Week 2 Day 2 - Arnie Comes to Town
Keeping an eye on the UN Climate Change talks in Paris is no easy task. There are 40,000 people within the gated campus by the airport all determined to have their say, from the rain-soaked protestors chanting about the death of fossil fuels, to the World Coal Association talking about the future of carbon. Somewhere amongst this organised chaos sit the negotiators - the reason we’re all here after all - hammering out the details by which global temperatures will be held at 2 degrees.
Progress has been slow. After all, the negotiating text began its journey to Paris back in March on the banks of the Rhine with the Bonn pre-negotiations. The draft agreement, in all its glory, is now in the hands of the world’s Environment Ministers, with the instruction to ‘fine tune,’ much like a block of marble has to be fine-tuned into a statue.
Needless to say, there are more countries unhappy than happy. Among them is coal-rich Malaysia, which is due to take to the floor in the plenary hall any minute now. Yesterday, Malaysia’s chief negotiator, Gurdial Singh Nijar, stated in no uncertain terms, ‘we cannot accept starvation as a price for the success of this agreement.' In other words, if there is to be an agreement, developed nations must compensate developing nations for their sacrifice in foregoing the development (and the resulting wealth) that excavating their coal would otherwise have delivered. To the outside world, the Paris negotiations are about temperature but, up close, money is never far from the table. Finance cuts to the heart of this debate; how much is on offer, and when it will be ready, will be key to delivering a global agreement. We will know from reading tomorrow’s draft who has been successful and the price tag for agreement.
All very interesting, but that is tomorrow. Today, Arnold Schwarzenegger was in town. Hemmed in by security guards, Arnie was literally the centre of attention. Encountering the Governator’s gaggle on several occasions as he crisscrossed the campus, he was greeted by whoops, cheers, sighs and howls from the selfie-seekers who dogged his progress. By a helpful quirk of fate, Arnie’s chief of staff went to St Andrews University and so did I.
Upon such coincidences does the world turn, and so I found myself with the former Governor talking about carbon emission trading. As the European Parliament’s lead negotiator on reform of the EU’s Emission Trading Scheme, we had surprisingly much to talk about. Arnold Schwarzenegger basically set up California’s carbon trading scheme after meeting ‘liberal’ Tony Blair in Downing Street.
Emission trading is a market-based approach to reducing greenhouse gas emissions using tradable permits. Heavy emitters need to buy permits to continue to emit at the same rate, thereby increasing their costs. It is therefore in the interests of such companies to innovative, and so reduce their need for permits and reducing their overheads. Companies which perform well, and so achieve greater emission reductions, can then trade their (now unneeded) permits for profit, a further incentive to innovate.
The ambition for the EU is to join forces with the other global emission trading schemes - like California, South Korea, New Zealand, Quebec and so on - to build a global carbon market with a common price. Arnie and I committed to exploring options to link the markets of the great state of California and the EU. As the governor might say, ‘We’ll be back’.
Late afternoon was bereft of celebrities, but the International Oil and Gas Producers Association know how to organise a debate. The topic: how best to combine gas and renewables in any future energy mix. My speech looked Scotland-ward, where the prospects of North Sea oil remains precariously balanced alongside the Scottish Government’s renewables targets, currently the most ambitious on the face of the globe. You can read my remarks here.
The day ended as it began, with consideration of the progress toward a final climate agreement. Lead EU negotiator Commissioner Cañete gave a brief brief. Seemingly frozen out of main US-China negotiations, the EU has adopted a new strategy. Rather than dancing with the big two, Señor Canete has elected to encourage other nations to join him at the ball. With 475 million euros in his back pocket, he has found 79 pals from Africa, the Caribbean, and the Pacific to endorse the EU’s position. Exactly what this means for the marge chiselling remains to be seen.