Global Economics

Climate Summit Accord Is a Step Toward Progress


An evening deal struck in Copenhagen has displeased some, but negotiators say world leaders have set forth a solid base for future global actions

As the dark, Danish evening wore on through Friday, Dec. 18, the last scheduled day of the climate summit in Copenhagen, exhausted delegates and observers were sleeping under blankets at the Bella convention center, nongovernmental organizations were handing out free food, and caffeine-fueled reporters gave chase to anyone offering the smallest crumb of news.

Word was that the talks might continue through the night, perhaps even through Saturday and Sunday. Yvo de Boer, the United Nations climate chief, said he had made sure to keep his hotel room through the weekend.

Suddenly, it was over. After a meeting between President Barack Obama and Chinese Premier Wen Jiabao, Indian Prime Minister Manmohan Singh, and South African President Jacob Zuma, Obama announced at a press conference that an agreement had been reached. It still has to be officially accepted by the other countries and it wasn't nearly as strong as many had hoped. But an Obama Administration statement called it "a meaningful and historic step forward, and a foundation from which to make progress."

retrenchments from draft text

The deal was based on a draft text, dubbed the Copenhagen Accord, that had been circulating, but there were some key last-minute changes. Here are some details:

The developed world will commit to reducing global emissions of greenhouse gases by 80% below 1990 levels by 2050, in line with U.S. promises. But the draft text had committed the entire world to a 50% cut by 2050. That proved unacceptable to the developing world, which is not yet ready to agree to such targets.

Another stumbling block was whether or not the international community would be able to verify that countries were making the cuts they promised. The draft text said that the cuts would be "subject to international measurement, reporting, and verification." This was watered down in the final version, but the final language was still better than nothing. "The agreement would establish the underpinnings of the verification system we need to be confident that countries are keeping their promises," says Elliot Diringer, vice-president for international strategies at the Pew Center on Global Climate Change.

The countries recognize the vital role of reducing deforestation, which is a major contributor to greenhouse gases.

The developed countries will commit to providing $100 billion a year by 2020 "to address the needs of developing countries." That "is exactly what is needed to create a truly global effort to solve climate change," says Timberland (TBL) CEO Jeffrey Swartz.

The parties to the agreement will review the accord by 2016 and then decide whether or not stiffer cuts are needed. This helps address the concerns of a group of smaller nations, which had been pressing for a goal of keeping the planet's temperature increase below 1.5 degrees Centigrade. With the reductions in the agreement now, scientists expect that the world will warm by at least 2 to 3 degrees.

Predictably, the deal was immediately denounced by some environmental groups. "This is not a strong deal or a just one. It isn't even a real one," says Erich Pica, president of Friends of the Earth U.S. "It's just repackaging old positions and pretending they're new."

talk of failure is "rubbish"

That's too harsh a judgement, says Robert Stavins, director of the Harvard Project on International Climate Agreements. "It's obviously less than hoped for, and less than some people expected. But given the status of the negotiations on Tuesday [when talks came to a halt], this is the most that could be hoped for. And if not for the President of the United States, we wouldn't even have gotten this."

In fact, says Steve Howard, founder and CEO of the Climate Group, a nonprofit group whose members include companies such as Google (GOOG), Duke Energy (DUK), and China Mobile (CHL), the idea that the world has failed to act is "a lot of rubbish." Howard adds: "This is the biggest peacetime mobilization of global effort on anything."

Both Stavins and Howard point out that one of the most important outcomes of the process may not be the deal itself, but the fact that a number of countries made their own commitments to reduce emissions along the way to the agreement. "If you think back a year or so, imagine the U.S., Brazil, China, India, Australia, and Russia all turning up and making definitive national commitments to significant emissions reductions—and the world committing to $100 billion a year for the developing world," says Howard. "It would have been inconceivable a year ago."

The fact that those countries are now heading toward a lower carbon-emitting future is a big deal for business. It adds up to far more certainty—and opportunities. Meeting the national targets of each country will mean a major shift to renewable power, to fuel-sipping cars, to efficiency steps such as a smart grid and green buildings, and to efforts to capture the carbon dioxide spewing from power plants. The Copenhagen Accord will continue to be criticized as a half-measure or even a failure. But in retrospect, it may be considered a turning point.

Carey is a senior correspondent for BusinessWeek in Washington. Scott is a correspondent in BusinessWeek's London bureau.

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