January2010

Last year in Copenhagen

Jean Pisani-Ferry

The noughties opened inauspiciously with a setback for global governance with the election of George W.
Bush, who believed in US leadership and was sceptical of multilateralism. They closed in Copenhagen
with a UN-generated multilateralist fiasco. The largest-ever assembly of heads of state in history ended in
confusion with an ambiguous three-page text which was not even formally adopted.

Reactions in Europe have been very negative. The Swedish presidency of the EU spoke of a disaster and
French philosopher Michel Serres of a ‘geopolitical Munich’. Beyond Europe, however, reactions were
markedly less harsh. The Indian environment minister referred to small steps, Barack Obama of a
breakthrough and Chinese premier Wen Jiabao of an accord to be treasured. This difference in perspective
calls for explanation and discussion.

The disappointment in Europe is understandable. It was Europe’s theme, the conference was taking place
on European land and the EU had announced both ambitious goals for cutting emissions and sizeable
financial aid for poor countries. Furthermore, European governments shared similarly activist views on the
topic (even though some in Central and Eastern Europe are less enthusiastic), if only in response to visible
public opinion concerns. And yet the Europeans were excluded from the final deal between the US and the
BASIC group consisting of Brazil, South Africa, India and China and they only rallied to the agreement
one by one. In short, the EU was marginalised. This was in part because it was committed to action
already, but also because it forgot that, in order to negotiate, one needs a negotiator, not twenty-eight (and
nor even four or five). This was a depressing result for a European Union which wanted to reinvent itself
as a global actor and had dreams of being the global leader of the climate crusade.

Chinese satisfaction is equally comprehensible. China did not want to get dragged into the mechanics of
the Kyoto protocol, as this framework was initially designed to be constraining for advanced countries
only, and it did not want to underwrite binding commitments likely to constrain its growth. At the same
time, it sought to assert itself as a central player in the debate. It achieved its objectives.

The US position was more complex. Even the biggest supporters of an international climate accord had
from the outset rejected the 1997 framework because it only committed industrial countries and ignored
the main emerging economies. In 1990, the Kyoto reference date, the combined emissions of the US and
the EU were four times higher than those of China. As of 2020 they will be lower. As Robert Stavins of
Harvard wrote beforehand, an ambitious, a legally binding Copenhagen agreement could only be a ‘Kyoto
on steroids’ and it was therefore bound to be constraining for developed countries only. For the US
advocates of a long-lasting international climate framework this would have been a false victory.
Furthermore an agreement of this sort would have had no chance of ratification by Congress. The US
objective was instead to rally all the key countries around an agreement of principle and to put in place
monitoring mechanisms, even if the emerging countries made no serious commitments for the next few
years. In a nutshell, China and India had to be offered a free ticket for the first part of the trip in order to
get them aboard.
This in crude terms is the result of Copenhagen, and this is what explains US satisfaction despite the
discrepancy between the stated objective (limit warming to two degrees) and the means (nothing concrete
at this stage), and despite the woolly compromise language about ‘international consultations and
analyses’ on the steps actually being taken by developing countries.

Which just leaves the most important thing: is this accord capable of forming the basis for a global climate
policy? Even if one adopts the optimistic view, one cannot but stress the remaining economic and
institutional obstacles.

In economic terms, an enormous amount remains to be done and time is running out. First, the goal of a
single global price for carbon is still distant despite the fact that it is essential to achieve it to prevent
distortions in the allocation of private investment. Second, a vague principle will not be enough to sort out
the burden-sharing issue. At some point the distributional dimension will have to be tackled seriously
rather than being papered over. A quid pro quo must be found between developed countries, responsible
for past emissions, and emerging countries, the main source of future emissions. Third, the disturbing fact
that countries are accountable for the emissions they produce, but not for those they consume, has not
been addressed. The reduction or the slowdown in the advanced countries’ emission is in part attributable
to the fact that the goods they consume are increasingly manufactured abroad, not least in China. Fourth,
‘promise and forget’ is not a viable regime and commitments will have to become binding, which raises
the question of penalties. This is not an insignificant agenda.

Institutionally, the United Nations framework revealed all its defects in Copenhagen. Quite apart from the
unanimity rule which led to procedural battles and hostage-taking by smaller countries, the debate was
haunted throughout by the spectre of the 1970s. Unlike what happens at the WTO, which also works by
unanimity, alliances did not change according to the particular issue but remained stuck in an obsolete
reminder of the North-South debates of the past. This is not the way to reach agreement on how to address
what is probably the main challenge of the 21st century. This experience suggests that for practical
purposes, the UN will probably need to be dispensed with in the future.

Copenhagen is definitely worth more than the Pyrrhic victory some observers and players hoped for. It
may have been a useful failure. But much perseverance will be needed to make sure it is a new departure
and, inevitably, precious time will have been lost in the meantime.

The author is a professor of economics at Université Paris-Dauphine and the Director of the Brussels-
based Bruegel think tank.