The international climate process survived at COP16, but the UN Cancun Agreement does not solve key issues such as legally binding emission targets and carbon pricing, according to chair of the Institutional Investors Group on Climate Change, Ole Beier Sorensen.
The agreements did not make “national emission reduction targets legally binding and they do not ensure a price on carbon”, Sorensen who attended Cancun with David Russell from USS, and Stephanie Pfeifer from IIGCC.
In addition, the future of the Kyoto Protocol remained undecided and this implied “considerable uncertainty” for the Clean Development Mechanism (CDM), said Sorensen, who is ATP’s strategy and research chief.
As well, the present situation where the US was outside the Kyoto framework was not resolved, and in the absence of a legally binding global agreement, real policy change remained in the hands of national initiatives and business.
Sorensen said the shift to a low-carbon economy was not yet in sight, and the overall efforts on emission reductions were left “much short” of what was needed, “with the result that mitigation costs will increase even further”.
Other areas which fell short in the run-up to COP17 in Durban next year included:
- securing a sufficiently ambitious international emissions reduction target
- agreeing on how this translates into national emissions targets
- agreeing on the future of emissions trading, and
- the lack of agreement on a national climate policy in the US congress.
Sorensen warned that in the absence of a global agreement and “in view of a cumbersome and lengthy international process, there is bound to be a greater focus on bilateral rather than multi-lateral agreements between countries”.
The private sector was crucial and was out-pacing politics, he said, “but in the longer term, the fundamental change to a low-carbon economy needs to be harnessed by policy”.