Pressure from the bottom up
I have focussed my time here on two categories of meetings: two UN committees (the AWG, charged with setting the road map/agenda of work for the next year and CMP, charged with review of performance under Kyoto to date); and side events about carbon markets run by the IETA (International Emissions Trading Association).
As you would expect the UN meetings are slow tedious, with the real substance hidden in acronyms and cross references to prior UN documents. However if one listens carefully and spends some time at night with the links to these documents it is possible to get a sense of the issues. The issue facing the CMP is whether the scope of review of performance under Kyoto so far is limited to the extent of compliance or whether the review can also discuss the implications of the experience under Kyoto to recommend changes for post Kyoto. The majority seem to favor a broader review; the countries opposed such as Russia and Saudi Arabia. appear to be afraid that recommendations for the future will either change their status or the cap they are subject to.
The IETA meetings have been refreshingly plain-spoken and substantive. Several of the sessions have included congressional staffers talking about pending legislation and the prospect that the United States will adopt a cap and trade system regardless of whether the US signs a post-Kyoto protocol or not. Many of these meetings have had congressional staffers on the panels. One session I attended yesterday was a round table of US and EU officials. There were four congressional staffers on the panel and five more in the audience.
As I think about all these meetings as a whole I am struck by the amount of energy at the bottom. The UN, Bush Administration ans the US congress are in danger of losing control of the process of creating a carbon market. It is being created now, will be a principal response to climate change and the UN and US are in danger of becoming irrelevant. These bottom up forces have already decide that we will use a carbon market rather than a carbon tax to reduce carbon emissions. Although a carbon market with an allocation auction can function very much like a tax.
How is the carbon market being created. In the US of course states an region frustrated by the lack of leadership at the federal level are at various stages of creating their own markets. Their actions are clearly a major source of pressure felt by Congress, which believes that a uniform national system is better. The EU system is almost fully operational; the CDM mechanism under Kyoto protocol is being revised to facilitate funding of smaller projects and this should eventually generate more carbon credits. And there is a growing private carbon market. The credits generated by these different systems are at present no compatible and do not produce fungible carbon allowances/credits. If the UN and nations of the world do not act soon to create a uniform system we will soon have many disparate and incompatible systems. This will only impair our ability to reduce carbon emissions world wide.
There is a feeling of urgency here, no matter how muted by UN-speak. I think that the delegates are feeling some of this pressure from the bottom up. I hope they realize they are in danger of being over-run by events, of becoming irrelevant if they do not act fast enough.