UN boss: Lima was a reality check, and leaders need to step up for Paris

Achim Steiner, executive director of the United Nations Environment Programme [Council of EU]

The differences between how the developed and developing countries view their responsibilities will hinder agreement at the UN Climate Change Conference in Paris, unless top political leaders provide the momentum needed to drive the talks, says Achim Steiner.

Achim Steiner is executive director of the United Nations Environment Programme (UNEP). Before joining UNEP, he was director general of the International Union for Conservation of Nature (IUCN) and before that secretary general of the World Commission on Dams.

Steiner spoke to EURACTIV deputy news editor James Crisp in an exclusive interview in Brussels, before he addressed EU environment ministers on the post-2015 goals for sustainable development.

Lima – 

What are your thoughts after the UN Climate Change Conference in Lima? And what does it mean for Paris next year, when nations will try to reach a legally binding global deal limiting global warming?

As has become a regular pattern, Lima ended again in a very intense attempt to try and craft a sufficient consensus to move forward. And I think we can agree that out of Lima, the climate negotiation process gained enough to be able to proceed towards Paris.

The draft agreement that emerged from Lima clearly had issues that remained unresolved. This perhaps shouldn’t be too surprising, because in many respects, what the climate convention is working towards in Paris 2015 goes well beyond the climate change issue.

It is in part also a reflection of a deeper geoeconomic and geopolitical change that is happening in the world, and because climate is in a sense so defined by the urgency to act, the international climate change negotiations have become almost an advanced platform from which the world is trying to renegotiate how it will cooperate on a multilateral level, but also in terms of the changing global economic circumstances.

So in Lima, the issue of differentiation was top of the agenda in terms of the issues that remained difficult to agree upon, and they partly speak to a deeper debate that is also happening in the post-2015 development agenda. How do you recognise that countries are bringing different responsibilities, different means and capacities to act on a global stage that is increasingly being defined by a universal set of either imperatives to act or goals to achieve? So I would say it was both in discussions on financing and shared responsibility where, not unexpectedly, the COP in Lima struggled.

So this is essentially a disagreement between developed and developing countries about their respective responsibilities?

Absolutely, and their ability to act. I think what is encouraging is that Lima took place in the wake of several  significant announcements and, notwithstanding the challenges from Lima, that definitely did influence the expectation that an agreement will be reached in Paris. I think the calendar that has now been set for the negotiations is a very intense one through 2015.

What perhaps is also clear after Lima is that negotiators on their own may struggle to find the formula that will be needed for a meaningful and effective agreement in Paris.

The announcements from the EU, China and the US on climate show that when political leaders send the clear message of shared intent and shared objectives, that this can make a significant impact on how such processes can evolve.  So I think in addition to the negotiation of the details over the coming 11 months, we will need to see significant engagement at top political level to ensure that we don’t end up at a dead end in Paris.

Australia is providing a kind of negative political leadership on climate change…

For domestic political reasons, Australia has taken a very critical stance on policies related to responding to climate change. But a few weeks after the G20 summit, Australia arrived in Lima and pledged $165 million to the Green Climate Fund.

That shows that it is very difficult for industrialised countries, particularly Australia, which has among the highest per capita emissions in the world, to step outside the global consensus.

There is always a temptation for countries, companies or sectors to find themselves cheaper options, and not necessarily be part of a global effort to move forward. But we operate in a global community politically, a global marketplace, and sooner or later it will be a disadvantage to national economies, industrial sectors and corporations to be in a group that is perceived as part of the problem, rather than part of the solution.

The response to Lima has been mixed…

The expectation, as always, was for breakthrough progress. But time and again, we realise that it’s a step by step approach. In terms of raising confidence for Paris, the outcome was sufficiently robust. But many people will have left Lima feeling that many issues remain unresolved, and therefore pose a risk to a positive outcome in Paris.  

A reality check after the wave of good news from the EU 2030 deal, and the US and Chinese announcements…

Yes, we have generated a lot of momentum, but the fundamentals for an agreement need to now be translated into real agreements in Paris.

Negotiations will continue throughout the year ahead of Paris. The next big moment will be the release of the Intended Nationally Determined Contributions in May, which will give us the next reality check.

– Paris –

What obstacles do you foresee in Paris?

Both developing and industrialised countries feel very strongly that the economic and carbon emission realities of 2014 need to find their way into this agreement. So we are dealing with a set of negotiations that are sitting right on the pivoting point of two eras.

Secondly, financing. We have seen the Green Climate Fund emerge with a $10 billion initial capitalisation, but for the developing countries, this is still a long way off the $100 billion mark that had been agreed in Copenhagen. So one challenge is how to provide the support from developed countries that is needed to accelerate the transition of the developing world to a low-carbon economy. Areas for investment include infrastructure, urbanisation, resource-efficient cities, public transport systems and electric vehicles.

