II The Opportunities for International Climate Policy

• 1 Climate Policy as Foreign Policy
• 2 The Current Conflicts within the International Climate Negotiations
• 3 The Benefits of Assuming a Leadership Role
  • 3.1 Strong Climate Policy as Peace Politics in Practice
  • 3.2 Europe Must Take the Political Lead
• 4 The Key Elements of a Climate Protocol

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II The Opportunities for International Climate Policy

1 Climate Policy as Foreign Policy

International climate policy is not developed in a vacuum. It is inextricably linked with foreign policy and peace and security considerations. These important policy areas themselves have an effect on climate policy, and this dynamic in turn affects other political spheres of activity. It can be said therefore, that this interrelationship, when properly structured, can help to ensure effective climate policy, while at the same time, offering an opportunity to influence other areas of politics as well.

The importance of international climate policy for the international oil and gas industry is self-evident. Investments totalling hundreds of billions of dollars and the future of many people in the oil and gas-producing countries are dependent on the progress made in the international climate negotiations. The implications for social questions as they relate to the balance between North and South is less obvious. Nevertheless, they influence the negotiations every bit as much as the interests of fossil fuel lobby. Many developing countries regard the Framework Convention on Climate Change primarily as an economic agreement, which provides both the opportunity to change what is perceived as an unjust international economic order, but also the risk that the status quo will be maintained, or even exacerbated.

Among the Western economic powers, i.e. the US, Japan and the European Union, climate policy is synonymous with the creation or prevention of comparative advantages in international economic competition. Furthermore, the US and the EU are fighting for recognition as the leading political power, here, as in the international trade policy arena. And due to the territorial conflict potential inherent in climate change, which ultimately will result from resource-related conflicts and migration, international climate policy also has a very profound influence on international peace and security policy.

These and other foreign policy dimensions should, however, not just be seen as factors which can influence the successes or failures of international climate policy. Climate policy actually offers an opportunity to exert a positive influence on the political areas mentioned. It can indeed serve as a lever for creating a more just and safe world in the next century. For the European Union, this global challenge offers an opportunity to exert itself as a world leader.

The 3rd Conference of the Parties to the Framework Convention on Climate Change held in Kyoto, Japan in December 1997 (COP 3) does not represent the end of the international process. Rather it merely represents but one stage in a longer-term negotiating process. A compromise must be expected, and this will probably be restricted a general regulatory framework. Therefore, independent of the outcome of COP 3, the creation of an alliance of the leadership countries is of crucial importance for the further development of international climate policy.

2 The Current Conflicts within the International Climate Negotiations

In many ways, the international climate negotiations are similar in many aspects to the disarmament „poker" of the 1970s and early 1980s (Sachs 1995). Several rounds of climate negotiations are held and every few years a major

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„Climate Summit" is accompanied by widespread media coverage. But behind the scenes, governments are busy „rearming", taking little or no action to control the steadily rising emissions of greenhouse gases. The major economic powers, the USA, Japan and the European Union, operate on the assumption that taking bold steps unilaterally will be detrimental. As a result, they refuse to do anything in advance to prevent climate change or in many cases, they simply implement measures half-heartedly. The consequences of such behaviour are reflected in the 5 to 8 per cent increase in emissions that has occurred since 1990 in some key countries, not to mention, extremely difficult international negotiations.

The US also continues to act according to the dictum articulated by former President George Bush before the Earth Summit in Rio in 1992, that the „American way of life was not up for negotiation". This life style is characterized principally by the availability and unsustainable consumption of cheap energy at all times. This explains why the US „is as dependent on fossil fuels as a heroin addict on his needle" (Rayner 1991, p. 277).

In combination with their own large reserves of coal, oil and natural gas, this mentality has contributed to a very energy-intensive economy, with the result that the US consumes about one third more energy per unit of GNP compared to Japan (IEA 1992, p. 28). Since 1990, the US’s CO₂ emissions have increased by 5.1% and due to the non-implementation of the Climate Action Plan approved by the US Government in 1993, a total increase of 13% is forecast for the year 2000. A further crucial factor behind the position of the US is also the aggressive exploration strategy of US oil and gas companies (within the Caspian Sea), which is supported by the US Government.

