Is Your Porfolio Ready for the End of the World?

It makes the case that the invective and verbiage spewed at the climate   conference in Cancun reflects a shared but largely unspoken belief that  the  chances of coordinated global action to reduce greenhouse gas  emissions are  basically zero.  The key then, is reducing the financial  pain and suffering for  rich and large developing countries by finding  ways to disregard the genuine  pain and suffering for small and  vulnerable countries.

There have been a few interesting and significant developments since then.

The delivery of the Cancun communique, a towering pile of steaming mush  deposited on the world’s doorstep, was not one of them.

Here is a more nutritious helping of news nuggets.

Killing Kyoto: The Sequel

Cancun was basically another episode in the excruciating snuff serial,  Killing  Kyoto, officially inaugurated at Copenhagen and designed to  conclude at Durban  next year (when Kyoto expires).

The United States is distinctly uncomfortable with the current Kyoto   structure.  Beyond the obvious problem of the free ride for Annex II  countries  like China, there is the profoundly awkward moral issue of  carbon reparations.

A lot of countries fundamentally threatened by climate change  (represented in  the G77 bloc), want the West to own up for chunking the  majority of greenhouse  gases into the atmosphere since the Industrial  Revolution.  Kyoto–a global  consensus mechanism–has served as a way  for them to get their voices heard,  together with demands that the  industrialized countries take the economically  onerous step of  drastically reducing their carbon emissions and funneling tens  and even  hundreds of billions of dollars to the vulnerable countries in climate   aid.

The US, on the other hand, is embarrassed by these small, insignificant  states  that, in the US view, treat their own survival as an entitlement  to be  guaranteed by the richer nations.

Better to let bygones be bygones, get the important players in a room,  and deal  with problems as they arise, seems to be the US policy.

In other words, let the poor nations beg for aid, and give it to them  only if  they satisfy grantors’ requirements for convenience, political  and diplomatic  utility, and overall value for money.

One more thing: better cap the amount of aid, so it?s clearly a Western   initiative, rather than open-ended compensation for screwing up the  planet with  150 years of industrialization.

How about…$30 billion in fast track aid with a rampup to $100 billion per  annum by 2020.

Oh, and one last thing: don?t even agree to disburse the aid until the  Chinese  yield on MRV?even if the Chinese aren?t receiving the aid–so  it?s even more  clear the aid is discretionary and not obligatory.

It?s a good deal for the West.  Getting the poorer nations to accept it   involves a certain amount of heavy lifting for a certain superpower.

In my article, I touch on the Wikileaks cable reported in the Guardian  that  describes US outreach to the Maldives.  “Outreach” looks a lot like  a bribe of  a few million dollars up front to the tiny island nation to  support the US  position on a post-Kyoto regime.

Todd Stern, the chief US climate negotiator, went distinctly  undiplomatic in  his effort at Cancun to neutralize the unfavorable  effect of the Wikileak.

In an article entitled US envoy rejects suggestion that America bribed countries  to sign up to the Copenhagen Accord, the Guardian reported:

Stern added: “We can eliminate any cause or accusation of bribery by eliminating  any money.”

Stay classy, Todd.

To make it clear that we’re talking discretionary grease administered by  the US  to compliant and deserving allies, and not payment of some  carbon blood money  out of moral obligation, Stern illustrated his  middle-finger posturing with an  anecdote of an innocent Western  moneybags victimized by an odious Third World  beggar (from the same  Guardian article):

Speaking at the UN climate summit in Cancun, Todd Stern, the US  special envoy  on climate change, suggested that countries that wanted  climate aid were in no  position to criticise.

Citing, with approval, a confrontation at the Copenhagen summit in which  a  Norwegian official berated a counterpart from a developing country,  he said,  “he just stood up and blasted the person, ‘you can’t on the one  hand ask for  and make a legitimately strong case for the need for the  need for climate  assistance and then on the other hand turn around and  accuse us of bribery’.”

The BASIC bloc made political hay from Stern’s oafishness by pointing  out that  they are not candidates for climate aid from the US (they are  enthusiastic  diners at the trough of Clean Development Mechanism funding  for green projects  administered by the EU instead), and Stern was only  bullying the smaller,  vulnerable nations–the same nations the US is  trying to wedge off China.

 Per Global Times:

Xie Zhenhua, head of the Chinese  delegation in the talks and deputy  director  of China’s National Development and Reform Commission, stressed  that BASIC  countries would always stand with the G77 group of  developing countries.

Xie, who met with delegates from other BASIC nations, also broached the  recent  WikiLeaks revelations on how the US and European governments used  monetary  incentives, threats and even espionage to advance their  “climate” agenda at  last year’s Copenhagen summit.

“Countries and people involved in the information that Wikileaks  released  should reflect upon their deeds, if the information is true,”  Xie said.

Gutting Kyoto has turned into a multi-stage process that involves

* wedging off China and India from the G77 by highlighting their unwillingness  to commit to Kyoto-style legally binding emissions

* a remarkably crude effort to hold China, instead of the West,  responsible  for holding back climate aid by linking release of the aid  to China’s  acceptance of onerous “MRV” (monitoring, reporting, and  verification)  procedures

* bribing some of the smaller countries with bilateral aid to support the US  position

* proposing capped (and suspiciously unfunded) climate aid to  vulnerable  countries to clear the West?s 150 year overdrawn carbon  account as an  alternative to open-ended Kyoto obligations

* using mighty diplomatic pressure to make sure that the refractory  ALBA bloc  of left-leaning South American governments is unable to seize  the podium and  make trouble. The trend, at least for the United States and a majority of Kyoto Annex I   signatories and a certain number of vulnerable states that, for  whatever  reason, choose to cleave to the US position seems to be: scrap  Kyoto, get the  small nations out of the room, and let the grownups (at  least those with money)  manage the climate change inconvenience through  the mechanism of the G20 or its  climate change affiliate, the MEF (Major  Economies Forum on Energy and  Climate).

