Just after 3 am on the last day of the UN climate change conference, exhausted negotiators from 193 countries signed an agreement that was modest and reflected elements of desperation (the one country refusing to sign, Bolivia, decried what it called "a hollow and false victory" that would fail "to prevent runaway climate change"). After the failure last year in Copenhagen, the UN-led talks were falling apart, with some beginning to suggests that the issue be handled outside the UN, either by bottom-up approaches or in more elite groups like the G-20. The Cancún Agreements are significantly less ambitious than what many observers had hoped for, but at least they avoided collapse. The failure in Copenhagen and Cancún to agree on binding emissions-reduction targets marks a significant scaling back from the 1997 Kyoto Protocol, the first and only international agreement to set legally binding targets.
In lieu of binding targets, the Cancún Agreements address technical issues like transfers of green technology to developing countries and a reiteration of the domestic reduction plans initiated in previous talks. The documents postpone, until next year's conference in Durban, South Africa, the contentious issue of whether to extend Kyoto, which expires in 2012. Instead they call for establishing a $100 billion fund to help developing countries adapt to climate change. But that fund will be managed by the World Bank, which has a dismal record on environmental protection. And it is still not clear where the money will come from.
"It is not what is ultimately required, but it is the essential foundation on which to build greater, collective ambition," said Christiana Figueres, executive secretary of the UN process, formally known as the UN Framework Convention on Climate Change (UNFCCC). Between pleas for progress, Secretary General Ban Ki-moon had to resort to a tired cliché to describe the mood: "We cannot let the perfect be the enemy of the good." By producing an agreement, the Cancún delegates partially restored the credibility lost at Copenhagen.
A key question about Cancún was whether the world's biggest emitters, the United States and China, would come any closer to a common understanding on who is responsible for the climate problem and what to do about it. The two countries together account for 30 percent of the world's economic output and 40 percent of greenhouse gas emissions from fossil fuels. The US and Chinese negotiators at Cancún were crafty and subtle. Both teams used cautious language that on the surface appeared to present similar positions. Both wanted a deal and both wanted to be seen as playing a constructive role—but each saw the other as an obstruction to progress.
When Dr. Yang Fuqiang, director of Global Climate Solutions for WWF International, arrived in Cancún, his hopes were dim that the United States and China would reach a meaningful agreement on reductions. With more than thirty years of experience working on energy and environmental issues in China, Yang has attended the three most recent of the UN's sixteen rounds of climate negotiations. China, he said, would only accept an agreement that allowed exemptions for developing countries—the concept known as "common but differentiated responsibilities," which is the bedrock of the Kyoto Protocol. In this claim, China is aligned with Article 3.1 of the UNFCCC charter, which states, "The developed country Parties should take the lead in combating climate change and the adverse effects thereof."
Throughout the meetings, the US deputy special envoy for climate change, Jonathan Pershing, expressed plans to scrap Kyoto—not surprising, since the United States is the only developed country that has not signed it. Washington wanted to draft a new agreement that has "symmetry"—one that is legally binding for developed and developing countries. As Pershing explained in a briefing to NGOs, the Obama administration can't sell a package in Congress that doesn't include specific requirements for developing countries like China.
By the end of the conference, it was clear that both delegations were oriented toward domestic regulators more than anything else. The chief negotiators, Xie Zhenhua and Todd Stern, read the same document but reported on it in completely different ways. Xie told China's Xinhua news agency that the Cancún Agreements uphold the Kyoto Protocol and reaffirm the principle of differentiated responsibilities. Stern told a press conference that the Cancún Agreements build on the 2009 Copenhagen Accord (widely viewed as the document that undoes Kyoto) and reflect progress toward firmer commitments from all nations, developed and developing.
From the beginning, the UNFCCC process has been marred by a sharp divide between developed and developing countries. Key developed countries hold the view that the developing world, where energy consumption is accelerating, should be bound by firm targets. The position of the developing countries, which China firmly promotes, distinguishes between luxury emissions and sustenance emissions, arguing that the latter are required for economic development and to alleviate pressing problems such as poverty and inadequate infrastructure.
In Copenhagen Chinese negotiators were eager to point out that although China is the world's largest emitter of greenhouse gases on an annual basis, its per capita emissions remain much lower than those of America (and America is still the world's largest climate polluter on a cumulative, or historic, basis). In addition, they point out, almost a quarter of China's emissions come from the manufacture of products sold in the West, a fact that leads many in China to argue for a consumption-based rather than a production-based approach to emissions quantification. Given this different view of the accounting process, China prefers to use its own domestic mechanisms to set and meet targets outside the UN system.