After the defeat of the Democrats in the 1994 US congressional elections, the Clinton Administration retreated from its original climate policy. It has bid an even further retreat hiding behind the US Senate, which is acting in part in an isolationist manner, and in part on behalf of the interests of the fossil fuel industry. As a result from congressional pressure, there was a long period of time before the US Government was able to table new reduction proposals in the international negotiations. The proposals that they have now tabled are characterized by the fact that every single one provides significant loopholes, which could ultimately lead to an increase in emissions (cf. Chapter II/4). The US has also insisted on binding commitments for developing countries on the basis of certain criteria, contrary to the mandate issued by the first Conference of the Parties held in Berlin in 1995. This would have a particular effect on newly industrializing countries (NICs).

This insistence of the US on including NICs in a climate regime is understandable from the point of view of ecological considerations. At some point in the second decade of the next century, the emissions of developing countries will overtake the current emission levels of industrialized states. Projected increases in emissions in China, South Korea, etc. are extraordinary. However this issue when raised at the first COP in Berlin, threatened to undermine those negotiations as well. After all, the developing countries are quite justified in highlighting the historical responsibility of the industrialized countries in producing 80% of all cumulative emissions. Quite apart from the questions of justice and equity, the environmental lobby argues that it is up to the industrialized countries to demonstrate that strong climate policy need not be the death knell for economic development.

In Berlin this roadblock was overcome by a compromise formula. According to the so-called „Berlin Mandate", the round of negotiations leading up to Kyoto would be expected to result in new, substantial obligations for industrialized countries. Efforts would be made to strengthen the existing obligations of developing countries, such as the requirement to report CO₂ emissions and to pursue climate protection policies. It was agreed that further commitments for developing countries would be discussed at a lager stage. In principle, there is nothing wrong against calling for further negotiations to extend

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the scope of participants. But it should be noted that those who demand the third step before the first, do not really want the first one (Loske/Ott 1995).

As host to the 3rd Conference of the Parties of the Framework Convention on Climate Change, Japan would be expected to assume a leading role in the negotiations. However, this was clearly not the case in the preparatory negotiations leading up to Kyoto due to the disagreement between the Japanese Environment Agency and the Ministry for International Trade and Technology (MITI). The position of the MITI, which rejects reduction targets, has been reinforced by the substantial increase in Japan’s CO₂ emissions since 1990, amounting to 8.2%, and by Japan’s generally weak economic position. Furthermore, the option of emission-free nuclear-generated electricity is less viable due to recent accidents in several Japanese nuclear power stations.

But Japan’s inability to assume a lead role also results from the fact that their foreign policy is traditionally linked to that of the US. The lack of experience with regard to foreign policy and diplomacy on the part of Japanese politicians and negotiators, resulting from the rather introspective nature of post-World War II Japanese politics, has had a disastrous effect on the negotiating process. Indeed, the very concept of influencing other states by way of diplomatic initiatives is alien to the Japanese political elite (cf. GWRN No. 5/1997).

On the other hand, the European Union has tabled the most progressive proposals as compared to other industrialized nations. For instance, in the summer of 1997, the EC Environment Council passed a resolution calling for a reduction in three greenhouse gases of at least 7.5% by the year 2005, in addition to a 15% reduction for the year 2010. However, the virtue of this proposal has diminished in the eyes of the other countries because the figures for the internal burden-sharing of the EU up to 2010 add up to only a 10% reduction, because no internal burden-sharing at all has been agreed on for the target year 2005. Thus the EU can only exert limited leadership in light of the inherent weaknesses in its positions. In addition, the European Union has so far failed to produce a convincing European climate protection programme. And no agreement has been reached on a CO₂ energy tax by autumn 97.

The consequences of these positions are evident in the trend of CO₂ emissions. Although the EU’s CO₂ emissions will not be higher overall than those in 1990, the targets outlined in the Council resolution for long-term stabilization at 1990 levels will not be achieved. By the year 2010 an increase in emissions of approximately 8 per cent is expected in the event of a „business as usual" scenario (EC 1997). Furthermore, the EU has been weakened by internal quarrels regarding the distribution of responsibilities between the member states and the European Community. Some member states are not prepared to devolve further responsibilities for implementing climate protection obligations to the EC. Yet it is essential that the EC be given the necessary authority, if the European Union intends to fulfill the reduction obligations as a whole (see Chapter II/3.2).