What is important to remember for Paris is that developing countries will have to make billions of dollars of basic infrastructure investments, and developed countries have a vested interest in helping them to make these as green as possible. Their contributions will be fairly small in the end.

Who fronts the money for the infrastructure and how is it paid for? Will it be through public-private partnerships between companies and the developing countries’ governments?

In South Africa, the government ran a series of auctions where power companies bid for licences to produce electricity with renewables. The $14 billion in this case largely came from the private sector.

And would South Africa be eligible for funding from the Green Climate Fund?

In theory, as an emerging economy, it could be, but the rules will be finalised in Paris. The formula for success on the African continent would be to use the fund to leverage international support for climate change investments, and offer a more secure environment for private investments. This would also help to lower the punitive interest rates that are often levied on African investments and lower the cost to the investor by providing risk guarantees.

The scale of the investment needed in energy infrastructure over the coming years, into the hundreds of billions of dollars, means that it will largely have to come from the private sector.

But the incentives have to be in place – reducing fossil fuel subsidies and creating the right tax environment – for that significant amount of private finance to move towards low-carbon investments. One of the things we are doing at the moment is to look at how monetary policy, banks and regulatory authorities can incentivise financial and capital markets to scale up their investments much faster.

Is it the case that the only way around this impasse is simply for the rich countries to pay up?

The rich countries have to realise that by putting up the money they are not simply donating to charity. It is partly in recognition of a historical reality between developed and developing countries, second, it is also a self-interested investment. Can you frame it in a way that it doesn’t end up being a charitable donation but as an investment? We will have to say, yes we want Africa to have access to energy, but we want it to be clean energy and we will pay a part of the costs that they will incur.

If it is an investment, what is the return?

Financially, Africa is the next big growth region, so Europe has an interest in helping Africa grow its economies and become part of the global market place in which European businesses and technology have a significant and rapidly growing share. Secondly, Europe could avoid a carbon emissions scenario whereby Africa could say “we have the right to do what you did”, and bring down our capacity to deal with the climate change challenge.

– Competitiveness – 

Is there an impact on European competitiveness?

China is drastically improving its air quality and pollution standards, while Europe is prevaricating. That tells us that China is making fast progress. They introduced European car emissions standards in just 15 years; a process that took Europe 40 years.

I think competitiveness in the future will be partly defined by more resource-efficient, less polluting economies, infrastructure and industries, and I think that Europe has invested a great deal in in cleaning up its environment over the last 30 to 40 years, giving rise to lots of new technologies and efficiency gains, but do not underestimate the speed with which Asia is investing in this market. Partly out of self-interest and partly beause it sees an enormous global market.

Some people I have spoken to have suggested that Europe has had a very steep learning curve on renewables and will not benefit economically to the same extent as China…

How do we measure the value of renewable energy to Europe? Initially, Europe was a key manufacturer of renewable energy technology. Twelve years ago, Europe was manufacturing 75% of the world’s solar panels, but in a decade that has reversed, and 75% is now produced in the global South, with two thirds being exported in the South-South trade. So Europe needs to ask itself why it lost the competitive advantage.

But part of the reason why Europe has been able to expand its use of renewable energy is due to the entry of China into the sector, bringing down prices and making the deployment of photovoltaics in Europe much more feasible and economical.

So yes, we can see a scenario where Europe lost its market leadership in manufacturing. But on the other hand, it has benefitted from China’s entry into the marketplace, bringing cheaper access to technology for Europe and the developing world. In Europe, only one out of five jobs in the renewables sector is in manufacturing, with the others being in servicing, maintenance, operating grids etc.

Europe may no longer produce the photovoltaic panels, but we have the smart grid technology, the focus on grid management and energy efficiency, and these are the new frontiers where Europe has the edge.

– Sustainable development – 

You spoke to EU environment ministers this week about the post-2015 objectives for sustainable development.

At the Rio summit, we recognised that sustainable development requires a more integrated approach to the social, environmental and the economic factors, and we also called for the development and adoption of a set of universal sustainable development goals, which recognise that sustainability in all areas can be achieved if we recognise that we operate in a global economy, a planetary reality and that every country needs to become part of the effort to move towards the path of sustainable development.

There are 17 sustainable development goals which provide a framework for envisaging the world and a global economy and nation states moving towards a more sustainable future, with the global population soon reaching  ten billion. The targets and indicators are yet to be developed, but what is critical is that they are universal, so countries in Europe will be as much a part of this framework as countries in Africa, Asia or Latin America. The USA will commit to these goals, the same as China or Brazil.

Europe is now adopting its joint position on these 17 goals. The next step is to go back to the general assembly in New York and negotiate these goals. The final text will be presented and adopted next September in New York.

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