core group of countries, major industrialized countries,
major developing nations, representatives of small island states of African countries,
brokering a political agreement which you just outlined, a political agreement which
talks about maximizing temperature increase, providing $100 billion a year to developing
nations, specific pledges of $28 billion in short-term finance were made, but there was
also, in that political package, an important political agreement on a financial architecture,
on a technology agenda moving forward. The agreement also indicates that we will make
reporting by countries more frequent, that actions will be reported on, will be monitored
and verified, especially if there's international financial support, so basically the architecture
was put in place. What I see flowing from that architecture are commitments at the national
level. Yesterday evening, when I was in my hotel room, on my BlackBerry came in the commitment
of the United States to a target in moving forward. China, India, Brazil, Mexico, South
Africa, Korea, a host of nations around the world are moving forward to address the issue
of climate change, the issue of energy prices, the issue of energy security in coherence.
Countries are moving forward at the national level, whatever they felt about the outcome
in Copenhagen. What we now need to do in moving forward towards Mexico is to ensure that we
put an international architecture in place, a regulatory framework that allows countries
to move forward on the basis of a level playing field, both politically and economically.
So, in that sense, Copenhagen will not have pleased the lawyers in the room, but I think
that Copenhagen has given an important signal to the politicians and economists in the room.
Wirth: Great. Thank you, Yvo. In Copenhagen, a very important group came together, the
so-called BASIC group, Brazil, South Africa, India and China. Shyam Saran, would you like
to give us a perspective on what you thought came out of Copenhagen and the BASIC group?
Shyam Saran, Special Envoy of the Prime Minister of India; Global Agenda Council on Climate
Change:
Thank you, Mr Chairman. First of all, let me clarify that as far as the four major developing
countries that you mentioned, they were very clear in their minds that they would like
to see a comprehensive, balanced and an equitable outcome from Copenhagen. That outcome was
not achieved and I believe that one of the reasons why Copenhagen did not live up to
the expectations that that the international community had was precisely because the question
of climate change has become enmeshed with issues of economic interest and I would say
even issues of political interest, so it is extremely difficult to really focus attention
on what all of us agree is one of the greatest global challenges that humanity faces, but
when we start working towards meeting that challenge, we get bogged down in a lot of
issues of level playing field, of trade competitiveness, issues which then make it very difficult for
us to deliver the kind of collaborative response that we need to climate change, and I think
that the point that was being made by the major developing countries, not only the four
BASIC countries but the other developing countries, was that really in this particular case we
need collaboration and that is the spirit of collaboration which was missing.
As far as we are concerned, what was good about Copenhagen was that the major developed
countries, the major developing countries did come together. They did reach broad consensus
which is reflected in the Copenhagen accord, and we think that it was an important development
in our journey towards a global agreement. The fact that we reached broad consensus on
some of the outstanding issues leads us to believe that this could in fact become a very
valuable input into the post-Copenhagen negotiating process, which will lead up to Mexico City,
and this is what the BASIC countries have in fact stated.
I would disagree with the notion that somehow or other the UN system and the multilateral
process failed. It is not the multilateral process which failed. Even in other multilateral
conferences, we have small groups of countries going into a side room discussing various
outstanding issues, but what is very important is that they always bring that back to the
multilateral process, and I think that one of the reasons why Copenhagen did not deliver
what it was supposed to deliver was because that particular link was missing, and I think
we should be very careful that we don't trash the multilateral process when we take this
process forward towards Mexico City.
Wirth: Great, Shyam. Congressman Ed Markey.
Edward J. Markey, Congressman from Massachusetts (Democrat), 7th District; Chairman, Select
Committee on Energy Independence and Global Warming, USA:
I think what happened in Copenhagen from the perspective of the United States was that
there was a very significant step forward. Not as far as we wanted to go, but it has
now put in place, as Yvo just pointed to, the requirement that all of the major players
have to make a commitment and put it in writing, and the United States yesterday put in writing
their commitment to a 17% reduction by 2020 of greenhouse gases, 42% by 2030 and 83% by
2050. Now, that's a huge commitment, so we had an election in Massachusetts last week.
The politics in the United States slightly changed, but the problems did not, and President
Obama in his State of the Union address on Wednesday night made it very clear that he
was fully committed to passing comprehensive energy and climate legislation this year.
We have already completed that process in the House of Representatives, the Senate is
now considering it, but I think that if anyone had any doubts, the President removed it on
Wednesday night. Yesterday, the United States made their commitment to the world and I think
what happened in Copenhagen with Secretary Clinton announcing the United States's intention
to lead the effort to produce a $100 billion a year commitment to developing countries
to help to finance deforestation prevention efforts, adaptation efforts in developing
countries and transfer of new energy technologies to developing countries should remove all
doubts that the United States is prepared to be a leader, partnering with other countries
in the world. The planet has a fever, there are no emergency rooms for planets, we have
to act together to put in place the preventative measures that will assure that we do not see
the most catastrophic consequences from catastrophic global warming.
