Conclusions and recommendations
1. International
negotiations must be guided by the best science we have available.
This indicates that to give us a good chance of avoiding dangerous
climate change, atmospheric concentrations of greenhouse gases
should be stabilised at no more than 450 parts per million CO2
equivalent. To make this happen developed countries, such as the
UK, will be required to reduce emissions by some 25-40% by 2020
and 80-95% by 2050. Developing countries will have to limit their
emission growth. Given that these reductions appear likely to
only translate to a 50-50 chance of avoiding dangerous climate
change the international community should aim for more stringent
reductions. (Paragraph 7)
2. We agree with the Government that it would not be right exclusively to press for contraction and convergence in current international negotiations, given the political difficulties that could be created. However, contraction and convergence should be used as a guide to the level of effort required by each country to avoid dangerous climate change. We are encouraged that the Government is modelling the impact of probable domestic commitments in other countries and that it is seeking to identify where further action might be achieved. It must find a way of ensuring this information is used to shape negotiations.
(Paragraph 12)
3. The post-2012 agreement
will have to be nuanced in its approach. Absolute emission reduction
targets, based on the IPCC scenario that leads to atmospheric
concentrations of greenhouse gases not exceeding 450 parts per
million CO2 equivalent, will have to be adopted by
developed countries. Developing countries will also have to play
their role by adopting actions that will reduce their future emission
trajectories. (Paragraph 13)
4. During these complicated
negotiations it is critically important that our negotiators do
not lose sight of the science of climate change. The 450 ppm CO2-eq
IPCC scenario, or the EU's two degree target, can not be traded-off.
They represent the minimum that we can accept. (Paragraph 14)
5. Parallel processes such as the Major Economies Meeting and the G8 can be invaluable in moving forward the UN process for securing climate change mitigation measures. But the UN negotiations are key and any agreements or conclusions reached in parallel processes will only be helpful if they support the UN process. They should not prescribe a way forward for countries excluded from participating in them.
(Paragraph 17)
6. We commend the FCO and Government's diplomatic efforts. It appears that this has helped to move forward the climate change debate in a number of countries. It has been particularly successful in reframing the economic debate surrounding climate change through its promotion of the findings of the Stern Review, as we discovered first-hand in China and Australia.
(Paragraph 20)
7. Diplomatic efforts must continue to target key stakeholder groups, in particular the business lobby. We recommend that the Government seek to build links between the UK business lobby and its counterparts overseas where this will contribute to moving forward the climate change debate. As part of this the Government should use Japan's presidency of the G8 as an opportunity to develop further the linkages between UK and Japanese business.
(Paragraph 22)
8. We welcome the increase in resources given over to climate change diplomacy, although it is not clear to us that these are additional rather than resources that have simply been diverted from sustainable development and other environmental work.
(Paragraph 24)
9. The loss of sustainable development from the FCO's strategic objectives is unwelcome. We are concerned that as a result there might be inadequate integration of sustainable development into climate change negotiations and therefore that any agreements might not be sustainable in the long-term.
(Paragraph 25)
10. It is clear that we need to display greater commitment to tackling climate change domestically if we are to have a credible voice in international climate change negotiations. The leadership demonstrated in the commissioning of the Stern Review and bringing forward the Climate Change Bill is in danger of being undermined by policies such as airport expansion plans or an over-reliance on international credits in meeting domestic emission reduction commitments.
(Paragraph 30)
11. The government should take steps to minimise the impact of domestic policies that run counter to climate change objectives. For example, the Government should reappraise its policies on airport expansion. The Government should also demonstrate leadership by reconsidering its opposition to the hypothecation of EU ETS auction revenues for climate change mitigation and adaptation in the EU and in developing countries. Failing this, the Government must explain why it opposes hypothecation.
(Paragraph 31)
12. Although the EU has said that it will increase its target to 30% if a successful international agreement is reached, it has undermined its negotiating position and displayed poor leadership by failing to base its unilateral target on the science. The Government should press for the unilateral target to be increased to at least 25% by 2020. The final target agreed might be more than 30% by 2020.
(Paragraph 32)
13. The optimal approach to carbon leakage is to maximise the number of abating countries, either though a comprehensive international mitigation agreement or through sectoral agreements. We accept that reaching such agreements might be challenging and recognise that other policies might be required to address carbon leakage, such as a border adjustment tax. However, the Government should ensure that the EU does not take a decision on carbon leakage measures prior to the completion of the UN negotiations. Such a decision might hinder the agreement of a more satisfactory post-2012 outcome.
(Paragraph 36)
14. A key challenge for Annex 1 countries will be finding the resources required to help developing countries to adapt to and mitigate climate change. Developing countries will not take on commitments if developed countries do not offer substantial binding commitments to financing and technology transfer.