3 The Benefits of Assuming a Leadership Role

The record of the international climate negotiations over the past years has revealed several worrying trends. First, many countries avoid undertaking unilateral climate protection measures in advance of any international agreement for fear that such action will undermine their economic competitiveness. Second, neither Germany nor the EU have been able to assume the leadership role that they played in the climate negotiations of the early 1990s. And third, it is equally unlikely, that neither the US nor Japan will play leadership roles themselves. In this regard, there can only be forward movement in the „climate poker game", if the EU member states recognize their responsibilities, and indeed the advantages of assuming a leadership role in international climate policy.

Lead states are of vital importance for the success of international negotiations. This is

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clearly evidenced by the results of comparative research in international relations (cf. Young 1991; Young/Osherenko 1993; Haas/Keohane/ Levy 1993; Oberthür 1997). Effective international agreements almost always depend on a strong player to put substantive proposals on the negotiating table and to raise the stakes of the negotiations.

However, the implementation of strong unilateral national climate-protection measures (or regional ones in the case of the EU) can positively contribute in both direct and indirect ways to the actual negotiations:

• the „environment" or „climate foreign policy" (cf. Prittwitz 1984; Brauch 1996) of states is to a considerable degree influenced by domestic policy. Strong domestic climate policy and popular support are the two essential elements is a country is to take up a progressive negotiating position in the international arena. This fact is clearly evident in the current climate negotiations. The EU states who have taken up the more progressive negotiating positions in the international climate negotiations are the ones who have successfully implemented energy efficiency and CO₂ reduction programmes at the domestic level (Ott H. 1997, p. 206).
• The success of one or more states in implementing domestic climate-protection policy, which does not produce major economic distortions, serves as an important model for those who doubt the economical feasibility of climate policy (cf. EC 1993, p. 158). At present, Germany cannot be said to have played such a role, since the reductions that it has been able to achieve are due more to the structural change in the former GDR, than any concerted effort at climate protection (keyword: „wall-fall profits", see Chapter III/2).

In the interest of a successful outcome of the current round of climate negotiations, Germany and the EU must therefore assume the leadership roles they had played in the early 1990s. This would not only result in benefits from an economic and social perspective, as described in Section I. The „climate dividend" could also take the form of a more just and peaceful world in the 21st Century.

3.1 Strong Climate Policy as Peace Politics in Practice

The motto of the 1988 World Climate Conference held in Toronto was „The Changing Atmosphere: Implications for Global Security" (Toronto 1988; see Loske 1996, p. 242). The security aspect relates not only to the uncontrollable risks of climate change (Schneider 1997). But climate protection also means a diminution of the potential threat to world peace. First, undue dependence on oil and gas imports can lead to highly explosive geographical hot spots, which in turn, may result in increased threats of war. Second, the direct and indirect consequences of global warming may lead to catastrophic damage to the environment, mass migration and violent conflicts over scarce natural resources.

The link between oil resources and military conflict is obvious. This was last evidenced in the 1991 Gulf war. The main reason for the US’s involvement was their dependence on the oil reserves in the Middle East. An attack on Saudi Arabia by Saddam Hussein was the „worst-case scenario", which had to be avoided at almost any price. The US’s dependence on oil imports has been rapidly increasing since the early 1990s as a result of the steady decrease in the US’ own oil reserves. It is expected that the share of OPEC states in the world-wide supply of oil will continue to increase, reaching about half of the world share by the year 2010, as was the case in the 1970s (Mitchell 1996). Accordingly, the strategic importance of this region will increase – both in economic and military terms. In the meantime, other areas such as the Caspian Sea, and countries such as Azerbaijan, Kasakhstan and Turkmenistan, may well be the site of future oil-related conflicts. Billions of dollars have been invested in the oil industry in those countries by American and European oil multinationals.