Wirth: President Calderón, it's over to you. Most people think that there was directionally
the right move and all these avenues pour into your office and to Mexico for COP16 at
the end of this year. Thank you, sir.
Felipe Calderón, President of Mexico:
It will be a quite interesting COP in Mexico. All of you will be very welcome in Cancun
at the end of this year. Probably one thing that we need to do is try to learn from our
mistakes in Copenhagen and the previous part of that. One thing that we need to do is to
re-establish trust and confidence between the parties. In order to do so, I want to
hear all the voices, I want to bring to the table each and every country and we need to
understand there are very different perceptions of the problem, very different economic, political
interests, and I need to say legitimate interests. It's not the same, the perception of the small
state nations who are in danger because they can lose their territory, is not the same
ambitions of developing countries without emissions than developing countries with emissions,
it's not the same ambitions of developed countries, it's not the same ambitions in Europe and
United States or Australia. So the idea is to hear everyone. I want to practise with
actually the President, still the Prime Minister Rasmussen and other members, distinguished
members, of the international community, tried to establish a method in which we can work
all the year together, and of course we will be very close to the United Nations, we will
be in very close contact with the specialized groups, the working groups working today in
the different issues in post-Kyoto protocol, working on the issues that are established
in the COP. Of course, in return I will insist on good-faith negotiations. I want to avoid
wasting our time and going home after Cancun with empty hands, and in order to do so we
need to be very careful about the procedure, and one of the points that we need to establish
is what exactly are the consequences. Copenhagen provided us with a very good basis, if I understand.
The goals about related to the temperature, the commitment related to the fund, the green
fund established there, and very important things. My perception is that the lack of
consensus is related with the economic problems in each nation, because there are economic
costs associated with the task in order to tackle climate change. If we can find an economic
mechanism with the right incentives in order to stimulate, in order to incentive actions,
coming out of developed or developing countries, we will be on track to find what we want to
find in Cancun: a robust, comprehensive and substantial agreement at COP16.
It's not going to be easy. I think there are a lot of troubles with the traditional mechanism,
negotiation by consensus, but we need to try that. Before Copenhagen, we started to organize
some virtual meetings between some members of the community. Each week on Wednesday,
several members, Prime Minister Rasmussen, Prime Minster from Australia, others, we have
meetings through internet. Maybe we can try to do exactly the same, we can try to get
informal gatherings through internet periodically in order to fix the problem and try to understand
what are the main concerns coming from each country. We will do our best, but let me be
clear, I realize how important is for the world to get a success in Cancun, how important
is to start taking actions today. For me it's clear the scientific evidence is overwhelming.
The effects of global warming are already affecting ordinary people, the lives of ordinary
people in developing and developed countries. Today, for instance, there are more than 2,000
tourists in Peru that are there trapped by a flood, they are trapped by mud, and you
can see it right now in Europe, the snow is almost paralysing the economic activity and
a few years ago in France, thousands of people died due to the wave, the wave of high temperature
that France suffered, so we need to act now and Mexico has a clear commitment in order
to achieve this comprehensive, robust and substantial agreement in COP16.
Wirth: Mr President, thank you. Maybe the magic words that we are hearing here is 'substantial
agreement' and we'll come back and talk about how we begin to define that. The other –
a central point that the President made is that we must start taking actions today. Carlos
Ghosn, one of the key variables in climate change are emissions from transportation and
you've been at the centre of the transformation of the industry and maybe you could –
When you heard the President say we have to start taking actions today, what does that
say to you?
Calderón: Well, let me talk about the Mexican commitment. Mexico was the first developing
country in order to present the four communications to the United Nations related to our emissions.
The first, developing countries established a unilateral, unconditional commitment in
order to reduce 50 million tonnes per year starting in 2012. We are submitting to our
commitment in order to reduce 30% our emissions from business as usual by the year 2020 and
50% by the year 2050, and in Mexico we are working preventing deforestation and we are
being very aggressive in terms of reforestation process. Actually we used to lose, like, 300,000
hectares a year the last decade and today we are preventing deforestation and reforesting
more than 500,000 hectares a year, so we are compensating and we are reaching equilibrium
in this particular arena. We are investing in technology in order to reduce our emissions,
for instance in oil industry, we are trying to transform transportations, we are trying
to apply new mechanisms to massive ways of transportations in the cities, and my point
is, it's very expensive for us, particularly for Mexican economy. We suffered a recession
almost 7% negative last year, but nevertheless we are keeping our commitment because it would
be in benefit of the people, and I think that each single country will make similar commitments.
What is the point? We need money for that. But the money will be there. I think it's
a very good step in Copenhagen to talk about $100 billions a year starting 2010 and the
point is, how are we going to use that money? One principle must be this: the result-based
principle. We need to measure and we need to be absolutely transparent about our action.