(Paragraph 37)
15. In order to facilitate negotiations the Government and EU should work closely with developing countries to explore mitigation options in a cooperative fashion without prejudice. The actions to be adopted by developing countries should be allowed to grow out of dialogue. The actions will vary according to the individual circumstances of each country but might extend to policy measures, sectoral agreements, or non-binding targets. The FCO and Government have a lot of work to do in relation to this nuanced diplomacy.
(Paragraph 41)
16. Although there will be a link between measurable, reportable and verifiable action in developing countries and measurable, reportable and verifiable financing by developed countries, non-funded action will still have to be taken by developing countries if climate change is to be addressed. In addition, some developed countries are unlikely to agree to a Convention that does not require some non-financed action by developing countries.
(Paragraph 44)
17. The Government should explore with developing countries opportunities for mitigation activities that might not directly be funded by developed countries. Key to this will be the stressing of the substantial co-benefits of certain climate policies in relation to energy security or pollution control. Such non-funded activities could be stimulated using global agreements such as the energy efficiency target proposed by Japan. Nevertheless, it is clear that substantial developed country financing will be required in order to help shift developing countries onto a low-carbon path.
(Paragraph 45)
18. The domestic actions taken by China give an indication of what actions a number of developing countries might be willing to commit to as part of an international agreement. The Government should ensure that China is aware of how it could use its position in the negotiations to ensure a better outcome. If China were to adopt international targets as part of a post-2012 agreement on the basis of its existing domestic targets, it would be an extremely provocative move that could give real impetus to the negotiations. We are hopeful that, given its extensive climate change programme, China will do this.
(Paragraph 51)
19. The scale of funds required for adaptation and mitigation in developing countries might run to some US $150 billion each year by 2015. Given past failures to meet commitments on Official Development Assistance it is unlikely that conventional funding sources will deliver the funds required. Existing mechanisms such as the international carbon market are also unlikely to be able to mobilise the scale of funds required. The Government has commissioned work to identify appropriate funding mechanisms. We welcome this and urge that the work should be published at the Government's earliest opportunity.
(Paragraph 57)
20. There appears to be a widespread perception in developing countries that they are missing out on certain key technologies due to the expense of intellectual property rights. This view has not been supported by the evidence that we received. However, given the significance of this issue for developing countries the Government is right to allow them to develop their own proposals.
(Paragraph 62)
21. Low carbon technologies will have to be deployed in developing countries. To facilitate this, technology transfer will need to include the direct funding of projects through mechanisms like the Clean Development Mechanism, as well as bilateral work on research and development. We welcome UK-China and EU-China commitments to closer working in relation to climate change, environmental technologies and research and development. It is critically important that these lead to advances in the deployment and diffusion of low-carbon technologies. Parties should explore the concept of Low-Carbon Economic Zones as a way to focus joint-working opportunities. In addition the Government and EU must seek to establish bilateral, low-carbon, free trade agreements, and also to define stringent joint standards for energy efficient goods. In order to aid the diffusion of low-carbon technology globally, trade barriers to low-carbon goods and services must be removed; efforts must continue on this issue in the Doha trade round.
(Paragraph 63)
22. We urge caution about the use of international carbon credits. The argument that a tonne of carbon reduced abroad is the same as a tonne of carbon reduced at home is an over-simplification of a complex issue. Permitting the use of too many international credits will drive down the cost of carbon, but this will also make renewables and air pollution targets more expensive to reach and potentially slow down the long-term shift to a low-carbon economy in the UK.
(Paragraph 69)
23. The Minister argued that the market in flexible mechanisms will help to provide investment in developing countries. We accept this but we caution that current flexible mechanisms will only provide a proportion of the funds required for mitigation and adaptation in developing countries. The post-2012 negotiations will have to identify additional sources of money to supply the tens of billions of pounds that will be required.
(Paragraph 70)
24. Nevertheless, we feel that there is still a role for flexible mechanisms in transferring funds and technology to developing countries. They will also provide a 'carrot' to developing countries to play their part in a post-2012 agreement. We agree with the European Commission that the current level of credits proposed to be permitted in the EU ETS should not be expanded further under current emission reduction targets. Only when the EU adopts a target of at least 30% by 2020 could their use be increased, and only to a level that does not undermine the carbon price in the EU.
(Paragraph 71)
25. We believe that there is a good case for sectoral and policy-focused CDM. We recommend that the government explores the desirability and feasibility of its introduction. The government should also explore whether CDM project approval rules need to be reformed.
(Paragraph 73)
26. We recommend that the Government explores with existing market participants and other interested parties the creation of a new independent regulatory body to manage and develop the international carbon market.
(Paragraph 75)
27. Deforestation and land use change will have to be tackled as part of the post-2012 negotiations. It provides an effective natural option for mitigating greenhouse gas emissions. However we have received conflicting evidence as to how this could be done without undermining the EU ETS. We intend to return to this issue at the earliest opportunity. In the meantime we welcome Government contributions to 'avoided deforestation' pilot studies. These studies will need to report as soon as possible to be able to inform the negotiations.
(Paragraph 81)
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