More than 100 heads of state gathered in Copenhagen in December in an attempt to hammer out a legally binding, long-term climate change agreement under the auspices of the United Nations Framework Convention on Climate Change and its Kyoto Protocol.
The resulting Copenhagen Accord fell quite short. The non-binding accord is a political text that is currently endorsed by only 30 member states, and it was “noted” and not formally adopted by the UNFCCC plenary. Consequently, for general and corporate counsel anxiously awaiting market signals and long-term certainty on climate change resulting from Copenhagen, the wait continues.
Macleod Dixon LLP legal professionals were fortunate to be included among the 25 business representatives of 25,000 non-governmental organizations afforded access to the plenary over the final days of the negotiations.
The experience led to our conclusion that if any long-term certainty on climate change is to be afforded from these negotiations, then process matters. Due process, audi alteram partem and its implicit right to be heard must be exemplified if any progress is to be made in the 2010 negotiations in Mexico.
At best, the accord may be viewed as a non-binding agreement to continue negotiating on key elements of the Kyoto Protocol and the Bali Action Plan. At worst, it may be viewed as evidence of a very divisive process that reflects a changing world, which may leave observers to privately question the potential for significant progress within a fully global, full consensus-driven, United Nations process.
The negotiations were characterized by unprecedented procedural challenges resulting from leaked draft texts, poor adherence to the UNFCCC interim rules of procedure, palpable schisms in ideology between capitalist and socialist country blocks (Venezuela, Bolivia, Cuba, Sudan, Nicaragua), and a changing world order demonstrating China’s new leverage.
Despite U.S. President Barack Obama’s valiant and sincere efforts to reach an agreement — and the many U.S. claims he brokered the accord — the president’s participation did not result in the commitment the U.S. had hoped for from developing countries. Specifically, China did not accede to U.S. demands for international monitoring and reporting of its greenhouse-gas emissions and reduction activities.
At the apex of the negotiations, member states were standing on their tables protesting process, Venezuela had literally drawn blood, Sudan made a beyond-the-pale Holocaust analogy, and the exhausted Danish president lost the confidence of the floor and had to be replaced.
There is little doubt these process issues must be addressed and remedied if any progress is to be made in the December 2010 negotiations in Mexico.
There are a number of implications for Canadian companies resulting from the accord.
First, there is undoubtedly no further business and investment certainty on climate change resulting from the accord and the international negotiations.
In the absence of a multilateral agreement on climate change, we anticipate increased use of border tariffs and low carbon fuel standards to protect national interests around the world.
Secondly, the new world order and China’s increased leverage is becoming clear. China’s position may make it difficult for the U.S. to pass domestic legislation through its Senate prior to its mid-term elections at the end of 2010. In the interim, we anticipate regional, state, and local programs to flourish. Watch the California cap-and-trade program and the Western Climate Initiative as a guide for Canadian policy-makers.
Third, in the absence of U.S. certainty and concrete congressional action in relation to climate change, Canadian policy-makers are likely to be slow to continue to develop Canadian climate change policy initiatives — particularly in an election year. We anticipate an increase in provincial and regional climate change initiatives; Quebec, B.C., and Ontario are leading the new charge.
Finally, forestry and burgeoning areas of nationally appropriate mitigation actions may pose new opportunities for Canadian companies.
In conclusion, much has been left to be determined for the Mexico round of negotiations in 2010 and timelines are dwindling for concrete action.
Elisabeth DeMarco is the head of Macleod Dixon LLP’s Toronto energy practice.