If current consumption trends, it is foreseeable that fossil fuels will become scarce by the

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latest, in the middle of the next century. Moreover, from around 2020 onwards, increasing exploration costs will lead to price increases, which will ultimately exclude poor countries from the global market. It is highly unlikely that these countries will not quietly protest their increasing lack of access to affordable oil imports. Rather, it is feared that more violent forms of resistance (e.g. terrorism) will occur and that political pressure on the oil-producing countries will be forthcoming from those densely populated developing countries, which lack oil reserves of their own. The high military costs of the Gulf War may prove insignificant when compared to the enormous costs that could be involved in controlling the potentially unsustainable energy demands of two-thirds of the world’s population.

Reduced dependence on oil and gas imports will ultimately result in a greater investment in peace as a result of the decreased probability of resource-related conflicts. At the same time, reduced import dependence can also strengthen the process of democratization in many oil-producing countries, which to date, have been governed by autocratic regimes with highly armed state-security systems and armed forces.

Climate change and the associated environmental changes also have a massive impact on international peace and security. Even if certain apocalyptic projections do not become reality in the next century (cf. e.g. Kaplan 1994), there is widespread agreement about the fact that environmental changes themselves will present major challenges to global security in the next century (cf. Westing 1986; Mathews 1989; Lübkemeier 1994; Homer-Dixon 1995). It is feared that problems such as mass migration and armed conflicts resulting from environmental degradation will prove too great for the international peace and security and conflict resolution machinery.

A large number of these problems will be caused or exacerbated, directly or indirectly, by the expected climatic changes. These include: sea level rise in critical, overpopulated regions such as the Nile Delta and in Bangladesh; the reduction of strategically important water reserves in the Middle East or Central Asia; land degradation in West Africa, the Indian subcontinent, China and Central America; and the spread of diseases hitherto confined to tropical and subtropical areas (see McMichael et al. 1996).

Global security is indivisible (UNDP 1994, p. 41). Massive environmental damage will not just be limited to the developing world. Even if the industrialized nations do succeed in barring the floods of migrants and minimizing the negative economic consequences, the actual foundations of democratic societies will certainly be affected. It is equally unlikely that the industrialized nations will be immune from water and land resource-related conflicts. An active and preventive climate policy is therefore indispensable, not only in terms of environmental policy, but also in terms of peace and security policy.

3.2 Europe Must Take the Political Lead

A dynamic and progressive peace and security policy could also help to raise much needed public awareness within the EU of the so-called „European Project".

The European Project is currently in a state of crisis. Now that an economic union has been established, the proposed monetary union is placing a considerable strain on European institutions, as well as on member states. Consumed with the difficulties in achieving the integration criteria, not to mention other internal problems, Europe seems to have forgotten the meaning and objectives of the unification project. From an economic perspective, a consistent climate and environment policy could provide solutions to the unemployment problems, which have resulted from efforts to meet stringent monetary integration criteria. It could also play an important role in encouraging technological innovation. These points have in fact been previously made in the „Delors Report", although at the time, the European Commission had argued in favour of the use of market instruments such as energy and CO₂ taxes. (EC 1993).

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But also from the point of view of the world economy, a strong European Union is more important than ever before. The US, as the current engine of economic globalisation, does not take a stand against the dangerous human health consequences of uncontrolled traffic nor the unlimited exploitation of nature (Fricke 1997). Furthermore, the very idea of the regulation or restriction of the exploitation of natural resources runs contrary to the thinking of neo-liberal economists and politicians in the US (cf. Pinkerton 1997). Here, the Europeans clearly have a „local advantage" due to the limited nature of available land and resources. It is essential to not only impose social and ecological „crash barriers" on the American neo-liberal mindset which is grounded in unfettered competition, but also, to help promote the model of an ecological and social market economy within the international arena as well.

Europe must evolve its role from that of reactor to globalisation processes, to creative actor for a sustainable and humane world of the future. In this regard, international climate policy can make an important, if not decisive, contribution.

However, certain countries in the recent negotiations leading up to Kyoto have created difficulties for the EU to play such a role. Several countries are preventing the Union, in particular, the European Community (in its capacity as legal entity and party to the Framework Convention on Climate Change), from playing its rightful role as active participant in the process. Although the European Community is expected to become a party to the reduction agreement, many countries refuse to allow the EC the necessary means to implement any resulting legally-binding commitments internally. EU member states argue that the EC as a whole should be allowed to fulfill its obligations within the framework of a so-called „EU Bubble", but at the same time they do not want to lose their national sovereignty.

