The "Danish text" – bad numbers, missed opportunity?

The blogosphere is filled with reports, originating in the Guardian, of developing countries’ fury over the leaked “Danish text” – a strawdog draft agreement.

The UN Copenhagen climate talks are in disarray today after developing countries reacted furiously to leaked documents that show world leaders will next week be asked to sign an agreement that hands more power to rich countries and sidelines the UN’s role in all future climate change negotiations.

The angry reaction strikes me as a missed opportunity. But more importantly, I think it’s a product of bad analysis, with an inflated population projection for the developing world creating a false impression of failure to achieve emissions convergence.

Here’s what I think is the essence of the text with respect to emissions trajectories:

3. Recalling the ultimate objective of the Convention, the Parties stress the urgency of action on both mitigation and adaptation and recognize the scientific view that the increase in global average temperature above pre-industrial levels ought not to exceed 2 degrees C.  In this regard, the Parties:

  • Support the goal of a peak of global emissions as soon as possible, but no later than [2020], acknowledging that developed countries collectively have peaked and that the timeframe for peaking will be longer in developing countries,
  • Support the goal of a reduction of global annual emissions in 2050 by at least 50 percent versus 1990 annual emissions, equivalent to at least 58 percent versus 2005 annual emissions. The Parties contributions towards the goal should take into account common but different responsibility and respective capabilities and a long term convergence of per capita emissions.

7. The developed country Parties commit to individual national economy wide targets for 2020. The targets in Attachment A would expect to yield aggregate emissions reductions by X1 percent by 2020 versus 1990 (X2 percent vs. 2005). The purchase of international offset credits will play a supplementary role to domestic action. The developed country Parties support a goal to reduce their emissions of greenhouse gases in aggregate by 80% or more by 2050 versus 1990 (X3 percent versus 2005).
9. The developing country Parties, except the least developed countries which may contribute at their own discretion, commit to nationally appropriate mitigation actions, including actions supported and enabled by technology, financing and capacity-building. The developing countries’ individual mitigation action could in aggregate yield a [Y percent] deviation in [2020] from business as usual and yielding their collective emissions peak before [20XX] and decline thereafter.

These provisions are evidently the source of much of the outrage. Again from the Guardian:

A confidential analysis of the text by developing countries also seen by the Guardian shows deep unease over details of the text. In particular, it is understood to:

• Force developing countries to agree to specific emission cuts and measures that were not part of the original UN agreement;

• Not allow poor countries to emit more than 1.44 tonnes of carbon per person by 2050, while allowing rich countries to emit 2.67 tonnes.

I have limited sympathy with the first point. If the world is to avoid the probability of serious climate change, emissions have to fall below natural uptake. That can’t happen if the developed world is shrinking while developing country emissions grow exponentially, so everyone has to play. You can’t cheat mother nature. If we’re serious about mitigation, the conversation has to be about how to help the developing countries peak and reduce, not whether they will.

The last point, concerning per capita emissions disparities, is actually not stated anywhere in the draft. Notice that the article 9 commitment for developing countries are expressed as variables to be filled in. To figure out what’s going on, I ran the numbers myself. I get about the same answer for the developed countries: 2.75 TonCO2eq/person/year. When multiplied by 1.5 billion people, that’s about 4.1 gigatons per year, leaving a budget of about 15.9 for the developing world (half of 1990 emissions of about 20 GtCO2eq, less 4.1). Dividing that by 1.44 yields an expected population in the developing world of 11 billion. That’s a bonkers population forecast, 2 billion above the UN high variant projection. If it came true, it would likely be a disaster in itself. More importantly, the per capita emissions ratios would be expressing a strange notion of (in)equity: the nearly 6 billion people added from 2005-2050 in the developing world would be emitting more than twice as much as all the people in the developing world.

