The road after Copenhagen

The accord from the Copenhagen climate change conference wasn't the result of a negotiation, but unidirectional concessions by developed countries to developing ones to support an agreement that obliged the latter to offer nothing in return.

Consider the scorecard.

Before departing for Copenhagen, India's minister of state for environment Jairam Ramesh stated in a speech to Parliament that he only wanted a "flexible" agreement, with non-negotiable positions on "legally binding emission reduction cut(s)" for developing countries and requiring them to "announce when their emissions will peak".  And in the Copenhagen Accord, India secured recognition that a developing country's emissions would only peak at some point in the future and an obligation to declare what emissions reduction actions it will take.

Throughout negotiations, China opposed being held to the same standard as developed countries for international measuring, reporting and verification of its domestically funded emissions reduction programmes.  And under the accord, India and China are only required to have international assessment for programmes funded by other governments or international finance pools.

Coming to the conference, African countries and the island states wanted financing for a mitigation and adaptation fund.  And in the accord, developing countries secured a $30 billion fund from developed countries for the next three years, with a goal of a further $100 billion a year by 2020.

By comparison, the US succeeded in securing a concession to "commit to implement ... economy-wide emissions targets" rather than being bound through a Kyoto Protocol model that it didn't want.  It also secured acceptance to increase its emissions baseline year to 2005, as did Canada to 2006-meaning emissions reductions would be less than in Europe which has a 1990 baseline year.

The US concessions were as much from Europe as developing countries.  As a consequence of giving up so little in these negotiations, developing countries have succeeded in keeping all their leveraging power available for the next scheduled mid-year negotiating round in Bonn and the next major conference in Mexico City at the end of 2010.

A challenge for the Mexico negotiations is to avoid repeating the hyped ambitions of Copenhagen.  The silver lining;  the separation between the perception and the reality of what Copenhagen could deliver was largely built on government "spin" to secure public support for domestic climate change policies.  Such spin cannot be credibly repeated in 2010.  And while Copenhagen was considered as a deadline after the 2007 Bali summit, the Copenhagen Accord deliberately excludes any such timeline impositions for the next negotiations.

Still, the problem last weekend-one the negotiations next year will also face-is achieving even the slightest consensus.  The near-collapse of negotiations at Copenhagen should not have come as a surprise because the Bali summit that led to these negotiations didn't even agree to the commencement of a new international treaty.  Instead, the negotiating road map supported the vaguest diplomatic "agreed outcome ... (for) a shared vision for long-term cooperative action".

Following the accord's announcement, the text has already been universally condemned for not doing enough to cut global emissions.  And the accord clearly has many problems.

For example, the accord doesn't include any comprehensive proposals on how to facilitate and promote the transfer of climate-friendly technologies beyond the establishment of mitigation and adaptation financing pools funded by developed countries.  How these finance pools will be funded is also left open, with proposals still on the table.

The accord also ran into other major barriers.  For instance, on Saturday morning (the conference's "overtime"), a bloc comprising governments from Africa, as well as South and Central America, objected to its proposition and ensured the consensus necessary for its adoption was lacking.  As a consequence of all this, the accord is now a meaningless footnote to the conference and carries no diplomatic weight.

Instead, it is being considered merely as the basis for future negotiations.  But if countries want to negotiate an agreement built on the weak architecture they now have for a future climate change deal, they would be better off revisiting whether the United Nations (UN) system is even capable of delivering on their lofty ambitions.

Given such ambitions, the process might just be doomed.  To secure the sort of climate change agreement that brings in all the countries of the world would be the most ambitious ever negotiated through the UN system and would impact every aspect of society and the economy it covered.  It would be even more ambitious than the agreements under the World Trade Organization (WTO)-the only agreements comparable in scope and ambition-but unlike other multilateral institutions, WTO happens to function outside the ambit of the UN, that too with its own dispute settlement and enforcement mechanisms.

As a consequence, countries will always be reticent to commit to a treaty with deep obligations, especially when there are currently no options for recourse if they are not enforced.