Wirth: Going again to Carlos Ghosn, who is the Chairman and CEO of Nissan-Renault made
major commitments in this area.
Carlos Ghosn, Chairman and Chief Executive Officer, Renault-Nissan Alliance (France and
Japan), France; Member of the Foundation Board of the World Economic Forum:
Thank you, Chairman. You know, the first question is what do we need, what do we need from here?
I personally think the results from Copenhagen are the best we could expect for in this timeframe
and we are expecting a lot that in Mexico, what we need are targets. We need to move
on, we need, as a private sector, we need to know exactly what is the level that we
need to reach, where, in order for this problem to be behind us. So we need clear targets.
Now, when we're talking about targets, is it 50% in 2005? Is it 60%? Is it 70%? Is it
80%? And we need to stick to these targets. Now, after this I think we need some encouragement
and processes like the President was mentioning, about favouring integrated approach. I mean,
you cannot go to the car industry and say, 'Okay, you're going to need to do this,' and
then go to another industry and say this, because from time to time, if in order to
reduce the CO2 emission for cars, the best solution will come from a good collaboration
between the car industry and the oil industry and the chemical industry. So I would be asking
for encouragement for an integrated approach, so nobody escapes his responsibility, but
we are sure that we are targeting the best solutions, the solutions that make the most
sense and require the least resources. When you push for integrated approach, you are
pushing industry to have a good representation. You know, representation of the industry is
today is a problem. We've been for the last three years, at the level of the car industry,
working towards one common position for the car industry. We were not successful. We were
not successful. I mean, recently, after three years of work, we came with one statement,
which is going to be official today, signed by four CEOs, four CEOs of the car industry,
because most of them did not want to sign, but these four CEOs represent a substantial
part of the car industry, so if we don't push for an integrated approach, you know, still
the public, you know, and the governments are going to have some difficulty to understand
what the technologies allow you to do, because at the end of the day, most of these solutions
are going to come from innovation and from technological solutions, and governments need
to have some kind of objective image about what technology can allow you to do.
Just to give an example, today, we can do with batteries for cars, things that five
years ago were not possible, and probably we can project in the next five years to do
with battery for car things that we cannot expect today, so somebody's going to have
to be in a very objective way to explain what's possible, what is not, what is not possible.
And the final thing I would like to mention is encouragement for private-public collaboration
and I'm very glad to see that there is one specific example that is taking place with
the electrification, you know, taking place in the United States and Europe or in Japan,
where governments and private sector are coming together to say, 'Okay, government cannot
do it alone, private sector cannot do it alone, we're going to have to work together in order
to make something that would make business sense and at the same time be very efficient
for the public good.'
Wirth: Thank you, that leads us right into Caio Koch-Weser. As I think all of you know,
Mr Koch-Weser has a long history in finance, public side with the World Bank, now at Deutsche
Bank. We have talked about these very large pools of capital that are going to be necessary
for mitigation and adaptation in the climate area, promises made from the developed world
to the developing world. This clearly cannot all come from the public sector. Caio, give
us your view. You've thought long and hard about the vehicles that may be necessary and
possible.
Caio Koch-Weser, Vice-Chairman, Deutsche Bank Group, Deutsche Bank, United Kingdom; Global
Agenda Council on Climate Change:
Well, Tim, first from a private sector perspective, I would call the results of Copenhagen a glass
half full. We didn't have very high expectations before and I think on the positive side, compared
also to Kyoto, all sectors are in now, very importantly forestry. So to speak, the group
of countries committed to serious mitigation action is now expanded. The BASIC countries
are a very important element in that, and I think we have the outline, at least, of
what could be a future financing mechanism, the $30 billion of fast-track money, the $100
billion which comes out of work of project catalyst, others we have been involved with
which will be required for mitigation, adaptation action, is in there. Obviously the details
to be worked out in a time where fiscal constraints are very light, and therefore the private
sector, through carbon markets in the future, will have to finance a lot of that.
An immediate negative to the list is we have uncertainty now to the future of cap and trade
in carbon markets, and even well-established carbon markets like the ETS in Europe have
some doubts on how this will go forward, so I think that uncertainty on the future of
the carbon price and carbon market should bother us as a near-term result.
Now, where do we go from here? I think we need to create momentum, a three-pronged approach
or even strategy. One is obviously the UN process and under the strong leadership of
President Calderón, I hope there will be progress. It will be tough, it will be important
to define milestones during the year, it will have to be run very differently. Let's be
critical, I mean there's a lot of lessons to learn. But I think a second prong in that
strategy becomes very interesting, and that would be to have smaller groups of like-minded
countries come together around certain sectors and issues and push the agenda forward. REDD
is a very good example, how some countries took the lead, there's money on the table,
there's payment for performance, there it's transparency. I could see this happen in other
sectors, from a business point of view, perhaps in a tradable sector and in a non-tradable
sector, international transport, shipping, steel, some of the Japanese ideas on sector
agreements come up again. Power. And I think to again put serious money on the table, have
on the recipient side credible performance and obviously all the MRV and transparency-related
issues. Such flexible, variable architecture, smaller coalitions of countries I think can
push that second prong forward, which could reinforce and maybe later lead back into the
first prong, which is the UN process. I would not even limit that to nation states. There
is now evidence, even within the US, that sub-national entities, states that are more
advance, California, in Brazil Sao Paolo, Gujarat could come together and form these
small coalitions to move on certain agenda items.