One might think that putting this matter in hands of the nations  responsible  for the problem, able to cope with the local effects of the  problem with  relative ease, willing to bribe vulnerable countries for  peace, quiet, profit,  and advantage, and fundamentally averse to  sacrificing their economies in order  to solve the problem they caused is  not going to yield an outcome that the  smaller nations will find  satisfactory.

But that’s where we are.

US on PR Defensive

From a public relations standpoint, things did not quite go the US way at  Cancun.

The climate is headed for a trainwreck.  Based on the current  scenario–lack of  significant emissions action but plenty of  self-congratulatory  greenspeak–global warming is going to be well north  of what is considered to  be very bad but maybe manageable–2  degrees–and might be as high as 5 degrees.

The fact that the United States is trying to cripple Kyoto, the only  binding  treaty dealing with this situation, and replace it with a  multilateral  rich-nations circlejerk is beginning to attract some  attention.

The US came in for a lot of adverse comment from climate change NGOers at  Cancun, and it even filtered into the New York Times.

 Nevertheless, the US is committed to demonstrating the dysfunctionality  of the  Kyoto process.  If the inability of the world’s nations to forge a  meaningful  and binding concensus is due in part to American obdurancy,  well so be it.

China–which gained a lot of kudos for its relatively aggressive  greenhouse gas  policies–can happily watch the United States under Obama  once again take the  majority heat, as it did under Bush, for roasting  the planet.

The other big Wikileaks noise related to climate change was a breathless piece  in Der Spiegel entitled The US and China Joined Forces Against Europe (in an  interesting example of the synergies–a.k.a. big media tail  wagging Julian  Assange dog–between Wikileaks and its media partners, as  far as I can tell,  Wikileaks has not yet released the cable Der Spiegel  is reporting).

The article, by Gerald Traufetter, seized upon an embassy account of a visit by  John Kerry to Beijing in summer 2009 to assert:

The dispatches reveal that the US and China, the world’s top two  polluters,  joined forces to stymie every attempt by European nations to  reach agreement.

* * *

During his visit to China, Senator Kerry, a former presidential  candidate for  the Democrats, told the Beijing leadership that the  Europeans were determined  to push through their goal for agreement on  concrete cuts in emissions for the  US and other industrialized  countries. However, nothing would change for China.  Together with the  other “developing countries” the Chinese would merely have to  say they  would “work hard to reduce emissions.”

The quid pro quo for the joint US-China collusion against Europe was allegedly  trade in green goods like US nuclear reactors.

This article is a bookend to a much more interesting article in Der  Spiegel  from May 2010 based on a leaked recording of a heated Copenhagen  discussion  between world leaders that also pushes the Everybody’s  Stabbing Deutschland in  the Back theme: How China and India Sabotaged the UN Climate Summit.  President  Obama was identified as a co-conspirator in the body of that article, if not the  title.

The Der Spiegel Wikileaks article is pretty weak beer.  The US position  in  summer 2009 was a matter of public record long before Wikileaks

On May 28, 2009, the Guardian reported on Kerry’s trip:

In their formal positions, the two sides remain far apart. China  wants  developed nations to make a 40% cut in emissions by 2020 from 1990  levels, far  above the goal set by President Obama’s administration.

The United States wants China to set voluntary but verifiable goals to  reduce  its energy use and, in the longer term, to join richer nations in  cutting  overall emissions.

But Kerry said senior Chinese politicians had shown a willingness to   compromise, particularly over the 40% target that he described as  politically  impossible in the US at present.

By sharing know-how and conducting joint research into renewable and   energy-saving technology, he said China would realise that it can go  beyond its  current target of a 20% cut in energy intensity of its  economy – the amount of  carbon released per dollar of GDP.

It is rather clear that China and the US, though both fundamentally   uninterested in accepting legally binding cuts, were at each others  throats in  Copenhagen, not colluding.

What happened between Kerry’s trip and Copenhagen was the bruising US  fight  over health care, and the realization that President Obama could  carry no  genuine commitments on US emissions cuts to Copenhagen that  could somehow  finesse a consensus approach to Kyoto.

China pretty much has put its eggs in the EU basket–the Clean  Development  Mechanism funnels a lot of money into China–and wants to  keep some kind of  Kyoto arrangement going.

The United States has apparently decided that it won’t be able do  anything on  climate change until it drives a stake through the heart of  Kyoto and starts  over with the Annex II countries compelled to adhere to  the same regime as the  EU, Japan, Russia, Canada, and the US.

But nobody believes that, once Kyoto is thrown under the bus, the United  States  will possess sufficient political will to legislate genuine  domestic emissions  reductions, let alone bankroll a massive global  transition to a low carbon  economy.

The inability of the US to lead on climate change, coupled with its  desire to  control and drive global climate change policy  notwithstanding, is the source  of a lot of the US-China acrimony that  obscures the general developed-world  paralysis on the climate change  problem.

PETER LEE edits China Hand.

Peter Lee is creator of the Patreon Peter Lee’s China Threat Report.