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“A deal is within our reach,” the Danish Prime Minister Lars Løkke Rasmussen said in his opening speech, Monday, Dec 07, 2009, at the Copenhagen climate change summit, stressing that the talks will have to overcome deep distrust between rich and poor nations on how to share the burden of curbing emissions.
Negotiations on a successor to the Kyoto Protocol at the United Nations conference on climate change in Copenhagen, began on Monday, with delegates from 192 countries in attendance, and will continue to December 18th.
Thousands of delegates will have a minimal role at the talks as the focus is inevitably on the big economies.
The IMF (International Monetary Fund) has published a paper on Climate Policy and the Recovery, which considers the challenge posed by the twin policy imperatives: how to exit from the crisis while developing an effective response to climate change.
At the same time, policymakers are searching for new sources of sustainable growth to recover from the deepest economic crisis for decades and, in many cases, also the means to cope with severe fiscal pressures exacerbated by the crisis.
The IMF says the crisis has had major effects on the global economy, but these detract little from the urgent need to combat climate change. The International Energy Agency (IEA) forecasts that declining economic activity could lead to global greenhouse gas (GHG) emissions falling by more than 2.5 percent in 2009 (having increased rapidly in recent years). But the damage from climate change - - predicted by the UK's Stern Review, for example, to be highly significant in the future, particularly in developing countries - - arises not from the flow of GHGs but from the accumulated stock. And the sheer scale existing stock, and its very slow decay, mean that even quite large reductions in emissions can make little dent on it.
IMF Managing Director Dominique Strauss Kahn has said that the global economic crisis must not distract us from tackling the important issue of climate change: “Sustaining the recovery and putting in place effective climate change policies can be mutually reinforcing with the right policies implemented resolutely,” he said. “Global cooperation, including among IFIs, will help countries to confront the challenges from climate change. These require innovative and long-term solutions, which have a part to play in supporting the recovery and sustainable growth. The IMF can assist in its areas of expertise to advise on policies and support countries that are most vulnerable to economic and climate challenges.”
Market failures
The IMF says fundamentally, the market failures underlying the climate problem - - above all, that polluters do not bear the full costs of emissions - - are unaffected by the downturn.
Current mitigation efforts are now generally acknowledged to be inadequate for meeting the economic, social and political problems climate change can create: even accounting for the effects of the crisis global emissions could rise by 40 percent against current levels by 2030, without further policy intervention. Broader and deeper international measures to raise the cost to firms and households of emitting greenhouse gases therefore remains a key priority in the coming years.
However, political focus on restoring economic prosperity could weaken the prospects for such measures. Yet a cautious shift toward more aggressive carbon pricing need not impede the recovery. And currently more moderate carbon and energy prices, as well some potential for “green” fiscal stimulus measures, afford important opportunities that should not be overlooked.
The political will behind the Copenhagen Climate Change Summit is big and it has never been bigger, Connie Hedegaard, minister of CO15 Summit, told CNBC Monday:
The IMF is publishing a series of articles on climate change in its quarterly magazine Finance & Development and on its blog, iMFdirect.
Restoring economic growth after the global financial crisis need not thwart the fight against climate change. Carbon pricing can strengthen fiscal positions, and improved climate resilience can promote macroeconomic stability.
Climate change exacerbates the challenges of growth and development. Climate finance can provide the resources developing countries need to mitigate and adapt.
Rather than trying to agree on elusive and ineffective carbon reduction targets, we should invest more heavily in new technology to fight climate change.
Global leaders should stop focusing on cutting carbon emissions, but should invest to make clean energy much cheaper, BjørnLomborg, author of "The Skeptical Environmentalist," told CNBC Monday:
As world leaders gather in Copenhagen, climate change is again in the headlines. The science of the issue can get pretty incomprehensible pretty quickly. And the politics are clearly very ugly. Let’s not forget, however, that much of the economics is simple. It’s an externality, stupid - -so price it.
