Stepping around the UN: how and where is a global climate agreement being made?

All sorts of misplaced hopes are currently being pinned on a global climate agreement, due to be reached at the UN climate conference in December. As things stand, the negotiating texts are fairly dire as regards action to tackle climate change, since they are framed around expanding market mechanisms and displacing action onto Southern countries. A key part of this has to do with how the debate is framed around "least cost" action rather than what is environmentally effective or socially just.

So while the talks currently underway in Bonn set out negotiating texts, working these over in excruciating detail, the framework they adopt is set out elsewhere. What follows here is a quick sketch of some of the key initiatives shaping the global treaty that exist outside of the formal UN process.

Global

* G8. The Group of Eight remains a key body for setting the global climate agenda in a business-friendly manner, even though it may eventually be eclipsed by the G20. A first tier of corporate lobby influence includes the participation of the World Business Council on Sustainable Development (WBCSD) and World Economic Forum (WEF). The World Bank and various Regional Development Banks also play a vital role. Second tier initiatives include Globe (currently chaired by Steven Byers MP, the former UK Trade and Industry Minister); and the Club of Madrid and UN Foundation (the former is a group of ex-Presidents, the latter a private organisation), which have advanced various principles at the G8 which have then found their way into the formal climate negotiations. The G8´s work to shape a global climate agreement started in earnest during the G8 summit in Gleneagles, Scotland, when Tony Blair launched the Gleneagles Dialogue.

* Major economies forum. Started by Bush and revived by Obama, this club of industrialised nations is now holding monthly meetings of representatives from: Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, South Africa, the United Kingdom, and the United States. Denmark (as chair of COP 15) and the UN also participate. A heads of state meeting of this grouping will convene at the G8 in Italy in July.

* World Business Summit on Climate Change: for a quick report, see here. This was hosted by the WBCSD, Copenhagen Climate Council, 3C, World Economic Forum (WEF), the Climate Group and the UN Global Compact.

* World Economic Forum hosts its own Climate Change Initiative, as well as carrying forward proposals at regional meetings. A "World Economic Forum Business Expert Task Force on Low-Carbon Economic Prosperity" which partners the WEF with the UK government will deliver recommendations in autumn 2009.

* Global business groupings: WBCSD and the International Chamber of Commerce (ICC) are the key bodies. The WBCSD, in particular, has been instrumental in pushing "sectoral carbon markets", which would expand the use of carbon offsets - as well as undermining attempts to waive intellectual property rules so that low-carbon technologies can be developed more quickly.

* Climate specific business grouping.

Project Catalyst is crucial here. With support from the consultancy McKinsey, its working groups include "a total of about 150 climate negotiators, senior government officials, representatives of multilateral institutions, business executives, and leading experts from over 30 countries." The UK government is heavily represented amongst these.

The Climate Group is also influential, with a task force on the climate agreement led by Tony Blair. As Henrey Derwent, CEO of the International Emissions Trading Association, IETA (and formerly the head of climate policy for DEFRA, in which role he played a crucial role in G8 negotiations in 2005) puts it: “PricewaterhousCoopers and the Climate Group have done a lot of work on scaling up the CDM [Clean Development Mechanism].” Their recommendations can be found here.

3C is an initiative of CEOs of major companies, hosted by Swedish energy giant Vattenfall.

IETA is an associating that promotes a global carbon market, as well as suggesting business-friendly rules for how those markets are governed.

Regional, national and sectoral

* Below this lies a far broader network of sectoral, regional and national lobbying - far too exhaustive to list here.

* USCAP is key in the push for carbon markets in the USA. It lines up alongside more powerful industry bodies that oppose or seek to water down all climate legislation. A good breakdown can be found here.

* The EU climate and energy package, passed in December 2008, was lobbied hard by numerous industry sectors. Avril Doyle MEP, the centre-right Irish MP who was rapporteur on carbon trading for the EU Parliament, suggests that German coal power and chemicals producers were loudest lobby voices.

