This Climate Change Meeting, COP17 (The 17th Conference of the Parties), falls just before the end of the timeframe for targets from the Kyoto Protocol, signed in 1997. This is the only legally binding global carbon agreement, so there is pressure on the participants of COP17 to reach a legally binding agreement.
An important potential outcome from the conference is a more formal agreement on the “Green Climate Change Fund”, a $100bn fund for adaptation towards climate change, particularly for poor countries. This was promised in the Cancun conference (COP16) last year, and the hope is that the implementation of this fund will be formalised during these talks at Durban.
Many leaders, including David Cameron, have expressed concerns about the potential for COP17 to create a legally binding agreement, and many are saying the world will have to wait until 2020. Recent information from the IEA though, suggests that by that point it will already be too late to keep below the 2° target, which is often cited as the limit before catastrophic climate change.
There have been talks of a potential global recession following OECD predictions, and many countries are likely to prioritise their domestic issues. European countries are particularly distracted by the continuing sovereign debt crisis and its political repercussions. The US is also distracted by their upcoming presidential election.
Why don’t they simply renew the Kyoto Protocol?
Although this seems like a potential solution, the Kyoto Protocol was created in a very different economic and geopolitical situation. Only developed countries were obliged to sign up, which at the time made more sense as developed countries were the highest polluters. The biggest polluter now is China, who did not sign up to the Kyoto Protocol.
Some countries who signed the Kyoto Protocol, such as Russia and Japan, are refusing to sign any new agreement unless other countries, particularly China, also sign. The US, who never signed the Kyoto Protocol, will also refuse to sign any agreement without the rest of the world’s major economies also signing.
This geopolitical dilemma is making global climate agreement difficult, and there seems to be slow and insufficient progress. This is leaving many people in many countries in a situation of high risk of climate disaster. The Alliance of Small Island States has voiced its opinion on this matter, and has suggested that it may “Occupy” the Durban talks.
Do we really need a new agreement?
David King, the former chief scientific advisor to the UK government, has made the argument for voluntary agreements and targets taking the place of global climate agreements (The Guardian: Is a global agreement the only way to tackle climate change?). Some of these have been particularly successful, such as China’s movement towards renewable energy, but as Achim Steiner, deputy director-general of the UN, points out in the article, these voluntary agreements are by definition not globally binding, and may be thrown aside when more pressing domestic issues take precedence.
Effects on Environmental and Thematic Investment
Even without an explicit global agreement on greenhouse gas reduction, countries are still continuing their own programmes, over 80 countries have explicit targets for carbon reduction, along the lines of the voluntary targets discussed by David King. Potential methods of “bridging the gap” between emissions and emissions targets, include energy efficiency, improved waste disposal methods and more productive agriculture (BBC: Carbon emissions divide 'can be bridged'). These are all themes in some of the investment funds listed on Worldwise Investor. As the world changes and adapts to the threat of climate change, investment opportunities will rise in these areas, and any global agreement would emphasise this phenomenon further, especially as companies with gain a degree of certainty of policy.