Saturday, December 19, 2009

UPDATED: On Trade, It's More Like "Nopenhagen"

First of all, sincerest apologies for the bad pun. I simply couldn't resist. Now, on to the news (if you can even call it that).

The UN Climate Summit in Copenhagen has officially ended, and the "agreement" reached is minimal. The greenies are (mostly) depressed. The politicians are spinning. And the leaders have all gone home. There's plenty of reporting on the negotiations and the details of the final agreement (assuming there actually is one), so I'll spare you those. Instead, I'll just focus quickly on the trade provisions - or, more accurately, the lack thereof - in the final "agreement."

The full text is here, and a quick review makes clear that there is not a single word about trade measures - be they border offsets, carbon tariffs, border adjustments, or other wonkish terms - in the entire "agreement." (As you'll recall, there were several draft paragraphs - ranging from very limiting to abject diplo-fluff - circulating as late as Thursday.) Moreover, President Obama didn't mention the contentious issue in his closing remarks to the press, and he also avoided any discussion of "domestic competitiveness" or any other stealth ways of saying "protectionism."

Indeed, the only provisions that might possibly cover the issue of trade measures are paragraphs 4 and 5, which read (basically, "Annex I" = developed; "Non Annex I" = developing):
4. Annex I Parties to the Convention commit to reducing their emissions individually or jointly by at least 80 per cent by 2050. They also commit to implement individually or jointly the quantified economy-wide emissions targets for 2020 as listed in appendix l, yielding in aggregate reductions of greenhouse gas emissions of X per cent in 2020 compared to 1990 and Y per cent in 2020 compared to 2005. Annex I Parties that are Party to the Kyoto Protocol will thereby further strengthen the emissions reductions initiated by the Kyoto Protocol. Delivery of reductions and financing by developed countries will be measured, reported and verified in accordance with existing and any further guidelines adopted by the Conference of Parties, and will ensure that accounting of such targets and finance is rigorous, robust and transparent.

5. Non-Annex I Parties to the Convention will implement mitigation actions, including those to be submitted to the secretariat by non-Annex I Parties in the format given in Appendix II by 31 January 2010, for compilation in an INF document, consistent with Article 4.1 and Article 4.7 and in the context of sustainable development. Least developed countries and small island developing States may undertake actions voluntarily and on the basis of support. Mitigation actions subsequently taken and envisaged by Non-Annex I Parties, including national inventory reports, shall be communicated through national communications consistent with Article 12.1(b) every two years on the basis of guidelines to be adopted by the Conference of the Parties. Those mitigation actions in national communications or otherwise communicated to the Secretariat will be added to the list in appendix II. Mitigation actions taken by Non-Annex I Parties will be subject to their domestic measurement, reporting and verification the result of which will be reported through their national communications every two years. Non-Annex I
Parties will communicate information on the implementation of their actions through National Communications, with provisions for international consultations and analysis under clearly defined guidelines that will ensure that national sovereignty is respected. Nationally appropriate mitigation actions seeking international support will be recorded in a registry along with relevant technology,
finance and capacity building support. Those actions supported will be added to the list in appendix II. These supported nationally appropriate mitigation actions will be subject to international measurement, reporting and verification in accordance with guidelines adopted by the Conference of the Parties.
If you can divine any commitments - or even aspirational or hortatory language - on trade measures, please let me know. You're either far smarter than me (quite possible), or you're crazy (also quite possible).

Of course, once it was decided that this "agreement" would, as President Obama made clear, "not be legally binding" in any way, shape or form, it's possible that the countries demanding limits on border measures just dropped the issue altogether. I mean, why waste valuable negotiating leverage on demanding restrictive trade language that could simply be ignored or amended in the very near future, right? (The word on the street is that Mexico City November 2010 will be the next "last chance to save the planet.")

Such reasoning, unfortunately, is pretty short-sighted, and I think that the final Copenhagen "agreement" is actually a pretty big win for the eco-protectionists here and abroad. Without any language on border measures - even hortatory language promising an examination of their positive and negative effects - US protectionists (in the House, Senate or EPA) have carte blanche under the "agreement" to include carbon tariffs in any domestic climate change mitigation measures. And they can even use the Copenhagen collapse - i.e., an alleged failure of developing countries to agree on binding multilateral commitments - as an excuse for why carbon tariffs are (again, allegedly) absolutely essential to maintaining US competitiveness. Their argument here is pretty obvious: developing countries prevented a binding multilateral climate change agreement, and without that agreement, US regulations would allow imports from these same developing countries to destroy the US manufacturing sector. Thus, carbon tariffs are essential, and they're even allowed under the Copenhagen "agreement"!

Spurious? Sure. Likely? Undoubtedly.

Fortunately, the chances of congressional passage of cap-and-trade or any other domestic climate change legislation before the Mexico City conference are slim-to-none. Thus, it's highly unlikely that Congress will implement any sort of eco-protectionism in the next year (at least as part of climate change mitigation legislation). However, that political reality doesn't change the fact that the final Copenhagen "agreement" does nothing to limit the developed world from resorting to green protectionism. And considering the strong language proposed by India and other developing countries banning the use of border measures, as well as the inclusion of such measures in current US climate change legislation, the failure of the Copenhagen agreement to even address the issue is, well, a failure.

UPDATE: the original linked text was not final. The text above is. Furthermore, the UN Delegates did NOT adopt the accord, they merely "took note" of it. Thus, this final text is practically worthless, and it's less of a win for the eco-protectionists. That said, it still would have been good to have something on border measures in the final "agreement."

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