As Gideon Rachman notes, the fact that the G20 has now staged a summit at the level of leaders rather than finance ministers – which by my reckoning made it a de facto L20 – means that “the venerable old G8 has a real challenger on its hands”.
In addition to the advantages that Gideon counts off – the G20’s novelty, its inclusion of emerging economies, the fact that the G20 has the earlier summit (G20 in April vs. G8 in July), the Berlusconi factor – there’s also the fact that Gordon Brown (who’s chairing the April G20) is already gearing up for a big push to make a success of the G20 and get the ball rolling in earnest on a Bretton Woods II agenda (c.f. David and my paper on this if you missed it).
Even before you consider the G20, there are some big question marks over the G8. What has it really delivered over the past decade since it enlarged from G7 to G8? My count would go something like this: debt relief; the Proliferation Security Initiative; the Global Fund on AIDS, TB and Malaria; and the Financial Stability Forum. Four credible initiatives, yes – but not much of a tally for ten years’ worth of summits, and also notable that none of these areas really involved any serious domestic implementation commitments.
Part of the problem here is the limited bandwidth of the ‘sherpa’ system that prepares the summit agenda before heads meet in the summer. As I noted in a Guardian piece back in July, sherpas have pretty busy day jobs (like Permanent Secretary at the Foreign Office, or Private Secretary to the PM), which rather curtails their capacity to tee up major global deals as well. It’s a case in point of the problem with moving issues to the leaders’ level: yes, you get the big picture, but at the cost of moving issues to the most over-stretched parts of governments. Hardly surprising that you’re more likely to end up with a media-friendly ‘initiative’ rather than a comprehensive long-term framework.
And perhaps it’s here that we come to what may be the real ace up the G20’s sleeve: its roots in the world of finance ministers. Like leaders, finance ministers have the big picture. But unlike leaders, they also have big departments that already cover most of the global waterfront (apart from a few hard security areas like arms control) – and hence a great deal more analytical capacity for getting to grips with complex issues like climate change, trade and reform of the global financial system.
True, foreign ministries have big departments with lots of capacity too – but they have no way of forcing coherence on the rest of their governments when it comes to implementation. Finance ministries, on the other hand, have a decisive advantage: while herding cats may never be easy, it’s a whole lot more manageable if you control the catfood.
Admittedly, the G8 has a Finance Ministers’ variant too – which has arguably achieved more in recent years than the leaders’ G8. But co-ordination between the two G8 bodies hasn’t stood out as a strong point. With the G20, Gordon Brown has a chance to forge a different, more effective relationship between the finance ministers’ and leaders’ levels; indeed, it would be hard to imagine someone better qualified to do so, given that as well as spending a decade as Finance Minister, Brown was chair of the IMFC for so long.
Obama has made his first speech on climate, via video to US governors…
He had this message for those who will shortly be heading to Poznan:
Let me also say a special word to the delegates from around the world who will gather in Poland next month: your work is vital to the planet. While I won’t be President at the time of your meeting and while the United States has only one President at a time, I’ve asked Members of Congress who are attending the conference as observers to report back to me on what they learn there. Once I take office, you can be sure that the United States will once again engage vigorously in these negotiations and help lead the world toward a new era of global cooperation on climate change. Now’s the time to confront this challenge once and for all. Delay is no longer an option, Denial is no longer an acceptable response. The stakes are too high; the consequences too serious.
Next week sees the publication of the International Energy Agency’s latest flagship World Energy Outlook, which has been heavily leaked to the Financial Times. The report makes the same point that I’ve been arguing since prices started to slide from their peak of $147 over the summer (to around $60 today): oil prices are going to go back up. A lot. As Javier Blas and Carola Hoyos summarise in the FT,
The world economy will witness a $2,000bn shift in wealth and power from oil-consuming countries to members of the Organisation of the Petroleum Exporting Countries as oil prices rise to $200 a barrel by 2030.