US-China tension erupted during the debate over measuring and verifying emissions. In UN parlance this is called MRV, or measuring, reporting and verification of greenhouse gas emissions. MRV, where the treaty details are actually spelled out, is what gives the agreement meaning and power and thus is also the area that can cause the greatest turbulence. It is to climate change what the 1040 is to taxes, an agreed methodology that makes clear what is and what isn't included in a carbon footprint, at the individual, corporate or national level. Too technical for nonexperts, MRV helps standardize quantification and ensures that a ton of CO2 in France is equal to a ton of CO2 in China or the United States.
The United States and China have agreed on how to do the M (using criteria established by the International Organization for Standardization) and the R (with domestic mechanisms and answering to local or central governments). But there is serious dispute over verification, and who has the authority to determine what constitutes an "avoided" ton of carbon—that is, carbon that would have been released into the atmosphere but was not because of national policies that promoted cleaner technology. The United States insists that emissions reductions not transparent and verified by international inspectors are not valid. For China, this is an example of how the United States has politicized the climate talks. Beijing views calls for inspections and "more transparency" as an infringement of its sovereignty and alleges ulterior motives aimed at destabilizing its government. From China's perspective, the US demands on verification are less about climate change than about the American establishment's desire for China to adopt Western-style democracy and transparency.
The tension was evident at an intercessional meeting in Tianjin in October, when Xie's deputy, Su Wei, met with his US counterparts. In Copenhagen, Vice Foreign Minister He Yafei had said Stern "lacked common sense." In Tianjin, the vitriol continued when Su said Stern (in absentia) was like a "pig preening itself in the mirror," a reference from an ancient Chinese legend that implies hypocrisy and gluttony. (I was later told by a Chinese friend that this episode was misunderstood in the US media and that two different but similar idioms were confused.)
Perhaps it was the paradisiacal quality of the turquoise beaches and the ubiquitous margaritas, but there was clearly a warming of relations at Cancún. Yang Ailun of Greenpeace noted that the Chinese delegation chose to focus on what it could offer rather than what it would oppose. This new posture marks a clear departure from its negotiating style at Copenhagen and Tianjin. But the new tactics do not reflect a new position. China's stance in Cancún—that its voluntary reductions could be part of a global agreement if the United States adopts a legally binding commitment—is a new arrangement of its previous position. The fact that the United States, given its domestic political climate, will probably not adopt a legally binding agreement renders the Chinese offer moot. It shows, however, that China is becoming a more sophisticated negotiator and more adept at public relations.
Su Wei, second in command of the Chinese delegation after Xie, opened the conference by declaring that China would play a "constructive role" in the talks. In the first week he announced that the differences between the United States and China were not significant. Then, to the shock of many, he said casually, "We have no problem with MRV." This statement struck many as a reversal of China's Copenhagen position, which had been vigorously against the MRV process. But, as Yang explained to me, when the United States and China speak about the MRV process, they have different ideas about what it means—and it is precisely these differences that prevent agreement on the fundamental issues of climate change.
To find out more about the MRV process, I talked with Lo Sze Ping, who has worked on China's climate policies with Greenpeace and on greenhouse gas accounting with the Beijing-based Society of Entrepreneurs and Ecology. Lo attended the Cancún conference as a member of Green China: Race to the Future, a consortium of Chinese and international NGOs, including Greenpeace and the Natural Resources Defense Council, which are raising awareness about the importance of climate change. In Cancún, they published a position paper calling on the Chinese and other governments to take stronger action to fight climate change. "China is playing hard on the MRV issues technically not because they are against it but because this is the issue where the United States is poking China," Lo explained. "From China's point of view, there are two issues.
The first is the issue of not making MRV references to finance and technology. The US demands aren't backed with money. It is entirely unclear where the financial resources will come from to support the reductions that the developed world is asking of developing countries. The developed countries are pressuring developing countries to become more transparent, but the issue of funding from developed countries is far from transparent." Indeed, developed countries have not been clear about where the $30 billion in fast-track funds will come from or how they will be allocated. Although promised in Copenhagen for the period of 2010–12, less than half of the money has materialized.
