Durban, South Africa—The U.N.'s climate change conference here in South Africa winds down today. As usual with these conferences, as the end becomes nigh negotiators turn elusive and rumors run rampant. At the moment, it looks like the negotiators will approve a new mechanism for distributing climate reparations to poor countries, the Green Climate Fund. At earlier Conferences of the Parties (COP-15 and COP-16) in Copenhagen and Cancun, rich countries promised to distribute $30 billion in aid to poor countries by 2012 to help them adapt to climate change. The rich countries further promised to send $100 billion in such aid to poor countries annually beginning in 2020.
The preferred options of the poor countries for funding the Green Climate Fund in the draft negotiating text state that COP-17 "decides that all adaption finance shall be provided in the form of grants and wherever possible, through direct access" and "decides that the main or/major source of funding will be public sources." Poor country politicians are very anxious that the climate change adaptation aid comes directly from the taxpayers of rich countries and is sent directly to their governments' coffers. About the Green Climate Fund, U.S. Climate Envoy Todd Stern said, "I have a fair amount of confidence this is going to get done in a positive way." Frankly, the sad, decades-long record of the failure of trillions of dollars in foreign aid to spur economic development in poor countries does not provide much optimism that developing country governments will handle climate change aid any more effectively.
The other big issue at COP-17 is what is going to happen to the Kyoto Protocol. Poor countries want rich countries to make commitments to further cut their greenhouse gas emissions for another five years. However, Kyoto signatories Russia, Japan, and Canada have declared they will not do so. The European Union says that it will make further emissions cuts under the Kyoto Protocol on the condition that the COP-17 agree to adopt a "roadmap" with the goal of negotiating a new treaty by 2015 that would be legally binding on all countries, especially major emitters like China and the United States. That new treaty would go into force by 2020.
As of late Thursday night, COP-17 negotiators were haggling over various options [PDF] concerning the "roadmap." One option on the table is a multiple choice draft statement which merely notes that the Parties will agree to make "a set of decisions to be adopted at the [18th][19th][21st][X] session of the Conference of Parties." In other words, we agree to decide something or other about climate change and adopt it whenever. A roadmap to nowhere?
Given all of the focus on keeping the Kyoto Protocol alive, let's pay a visit to an alternative universe. In this universe, President Bill Clinton submits the Kyoto Protocol to the U.S. Senate for ratification. And in this world, the U.S. Senate does not vote 95 to 0 that the United States should not sign on to any treaty that that did not include binding targets and timetables for developing as well as industrialized nations because that "would result in serious harm to the economy of the United States." Instead, the U.S. agreed to cut its greenhouse gas emissions by 7 percent below their 1990 levels. As it happens, the U.S. emitted a total of 6.2 billion tons [PDF] of greenhouse gases in 1990. Now, let's also say that the U.S. fails to meet its Kyoto targets. This is not implausible. After all, Kyoto signatories Japan and Canada [PDF] failed to meet their greenhouse gas reduction targets in the real universe.
Under the Protocol, countries that fail to meet their targets by making domestic cuts in emissions can promise to meet their targets in the next five year commitment period or they can buy some sort of offsets to fulfill their treaty obligations. To make it simple, let's assume that the U.S. could buy emissions credits in the European Trading Scheme market. So what might have happened?
In 1990 the U.S. emitted about 6.2 billion tons of greenhouse gases and the goal was to emit 7 percent less than that by 2012. The actual commitment period ran five years from 2008 through 2012. In order to get some idea of how much the U.S. emitted, let's add the actual emissions as reported by 2008 and 2009. The figures for the final three years are not yet available, but in 2010 U.S. emissions of carbon dioxide increased 200 million tons. So let's add that to the 2009 figure and assume that overall greenhouse gas emissions stabilized at that level for the duration.
Over the years the price for European emission credits has swung wildly back and forth, rising as high $44 per ton and falling to near zero. The current price hovers around $7 per ton. Based on the above assumptions and calculations, the U.S. will have emitted more than 5.8 billion tons more than its Kyoto target during the relevant period. Had the U.S. had to buy offsetting credits when the price per credit was $44 per ton that would have added up to an outlay of about $255 billion. At $7 per ton, it would amount of about $40 billion. Of course, had the U.S. been in the carbon market that would likely have pushed the price for emissions credits up substantially.
But what if the U.S. had actually fulfilled its treaty obligations in this alternative universe, what would the costs have been then? Since the U.S. did not join the Kyoto regime most econometric studies were done over a decade ago. For example, Yale University economist William Nordhaus has been modeling the economic effects of climate change policies for a long time. Back in 1998, he and Joseph Boyer calculated that if the U.S. joined the Kyoto Protocol the total global cost of treaty compliance would amount to $716 billion [PDF], of which two-thirds would be paid by the U.S. Nordhaus also estimated that the costs of compliance would outweigh the benefits by a ratio of seven to one. Interestingly, the Swiss bank UBS just issued a report that concluded that the European Union's emissions trading scheme has cost European consumers €210 billion ($283 billion) for "almost zero impact" on cutting CO2 emissions.
Finally, one little bit of drama occurred during U.S. climate envoy Stern's address to the plenary session of the COP-17. According to news reports, Middlebury college student Abigail Borah interrupted Stern's speech declaring, "I am speaking on behalf of the United States of America because my negotiators cannot. The obstructionist Congress has shackled justice and delayed ambition for far too long. I am scared for my future. 2020 is too late to wait. We need an urgent path to a fair ambitious and legally binding treaty." Borah was apparently applauded by many delegates before she was removed from the auditorium by police.
Note: This is the fifth daily dispatch from the U.N. Climate Change Conference in Durban. The conference ends Friday. I will be reporting from the conference until the bitter end.
Ronald Bailey is Reason magazine's science correspondent. His book Liberation Biology: The Scientific and Moral Case for the Biotech Revolution is now available from Prometheus Books.