A Tale of Two Cities

Authors Note:

This analysis of the linked destinies of the climate equity and global justice movements was written in August and then put aside to settle. After September 11, we decided to defer its publication, and since then our assessment has inevitably been overtaken by events. This, however, is true of most everything thats been written about Bonn. And as these movements strike us as more important than ever, weve decided to go ahead and publish this, our analysis of the Bonn Compromise. Some rewriting was done, but not much. In the next issue of Climate Equity Observer, well give our views on how September 11 has changed the terrain of global environmental politics. Meanwhile, we hope you find this analysis to be both interesting and provocative.

Table of Contents

“Kyoto Lite”

The Deal and its Challenges

Lack of “Supplementarity” Caps

Sink Loopholes

Pathetic financial package for the G77

Back to Genoa

Last July, when the rising tide of anti-globalization protest finally rose to claim the life of a Genoa protester, the worlds media knew the drill. They focused on the G8, and in particular on the poses and pronouncements of Big Power summitry besieged by internet-organized discontent.

Only the astute among themand they were still too fewstretched the frame to take in the larger tale, the one unfolding simultaneously in Genoa and at the climate convention in Bonn. And yet there it was, as clear as daylight. In Bonn too there were protests, and they concerned more than the mock statesmanship of the early 21st Century. In Bonn, the protesters confronted a summit in which a real showdown was taking place, one that wont be forgotten as the decades advance, one in which the ministers of 178 nations were locked in all-night meetings to determine the fate of the Kyoto Protocol, and of the climate negotiations as we have known them.

The two events were obviously tied together, most manifestly by the phone calls and communiqus that were shuttling between key ministers in Bonn and their chiefs in Genoa. This, of course, was widely noted. But there was more as well, much more. Genoa and Bonn, taken together, portray the Janus face of globalization: on the one side, the continuing domination of international governance by the core capitalist countries, their corporations, and their central banks, and with it the maintenance of a firm and sometimes brutal wall against protest and creeping delegitimation; on the other, the slow emergence of new kind of multilateral governance, one that features increasing participation from both the developing countries and the international NGOs, one in which protest culture and policy culture merge. For in Bonn, the same groups that organized the protest were inside the convention center as well, playing an unprecedented role in the negotiation of an international treaty.

The Genoa protests made bigger news; they were the more dramatic, and even at the time they were manifestly a culmination in one of the key social moments of the post WWII period. But the Bonn compromise was also a culmination, and the movement that won it will be as significant, in its own way. With Bonn, the central issues of sustainable developmentthe finitude of the planet and the need to share its resources equitablyhave been given substance for the first time. And this victory (and we argue it is a huge one) was won through a process of North-South coalition building and civil-society organizing that offers real hope for the future.

Kyoto Lite

Even before the ink on the Bonn Compromise was dry, the spin began. And from the very beginning there was the problem: the deal as we have it is even worse that the one the US tried to get at The Hague. More fundamentally, the key point is that the Kyoto Protocol, with its original rules and emission-reduction targets, was barely a start on the problem, and Kyoto Lite (as it was dubbed by a Greenpeace Germany press release) is even weaker. Who, then, were these environmentalists, standing now to support a package thick with the loopholes that theyd been fighting against for years Sellouts Fools Victims of a negotiational Stockholm syndrome that had left them too locked into the deal to reject it, even after its evisceration

Its easy for the radicals to say so, and they do. (For a sample, see the commentaries grouped under Bonn – a disastrous compromise on www.risingtide.org.uk.) And they are quite wrong. The Bonn rules, even with all their loopholes and flexibility mechanisms and concessionsto the Japanese, and the Australians, and the Russians, and, indeed, the Americanslay down an open-ended architecture designed to be strengthened incrementally as the science hardens and the political will to address climate change grows. The rules, to be sure, contain serious loopholes, but it must be acknowledged that these are the results of the strategic retreat that made the deal possible. As the impacts worsen, the climate protection coalition firms up, and the technology advances, well have a good chance to close them. And, for the record, some of the loopholes are better seen as concessions to historical reality. Emissions trading is the defining example, for without it Kyoto would have died long ago.

And if, despite all the efforts which the US and its allies will still make to prevent ratification, it is nevertheless won, then its signatories will have crossed the threshold to embrace a regime that sets globally binding obligations to limit greenhouse-gas emissions. Be clear about thisthe Kyoto Protocol is not only a climate treaty, it is an economic treaty as well, and, indeed, it is the very first economic treaty that can plausibly be counted as a major step towards sustainable development. In a capitalist world in which talk alone has few lasting consequences, carbon, or rather the right to emit carbon, will finally have a price. This price, moreover, will have been imposed by an open multilateral process based in the United Nations. With unilateralism rising and the globalization debate desperately in need of ways forward, the significance of such a development should not be underestimated.