A patent Copenhagen solution

India's negotiating position on intellectual property (IP) at the Copenhagen climate change conference might be good politics, but it's unlikely to help developing countries cut their emissions.

Many key negotiating deadlocks at Copenhagen are focused on classic attitudinal divides between North -- meaning developed -- and South -- meaning developing -- countries;  and none more so than over access to climate-friendly technologies.

As a South country, India has sought inclusion into the negotiating text on how to boost the transfer of climate-friendly technologies through the removal of IP rights, principally patents, on climate-friendly technologies, many of which are owned by US and European companies.

Working with Bangladesh, Bolivia and Ghana, India is complaining about its obligations under the World Trade Organisation's (WTO) IP treaty-called the Agreement on Trade Related Aspects of Intellectual Property Rights, or TRIPS.  These obligations that are claimed to increase the price and to cut access to essential medicines are also stopping access to affordable climate-friendly technologies.

Last Wednesday's negotiating text included flexibility for countries to ignore IP rights that would prevent countries "from taking any measures to address adaptation or mitigation of climate change ... and (the) transfer of, and access to, environmentally sound technologies and know-how".  The text also proposed the establishment of a global technology pool that would grant access to royalty-free patented technologies and would also "revoke" existing patents on these technologies.

One of the reasons technology access is such a sore negotiating point is because, in the words of Ajay Mathur, director of India's Bureau of Energy Efficiency, "technology is the only way" developing countries can afford to cut their emissions.  But concerns about patents on access to climate-friendly technologies are built on false foundations -- they're radically different technologies to medicines.

We know the patent premium on medicines makes up a significant portion of the final price because the cost of initial research protected by patents is large and the physical manufacture cost, the marginal price, is small.  Medicines are also built on single-compound patented technology that often turns the exclusive right a patent confers into a near-monopoly, because of the lack of competition from other products that can provide the same therapeutic outcome.

But in the case of climate-friendly technologies, the physical cost and tacit knowledge in manufacture and deployment make up the vast majority of the final product's cost.  And because there is significant inter- and intra-product competition, the leveraging capacity of a patent is modest.  The business reality is that if a wind turbine manufacturer sells an expensive product there are plenty of other competitor technologies in the marketplace, as well as other wind turbine manufacturers, to keep the price down.  And those were the personal conclusions of former Indian TRIPS negotiator, Jayashree Watal, at a symposium jointly organised by the University of Copenhagen and WTO last weekend, who pointed out the ineffectiveness of the comparison between medicines and climate-friendly technologies.

Lingering behind complaints about patents is the perception that buying these technologies will result in a boon for developed country companies at the expense of the world's poor.  But a March study by Copenhagen Economics, a consultancy, found that from more than 200,000 patents sampled, only 0.1% was registered in the lower-income developing countries-suggesting that the developed world is essential for these patents.  So it's widely accepted in Copenhagen that access to these technologies is essential, but developing countries can take action closer to home to promote technological diffusion.

Yet, a 2007 World Bank report found that tariff and non-tariff barriers on low-carbon technologies in the top 18 greenhouse-gas emitting developing countries can be as high as 165%.  India's barriers on fluorescent lamps alone amount to 117%.  The extent of trade barriers on environmental goods and services in rich and poor countries alike has prompted discussions about a new international trade agreement to seek their removal.

Removing patents is also likely to disincentivise patent holders from licensing their technologies into developing country markets.  And if they don't do so, developing countries will only delay the development of their own domestic manufacturing and skills capacity to manufacture their own technologies and diffuse them.

All this is important because, in the face of steep and costly carbon emissions cuts, developing countries will need next-generation technologies to make the cost of mitigation and adaptation affordable.  But without patents, innovators will be reticent to make the financial commitment necessary for the innovation of climate-friendly technologies, let alone their deployment in the developing country markets that need them.

For now the proposals seem back off the table, but if India insists on the inclusion of anti-IP text in a final Copenhagen agreement, it may win a political victory.  Still, it'll come at the expense of developing the most cost-effective way to cut emissions.