This approach is clearly problematic. Other countries, such as the US and Japan, justifiably question what means the European Commission will use to compel a non-complying member state to honour internal reduction commitments. At present, the EC only has limited authority to compel implementation of internal reduction obligations in the fiscal and energy-policy area. Resolutions in these areas require unanimity (Art. 130s EC Treaty), a requirement which the proposed European CO₂/energy tax was unable to meet in order to be translated into EU law.

European solidarity must not be limited to just the trade arena. Rather, Europe must mobilize itself to present a unified front as the defender of a larger set of interests. The European institutions must promote not just the interests of the EU, but of humanity as a whole in the climate policy arena. This would provide the EU with a legitimate moral claim to leadership, as opposed to the US, who maintains its leadership solely on the basis of economic and military power. European leadership would strengthen the work of those stakeholders who argue for stronger sustainability goals and targets in the US. And it would promote a more positive image of the EU in Asia, Africa and Latin America. There would be considerable economic benefits in both the short and long-term.

4 The Key Elements of a Climate Protocol

For ecological and strategic reasons, Germany and the European Union must press for strong targets in the international climate negotiations and work to ensure that the outcome of the negotiations will not simply be the lowest common denominator. It may be difficult for the EU to match the negotiating skill of the US. But the history of climate and other environmental negotiations has shown that even a powerful player as the US can be subject to pressure from an alliance of like-minded states, NGOs and media (cf. Oberthür/Ott 1995). However, the leadership states must not only be prepared to propose strong targets, but to stand firm behind them and refuse to concede to proposals that may weaken them.

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The following elements should be contained within the Kyoto protocol:

• the reduction obligations must be legally binding;
• the first reduction target year must not be later than 2005;
• the base year for calculating the reduction obligations should remain 1990;
• for ecological reasons, the AOSIS target, (reduction of 20% from 1990 levels by 2005) should be serve as the basis of the climate protocol. (The minimum accepted target is the EU proposal of a reduction by 7.5% in the year 2005 and by 15% in the year 2010);
• if possible, all gases should be included, but separate targets should apply for each greenhouse gas (gas-by-gas approach as opposed to a basket approach): and
• legally-binding commitments should only be made on those important measures, which can be implemented internationally and/or jointly (i.e. the establishment of an International Solar Energy Agency and the introduction of a world-wide tax on kerosene in the private and commercial sectors)

The most important outcome to be achieved is the agreement of a legally binding reduction commitment for industrialized states for CO₂ and other greenhouse gases. Strong language is needed and all efforts must be directed to avoid the vague and ambiguous language of the Framework Convention on Climate Change, which was actually celebrated as a success (cf. Otto 1996). The ineffectiveness of the Climate Change Convention is clearly reflected in the continually increasing CO₂ emission levels. The legally binding reduction commitment should be anchored in the protocol and not in the Framework Convention on Climate Change itself. The other possible option of negotiating an amendment to the Convention, has limited appeal. The EU does not favour this option, arguing that any re-opening of negotiations around the Convention itself would result in a large number of requests for amendments. And this would have the effect of further delaying the conclusions of the negotiations.

With regard to possible reduction targets, the EU should stand firm on its proposal for as long as possible. Nevertheless, it is important to point out that ecological imperatives necessitate a much stronger target, such as the 20% proposal of the Alliance of Small Island States (AOSIS), which was first endorsed at the 1988 world Climate Conference in 1988.

The EU proposal (7.5% reduction in 2005 and 15% reduction in the year 2010, based on a 1990 baseline year) represents the minimum target that would be acceptable. Contrary to the EU’s position, the reduction targets should be set for individual gases. The EU target, which was agreed in March 1997, is actually based on a so-called „basket" of three greenhouse gases, i.e. carbon dioxide, methane and nitrogen oxide. It is argued that a single-gas approach has many advantages over a „basket" approach for the following reasons:

• It provides a better stimulus for structural change because those countries with legally-binding commitments will not be allowed to simply fulfill their obligations by selecting the easiest gas to avoid;
• It presents no reporting problems, since CO₂ emissions can be recorded reliably; and
• It does not allow for the „offsetting" of different greenhouse gases, as is the case with the „basket" approach (the so-called „global warming potential", cf. IPCC 1992).

