A crucial year for climate justice

Down to Earth No.80-81, June 2009

This is a key year for decision-making about climate change as governments work towards a global agreement in Copenhagen in December. Will COP15 bring social justice, environmental sustainability and protection for human rights into the negotiations, as many civil society groups around the world are calling for? The article below considers the prospects for climate justice by looking at recent developments internationally and in Indonesia.

Climate change has been moving higher up the international agenda as the deadline for reaching a new agreement to cut global emissions draws nearer. While the international credit collapse continues to act as a drain on attention and money, hopes have been voiced that the malfunction of the current financial system will wake governments up to the fact that a totally new approach is needed. One that is geared towards living on this planet sustainably and one that works to stop overconsumption of the earth's resource by the minority at the expense of the majority. This is a majority whose livelihoods and strategies for surviving poverty are being made even more difficult by the impacts of climate change.

In the last few months, there have been some positive changes, on the surface at least. These include indications of a change in climate change policy in the US by President Obama, including a pledge to reduce US emissions to 1990 levels by 2020 and new targets for reducing emissions from vehicles.¹

The UK has set an ambitious target to reduce its GHG emissions by 80% on 1990 levels by the year 2050, and made a legal commitment to do so by passing the Climate Change Bill in December 2008. The law also requires the government to set the first three 5-year 'carbon budgets' by June 2009.

Also in December, the European Union issued a whole string of legislation, committing itself to reduce emissions on 1990 levels by 20%, achieve 20% energy efficiency and 20% renewable energy - all by the year 2020. A policy outline calls on developing countries to limit their growth in their GHG emissions by 30% by 2020 compared to business as usual. In return for this, the EU says it will up its commitment to a 30% cut.²

Norway, Guyana, Costa Rica and the Maldives have all committed themselves to carbon neutrality.³

More recently, China - the world's biggest total emitter of greenhouse gases, has indicated a willingness to set targets for reducing carbon intensity (ie reducing the amount of carbon used to produce each unit of economic growth) but wants industrialised countries to pledge to make more ambitious cuts in return.⁴

Meanwhile, latest research on climate change does not bring good news and the target of keeping temperature rises below 2°C is getting further out of reach. Recent research by the UK's Tyndall Centre for Climate Change Research says that 3% global cuts could still mean 4°C of warming by the end of the century, yet global emissions are set to continue rising, rather than decrease.⁵ A separate UK study has predicted that at least one third of the Amazon forest will be destroyed by even modest temperature increases, with more being killed off in higher temperature scenarios.⁶

Overall, what much of the recent science suggests is that the figures on which the UNFCCC negotiations are based are now worryingly out of date.

A recent report by the Asian Development Bank said that Southeast Asia is one of the world's most vulnerable regions to climate change and could face conflict over failing rice yields, water shortages and high economic costs. The region's economies could lose as much as 6.7% of combined GDP per year by 2100, compared with an estimated global loss of just under 1% GDP. Annual mean temperatures in Indonesia, Philippines, Thailand and Vietnam could also rise by an average 4.8 °C from 1990 levels by 2100 if global emissions keep rising.⁷

The estimated cost of dealing with climate change have gone up too - just when money is being poured into preventing total meltdown of the banking system. The World Economic Forum said in January, for example, that at least US$515 billion should be spent annually on measures to limit carbon emissions and prevent a rise of more then 2°C by 2030. More than $10 trillion will be needed between now and 2030, said the Forum.⁸

Even if countries do make ambitious commitments to cutting emissions, the commitments still have to be adhered to. In the UK, for example, the labour government's manifesto pledge to cut emissions by 20% on 1990 levels by 2010 will not be fulfilled, though the UK will easily meet its Kyoto emissions reduction target.

Another issue is the method of calculating targets: if the UK were to factor in emissions linked to UK consumption, plus aviation and shipping, as many argue would be fair, the target would increase substantially. A recent study shows that rather than falling as the official figures show, UK emissions instead rose by 19% between 1990 and 2003 if these consumption-linked emissions were taken into account.⁹

The issue of offsetting

Offsetting - where emissions produced by one activity are compensated by an equivalent amount of emissions reduction or carbon conservation elsewhere - is one of the main bones of contention in the wider climate change debate. Offsetting between rich and poor countries is particularly contentious, because it lets polluters buy their way out of their obligations. Many civil society organisations (including Down to Earth) consider offsetting an unacceptable get-out for rich countries and their industries, from making the difficult and costly changes needed within their own countries to move quickly to a low-carbon economy. By funding emissions reductions in poor countries they are in effect using up another country's carbon store in order to avoid making more expensive and politically difficult cuts at home.

DTE has raised concerns about offsetting in a letter to UK climate change minister Ed Milliband. This offers comments on a UK-Indonesia MoU on climate change signed at COP14 in Poznan, Poland, last December (see letter).

Concerns about offsetting are also connected to the latest science, which indicates that massive reductions of greenhouse gas emissions need to be made across the world, not merely swapped or traded between countries.

This means that carbon markets - trading carbon allowances between countries and letting the market set the price - won't generate enough cuts. In the case of a potential forest carbon trade between Indonesia and the EU, for example, what is needed is to cut emissions from industries in Europe and to prevent further forest loss in Indonesia, not to allow one to be offset against the other.