Third prong very quickly, obviously leadership from the private sector to identify this as
a major opportunity, not a burden, opportunity for future growth, technological innovation
and lead with big, iconic, mega-projects. We are involved, Carlos you are involved in
many of these. We, Deutsche Bank with other German companies have started DESERTEC with
the big ambition of bringing 15% of electricity requirements of Europe by 2050 from particularly
concentrating solar power from the Sahara. These are truly transformational mega-projects.
The technology exists. The financing will be difficult, but it is doable. The geopolitics,
of course, is complex. And then come to government, as private sector, around these new innovative
projects, and ask governments for the framework conditions, and here comes the public-private
partnerships. I think there's work underway that can lead to success which would scale
up and leverage up limited amounts of public money. For example, if we were taking first-class
equity positions on certain projects, that then on a factor of five, seven, 10, leverages
in private flows, because the $100 billion, I believe, in the end will have to come about
a third from cap and trade and carbon markets, private to private, will come through schemes
like this of leveraging up public-private public monies, guarantees, the ADBs, World
Banks, IFCs of this world could play a role, and, of course, the fiscal coffers will also
have provided some. That would be my three-pronged strategy. This is independent, these prongs
from each other, but mutually reinforcing in the end.
Wirth: Great, thank you very much, Caio. Ed Markey, we're beginning to get to a point
of giving advice, I think, to President Calderón as to what this animal is he's going to be
trying harness in the next year. What can he expect, do you think, from the United States
of America?
Markey: Well, first of all, President Calderón's going to do a fantastic job over the next
year, so let's just stop there, and he already outlined in his statement his complete identification
of all of the big challenges ahead for him and so I don't think we really do have to
worry about President Calderón. He is going to be a world leader over this next year,
and I think we can bring together a great coalition. In the United States, again, President
Obama recommitted the United States to passing climate legislation this year. There is a
coalition of Republican members led by Lindsey Graham and Susan Collins, who are partnering
with John Kerry and with Joe Lieberman in the United States Senate, working with the
White House towards finding a comprehensive agreement. The intention then is for the House
Representatives, Henry Waxman and I, Nancy Pelosi, then to work with them in order to
produce the legislation this year. I believe that that will happen. I believe that that
bill will be on the President's desk, and the reason I believe it is that's in our national
security interest, it's in our long-term economic interest. Half of our trade deficit is importing
oil, a lot of it from countries that really we should not be sending that capital to.
So I think those imperatives are driving us towards resolving this issue in the United
States and I think since Mexico is our closest neighbour then working with them to help to
produce hemispheric understandings that can help then to create a model for the rest of
the world. There is no question, though, that we will be successful. We don't have an option
in the United States and legislatively I think Republicans and Democrats both understand
that the world looks at us and they say, 'Most of that CO2 is red, white and blue. Stop preaching
temperance from a bar stool. Don't tell us what to do unless you have put your own laws
on the books.' And our intention is to do that. We will complete that next year and,
at the end of the day, go to Mexico as a leader, partnering with President Calderón in order
to accomplish those goals.
Wirth: You might remind that if this does not happen legislatively, the President has
many authorities administratively, correct?
Markey: If I may, yes. We had a very important Supreme Court decision, Massachusetts versus
EPA, two years ago. Under that authority the President and the Environmental Protection
Agency of the United States now has the authority, administratively, at the executive level,
the presidential level, to regulate greenhouse gases, to regulate CO2, so it's no longer
a question of whether legislation passes or doesn't pass. If legislation does not pass,
the President has the authority to regulate, even without legislation. If we pass legislation,
it allows us to moderate the impacts on industries, on consumers, to put in different trade protections,
but even in the absence of that, although it will be a less refined process, the Environmental
Protection Agency of the United States can regulate greenhouse gases and the President
and the EPA have already put in motion the process to make that possible and to do so
in the course of this year, unless we legislate.
Wirth: Shyam Saran, President Calderón laid out a very, very impressive list of things
that Mexico is doing. Mexico is a non-Annex 1 country, does not have the same obligations
that developed countries do, but he has, as a rapidly developing country, put together
this very, very impressive list of commitments. The other, the BASIC countries coming in,
what will they be able to offer to, you think, the goal of reaching, as the President said,
a substantial agreement in Mexico? Will you be matching the kinds of commitments, do you
think, that Mexico has been making?