* There are also a plethora of inter-governmental and inter-regional meetings to shape the agenda - including EU-US, US-China and EU-China bilateral meetings. US and EU carbon markets are not dependent on a global agreement, while the EU is pushing plans to link these together across the OECD (industrialised nations) by 2015.

* Most industry sectors are preparing their own plans on the climate agreement too. The head of the International Air Transport Association (a private industry body), for example, effectively pre-announced the International Civic Aviation Organisation (UN body) plan on climate at the World Business Summit - suggesting that the latter is captured by corporate interests.

Specific companies

A lot of the usual suspects are involved, but amongst the most active - either on their own or, more typically, through broader associations, are: BP, Shell and Vattenfall. PricewaterhouseCoopers and McKinsey are also very active as advisers.

Business as usual on the climate

(An edited version of this article was published by The Guardian on 28 May)

When Sir Crispin Tickell had the temerity to suggest that "the business community needs to re-examine the fundamentals of economics" at the recent World Business Summit on Climate Change in Copenhagen, his discordant tone was drowned out by a chorus of over 800 delegates singing the praises of unfettered markets as a means to tackle climate change.

The commitment to carrying on with business as usual took an almost surreal form at times. Indra Nooyi, CEO of PepsiCo, proudly proclaimed "The fact that I flew here for 1 1/2 hours to sit on a panel them I´m flying straight back to the US is an example of our commitment to environmental sustainability."

More worryingly, plans for low-carbon technology give the expansion of high-carbon coal power pride of place. The promotional rhetoric is of Carbon Capture and Storage (CCS), yet those from the power sector are blunt about its shortcomings. "One of the plants we are building is CCS ready, although to be quite frank no one really knows what that is at the moment" claimed Steve Lennon, Managing Director of South Africa´s Eskom. James Rogers, CEO of US-based Duke Energy, added that CCS is at best 15 years off and is likely to prove unfeasibly expensive if it even works at all.

The underlying problem is that business adjusts the problem of climate change to neoliberal economics, which judges value according to financial cost rather than environmental sustainability or social justice. This manifests itself in a promise to massively expand carbon markets. The idea is that governments give out a limited number of permits to pollute; the scarcity of these permits should encourage their price to rise; and the resulting additional cost to industry and power producers should encourage them to pollute less.

Jos Delbeke, Deputy Director-General for the Environment at the European Commission, was in Copenhagen claiming that this is how the EU Emissions Trading Scheme (ETS) is now working. Yet his department´s own data for 2008 shows more international "offset" credits circulating than the level of claimed reductions, while lobbying pressure has resulted in a twin-track system from which every business wins.

On one side, heavy industry like the steel sector has more credits than would be needed to reduce its emissions, so it sells them. Delbeke shared a panel on carbon markets with a representative of ArcelorMittal, which alone gained an estimated subsidy of over €1 billion between 2005 and 2008 by this means.

On the other side, power companies pay less for pollution permits than the cost they pass on to consumers, generating windfall profits that could reach up to around €70 billion by 2012. The circulation of these permits does nothing to help new investment in renewables, as Zhengrong Shi, CEO of Chinese firm Suntech Power, admitted in a second session on carbon markets: "All European investment in renewables, in our sector [solar] is based on a feed-in tariff not the Emissions Trading Scheme or Clean Development Mechanism."

Carbon markets might be used to help polluting sectors avoid other obligations that are placed on them, however. As Giovanni Bisignani, Head of the International Air Transport Association (IATA), put it, "If some governments still want to implement taxes [on aviation emissions], we should get carbon credits to compensate every penny of these taxes."

Other measures to avoid business obligations displace the problem of tackling climate change onto the global South. The Summit´s final Copenhagen Call talks of a crucial role for forest protection in developing countries, with the co-organisers´ Business Case for a Strong Global Deal suggesting that such measures should represent around half of the action needed to limit climate change by 2020.

These figures are taken directly from Project Catalyst, an initiative bringing together "climate negotiators, senior government officials... and business executives", whose presentation (marked confidential) more straightforwardly emphasises the "the size of the prize for business" and, in particular, the opportunities for "companies in forest management, pulp and paper, or construction" to access a "€20-30bn value chain" in developing countries.

