UN negotiations in Bonn

06 June 2011

Richard Gledhill, partner, PwC Sustainability and Climate Change previews the UN's negotiations in Bonn.

Almost half way along the road to the UN climate conference in Durban, the latest round of climate negotiations take place in Bonn this week, in the shadow of IEA’s report of record emissions despite the downturn, and Germany’s radical new proposal to abandon nuclear by 2022.

Although Cancun managed to resuscitate the stalled UN process, the climate negotiations aren't getting any easier. With temperatures and carbon emissions both recording new peaks this year, the stakes are getting higher. What's needed now is leadership and ambition, but politicians in the West are constrained by budget deficits and concerns about competitiveness, while in most developing nations, for all the talk of green growth, the real focus is on plain old growth.

There is little prospect of a comprehensive deal in Durban. The best we can hope for is piecemeal progress. Negotiators need to focus on a few real priorities. Progress on finance will be key, but there is also potential for the African conference to get agriculture back on the agenda, a sector so critical for the continent.

The next ten years are crucial for the global economy to decarbonise if the world is to avoid dangerous climate change. Because of the slow progress towards decarbonisation in recent years and the acceleration of global growth, the amount of CO2 emissions for every unit of world GDP produced now needs to fall by 4.3% a year for the next ten years, compared to 3.5% only two years ago. In the short term this means keeping the global economy growing with the same energy base we have today.

Limiting emissions growth to 2015 and reducing them from then on will need to happen against a backdrop of slow recovery in the West, compared to much faster growth in the emerging economies, particularly in Asia.

The recession and subsequent debt crises in Europe provided temporary respite to emissions growth, but it also slowed investment in clean energy.  Meanwhile the emerging economies, particularly Asia, have been driving global economic growth, and consequently emissions.  China, for example, overtook Germany as the world’s leading exporter in 2009, accounting for 10% of world merchandise exports by value. That year, its emissions also moved ahead of aggregate emissions for the US and Canada.

In many respects, this two-speed global economy is making the reality, and the politics, of the climate change challenge more difficult. Although 40% of global emissions came from OECD countries in 2010, non-OECD countries – led by China and India – accounted for 75% of the emissions growth from 2009 to 2010.

Meanwhile, policymakers in Europe are having to balance their desire for leadership on climate policy with bona fide concerns about the impact of climate legislation on the European competitiveness, particularly in carbon intensive sectors, and funding ambitions for climate action in less developed countries are being constrained by economic pressures in many donor countries.

As the UN caravan moves on to the Rio+20 sustainability summit, negotiators must be pondering whether they will still be striving for an international deal on climate change in Durban+20. If they are, South Africa will surely be a hotter, drier, less pleasant place to visit.

Read our full briefing http://www.ukmediacentre.pwc.com/Media-Library/PwC-UN-Climate-Conference-Bonn-Preview-793.aspx