In an interview with the FT yesterday, Wen Jiabao sets out China’s negotiating position in the run up to the Copenhagen climate negotiation. Three main points:
- Green stimulus as part of the response to the financial meltdown.
- Domestic action to increase energy intensity by 4% a year (“We failed to meet the targets in the first two years of the five year period, and we succeeded in meeting the target in 2008.”)
- No quantified emissions targets for China – the country is still at an early stage of development and “in terms of per capita greenhouse gas emissions, we are certainly not the biggest one.”
How strong is China’s position? Not very, I think. China is obviously right to expect the rich world to do more, but if they accept tough targets and China refuses to, then there are two consequences. 450ppm stabilization becomes impossible – and it’s the rest of the G77 that will end up with a highly inequitable deal.
I’ve been in Japan today, speaking at ‘Reforming International Institutions – Meeting the Challenges of the 21st Century’, a seminar organized by the United Nations University and the British Embassy in Japan.
- It’s going to be a tough year. The financial meltdown has a long way to go, and the downturn is risking turning into a global depression.
- Trade is a bell wether. Protectionist pressures are already on the rise. If they gain traction, take that as a warning of a wider loss of confidence in global institutions.
- The unravelling of global economic imbalances could prove corrosive to the international order. If countries start to devalue to protect exports, expect a tit-for-tat dynamic to kick in.
- Scarcity issues (energy, water, land, food, atmospheric space for emissions) remain the key medium term driver of global change. Commodity prices will spike again as soon as there’s recovery.
- The downturn has stemmed the uncontrolled growth of emissions, but also lessened the chance of a robust global deal on climate.
- Economic bad times could well drive increased conflict. A major new security threat might be the fabled black swan – hitting just when the global immune system is already overloaded.
- If we experience a long crisis (or a chain of interlinked crises), we are likely to see either a significant loss of trust in the system (globalization retreats), or a significant increase in trust (interdependence increases).
- You need to stretch time horizons to get the latter – shared awareness (joint analysis of risks and challenges), as a basis for shared platforms (loose coalitions of leaders), which can lobby for a shared operating system (a new international institutional architecture).
- 2009 sets a challenging agenda for the G20 (financial reform and economic recovery – but framed by a broader vision on climate, resources, security etc.)…
- …the G8 (caucus of rich countries able to tee up Copenhagen and kick start development assistance if developing countries begin to teeter)…
- …the UN (especially Ban Ki-Moon’s proposed high level ‘friend’s group’ on climate, but also as a fora for getting to grips with scarcity issues)…
- and the Bretton Woods institutions and the WTO (first of all ensuring they keep their heads above water, then looking to ‘save globalization from itself’).
- Oh and be ready for the backlash – people are angry and rightfully so, but that may well lead us down some populist blind alleys.