The IEA says that Opec oil reserves are big and cheap enough to increase production and cap oil prices, but it warns: “Investment by these countries is assumed to be constrained by several factors, including conservative depletion policies and geopolitics. “There remains a real risk that underinvestment [bet-ween now and 2015] will cause an oil supply crunch” the report states…
In its report, the IEA sees oil prices reaching $200 by 2030, almost doubling last year’s forecast of $108 by the same year. The report suggests that current oil prices – below $70 a barrel and less than half their peak summer level – are a temporary effect of the economic crisis.
The $200 a barrel figure is the same one mooted by a Chatham House report on oil published in August, which shared the IEA’s concern that the investment needed to bring new production on stream just wasn’t happening fast enough. The IEA was already worried about that point when it published last year’s Outlook, remember – the fact that prices have crashes to less than half their peak level since then will hardly have helped to bring new investment on stream.
Exactly as with food prices, then, it’s the recent fall in prices that represents the blip – and the recent highs that represent the start of a long term trend. The IEA’s report is just the latest in a series of very good reasons why policymakers need to get their act together quickly on agreeing collective approaches to resource scarcity issues while the political heat on them is – for a little while – off.
But to repeat what I said in July, massive investment in new oil production just can’t be squared with what needs to happen on climate change. The global deal that we really need for managing energy security and competition for oil resources is a global framework for climate policy that manages the problem over the full term of its lifecycle – not just the next few years, as with Kyoto, as this is far too short term to give real investment certainty – and that has targets for all countries, not just developed ones.
That, of course, takes us straight back to David’s recent question on developing country participation. More on that in another post shortly…
In the summer, I gave a talk at the United Nations University G8 symposium on climate change, where I explored the threshold between conflict and cooperation on carbon control.
Belatedly, the talk is online – either as a pdf, or you can read the full text after the jump.
Imagine you’re advising China or India – or perhaps a poorer developing country such as Ghana – on their preparations for the climate change negotiations in Copenhagen. What sort of deal should these countries be prepared to accept? What would seem fair?
Nick Stern sidles up to these questions in his paper – Key Elements of a Global Deal on Climate Change. His starting point is that global emissions need to drop to around 20 gigatonnes of carbon dioxide equivalents (and then further to around 10GT CO2e in the decades that follow) – that’s around 2 tonnes of CO2e in 2050 for each of the world’s 9 billion people or so.
Stern believes that there is no choice but for countries to converge on this per capita average:
This target for per capita emissions by mid-century is so low that there is little scope for any major country to depart significantly above or below it. If one or two large countries were to manage only to reduce emissions to, say, 3T or 4T per capita, then it would be difficult to see which other major grouping of countries would be able to get emissions close to zero: and the global target would be unlikely to be reached.
So…let’s imagine the Americans have accepted this logic (suspend belief for a moment) and have a proposal for reducing their emissions from over 20T today to Stern’s 2T by 2050. They enter the negotiating room expecting other countries to do the same.
How would you advise China, India or Ghana to respond? They start from a very different point – around 5T per Chinese citizen, 2T for an Indian, and maybe around 1/2 tonne for a Ghanaian.
Now, as Stern admits, for them, simple convergence would be a pretty rough deal.
All major groups getting to 2T/capita is a pragmatic approach and not a strongly equitable one. It takes little account of the greater per capita contributions of the developed countries to the historical and future contributions to the stock of GHG emissions.
My instinct would be to urge the Chinese, Indians and Ghanaian to forgo what might be a fun, but ultimately unproductive, squabble about historical emissions. Be magnanimous about the past, I’d suggest. Instead focus on what really matters – who’s going to be allowed to emit what over the next forty years.
Because however far Chinese, Indian or Ghanaian emissions are allowed to increase before they start to drop towards 2T – its absolutely certain that their total emissions between now and 2050 (on a per capita basis) will be significantly lower than America’s.
In other words, there’s no trajectory that can be drawn that gives these countries a fair share of the next generation emissions ‘cake’.
