Durban Climate Conference: a step in the right direction?

14th December 2011

This year's summit in Durban, which concluded last weekend, was no exception – overrunning by 36 hours and coming up with a deal that requires no agreement until 2015 and no action until 2020. It was decided that a $100bn-a-year Green Climate Fund would be the new vehicle for public financing of low-carbon, climate resilient development, but we have no idea where the money will come from.

Durban's real coup de theatre was the resurrection of the Kyoto Protocol, which everyone thought would wither away when its first commitment period concludes at the end of next year. Yet there will now be a second round of targets of either five or eight years (that's one of the many deferred decisions that need to be made next year). It won't make much difference to the emissions cuts that will be made – most of the countries that have committed to it are EU members who will merely make their EU targets subject to Kyoto. They are likely to be joined by Switzerland, Norway, Australia and New Zealand to make a group that is responsible for just 15% of global emissions.

Absent will be the US, which never ratified the protocol, Japan, Russia and Canada, which all said they would not sign up to a second commitment period unless all major emitters were included. Indeed, Canada has withdrawn entirely from Kyoto because its previous inaction now leaves it facing fines of $13.6bn for failing to meet its obligations. In addition, large emerging market emitters such as China, Brazil and India, are not subject to targets.

However, the extension of Kyoto is important because it provides certainty that the UN-backed carbon market, the Clean Development Mechanism, will continue. Given those left in the Protocol, it is most likely that the second commitment period will run to 2020 to coincide with the third phase of the EU's Emissions Trading Scheme and it provides a crucial bridge to the new agreement, the "Durban Platform".

UN climate talks have such an enormous capacity to disappoint that it is dangerous to say: "This time it is different." And yet, the Durban platform does feel like an important breakthrough. For the first time, all 194 members of the UN Framework Convention on Climate Change have agreed by 2020 to take action to cut their emissions. That means China, India and the US, so long on opposite wings of the climate debate, are now for the first time on the same side.

It is a reflection of the fact that the world has changed since the Kyoto Protocol was signed in 1997. From 1905 to 1990, the US was responsible for about 31% of cumulative global emissions, according to a note from HSBC, compared to just 6% for China. Over the period from 2009 to 2035, 28% of projected emissions will come from China, against 14% from the US.

Even deferring a decision until 2015 begins to look like an astute move – it is the year after the next update on climate science from the Intergovernmental Panel on Climate Change, which is likely to further strengthen the case for urgent action; the worst of the financial crisis should be behind us; it fits neatly into the US presidential cycle (but only if Obama wins next year's election); and by then it is possible that there will be national carbon schemes up and running in China, Australia and South Korea, along with a host of regional schemes from California to Rio de Janeiro.

The deal also strengthens the case for the EU lifting its emissions reduction target to 30%, which it said it would do if other countries signed up to more demanding reductions. This in turn could create a virtuous circle of commitments elsewhere.

Of course, all this could go the other way and there are any number of areas where the deal could be derailed – but it feels like a step in the right direction.

More from Mindful Money:

Capitalism vs. Climate Change: The Big Debate

Emerging markets: Climate change and future performance

Emerging markets and climate change – A bleak future?

Capitalism vs. Climate Change: The Big Debate

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