Therefore, a special reduction target should be fixed for each greenhouse gas. If the single-gas approach can not be agreed upon, then it is important some form of differentiation should be ensured for each sector within the basket approach. Moreover, it is important that those greenhouse gases which have received minimal attention in the past, but which present considerable environmental impacts, (such as PFC; HFC or SF6) should be included in the reduction obligations.

The EU should insist on the 1990 base year for reductions, as set out in the Framework

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Convention on Climate Change, in negotiations. The US and Japan both favour a later date and at the G8 summit in Denver they succeeded in blocking any reference to a 1990 base year in the final communiquE. A later baseline year would prevent the recognition of successful climate protection efforts that have been made since 1990. But, on the other hand, it would favour those countries such as the US and Japan, whose emissions have in fact increased considerably. This would be unjust and would most likely stifle motivation to take stronger action in the future. In addition to seeking recognition for having done absolutely nothing, the US has proposed a wide range of measures which would have the effect of creating serious loopholes in the actual protocol and diluting the actual strength of the commitments contained therein.

The first such measure proposed by the US is the „net approach". In effect, it allows for a party to deduct from its overall emission reduction obligations, the CO₂, which is actually absorbed by the country’s forest „sinks". The net approach is inherently problematic for several reasons, and as such, it should not be included. The absorption of CO₂ by forest sinks is very difficult to monitor. Moreover, it fails to redress the problem of climate change because the CO₂ would not be absorbed forever. In fact, absorption could only be guaranteed for a few decades, if at all. Another important point is that the net approach lessens the pressures on governments to address the actual source of the problem of climate change, namely the need to reduce consumption of fossil fuels and to promote renewable energy sources.

Another proposal by the US involves the „borrowing" of emission credits, which would allow for countries to borrow emission „credits" from future years in order to enable countries to exceed allowable emissions reduction targets in a particular year. This would have the effect of placing an unduly heavy mortgage on future generations, and from an ethical perspective, it is wholly unacceptable.

The US also strongly supports the concepts of emissions trading, where industrialized nations may trade in emission licenses, and joint implementation, where industrialized countries can offset their obligations by investing in certain types of environmental initiatives in developing countries.

In principle, there are no objections to the concept of emissions trading, per se. Rather, it is the actual modalities for establishing and operating emissions trading systems, which are far more problematic. To date, no concrete suggestions have actually been tabled, and with limited time remaining, all that can be possibly included in the final text will be a general reference.

The EU has a critical role to play to ensure that reduction obligations are not unduly tied to the trading system. This would have the effect of completely devaluing and undermining the legal obligations, since industrialized countries would be able to dispute their commitments, simply by pointing to the existence of an emissions trading scheme in which they were involved.

Furthermore, a system of tradable emission licenses should only be established over and above a certain level of reduction commitments. On no account may industrialized nations be permitted to circumvent obligations by purchasing cheap licenses from the former Soviet Union. This would undermine the „bottleneck" function of binding reduction obligations, whereby a certain amount of pressure forcing governments to cooperate is needed to combat climate change over a given period of time.

A similar principle applies to the concept of joint implementation. On this point, the EU correctly maintains that this instrument should only be permissible with those countries, who are also subject to binding obligations.

Finally, agreement must also be reached for a range of important measures, which must be carried out on an international level. The first measure consists of a global tax on kerosene in both private and commercial aviation. The proceeds from this tax could be used to create a special fund for developing countries to facili-

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tate the transition to climate-friendly policies and measures. In this context, priority should be given to the introduction and marketing of renewable energy sources. The second measure, an International Solar Energy Agency should be set up within the framework of the climate protocol in order to provide the same level of institutional support to solar energy as is currently provided to fossil fuels and nuclear energy. This measure is the international counterpart of the national „Solar Initiative" that is proposed for Germany (see Chapter III/3.3).

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