Saran: Mr Chairman, first of all, let me compliment Excellency President of Mexico for the very
strong lead that he has given in this global effort to reach a successful outcome at Copenhagen,
and let me assure him, on behalf of India, and I'm sure this is the sentiment which is
shared by his colleagues in the BASIC countries, that we look forward to working very closely
together with you to ensure that we have a successful outcome.
Let me say that just as Mexico has shown the way in taking on commitments which it does
not legally need to do, frankly speaking most of the developing countries, major developing
countries, are ahead of the curve. If you're looking for leadership with respect to what
is required to be done, which is a strategic shift from our current reliance on fossil
fuels to a pattern of growth which is based on renewable sources of energy, clean sources
of energy, these countries are way, way ahead. Look at India: we have only recently adopted
perhaps the most ambitious solar energy development plan in the world. We are looking at something
like 20,000 megawatts of installed capacity of solar energy by 2022. We are looking at
an increase in our energy efficiency by 2020 by a further 20%. We already have 22% of our
land area under forest. We want to increase this finally to something like 33%. That's
a huge carbon sink, and it is this which has given us the confidence to declare, voluntarily,
that by the year 2010 we will be able to reduce the emission intensity of our GDP growth by
something like 20% to 25% with 2005 as the base year, and if you look at the commitments
that have been made by China, which have been made by South Africa, by Brazil, you will
see that these four countries actually are already, despite the fact that we do not have
a global agreement, have already taken the lead, so there should be no doubt that these
countries are going to work together with Mexico, with other countries, our partners
in the United States, for example, to make certain that the kind of collaborative, as
I said, the collaborative response that is required, does come about, and I would like
to just inform you that very recently the environment and climate ministers of the four
BASIC countries met in New Delhi and they agreed that they will work together, not only
as a group themselves, but also with the G77 and China group, with our partners from the
developed world, to try and ensure that there is a success to the process now at Mexico.
We have suggested, in practical terms, we have suggested that we should from now to
Mexico have at least five rounds of talks amongst the two working groups which have
been set up, both on the Bali action plan as well as the Kyoto Protocol, because we
believe that this is really an urgent and compelling problem, then we need to intensify
our efforts to try and resolve that problem, so that is one important thing and the second
thing which I would like to mention is that the BASIC countries, despite the fact that
they are developing countries, have also agreed to work together to help other developing
countries in a spirit of South-South cooperation to both meet the challenge of adaptation as
well as mitigation, so this is the spirit in which we will, Mr President, approach these
negotiations.
Wirth: So if I'm President Calderón's staff, I'm taking notes here, Yvo, and I hear that
the UN process works. Smaller groups of like-minded countries are coming together as in REDD,
sectors like the automobile industry are coming together, we've got a $100 billion package
that is arriving and great different kinds of financial models from the finance sector,
the US's commitment to act, the BASIC countries have agreed to act, came together in New Delhi
and agreed to act, sounds like a piece of cake. Why, Yvo, is this so hard?
De Boer: I think that President Calderón made it very clear why this is so hard. It's
so hard because different countries have very different interests in this process and because
different industries have very different interests in this process. Like any other process, there
will be winners and there will be losers, and the losers are very vocal in this process.
So, as President Calderón pointed out, what we need to do is to find a balanced way
forward. What we need to do is, as it were, make the cake bigger and make sure that we
are offering solutions for different countries and different sectors of the economy and that's
why it's so important that we're not only talking about reducing emissions, but we're
also talking about adapting to the impacts of climate change, we're also talking about
addressing the issue of deforestation, we're also talking about mobilizing technology,
we're also talking about mobilizing financial support for developing countries, to try and
create a scenario in which there will be maybe not something in it for everyone, but hopefully
something in it for as many companies and countries as possible and in that context,
I want to say, if I may, Tim, something about finance, because there's been a lot of talk
about hundreds of billions. I would like to be the last person in this room to create
the impression that we are going to subsidize our way out of climate change and that we
need to subsidize our way out of climate change, and let me give three reasons. First is that
the IPCC, the scientific community, has been telling us for 15 years that we can reduce
global emissions by 30% by taking action that will pay itself back through a lower electricity
bill in three to five years. We're not doing it. The second thing is that I do not believe
it is physically possible to continue to grow the Chinese economy at 8-9% a year using the
current economic model; it just can't be done. And thirdly, I believe that Europe's target
of a 20-30% reduction of greenhouse gas emissions is not an environmental target; it's an economic
renovation target, it's an energy security target and it's an energy prices, so there
is an economic agenda at the heart of this, and this takes me to a very important point
that was made by Carlos. It's fine and it's important that countries set targets, but
what is even more important is that we get to those private-public partnerships that
will design the solutions that make sense from a business point of view, rather than
just throwing billions of dollars at climate change.
