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19. If the success of the UNFCCC is measured simply
in terms of reducing greenhouse gas emissions, it has been a failure.
The Committee heard from Sir David King that the UNFCCC process
has become a "culture within a culture" and the officials
involved seem to have lost sight of the overall objective.
20. The importance
of other processes such as the GLOBE World Summit of Legislators,
working at a national level to translate international commitments
into national legislation, should be recognised. The convention
track needs to have a complementary process of engagement by national
legislators to frame national law and scrutinise governments'
delivery at the national level.
21. However, the UNFCCC continues to be an essential
instrument for bringing all the concerned parties together. DECC
said that Durban showed the UNFCCC process "can work and
deliver results" and the Government remains committed to
it as the "primary vehicle for delivering a legally binding
They added that the UNFCCC process is the "least worst"
22. UNICEF also said that the UNFCCC remained the
"best forum" in which to negotiate a global legally
binding emissions treaty.
WWF-UK asserted that only the UNFCCC has the "universality,
legitimacy, and evolving procedures" to achieve a fair global
agreement on climate change.
Christian Aid stated that the UNFCCC remains "a central decision
making forum where a global solution for the global common problem
can be found [and there is] presently no alternative venue where
all countries can negotiate for a global comprehensive agreement".
23. Reaching a single agreement among almost two-hundred
nations will be extremely difficult, but the UK should still concentrate
on doing this. Voluntary commitments like those achieved in Copenhagen
are a valuable first step to achieving a single agreement with
24. Near negotiations are informal negotiating forumsoutside
the UNFCCCthat can be used to unblock areas of disagreement,
and bring developing and developed countries closer together.
Forums such as these where heads of state meetsuch as the
BASIC group, G8, G8+4, G20, G77 help to overcome the process
culture within the UNFCCC and are sometimes able to achieve more.
The Association of Small Island States is having an impact far
beyond the population size they represent simply by combining
forces on the single issue of rising sea levels. The European
Union also creates a common policy around climate change issues
that brings together all 27 nations.
25. DECC supports using other forums outside the
UNFCCC to "deliver vital practical action in specific sectors",
such as the Montreal Protocol (on Substances that Deplete the
Ozone Layer), the International Maritime Organisation (IMO), and
the International Civil Aviation Organisation (ICAO).
WWF-UK suggested moving hydroflurocarbons (HFCs) into the Montreal
Protocol. HFCs are
CFC substitutestherefore they do not deplete the ozone
layerthat are also powerful greenhouse gases.
Several witnesses suggested that aviation and shipping emissions
should be dealt with in alternative forums such as the IMO, ICAO
or the World Trade Organisation. Dr. Falkner stated that taking
aviation and shipping emissions out of a global agreement "will
make it easier to negotiate an agreement".
26. But these other forums are not a substitute for
the UNFCCC itself, which provides a space for vulnerable countries
to have their say.
WWF-UK noted that some non-UNFCCC forums tended to involve only
"wealthy, powerful countries", which made their processes
"lopsided" and they called into question their global
27. Dr Falkner noted that "none of these forums
have provided a platform for actual negotiations of mitigation
commitments" and that they were "unlikely to offer a
realistic and practical alternative to [the UNFCCC]".
He added that "we need to conceive of international climate
policy as an ongoing process of political engagement rather than
a one-off treaty negotiation."
28. The other forums such as the G8, G20 and the
Major Economies Forum have no institutional framework underpinning
them, so even though they are useful in enabling agreement to
be reached eventually, the only means of implementing an agreement
now, and in time, is the UNFCCC. Dr. Falkner called attention
to the fact that "while we have alternatives for political
debate, we have no institutional framework to deliver. If the
UNFCCC is criticised for not delivering fast enough, no alternative
is in place or could be built in the timeframe that is required
to replace it." 
29. We agree
with DECC that "there is no other forum [than the UNFCCC]
that offers a better opportunity to secure agreement."
We recommend that the UK and the EU continue to use this process
to promote further global action to combat climate change.
30. We recommend
that the Department should advocate moving HFCs into the Montreal
31. In July 2011 Sir David King was the lead author
of a report which proposed a global cap and trade system based
on a per capita emissions target:
[The] principle describes a trajectory
whereby the overall emission level is reduced over time whilst
the per capita emissions rates of different countries converge
on a low value aimed at meeting the 2°C objective.
