Climate Deal - Next stop Cancun

By Andrew Whitehead on Jul 23, 10 03:35 PM in Law

When it comes to international climate change agreements, the UN has been the only game in town. However, Copenhagen demonstrated the inability of the UN to deliver consensus, in the face of so many participant countries with such diverse agendas and perspectives. Now it looks as if some other approach is probably needed.

The key is the US - until recently the world's biggest polluter. Believe it or not, it is now 18 years since the 'Earth Summit' in Rio, when the US joined other countries in signing up to the need for sustainable development. And although it has to be said, the US has done little since to match its fine words with action, US climate change legislation of some description does now seem inevitable. And when it emerges from what is an impressively tortuous legislative process, the US will be in a much stronger position than it was in Copenhagen to encourage commitments from developing countries, in particular the likes of China.

Indeed, there are some who argue, that if they can find enough common ground, a grand US-European coalition which can show genuine leadership on the issue, is the way to bring the key developing countries to the table. However, this might require Europe taking a punt and going it alone with a 30% target in order to secure a deal.

But to get a deal the developed countries will also have to match taking the moral high-ground with giving hard cash. Developing countries simply cannot begin the transformational change needed to create low carbon, high efficiency economies without significant financial support.

If it delivered nothing else, Copenhagen did at least result in the promise of funding for developing countries, with a goal of $100 billion a year from 2020. However, the required financial mechanisms need to be set up without further delay to build confidence that this funding will indeed be delivered, since any deal requires trust on both sides. This is another good reason why protectionism and a trade war need to be avoided at all costs.

So great care is needed over the next steps and it is probably unrealistic to expect any sort of binding agreement to emerge at the next climate change summit, in Cancun in Mexico at the end of the year.

But it is essential the building blocks for that deal, especially around funding mechanisms, be put in place at Cancun. Whilst the consequences of failure are to most people unimaginable, the prize for success will be huge in terms of new business opportunities.