Wirth: Thank you, Yvo. Before we get to the promised questions, President Calderón,
let me give you a chance to summarize what you think you've heard, what's been helpful
and what are the biggest kinds of problems that you face in trying to organize this and
lead us all into this sunrise in Cancun.
Calderón: Well, first, let me express my gratitude for the expression of representative
of Indian government. We have a strong collaboration in several fields. Actually, probably one
thing that we need to do is talk about this, between all the parties, but specially developing
and largest countries, because we need to build a bridge between poorest countries and
developed countries, and we can do so. Actually, we talk a little bit in our group, the G5
which is Brazil, India, China, South Africa and Mexico, and we can build upon the efforts
of BASIC group and actually work together, we need to work together. So one very important
point, Chairman, is there is a willingness and that's important. Second, there are several
quite interesting proposals, technical and financial proposals, like the cap and trade
proposal of Mr Markey. Actually, let me suggest you can change a little bit talking about
not only cap and trade, American cap and trade, but North American cap and trade, because
a lot of projects could be made; in Mexico, for instance, we can establish solar facilities,
energy solar facilities in the border providing energy to the United States. It would be a
very good business for Mexico and it would be a way to match the commitments of several
enterprises in the United States. I think there are huge possibilities for the success
of your proposal, if the Congress approve it. Third, there is a commitment in terms
of finance, which is important. Probably it's not enough, but we need to start to work and
work together. Fourth, I realize that there are very low expectations about Cancun, about
COP16, and I do prefer low expectations, no? So the worst enemy of any politicians and
head of state is to have very high expectations. I do prefer to work in this way. And finally,
we have an instrument, which is the Bali action plan. We have the instruments of the Kyoto
Protocol itself, the working groups, and of course the Copenhagen agreement which was
not enough, nobody is satisfied with it, but it's a very important mechanism to move on,
so we will be in contact to organize these kind of meetings during the years. I take
the suggestions about the milestone, it's quite important for the success of the meeting.
Finally, and special invitation for Nissan, if you are planning to build those batteries
or even the electric vehicles, you will be very welcome in Mexico, whatever you need
in order to establish your plan and there is a huge market in the region and the world
and we are leading the process of automotive industry, we are very competitive, so you
can contact me for that purposes.
Wirth: Well, Mr President, thank you, that's a good answer to the question asked in this
session, what immediate steps should be taken. That gets us along the way, I think very,
very constructive in this extremely important and difficult task. We're now at the promised
time for questions from all of you. If you could raise your hand, a microphone will be
coming in direction. Please stand up, introduce yourself and ask a question, don't make –
give an advertisement for your institution.
Arthur Mutambara, Deputy Prime Minister, Zimbabwe:
Arthur Mutambara from Zimbabwe. Don't you think one of the problems we have is...?
Wirth: And who would you address your question to?
Mutambara: Anyone in the panel, in particular maybe the President of Mexico. Don't you think
one of our challenges is a silo mentality where we address global challenges in isolation?
We deal with climate change, we have another agenda on the financial global crisis, on
poverty, on development, on nuclear weapons, on HIV/AIDS. We need to address these matters
in an integrated and holistic manner. Why? Because some nations are more concerned about
development. They are more concerned about HIV/AIDS. They are more concerned about poverty
alleviation, so as you pursue the climate change agenda and you are quiet, or rather
not as vociferous on the issues that are affecting other communities, you are ineffective. So
the challenge is, how do we...?
Wirth: We're moving to an editorial, away from the question, but I think the key part
of the question is there. Mr President?
Mutambara: Okay, but what I want to say is how do we unlock the linkages, unlock the
interconnectedness between global challenges so that we can have a holistic and sustainable
solution?
Wirth: Terrific question. Mr President. Maybe Yvo, you mentioned what makes this so hard,
we're beginning to get to some of the edge of this.
Calderón: Well, let me try to answer in this way. The first time that I listened about
global warming was in the 70s, coming from my father. He was quoting special research
coming from the Club de Roma, Rome Club, or very famous research, I can't remember the
name, but 'Our Common Future' or something like that, and they were talking about the
melting snow, they were talking about global warming and all that stuff. But the point
is this: the main thesis of this research was that there are two gaps that are threatening
the future of human beings and those two gaps are the gap between the man and environment
and the other one is the gap between the rich and the poor, and that's true. And the only
way to overcome these challenges is to connect the solutions of both problems, and the way
to do so is, again, to establish an economic system in which we can fix the environmental
challenges and, at the same time, we can provide economic opportunities for poorest people
in the world. Is that possible? Yes. That is possible. Why? Because one thing that we
need to see is fighting climate change will require new kinds of development. The low-carbon
pact should be, must be a new model of development in which we can provide new opportunities
of jobs, new opportunities of growth, new opportunities of investment and that is true,
for instance, new industries will arise, new opportunities should come to poorest countries
and people. We can create a lot of jobs associated with renewable energies, preventing deforestation,
reforestation projects. I was telling yesterday the situation on Haiti. Of course, Mexico
is collaborating with a lot of countries with these rescue operations, but in the meantime
what is going to happen with Haiti? One project could be to reforest Haiti. We can create
jobs for the poorest people, we can pay for the effort in order to reforest that island
which is the most deforested in the Caribbean Sea, we can have more jobs in the automotive
industry. Low-carbon pact doesn't mean to disappear the automotive. It means to have
electric vehicles, more efficient with no or low carbon emissions. That idea. So the
answer is we need to find out a way in order to fix poverty and to fix climate change at
the same time, and that is possible. Finally, one way to do so is for instance payment of
environmental services. A programme, for instance, in our country we have indigenous communities
are the owners of the woods and rainforests and we are losing a lot of woods and rainforests
in the last decades. Why? Because they have not means to survive, they have no income,
so we are providing to them a payment, month by month, in order that their commitment is
to preserve the woods and the rainforest, and in that way they are getting a job, they
are coming out from the poverty and we are preserving the air and the water that we need
for the whole community.