The Bonn Compromise is already significant, and if it holds, it will be likely counted as epochal. Not only should we support it, we should honestly and knowingly embrace as the victory it was, even as we fight to strengthen it. Indeed, the task just now is to do just this, to look to the future, and to the doors that Bonn has opened, even as we keep a cold eye on the right, where Bush’s supporters are claiming that the agreement is a trivial one, and hoping that by so doing they can reduce its chances for ratification, or at least cut the political damage that their man will suffer for rejecting it.

Indeed, even if Kyoto fails it will be a success, for only by passing down this path can we open the political space for alternatives, or establish the North/South coalition that can fight for a future equity-based deal. The environmental groups who supported Kyoto in spite of its obvious inadequacy have, with the inadvertent help of a ham-handed Bush Administration, won a huge tactical victory. If their strategy bears fruit, and just now the odds look good, even Kyoto Lite will radically accelerate the decarbonization of the global economy. Furthermore, the Bonn agreement symbolizes the lapsing of US hegemony in an areaglobal environmental regulationthat is moving rapidly from the sideshows of international politics into the center rings. After Bonn, its clear that there are three main acts in the circus of geopolitics: the first of course, is military security, the second is trade, and the third, now quite clearly, is the environment. Bonn, then, was a victory for progressive multilateral governance, for in saving the climate negotiations; it saved our best hope for making equitable and sustainable development into something more than a rhetorical swindle.

The Deal and its Challenges

The story of what actually happened in Bonn is important, because it was in the long days and nights at the heart of the conference that the climate protection coalition finally began to gel. With the US having officially taken itself out of the game, a coalition between the EU and the developing countries (the G77 and China group) emerged to drive the process, first forming an alliance around the so-called financial package and then forcing the holdouts to concede by making a series of strategic concessions backed by a plausible take it or leave it threat. In effect, the EU/G77 coalition offered the holdout countriesJapan, Canada, Australia, and Russiasuch large concessions that they couldnt legitimately back out. It was an aggressive and even desperate gamblebut it worked.

And what was the actual deal Legally, it was a decision of the Conference of the Parties to the Framework Convention on Climate Change (signed by George I at Rio), agreeing to a set of political principles to be implemented in the detailed rules of the Kyoto Protocol. It addressed four key issues: financial transfers between North and South (the financial package), rules for enforcing compliance with the Protocol, rules governing the flexibility mechanisms (emissions trading, joint implementation, and the Clean Development Mechanism), and the extent to which carbon sinks (carbon sequestration through forestry and agriculture) would be allowed. The details would bore all but the climate junkies among us, but a few key points should be mentioned.

Lack of Supplementarity Caps

The first major problem with the Protocol, as we now have it, is that the rules governing the flexibility mechanisms dont limit the extent to which the rich countries can supplement real domestic emission reductions with reductions purchased from other countries. The most important of the flex mechs are emissions trading, by which the US, say, could buy atmospheric space from, say, Russia, and the Clean Development Mechanism (CDM), by which the US, say, could get credit by financing (hopefully virtuous) projects in the developing world. Without supplementarity caps, a rich country could, at least in theory, use the flex mechs to buy its way out of any having to make any domestic reductions whatsoever, and it wouldnt be in violation.

In Bonn, The EU abandoned the position it held at COP6 in The Hague, where it insisted on caps that would have limitedto perhaps 50 percentthe amount of a countrys emission reduction that could come via the Protocols flexibility mechanisms. Even worse, with the USs withdrawal from the treaty, theres so much Russian and Ukrainian hot air set to go on the market that that the price of carbon may wind up being very, very low. If this turns out to be the case, Kyotos rich-world signatories will not only be able to buy their way out of the need to make significant domestic emissions cuts, theyll be able to do it cheaply.

Sinks Loopholes

And, thanks again to the US, Canada, Australia, Japan, and the Russian Federation, the Bonn rules contain huge, scientifically dubious sinks loopholes. Taken domestically, these allow high-emitting countries to claim credits for forestry, agriculture and vegetative growth; taken internationally (via the CDMs afforestation and reforestation provisions) they raise the possibility of some truly sleazy deals. Imagine, for example, a rich country getting emission credit by paying a poor one to evict indigenous communities, raze a rainforest, and plant a monocultureal pine plantation as a carbon sink.

In past years, the climate NGOs swore theyd never accept sinks, which they saw, quite correctly, as a device for the stealth renegotiation of the Kyoto targets. Now, theyre swallowing hard and keeping the sinks language down. It isnt easy; according to a Greenpeace analysis of the new sinks language, it could render the Protocols nominal mandate of a 5.2% overall reduction in rich-world emissions into a 0.3% increase.