If you rerun the numbers with a more sensible population forecast, with about 7.4 billion people in the developing world, the numbers are 2.75 and 2.15 tonsCO2eq/person/year in the developed and developing countries, respectively.  (UN mid variant population projection is 7.9 billion, but I’m sticking with C-ROADS data for convenience, which has slightly different regional definitions). In other words, convergence is at hand: the world has gone from 3.5:1 emissions per cap in 1990 to 1.28:1 – a rather stunning achievement, not something to get mad about. In addition, it’s not physically possible to do much better than that for the developing world, because the developed world represents a small slice of the global population in 2050. For example, even if the developed world could reach zero emissions in 2050, the remaining emissions budget would only permit emissions of 2.7 tonsCO2eq/person/year in the developing countries.

Even if the high population projection came true, I still think it would be a mistake for developing countries to get mad, because there’s article 20:

20. The Parties share the view that the strengthened financial architecture should be able to handle gradually scaled up international public support. International public finance support to developing countries [should/shall] reach the order of [X] billion USD in 2020 on the basis of appropriate increases in mitigation and adaptation efforts by developing countries.

Rather than asking for higher emissions, developing countries could ask for a bigger [X] to compensate for smaller per capita emissions. Then they’d have help moving towards a low-carbon economy, with all the cobenefits that entails. They wouldn’t have to follow the developed world down a fossil-fired, energy intensive path that’s ultimately a dead end. Maybe the real anger arises from the difficulty of getting meaningful financial terms, but that’s the conversation we should be having if we want a shot at 2C or below.

Check my math. If you think I’m right, spread the word. It would be a shame if the possibility of a climate agreement were derailed by a flawed analysis of a draft document. If you think I’m wrong, please comment, and I’ll take another look.

Update: I’ve published the numbers behind this in my next post.

C-ROADS Roundup

I’m too busy to write much, but here are some quick updates.

C-ROADS is in the news, via Jeff Tolleffson at Nature News.

Our State of the Global Deal conclusion,  that current proposals are not on track, now has more reinforcement:

Check out Drew Jones on TEDx.

This is freedom?

From the CSM on the Gates arrest:

“The rule is, if a police officer stops you in a car or on the street, he’s the captain of the ship, and whatever he says goes,” says Jim Pasco, executive director of the Fraternal Order of Police’s legislative division. “If you’ve got something to address, do it later. Do what he says, or else only bad things can happen.”

I think I see where this guy’s coming from, but it really sounds bad. If an officer asks me to stop doing something constitutionally protected (say, taking pictures), I can’t argue the case on the spot? I either give up my rights or go downtown?

The RPX is up

While the Case-Shiller index is down and the conventional wisdom suggests that housing prices will continue to fall, the RPX composite is up for the first time since 2007. The year-on-year ratio hit bottom in Feb 09. The RPX has a lot less lag than the CSI, but also a seasonal signal, so this could merely mean that seasonally adjusted prices are just falling more slowly, but it would be nice if it reflected green shoots. I’m not holding my breath though.

ABC to air Clout & Climate Change documentary

This just in from CNAS:

ABC News will air Earth 2100, the prime time documentary for which they filmed the war game, on June 2, 2009, at 9:00 p.m. (EST). You can view a promotional short report on the documentary from ABC News online, and hopefully you will all be able to view it on television or via Internet.

In conjunction with the airing of the documentary, CNAS has made the participant briefing book and materials from the game available online. We encourage other institutions to use and cite these materials to learn about the game and to stage their own scenario exercises. I also hope that they will be useful to you for your own future reference.

Finally, we are posting a short working paper of major findings from the game. While the game did not result in the kind of breakthrough agreements we all would have liked to see, this exercise achieved CNAS’s goals of exploring and highlighting the potential difficulties and opportunities of international cooperation on climate change. I know that everyone took away different observations from the game, however, and I hope that you will share your memories and your own key findings of the event with us, and allow us to post them online as a new section of the report.

Visit the Climate Change War Game webpage to view the CNAS report on major findings and background on developing the 2015 world, the participant briefing book, and materials generated from the game.

The only thing worse than cap & trade …

… is Marty Feldstein’s lame arguments against it.