Wirth: Excellent question to get us going.
Buyelwa Sonjica, Minister of Environment, South Africa:
Thank you very much, Chairperson. I am Buyelwa Sonjica, Minister of Environment, South Africa.
Just a comment first before I pose my question. Firstly, the targets taken by the developing
countries must be understood in the proper context, which is common but differentiated.
That principle underpins the targets that we take as developing countries, but we have
committed as BASIC, as part of the meeting in India, South Africa will be taking 34%
2020, moving away from business as usual. 42% 2025, on condition that finances and technology
are made available, because the reality of the situation is that we do not have the finances,
we do not have the technology. It doesn't mean that as individual countries we have
no programmes; there are programmes, and indeed for business there are opportunities in our
countries, because we have programmes to deal with the effects of climate change.
Secondly, the question that I would have wanted to ask, there are two questions. Firstly,
it's directed to Yvo. Yvo, would it be possible for you to speed up the process of transferring
the political process into the formal process, because really, we are all keen to see Cancun
succeeding, so we need to meet in the context or under the auspices of the UNFCC? The question
really would be directed to Mr Markey relates to what now I think is called the Boxer-Kerry
bill. There is a perception that this bill is promoting protectionism and I would like
your comment on that. Thank you very much.
Wirth: Great. South Africa will be hosting COP17. After Mexico, South Africa is the next
host and has shown real leadership in all of this. Yvo and then Ed. Yvo, do you want...?
De Boer: Thank you. And thank you, Buyelwa, for that question. Yes, we do need to invigorate
the process, yes, we do need to speed it up, yes, we will need additional meeting time
in the course of this year on the road to Cancun, but additional meeting time in and
of itself, as you know, is not enough. The President talked about having modest expectations
for Cancun. I think one of the things the community needs to do is get clear what those
expectations are, what are we actually towards and how are we going to use the meeting time,
however much it may be, to get us effectively to that goal. So, yes, we need more time,
but we also need a clear target and a clear game plan.
Wirth: Ed Markey, protectionism?
Markey: Yes, in the legislation which I am the author of in the House Representatives
and in the Senate legislation, there are tens of billions of dollars for technology transfer
from the United States and other developed nations to developing nations in the world.
We understand that we have that responsibility and the same way, the tens of billions of
dollars will be transferred to developing nations for the protection of their rainforest.
At the same time, we are trying to convince all of our industries that there is a pathway
from today, the jobs of today, the industries of today and consumers of today in the United
States to the industries of tomorrow, the consumers of tomorrow, the workers of tomorrow.
And so to convince the steel industry, the cement industry, aluminium industry that they
should move forward, what we're saying to them is that we're going to give them a long
transition period, but if there are countries in the world that try to exploit this incredible
commitment that we are going to be willing to make to our environmental side, that we
are going to ensure that that kind of cooperation with the globe is not exploited in terms of
the loss of jobs in the United States. That said, I think at the end of the day, we will
never have any protectionism, because I think the kinds of agreements that are going to
be reached in Mexico and subsequently are going to ensure that there is transparency,
that there is verification and that there is cooperation amongst the nations of the
world so that there never will be the implementation of protectionist measures by the United States
or by any other developed country in the world.
Wirth: Great, thank you, excellent questions. Let me come over here.
Virgilio Viana, Amazonas Sustainable Foundation, Brazil:
Virgilio Viana from Brazil, Amazonas Sustainable Foundation. One of the concerns we have about
the outcomes of Copenhagen was the loss of momentum, how there were expectations too
high on one hand. We also had a lot of people trying to do things and trying to get things
done before Copenhagen and there's sort of a feeling of a hangover, people are not engaged
into these discussions, so one issue that I'd like to pose to all of you is to see what
kinds of things that could be done to restore this drive. I think Caio made a very interesting
suggestions of these small meetings and maybe President Calderón could take the lead
of saying, 'Let's get one achievement,' and maybe the low-hanging fruit could be REDD
and Mexico is a very important country in terms of forests, and then we could have that
done not in the night of the last day of the meeting in Cancun, but six months in advance.