Pathetic Financial Package for the G77

And, perhaps most tellingly, the G77 got screwed; though, as Jan Pronk, the Dutch president of the conference, said (evidently as consolation), It could have been worse. At the final happy-time plenary, there was a whole litany of promises for special funds for tech transfer, adaptation, and capacity building in the developing countries, but the only actual cash fund by which the North will assist the South during the first budget period (2008 to 2012) is both embarrassingly small ($600 million per year) and strictly voluntary. Annually, it comes to less than the cost of Bostons Big Dig.

Given these problems, which we willingly acknowledge, why dont we agree with Bonns critics, who derogate it as a relatively toothless victory, if not a capitulation and an actual fraud The answer, simply put, is that we dont see the Bonn rules as yielding a toothless treaty. The loopholes, to be sure, are large, and the position dangerous, but these, were convinced, are the problems of victory. The Protocol now exists, or will soon, and the ground has shifted.

In fact, the realists who support the deal and the radical critics who criticize it share a common concernthat Kyoto/Bonn will offer only the illusion of action, while in fact allowing the rich world to continue on a more-or-less business-as-usual emissions path. In fact, many of the activists who support the Bonn compromise are already planning campaigns to limit the use of the loopholes that Bonn created. Sinks watch is one formulation of the project; another is a new campaign against the World Banks carbon projects; another is fighting to leverage the deal into sustainable development projects with real climate co-benefits. All these are aspects of one overarching fight to ensure that climate regime is both just and effective, and that emissions reductions actually lead to the kind of technology innovation and diffusion that well need to reach the soft landing corridor.

Its important to be clear here. The environmental groups supporting the ratification of the post-Bonn Kyoto Protocol share two critical strategic assumptions. First, that establishing any global limit on carbon emissions will accelerate the green technological revolution. Second, that creating a better treaty will be far easier with the political institutions of the Kyoto Protocol in place, and may in fact be impossible without them. Immediately after Bonn, in the move by many US utility companies to support CO2 limits in new legislation regulating power plants, we got some evidence that the first assumption is correct. Evidence for the second will be longer in coming.

Todays problems, in other words, are the residua of a strategic withdrawal that isolated the US and established a crucial Euro-G77 coalition. We have lived to fight another day, and the climate battle will continue to yield both dividends and opportunities. Its already helped to erode the USs geopolitical hegemony, and accelerated the delegitimation of US unilaterism. And we havent even gotten to the ratification battle, or the USs inevitable climbdown, the one that comes after its corporations discover how much cheaper it will be for them to control their emissions if the US becomes a party to the Protocol. Kyoto, in other words, is a geopolitical earthquake, and there will be positive aftershocks for years to come.

In all this, the North/South climate protection coalition is the bottom line. This coalition, moreover, will soon be broaching the all-important question of climate justice. With the Bonn Compromise in place, the opening is over, and the climate game is moving on. It is, moreover, moving on into a grim new world in which the campaign for a just climate treaty offers a near-term opportunity for positive, and even visionary, forms of international cooperation.

Next up after ratification, and starting no later than 2005, well have the main event, the one against which this last years wrangle will appear as an opening actthe struggle to define the terms of the second commitment period. It wont be easy, because a new set of emissions targets will have to be defined, a global or near-global set that includes at least the key developing countries. This is the second step, the one that was always going to come after Kyoto, and with the agreement at Bonn, its getting increasing attention. In this context, the profile of the equity alternative has already risen, particularly outside the United States.

Events, in other words, have a new direction, and if the spirit of the EU/G77 compromise can be built on in the years ahead, theres every reason to think that this direction can be maintained. For one thing, we have the winds of science at our backsits really quite simple to demonstrate that, over the next century or so, emissions in the rich world must fall to a small fraction of what they are today. The alternative is a climate significantly harsher that within which we evolved into human beings, and a system of global apartheid in which the developing regions are somehow kept forever in a state of low-energy privation. And such a system, apart from being morally unacceptable, is simply not plausible.

Back to Genoa

The challenge is long-term, so judge Kyoto by whether is opens the door to long-term solutions. Judge it by the opportunities it creates for the continuation and deepening of the global coalition for equitable and sustainable development, and by its connections to the larger movement to break the back of the Washington consensus. Judge it, as the months roll on and Rio+10 (Kyotos unofficial ratification deadline) comes onto the calendar, by progress towards ratification. And judge it, especially, by its contribution to the construction of post-Cold War world in which equitable and sustainable development is understood for what is actually isa historical necessity that can only emerge in a post-neoliberal world.