This allows developing countries to
maintain some emissions growth in the intermediate phase, which
is made up for by a decrease in developed country emissions. The
overall amount emitted should not be more than will cumulatively
push temperature increases over 2 °C. In the global cap and
trade system we propose here, emissions are traded based on a
per capita allocation of CO2
trading permits at some future
date (2050 is favoured by many).
The per capita system functions by setting a forward
trajectory for CO2 emissions per head per nation, this
amount being the same for all countries by the target date.
32. Taking into account projected population growth,
the emissions that will allow temperature increase to be 2 degrees
or less are calculated to be 2 tonnes per capita by 2050. The
scheme would issue CO2 trading permits at 2 tonnes
per person, and excess permits could be sold off.
33. The EU-ETS has shown that carbon dioxide can
be made into a tradable commodity. China is also piloting cap-and-trade
systems. Different carbon markets with different mechanisms around
the world will lead to different carbon prices, which is not optimal
for a single, tradable commodity. As Sir David pointed out, "There
is the natural pressure behind a global cap-and-trade, evolving
from regional cap-and-trade into a much more natural process towards
global trading." 
In theory at least all the regional schemes could evolve and eventually
join up to become one global scheme.
34. If China develops a full scale domestic cap-and-trade
system, there could be scope for eventually linking it to the
EU-ETS. This would create two very large blocs with potentially
unstoppable momentum. As we pointed out in our report EU Emissions
Trading System, the EU and China could together reach a critical
mass of key emitters involved in emissions trading. 
35. However, we also heard from witnesses who were
sceptical about the feasibility of this approach. Other countries
such as Korea and Australia have announced their intention to
introduce their own cap-and-trade schemes, and China is about
to pilot one, even against the backdrop of the over-allocated
EU-ETS. Oversupply of EU-ETS credits, combined with recession,
has caused the price to fall to about 8 in July 2012 which
is far too low to drive long-term low carbon investment decisions.
Linking schemes between countries will be extremely difficult.
Dr. Falkner said it would require "a massive effort to build
up institutions, because what you are doing is effectively creating
36. The solution proposed by Sir David would be an
equitable one, as all nations would have to reach the same emissions
per capita by 2050. This is the basis on which the UK's 80% reduction
by 2050 was calculated, but we note that is unlikely to achieve
the equitable goal of approximately 2 tonnes per capita. As developing
countries' economies grow those whose per capita emissions are
currently very low could increase emissions in the short term
and then return to the agreed objective by mid-Century.
A dynamic cap would need to be established for each country, enabling
a developing country with a cap in excess of its normal emissions
to trade in the surplus for cash on the market. Establishing this
dynamic cap would involve complex discussions around the principles
underlying equity. As each nation joined this cap-and-trade mechanism,
governance and compliance measures would also have to be negotiated.
37. The Minister
noted that "a global cap-and-trade system is what we all
We see considerable merit in the system that Sir David advocates,
but there are also enormous challenges that may make it impracticable.
38. The Committee heard from industry of their concerns
about the effect of emissions reduction targets on industrial
sectors in developed countries. In some developing countries some
of these sectors are already developed (for example steel) and
compete with the same sectors from developed countries,. In terms
of emissions trading, if the developing country was treated as
a homogeneous unit and provided with emissions credits, its developed
industrial sectors might not have an incentive to reduce their
emissions and increase efficiency, so they would have an advantage
over the same sector in a developed country. One solution may
be to set up sectoral global trading schemes, which would drive
emissions down in a particular industry while ensuring there was
a level playing field.
39. We recommend
that DECC cooperates with industrial sectors and other interested
stakeholders to identify the obstacles to and benefits of a sectoral
trading scheme with a view to including it in an international
25 Q 85 Back
Ev 62 Back
Q 170 Back
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Q 132 [Prof. Michael Jacobs] Back
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Q 169 Back
Smith School for Enterprise and the Environment, Climate change
negotiations: key lessons & next steps, July 2011, p 31 Back
Smith School for Enterprise and the Environment, Climate change
negotiations: key lessons & next steps, July 2011, p 32 Back
Q 87 Back
Energy and Climate Change Select Committee, EU Emissions Trading
System, January 2012, HC 1476, p 23 Back
Energy and Climate Change Select Committee, Tenth Report of Session
2010-12, EU Emissions Trading System, January 2012, HC
1476, para 20-21 Back
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