Why don't we change the pattern? So maybe that agreement on one or maybe other things
before the meeting itself would be something that would generate again this momentum. So
the question is, what are your thoughts on how to generate this momentum?
Wirth: Yvo, Ed Markey talked about a bar stool. The question is about a hangover. What do
you do about the issue of expectation? How do you keep those at a reasonable perspective
as the President suggested?
De Boer: Well, if I were facetious, which I'm not, I'd say the best thing to cure a
hangover is to have another drink, and actually, I think that we do need to come back to the
process. As the Minister from South Africa was saying, we need to build up the frequency,
we need to meet more often, and yes, I think we need subsets of meetings, countries focusing
on individual issues. I think trying to advance certain topics ahead of Cancun is also interesting,
although, of course, you know that everything is related to everything else, but nonetheless
you can prepare a number of decisions. I think what is really important, and President Calderón
pointed to that at the beginning, is transparency and inclusiveness, that even though you may
be meeting in small settings and that is important, to always take the advance back to the larger
constituency and make sure that there is inclusiveness in that sense.
Wirth: Caio, you have a quick comment on expectations?
Koch-Weser: Well, again I think to really lend momentum you a) would have to expand
quickly, and with leadership also now coming from Brazil, the REDD reduction in emissions
from deforestation and degradation framework, because beyond that, as I said before, it's
also model that you could do in others. Pick some other sector where you have the same
like-minded coalitions, bring money, performance, transparency together. Third, or c), the private-public
partnership, that could happen, and the high panel that will be instituted should immediately
get to work, not only on how to mobilize money from fiscal coffers, but how to perform these
partnerships. Could I add just d) very quickly? In the end, it will be a carbon price. Give
us a carbon price, give us the incentives, the private sector will do the job, and that's
why cap and trade and carbon markets are so important. A very important message the high
panel would send, may I suggest, President Calderón, is if the reform and the scaling
up in future of the CDM mechanism was also on the agenda, and a contemplated or an execution
trading systems in different countries, parts of the world, also the US. There are vast
volumes expected from this offset trade. Even the US contemplated bill has one gigatonne
that would come from international sources. You need to professionalize, to scale up and
to reform the CDM. That would be a very powerful message also to the private sector. Why? Otherwise
you have also fragmentation in the regulation, if the Australians move in one direction,
US in others. Let's avoid fragmentation, have some harmonization and scale up to the volumes
that we expect. Those would be my four suggestions.
Wirth: For everybody here, as we come to a close, Caio reminds us that as the President
is trying to pull together all these very complicated political threads that have been
mentioned today, there will be a number of extremely promising working groups, working
on REDD, working on automobiles, working on finance, working on energy efficiency, working
on renewables, working on cook stoves and black carbon. A number of these coming together,
largely built around private sector initiatives, trying to understand, as Yvo would remind
us, what rules have to be changed to allow progress to be made. What is that juncture
between political people changing the rules, private sector bringing together their expertise
and stimulating the technology that has to be there? So there will be a series of these
during 2010 which may be the single most important contributors to the success of what happens
in Mexico, what happens in Cancun toward the end of 2010. We have a couple of minutes,
I'm going to leave this to you, Mr President, for a final word.
Calderón: Yes. Thank you. Well, first point is, we need that energy. We need to create
momentum again and in order to do so, we need the support of civil society. We need the
NGO efforts again for Cancun. I share your feelings about Copenhagen. It was very disappointing
in several fields. Actually, after the state dinner, with the Queen, at 11 o'clock we went
to this meeting in a very, very short room and we were working until kind of four o'clock
in the morning and then again at eight o'clock and until two o'clock in the morning the day
after, and was this useful? Most of that time. And we need to be prepared with very large
anticipations, but we need the pressure, we need the opinion and we need the energy of
civil society. Finally, thank you for the suggestion. I think in Mexico a lot of projects
could be offset. The American industry would be great for everyone. Finally, I think it's
going to be very difficult. There are a lot of problems to fix, there are different concerns
of the countries, mainly the economic costs of any measure, especially in developing countries.
However, we need to work really hard. We have not more time to waste. We have not more time
to work on this. I don't want to see another COP without results, another COP without substantial
results. Mexico will do our best and I hope there will be new mechanisms for the future
of human beings after our meeting.
Wirth: Great. Thank you, Mr President. You've set a record here. This panel, on this difficult
issue, is just like COP16 in Mexico, closing on time within the budget and we thank you
very much. Before thanking our panellists, let me remind everybody here that and ask
you to remain seated for the presentation of the Global Statesmanship Award from the
World Economic Forum. With that, please join me in thanking our panellists and wishing
President Calderón every good bit of luck and goodwill as we move through to 2010. Thank
you.