  • He cites CBO household costs of policy that reflect outlays, rather than real deadweight or welfare losses after revenue recycling.
  • He wants the US to wait for global agreement before moving. News flash: there won’t be a global agreement without some US movement.
  • He argues that unilateral action is ineffective: true, but irrelevant if you aim to solve the problem. However, if that’s our moral philosophy, I think I should be exempted from all laws – on a global scale, no one will notice my murdering and pillaging, and it’ll be fun for me.

There is one nugget of wisdom in Feldstein’s piece: it’s a travesty to overcompensate carbon-intensive firms, and foolish to use allowance allocation to utilities to defeat the retail price signal. I haven’t read the details of the bill yet, so I don’t know how extensive those provisions really are, but it’s definitely something to watch.

Well, OK, lots of things are worse than cap & trade. More importantly, one thing (an upstream carbon tax) could be a lot better than Waxman Markey. But it’s sad when a Harvard economist sounds like an astroturf skeptic.

Hat tip to Economist’s View.

Reactions to Waxman Markey

My take: It’s a noble effort, but flawed. The best thing about it is the broad, upstream coverage of >85% of emissions. However, there are too many extraneous pieces operating alongside the cap. Those create possible inefficiencies, where the price of carbon is nonuniform across the economy, and create a huge design task and administrative burden for EPA. It would be better to get a carbon price in place, then fiddle with RPS, LCFS, and other standards and programs as needed later. The deep cuts in emissions reflect what it takes to change the climate trajectory, but I’m concerned that the trajectory is too rigid to cope with uncertainty, even with the compliance period, banking, borrowing, and strategic reserve provisions. So-called environmental certainty isn’t helpful if it causes price volatility that leads to the undoing of the program. As always, I’d rather see a carbon tax, but I think we could work with this framework if we have to. Allowance allocation is, of course, the big wrestling match to come.

The WSJ has a quick look

Joe Romm gives it a B+

GreenPeace says it’s a good first step

USCAP likes it (they should, a lot of it is their ideas):

USCAP hails the discussion draft released by Chairmen Waxman and Markey as a strong starting point for enacting legislation to reduce greenhouse gas emissions. The discussion draft provides a solid foundation to create a climate strategy that both protects our economy and achieves the nation’s environmental goals. It recognizes that many of these issues are tightly linked and must be dealt with simultaneously. We appreciate the thoughtful approach reflected in the draft and the priority the Chairmen are placing on this important issue.

The draft addresses most of the core issues identified by USCAP in our Blueprint for Legislative Action and reflects many of our policy recommendations. Any climate program must promote private sector investment in vital low-carbon technologies that will create new jobs and provide a foundation for economic recovery. Legislation must also protect consumers, vulnerable communities and businesses while ensuring economic sustainability and environmental effectiveness.

The API hasn’t reacted, but the IPAA has coverage on its blog

CEI hates it.

Rush Limbaugh says it’ll finish us off,

RUSH: Henry Waxman’s just about finished his global warming energy bill, 648 pages, as the Democrats prepare to finish off what’s left of the United States. Folks, we have got to drive these people out of office. We have to start now. The Republicans in Congress need to start throwing every possible tactic in front of everything the Democrats are trying to do. This is getting absurd. Listen to this. Henry Waxman and Edward Markey are putting the finishing touches on a 648-page global warming and energy bill that will certainly finish this country off. They’re circulating the bill today. The text of the bill ought to be up soon at a website called globalwarming.org. The bill contains everything you’d expect from an Algore wish list. Reading this, I don’t know how this will not raise energy prices to crippling levels and finish off the auto industry as we know it. (More here)

Al Gore Armageddon

Time points out that the Senate could be a dealbreaker:

The effects of the already-intense lobbying around the issue were being felt across the Capitol, where the Senate the same afternoon passed by an overwhelming margin an amendment resolving that any energy legislation should not increase electricity or gas prices.

That’ll make it tough to get 60 votes.