Even before Bonn, it was clear that the apparent stasis of the post-cold war moment was passing into new possibilities. The global justice movement was beginning to be taken seriously, and was visibly splitting the elites, to the point where even G.W. Bush, the bte noire of the Kyoto coalition, had to rise in Genoa to say, Those who claim to represent the voices of the poor arent doing so. He meant, of course, to echo the claim that only continued globalization offers the poor a chance for a better life; for this, after all, is its only real basis for legitimation. Note, then, that a recent study by the Center for Economic and Policy Research (The Emperor Has No Growth: Declining Economic Growth Rates in the Era of Globalization, available at www.cepr.net), questions even this venerable mainstay of elite wisdom. Neoliberal globalization, as it turns out, may be correlated far more closely with rising inequality than it is with economic dynamism:

Throughout the growing debate, it has generally been assumed that globalization has helped spur economic growth throughout most of the world. Even critics of globalization, and of the IMF and World Bank, have generally accepted this assumption. They have argued that these institutions have focused too much on promoting growth and not enough on other goals such as alleviating poverty and protecting the environment.

The official data for the last two decades (1980-2000) tell a different story. Economic growth has slowed dramatically, especially in the less developed countries, as compared with the previous two decades (1960-1980). For example:

* From 1960-1980, output per person grew by an average, among countries, of 83%. For 1980-2000, the average growth of output per person was 33%.

* Mexico would have nearly twice as much income per person today if not for the growth slowdown of the last two decades; Brazil would have much more than twice its current per capita income.

* Eighty-nine countries77%, or more than three-fourthssaw their per capita rate of growth fall by at least five percentage points from the period (1960-1980) to the period (1980-2000). Only 14 countries13%saw their per capita rate of growth rise by that much from (1960-1980) to (1980-2000).

* In Latin America, GDP per capita grew by 75% from 1960-1980, whereas from 1980-1998 it has risen only 6%. For sub-Saharan Africa, GDP per capita grew by 36% in the first period, while it has since fallen by 15%.

If further research bears out the CEPR resultsand if they become well knownthe results will be interesting indeed. The climate regime, after all, will be as deeply affected by the economics of this strange new world as it will be by its geopolitics. And with the new global economy teetering on the edges of both economic downturn and institutional delegitimation, the situation is evolving rapidly indeed. If, in this context, it turns out that the current development model is compromising even growththe magic elixir to which, in the face of poverty and suffering, the elites have always appealeda legitimacy crisis is essentially guaranteed.

The links between economy and equity are, in other words, on their way to the center of the geopolitical debate. Indeed, the US stancethat Kyoto is inadequate because it doesnt include caps for developing countriesis itself an inadvertent recognition that climate change cant be addressed without addressing North South equity. The US hoped to use its muscle to force developing countries to accept some form of grandfathering; the Bonn compromise, like the Berlin Mandate before it, shows that the rest of the world wont buy it. And in the end, China doesnt need US permission to burn its coal; if we expect it to act with restraint and global responsibility, we must do the same, even if it means that they have something to say about how we burn our coal. Its a hard lesson for the Big Men in Washington to swallow, but the Europeans, at least, seem to have gotten the point. They stood with the South in Bonn, and this, we sincerely hope, is a sign of things to come.

Even before September 11th, is was time for the connections between equity and development, between the international financial institutions and the climate crisis, between the anti-globalization movement and the climate movementbetween Genoa and Bonnto be drawn in new and clearer lines. And after the situation gels, this may be just whats in the cards. The pundits say that, to deny the terrorists their victory, we must return to our lives, though this time with a new resolve. Very well then, let us do so. Let us return to the economic and environmental crisis, and let us demand the same of the elites that would represent us. Let us, in particular, insist that the European governments that sided, at Bonn, with the South (and with their own domestic NGOs and environmental constituencies) continue to connect the dots. Some questions to keep in mind: Will they hold the lines they drew in Bonn Will their positions in the new war coalition, and in the new round of trade negotiations, be consistent with their role in the climate coalition Can they, in particular, support the South in Morocco and then undermine it in Qatar Will they try

The challenge, now, is for climate justice and global justice activists to see their mutual movements in a broader perspective. Both are focused on the same central problemsustainable human well-being on an increasingly overburdened planetand both are being led, each by their own logic, to the problems of historical and institutional justice. From Seattle to Genoa, the protesters stood for labor rights and environmental protection, or more broadly for empowering those at the bottom in a drive to rewrite the rules of globalization. From Kyoto to Bonn, the climate campaigners labored to constrain the engines of development, to force their adaptation to the Earths finite ecological spaces, and, increasingly, to make the commitment to equity and democracy that this finitude requires.

From Genoa to Bonn, both movements have won substantial victories, and both paid dearly for them. Now, both are being forced by the consequences of those victories, and by a world that has lurched madly towards the darkness, to stretch for a new future, to revisit old assumptions and prepare new coalitions. This isnt the place to go into the details (many of which, in any case, we dont yet know) but its obvious that two cutting edge movements are better than one, and that these two, in particular, have a lot to learn from each other. After all, if you rub two cutting edges against each other, wont they both get sharper

— Tom Athanasiou and Paul Baer (2001).