The pit stop at Lima

It is now common knowledge that the countries at the negotiating table on climate change are actually negotiating the mother of all economic treaties, one whose implications may dwarf those of the WTO agreements. This is because, at the bottom, the countries are largely deciding on a global rationing scheme of affordable energy resources, and energy is a ubiquitous input in all economic activities.

The climate change regime has gone through several milestones-the UNFCCC (1992), the Kyoto Protocol (1997), the Bali Action Plan (2009), the Cancun Decisions (2010), and the current phase, under the Durban Platform (2011), is intended to conclude in a new outcome in Paris next year, to cover the post-2020 period, and would apply to all countries. Lima was the last pit stop before Paris. The Delhi Sustainable Development Summit 2015 in February will discuss the options at Paris.

To understand the significance of the Lima conference, which yielded two documents-the Lima Call for Climate Action, and a 43-page draft negotiating text for Paris-it is important to compare the nature of the global compact in the UNFCCC (1992), and that contained in the Lima Call.

The UNFCCC categorically distinguished between industrialised countries (Annex I), and developing countries (non-Annex I), and established the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR&RC), as the basis of differentiating the actions expected of each category. Annex I was to reduce its greenhouse gas (GHG) emissions in the absolute (after stabilising them collectively at the 1990 levels by 2020), and non-Annex I were to take such actions as would preserve their prospects for growth and poverty eradication, but could do more if provided finance, technology, and capacity building ("means of implementation"), by a subset of Annex I, the rich industrialised countries, termed Annex 2, to the extent of "full agreed incremental costs". The actual scale of the actions by each country, including mitigation, adaptation, and, additionally in the case of Annex 2, provision of the means of implementation, would need to conform to considerations of "equity".

In progressing to Lima, via the intermediate milestones, the basic compact of the UNFCCC has been sought to be overturned by several developed countries. The US and EU have essentially sought to erase the CBDR&RC principle (and any considerations of equity), and thereby the difference in the nature of actions (though not necessarily the actual extent), and the level of external scrutiny, by developed and developing countries. The EU has in addition, emphasised, that the 2015 outcome must be internationally legally binding (to which the US is lukewarm). Their main reasoning is that the world has changed since 1992, meaning that China, India, and some other "emerging economies" have now become major global economic players (meaning, economic competitors). Developing countries have reiterated that the UNFCCC compact is sacrosanct, and that their individual historical and current responsibility for climate change remains a fraction of that of developed countries.

The Lima Call has preserved the CBDR&RC principle, but qualified it by a gaping loophole, "in light of different national circumstances". It refers only implicitly to equity, in its Preamble, by reiterating that the 2015 outcome would be "under the UNFCCC principles". What actions exactly, and to what extent, each country would undertake these, are left to them to decide, and to clarify, if they wish, why their nationally-determined "contributions" are "fair". It does not commit the developed countries to provide the means of implementation to developing countries, but only "urges" them to do so. Taken together, these mean that a global regime with responsibilities and entitlements of countries assigned on the basis of a universally-agreed equity norm, which would also limit global emissions to a safe level, is no longer on the table.

So, can we now discern the contours of the 2015 Paris outcome? To do this, we need to also look carefully at the November 12, 2014, joint statement by the US and China. This document specifies that the US will accelerate the rate of its GHG reductions setting a target of 26-28% reduction from its 2005 level by 2025. China, on the other hand, only intends to stabilise its GHG emissions by 2030, at an as-yet-unspecified level. It also intends to ensure that around 20% of its primary energy use in 2030 would come from non-fossil fuels. This is huge, and amounts to perhaps 1,000 GW of power capacity from non-fossil sources in China by 2030-almost corresponding to the total US power generating capacity at present.

According to TERI analysis, China's per capita emissions in 2030 would be about 10 tons per capita, while that of the US at that time would be lower, and on a reducing trajectory. China's emissions, which may reduce after 2030, would clearly do so in the initial phase more slowly than that of the US, and it is likely that perhaps some decades after 2050, they would converge to a low figure which would depend upon technological possibilities at that time. The overall effect is that the CBDR&RC principle is affirmed both in words and practice. Further, the notion that per capita emissions entitlements of developed countries would be higher than that of developing countries till far into the future is jettisoned, and some accounting is made for the greater historical responsibility of the US as compared to China's. Moreover, both the US and China carefully qualify their announced goals as "intentions" and "best efforts", and not any form of internationally-binding commitments. Broadly, as regards mitigation, the US-China joint statement, is consistent with India's long-standing negotiating objectives on this aspect.

Would a 2015 outcome on these lines sufficiently address the climate change problem? This depends upon energy choices in the context of two opposing technological trends that are currently happening. First, the development of renewables technologies-which have made considerable progress, and which the 1,000 GW market on offer by China may vastly accelerate. Second, the parallel development of shale oil and gas, and methane hydrates technologies, which may help ensure cheap fossil energy for many decades, no matter that the middle east remains turbulent. We live in interesting times!