Intense was the only way to describe the atmosphere in Copenhagen last week at the 15th Conference of Parties to the UN Framework Convention on Climate Change, or COP15 as it is known.
With each day, we saw heightened security at the Bella Center (the official location of the UNFCCC talks), the Crowne Plaza (the hotel next door where the overflow of attendees were gathered and side events were conducted), and in the city of Copenhagen itself. As dignitaries from all over the world arrived for the last few days of negotiations, police escorts and helicopter surveillance became commonplace.
Restrictions increased every few hours at the Bella Center to the point where people beyond certain security checkpoints were told not to leave meetings otherwise they would not be allowed back in.
We were provided with regular updates by the few non-government attendees still allowed in the sessions.
The president of the talks resigned in the final stretch. So is the result worth all the drama and excitement? That all depends on your perspective.
Within hours of agreement on the final Copenhagen Accord, as it is now being called, we were able to review and measure it against the objectives bantered about for months leading up to COP15.
That analysis didn’t take long — the accord is only just over 1,300 words long. Probably the most important aspect of it is the continuation of the Kyoto Protocol, largely at the demand of China and India as it gives them comfort that “common and differentiated” responsibilities will be maintained.
Many countries were stunned to show up at COP15 to discover some were actually proposing that the Kyoto Protocol be replaced in its entirety and not just further extended.
The accord also: recognizes the 2 C temperature threshold (admittedly with no guarantee that developed country targets will provide comparable action); provides a pledge to give developing countries additional upfront financing of $30 billion by 2012; sets a goal of $100 billion in developed country financing to fund mitigation and adaptation by 2020; and commits to mobilize resources to control international deforestation.
In my optimistic view, COP15 has had several outcomes significant to Canadian lawyers and their clients. Of course, I admit I went into COP15 with the realistic view that we were not going to see a perfect agreement emerge that would satisfy every country of the world. But seeing representatives from almost every country in the world gather in one place to discuss an issue of perceived global importance is an impressive result, even if they didn’t all agree.
First, in the days leading up to the conference, Canada finally came clean and admitted what everyone already knew; whatever policy we adopted had to mirror that of the United States so as not to upset a well-developed, but fragile, trade relationship.
I think this actually helps Canada’s global reputation as it explains in part Canada’s failure to implement the commitments Canada agreed to as part of the Kyoto Protocol. There, we’ve said it — our solution will be tied to that of the U.S. Now carry on and start officially considering the U.S. and what it offers in your climate-change business model.
Staying silent was increasingly becoming less of an option. Given our penchant for collecting medals and awards, it is noteworthy that at COP15 Canada received its third Fossil of the Year award in a row from the coalition of environmental groups that distributes the awards at the these events. That after a series of gold, silver, and bronze medals in the daily competitions; Canada was not to be denied.
Second, the U.S. is moving towards its climate change solution at an accelerated pace. Once we know what the U.S. solution is, then we can develop our slightly tweaked Canadian solution.
That will be the top-level framework for Canada’s climate change policy. Somehow that framework, or list of goals, will have to be translated into a series of mechanisms to turn the goals into actions. Those mechanisms can include things like cap-and-trade systems, carbon taxes, renewable-energy generation incentives, etc.
If Canada is going to advance in a meaningful way on climate change issues, it has to come to an internal consensus on which of these mechanisms will be used. The federal and provincial governments have to stop pulling in different directions and stop pretending that this is an issue that should be regulated at the provincial level.
Therein lies the opportunity for Canadian lawyers and their clients who want a piece of the climate change pie. Understand, and more importantly accept, that climate change is being treated as a global issue (regardless of whether you believe the science).
If you understand the global policy reasons behind these local mechanisms, you will be better positioned to develop products, solutions, and opportunities that will actually be successful and not just die on the Canadian-only vine.
At one of the side events at COP15, I listened to a senior investment bank executive make the following very clever analogy. An effective global climate change solution is like a three-legged stool. The three legs are policy, technology, and capital. Stating the obvious, if any one of those three legs is shorter or weaker than the others, the stool is not a great platform on which to place your future.
Given that most climate change solutions tend to have a long-term focus, the three legs of the stool have to do likewise. Technology in the renewable energy and industrial efficiency areas is continually evolving, but is generally well advanced.
The capital markets are very comfortable with stable, long-term projects tied to fixed revenue models.
Policy, the third leg, is currently what makes the stool wobble. While certain jurisdictions around the world (Spain and Texas, while not perfect models, are two that stand out) have established reputations as having well-developed climate change policies in place, most of the world (and certainly Canada) does not.
So for Canada, the good news is we have sunk fairly low in world perception with respect to climate change issues and should now find it easy to move up. The U.S. has fought some of our battles for us at the talks, also focusing on verification and credibility to go along with any foreign subsidies handed out.
Given that several of our weak regional solutions to date attempted to fend off a nationalized Canadian approach by partnering with the U.S., it shouldn’t be hard to come up with a national Canadian regime that recognizes the reality of our economic ties with the U.S. Once we do that, Canada will then have done its part to make that stool a little less wobbly.
Greg McNab is a partner at Baker & McKenzie LLP in Toronto who attended the COP15 summit in Copenhagen.