Friends of the Earth makes this clear in its critique of the interim targets of 20% by 2020 set by the EU. FoE argues that offsetting-based market mechanisms such as the Clean Development Mechanism cannot guarantee net emissions reductions - they may even enable an increase in global emissions. Moreover, "...the science of climate change shows that industrialised countries need to reduce their emissions by 40% at home in order to avoid catastrophic climate change. Funding for international efforts to reduce emissions and halt deforestation elsewhere in the world are urgently needed - but this funding and support must be in addition to domestic reductions..."¹⁰

The UK government law does not set any limits on the amount of off-setting, but the Climate Change Committee - a body set up under the law - does recommend that the majority of the 80% cut by 2050 will need to be made at home. The CCC has drafted two sets of carbon budgets, an 'intended' budget to achieve a 42% cut in GHG emissions on 1990 levels (or 31% relative to 2005 levels) by 2020, and an 'interim' budget to achieve a 34% cut (21% on 2005 levels). The deeper cut is dependent on whether there is global agreement in Copenhagen. For the intended budget, the CCC recommends that around 20% could be met by offsets, and for the interim budget, less than 10%.¹¹ How far these recommendations will be taken up by the UK government is not yet clear.

The EU's emissions reductions targets are contained in two policies, the Emissions Trading Scheme (ETS) which controls emissions from energy intensive industrial sectors and the so-called Effort Sharing Decision which covers all other sectors. The EU is allowing at least half of the required emissions cuts to be met through offsetting. Friends of the Earth calculates that the EU is only committing to about a quarter of the cuts needed to avoid catastrophic climate change.¹² More detailed analysis of the targets and offsetting has been done by the NGO FERN which calculates that the reduction required between 2013 and 2020 within the EU itself is just 3.9% compared to 2005 levels, and that nearly 60% of the emissions reductions could come from offsetting.¹³

One positive point amongst all the offsetting gloom is that the EU has opted not to include forests offsets in the ETS until at least 2020 because they fear that flushing the carbon market with forest offsets would drive down the price of carbon to too low a level. However the EU ETS directive signed in December, leaves room for this decision to be amended.¹⁴

Many governments and proponents of offsetting argue that it is the only realistic way of getting enough money flowing North to South to fund carbon emissions reductions there. Some claim that carbon markets linked to REDD (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries) are the most effective way of getting significantly large amounts of offset money into the system.

The UNFCCC process already includes a North-South offsetting mechanism, the Clean Development Mechanism (CDM), and could well extend offsetting to cover forests in a post-Kyoto emissions reductions regime, starting 2012.

In a recent survey of proposed REDD schemes across the globe by FERN, almost all projects included an element of offsetting.¹⁵

But many are asking why we should put so much faith in markets when they have malfunctioned spectacularly over the past few months of financial crisis. Market volatility - as witnessed last year for oil, gas, oil palm and many other food crops - is another argument against such a system, where a reliable flow of resources is vital to fund well-planned, socially and environmentally sound low carbon economic change in the South.

The price of carbon in Europe's internal carbon market (the ETS) has collapsed in recent months, but despite this, the system is still being promoted as one that can be applied between the US and the EU and, eventually, at a global level.

Of course among the attractions for poor countries such as Indonesia are the opportunities to tap into large amounts of funding if they sign up for carbon trading of other offsetting deals. Government ministers, such as current forestry minister MS Kaban, have regularly said that rich countries should pay for the global environmental service that Indonesia's forests perform (see 'REDD in Indonesia' section below).

Where corruption remains a massive problem, the opportunities for diverting cash from public channels into private pockets could prove irresistible, as they did in the Suharto years when around 20-30% of all development aid is thought to have been siphoned off by the then President and his cronies.¹⁶

Financing concerns remain

The arguments over control and management of climate change funds are continuing, with many CSOs and some governments strongly opposed to the World Bank's position at the centre of funding arrangements (see DTE 76-77 for background).

In December last year a group of prominent UK-based NGOs issued a statement to the UK government calling for a clear commitment on climate finance in the form of grants, not loans. The statement by CAFOD, Tearfund, Christian Aid, Friends of the Earth, WWF, Practical Action and IIED, expressed alarm at the proliferation of funds outside of the UNFCCC. Particular concern is directed at the World Bank "given its asymmetric governance structure, very poor record on funding environmentally sound energy programmes, its donor-driven agenda and inability to genuinely consult and engage with civil society, undermining the trust so desperately needed to deliver a deal in Copenhagen."¹⁷

Nevertheless, the UK is continuing to channel its contributions through the World Bank's Climate Investment Funds (CIFs). For example, in December the UK government pledged GBP100 million in funding for forest protection schemes, to be disbursed through the CIFs.¹⁸

Notes:

¹ Guardian 7/May/09, BBC Radio 4 Today Programme, 16/May/09 ² Guardian 29/Jan/09
³ J Caldecott, Indonesia and Climate Change, Talk given at Bath Spa University 23/Mar/09
⁴ Guardian 7/May/09
⁵ Guardian 17/Mar/09
⁶ Guardian 12/Mar/09
⁷ PlanetArk 28/Apr/09. The report is available from www.adb.org/Documents/Books/Economics-Climate-Change-SEA/default.asp
⁸ Guardian 30/Jan/09
⁹ Guardian 4/Dec/08 quoting a report by Dieter Helm at Oxford University and two other experts.
¹⁰ EU climate and energy package - the final days (FoE UK, December 2008)
¹¹ See www.theccc.org.uk/reports/
¹² FoE UK 12/Dec/08
¹³ Reducing Emissions or Playing with Numbers? EU Forest Watch 136, March 2009
¹⁴ EU Forest Watch 134, January 2009.
¹⁵ See FERN: From Green Ideals to REDD money...A brief history of schemes to save forests for their carbon, November 2008 and An Overview of Selected REDD proposals, November 2008. Both downloadable from www.fern.org/
¹⁶ See DTE IFIs factsheet 5, June 2000
¹⁷ NGO Statement on Climate Finance - an opportunity for UK leadership, December 2008.
¹⁸ DECC press release 12/Dec/08