"The second issue," Lo continued, "is that developing countries are not happy with the insufficient ambitions from developed countries regarding their own reduction plans for the medium term [up to 2020]. What is on the table from developed countries does not add up to what is required by science." This point leads China to believe that the United States is not willing to accept its share of climate responsibility. "Developed countries didn't show sincerity in their response, and now they are asking the developing countries, like China, to do more than what is required by the Kyoto Protocol," said Lo.
And this is where MRV comes in. The United States understands that process as a rigorous mechanism for reductions that should be applied in the same way to all countries, developed and developing. In the US view, MRV should have universal application, in which international inspectors with official access to the domestic activities of a country can verify reports of reduced emissions. Chinese negotiators view the US interpretation of MRV as a way of reversing the "common but differentiated responsibilities" clause in the Kyoto Protocol. "China believes we should not be renegotiating the mechanisms of the Kyoto Protocol; instead, we should stick to the Kyoto Protocol and negotiate just the second commitment period targets for each country," Lo explained. "MRV could be used as the Trojan horse to dismantle the Kyoto Protocol." For China, the MRV process functions as a domestic tool to quantify and verify emissions and reductions—an accounting instrument that China has already adopted. To Beijing, MRV and "differentiated responsibilities" are not mutually exclusive.
After sixteen climate change meetings, beginning with the first conference in Berlin in 1995, the United States and China are still unable to get beyond the dilemma of how to quantify emissions and determine who is responsible for reducing them. To progress, the United States would have to show China it has adopted a national plan for emissions reductions, such as cap and trade. As long as America forgoes domestic climate legislation, China is likely to doubt the sincerity of US action. Now, with recent GOP victories in Congress—86 percent of the incoming Republicans oppose government action on climate change—and noise from Tea Partiers (only 8 percent of whom believe global warming is caused by human activity), the United States appears to be retreating from climate legislation.
While US green ambitions are shrinking, China is reorienting its economy toward sustainability and renewable energy in a way that is nothing short of revolutionary. It has invested billions in renewable energy, energy efficiency, public transportation (the Chinese bullet train made headlines by reaching a record 300 mph during the Cancún talks) and developing standards for products, buildings, vehicles and fuels. In July Xie announced that a cap-and-trade system would be included in China's twelfth five-year plan (2011–15). In September China's most powerful agency, the National Development and Reform Commission, announced that China was setting up low-carbon pilot sites in five provinces and eight cities. One focus is to implement methods to measure, report and verify emissions. These events are an indication that China's lead over the United States in green technology will likely increase in the coming years.
Green technology is still a boutique industry in the United States, while China is producing it on a massive scale. Through aggressive government investment and central planning, Beijing has become a leader in solar panel technology, wind turbines and electric vehicle manufacturing. In fact, it is emerging as the only country in the world capable of driving down the price of green technology so that it can become affordable in poor countries in Asia, Africa and Latin America.
However, China's government-led policies have met with hostility in the United States. Earlier this year the United Steelworkers filed a 5,800-page complaint with US trade representatives, stating that China's subsidies of green technology were illegal and unfair. From the Chinese perspective, this is a no-win paradigm: if China doesn't invest in a cleaner economy, US lawmakers threaten to slap a high-carbon tariff on Chinese imports. But if China takes the environmental issue seriously and invests in renewable energy, US lawmakers threaten to punish China for "unfair" trade practices. Without prospects for a US-led agreement for emissions reductions at the UN, China has become a scapegoat in the US media and among US politicians. China-bashing is at an all-time high. In the recent midterm elections, an astonishing twenty-nine candidates used anti-China messages in campaign ads.
Dr. Dale Jiajun Wen is a Chinese citizen who watched the US-China negotiations from San Francisco, where she is China Scholar at the International Forum on Globalization. "The US failed to pass crucial climate legislation. Meanwhile, it has been seeking to divert attention away from its own failures by pointing fingers at China," she says. "The Chinese people are asking the US to stop using China as an excuse for its own inaction.
"China is very serious about its targets," she continues. "In recent months, in the final push to achieve its domestic energy efficiency target for the eleventh five-year plan, not only were some factories shut down but also some residential areas experienced blackouts. Have any Annex 1 [developed] countries had blackouts in order to comply with Kyoto targets? Yet in most discussions about transparency in Western media, China is presumed guilty. In Bali [the thirteenth climate change conference, in 2007], the United States was told, 'If you are not willing to lead, then get out of the way.' To give it fair credit, the Bush government did get out of the way and allowed the world to move forward with the Bali Action Plan. Now it is again time to ask the United States to get out of the way if it cannot lead."