How might the USA now engage at the UNFCCC?

President Obama’s recent speech on climate change marks a welcome shift for an Administration that has been largely silent on the issue for some time now and puts into context the climate teasers that were dropped into the Inauguration and State of the Union addresses.

As many commentators have now discussed, the speech focused mainly on the steps that the USA will take to deliver on its Copenhagen pledge. Whether theses steps will be sufficient remains to be seen, but they are nevertheless concrete and doable, which are two important prerequisites for success.

But the very end of the speech was perhaps the most important turning point for me, in that it marks the first real attempt by the USA to guide the global political process on climate change since, perhaps, the mid 1990s when the Kyoto Protocol was hammered out. Of course the Administration put tremendous effort into the process in the lead-up to Copenhagen and President Obama went to the negotiations along with many other leaders, but at that point in time his Presidency was less than a year old, which in the context of the UNFCCC process is really not very long. There just hadn’t been enough time for the new Administration to really make its mark.

On the back of the following three short paragraphs are we now going to see the USA in the driving seat, and what will that mean? With over three years left in the Obama Presidency, there is certainly time to guide the international climate process.

And finally, my Administration will redouble our efforts to engage our international partners in reaching a new global agreement to reduce carbon pollution through concrete action.

Four years ago, in Copenhagen, every major country agreed, for the first time, to limit carbon pollution by 2020.  Two years ago, we decided to forge a new agreement beyond 2020 that would apply to all countries, not just developed countries. 

What we need is an agreement that’s ambitious — because that’s what the scale of the challenge demands.  We need an inclusive agreement -– because every country has to play its part.  And we need an agreement that’s flexible — because different nations have different needs.  And if we can come together and get this right, we can define a sustainable future for your generation.

The current state of the international post 2020 discussion remains lacklustre at best. Although there is some progress on items left over from the Copenhagen era, for example the Green Climate Fund, almost nothing has transpired on what might happen in the period after 2020. Further, a series of national pledges under some sort of international umbrella of ambition is highly unlikely to deliver any real shift in global emissions, more structure is needed.

In the mid 1990s the USA did set the agenda and drive the pace with its idea of building a global carbon market, starting with clearly defined ambition in developed countries, supported by carbon pricing instruments (most notably the AAU) and strong compliance. Many countries adopted this approach and the EU embraced it by cascading its own obligations into an internal carbon market, as did New Zealand and eventually Australia. Although such a Kyoto style framework is not on the agenda now, there is still much to learn from its implementation as I have discussed in earlier postings. In particular, a new market mechanism which mimics the role of the AAU for those that wish to link their domestic carbon is one possible option. This could at least lay the foundations for a global carbon market.

Difficult though it may be, key architecture questions are on the table today, yet progress in addressing them is at a standstill. This is where American  (and European) leadership is required. Simply trying to coax ever greater pledges out of the likes of China and India isn’t a route to success, rather a clear and robust framework needs to emerge that will drive energy investment down a lower emissions pathway and trigger one technology in particular, carbon capture and storage (CCS).

Love it or hate it, carbon pricing remains a key deliverable. CCS will eventually be triggered by a carbon price, but in the interim an international agreement needs to ensure that this technology appears on a near commercial scale in a dozen or so countries / regions (e.g. North America, EU, Russia, Oceania, Gulf States, South Africa, China and India).