Carbon Emissions: Diplomacy and Markets Will Decide Our Future

Data on the growth of CO2 emissions have set a new record in 2010 after the 2009 pause due to the effect of the crisis. The inexorable rise of the Chinese economy and the burning of fossil fuels in many other emerging economies pose with a renewed emphasis the issue of environmental and climate sustainability of our mode of development. They compel our ingenuity to find new policy instruments, new technologies, and new business models that are able to break the close relation that exists between economic growth and consumption of natural resources.
First of all, this means understanding the complex feedbacks at work in the planetary biosphere: an immense challenge that has involved scientists and researchers in many fields from all over the world.
Johan Rockström and his colleagues Stockholm Resilience Centre have sought to understand the basic functions performed by ecosystems and what safety limits we must respect if we don't want to incur in potentially catastrophic planetary transformations. The findings of this research effort, published in Nature in 2009, are twofold: on one side, nine fundamental natural processes have been identified which affect the productivity of ecosystems that we all depend on and are threatened by chemical pollution and land overuse; on the other, it has been ascertained that at least three of these processes (biodiversity loss, climate, nitrogen cycles) have been radically altered and have exceeded the established safety range. The issue of limits to growth is not new in the discussion about sustainability of our production and consumption model. The cap-and-trade mechanism introduced with the Kyoto Protocol in 1997 to bring climate-changing emissions under control represents the most important attempt to limit emissions of greenhouse gases. This means that if we want to continue growing while respecting ecological constraints, it is imperative to decouple growth from its environmental impact, i.e. to decarbonize technology and consumption.
International diplomacy has established that the safety limit to avoid climate variations causing unacceptable social and economic risks is 450ppm of CO2 in the atmosphere (by 2035). This scenario translates into an increase in global mean temperatures of 2° C. According to the estimates made by the International Energy Agency, the 450ppm scenario requires a significant reduction of the carbon intensity of GDP, which should be halved on an annual basis in the 2008-2020 period, and decrease by 25% each year in the 2020-2035 period. This target means that over the 2010-2035 period, 50% of the cut in greenhouse cumulative emissions is to be made by the US and China, 8% by Europe, 7% by India, and the remainder by the other economies of the world. The objective implies a substantial overhaul of our energy model, the rapid diffusion of renewable energy sources, deployment of-carbon capture-and-storage technologies, nuclear energy, and most of all, a major increase in energy efficiency.
The failure of the 2009 Climate Summit in Copenhagen in finding a successor to the Kyoto climate treaty, which will expire in 2012, has left us with great uncertainty about the possibility of limiting the rise of global temperatures to 2 degrees with respect to pre-industrial averages by 2020. The idea of a binding international framework committing all countries to cuts in emissions, by determining a de facto single global market for CO2, is for many the most effective solution to the problem. However this route increasingly seems foreclosed, with the exception of the EU which has developed such a market. Most countries seem to prefer other kinds of international accords, such as bilateral, industry-level and bottom-up agreements, as the Cancun Climate Summit has proved.

In the next ten months, first in Durban, then in Rio, there will be two fundamental international meetings for sustainable development and the climate. We shall see whether international diplomacy and market economies find a way to put humankind back on the path of economic development that meets the constraints demanded by nature.