from Energy, Security, and Climate and Energy Security and Climate Change Program

Kerry-Lieberman and the International Climate Talks

May 13, 2010

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[IMPORTANT UPDATE BELOW]

I’ve got three quick thoughts on what the big Kerry-Lieberman energy and climate bill means for the international negotiations, and they’re not good. (More to come later; I’m on the road.)

1. This bill probably won’t pass. While it lives, U.S. negotiators will have to pretend, however half-heartedly, that they think it’s got a serious chance. An effective strategy for the Cancun climate talks at the end of this year, though, needs to be based on reality, which will probably be that the United States doesn’t have a climate bill, and is hence on the defensive. The net result is great difficulty for the United States to engage seriously until the bill’s fate is clear. That is a recipe for lost time and opportunity.

2. The bill, even if it doesn’t pass, will gut expectations for how much money the United States can contribute to international climate change efforts. Waxman-Markey set aside 5% of allowance value in 2012 to protect forests, 1% for international technology cooperation, and 1% for adaptation assistance. Kerry-Lieberman has the same goals for protecting forests but devotes no money to it; has no money for international technology cooperation; and devotes a very small amount to international adaptation.

[IMPORTANT UPDATE: Section 797 of the bill allows the President to designate up to 5% of allowance value for these sorts of things in the context of a multilateral agreement covering over 67% of global emissions. That’s serious money. One could even argue that, because of its contingent nature, this provides more leverage for the international negotiations. It will be very tough politically to designate that 5%, though, since as the bill is written, every other use of allowance value would need to be cut proportionally (including consumer rebates, etc), which means that the President would need to fight with everyone in sight as he took away their money. It would also make it hard for the United States to engage bilaterally or in smaller groups absent a global agreement. But there is some substantial positive news there.]

The turning point at Copenhagen was when Hillary Clinton announced that the United States would aim to help raise $100 billion a year for international climate assistance, which turned a huge number of poorer developing countries against China. That was by far the biggest incentive for China to agree to the Copenhagen Accord. It will be challenging for the United States to defend that stance this year at Cancun if Kerry-Lieberman is the new normal, which could make it, rather than China, the focus of everyone’s anger. I’m all in favor of injecting reality into international discussions, and Kerry-Lieberman may do that, but it will not be pretty.

3. One of the brightest lights at Copenhagen was progress on efforts to reduce emissions from deforestation. It’s also been one of the main deliverables lots of people have been talking about for the Cancun talks at the end of this year. Waxman-Markey set a goal of conserving forests equivalent to 10% of U.S. emissions – a huge number – and set aside several billion dollars to pay for it. Kerry-Lieberman maintains the goal but without the money. It’s not clear that the Administration will have the confidence to do a “mini-deal” on forests this year if it requires significant amounts of cash.

[UPDATE CONTINUED: Some of the 5% could go to forests, so REDD isn’t completely out of the picture. Still, the caveats above apply.]

There’s also a lot of good stuff in the bill. An efficient U.S. cap on carbon would be tremendous progress. But there are some serious problems here.

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