Strikingly similar assumptions have found their way into negotiating texts on Reducing Emissions from Deforestation and Degradation (REDD), which will be discussed when UN climate negotiations resume in Bonn next week. Yet the whole idea that deforestation can be stopped by simply putting a price on forests is flawed, with forest communities and Indigenous Peoples warning that it will encourage further land grabs by large companies. They point to evidence that the real drivers of deforestation are the major construction, mining, logging and plantation developments whose owners stand to be rewarded by REDD funds.

These are the voices that the world should be listening to as it seeks to tackle climate change - for, as things stand, even the self-proclaimed "progressives" of big business seem to be putting profit margins above environmental need. Without a more fundamental re-examination, to paraphrase one panellist, they look more like the back end of a horse that is galloping in the wrong direction.

World Business Summit on Climate Change... quote, unquote

I have a whole notebook from the summit, which will feed a report at some point. In the meantime, here´s a selection of the "finest" quotes from day 1 of the summit...

5. “Tom Burke of [E3G, also of Rio Tinto, also of the UK Foreign Office.” - Tom Burke, overselling himself somewhat whilst proving that conflict of interest is alive and well. His registration badge said Rio Tinto.

4. “We are perhaps the only company using windfarms to generate the electricity powering our oil platforms.” - Fu Chengyu, Chief Executive Officer, China National Offshore Oil Corporation provides some Greenwash, Chinese-style.

3. “Like other industry we should pay only once. If some governments still want to implement taxes [on aviation emissions], we should get carbon credits to compensate every penny of these taxes. ... we can make aviation the first global industry to achieve carbon neutral growth and I hope it will be a model for others to follow.” - Giovanni Bisignani, Head of the International Air Transport Association (IATA), presents the true reason for his industry´s promise of “carbon neutral growth” by 2050.

2. “Sustainable next generation biofuels could increase our carbon footprint by 80 per cent. We are already flying test flights with biofuels of the next generation and we will be able to certify those by 2011. For the first time aviation could have a sustainable alternative to fossil fuels.” - Giovanni Bisignani of IATA, again.

1. “The fact that I flew here for 1 1/2 hours to sit on a panel them I´m flying straight back to the US is an example of our commitment to environmental sustainability." -Indra Nooyi, Chairman [sic] and CEO of PepsiCo.

Copenhagen, 24 May

Welcome to the Bella Center

The Bella Center is in the Copenhagen equivalent of London´s Docklands, and will be site of the main UN climate conference in December. Vestas have erected a wind turbine in the car park in the front, which will be dismantled again when the UN climate conference is over. The car park is full of police vans.

I arrived by metro, walking around a building site to get there. Hardly any of the delegates to the World Business Summit on Climate Change take this route though - it is all taxis and limos.

On first arrival, the staff at registration are from the World Economic Forum and from the World Business Council on Sustainable Development - two of the six co-sponsors of the summit. I was refused a copy of the participants´ list but acquired one by other means... it is a list of men from North America and the EU, headed up by a range of dignitaries including the Queen of Denmark, UN Secretary General Ban Ki-Moon and Al Gore. Most participants are CEOs or senior executives, with a significant proportion of government officials too.

My first “networking” experience involved being approached by a Californian with a Willy Loman personality trying to sell me hydrothermal vents as “the greatest new source of energy since nuclear”. For the most part, though, the CEO club is too inward looking to bother me so I can slip by unnoticed for most of the three days of the Summit.

Copenhagen, 24 May

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Update: Taking a page of the participants list at random, the ratio of men to women was 4:1. Four of the 43 participants named on the page were from outside of the "annex 1" industrialised countries. (I counted four other pages, where this ranged from 4 to 6 - mostly from Korea, China, South Africa and the Middle East).

The official press pack states that "The World Business Summit on Climate Change gathers more than 800 participants from 47 countries including 500 business leaders, 137 government representatives and 43 NGOs" as well as 261 journalists.