Rede von Ricardo Lagos, President of the Club of Madrid, UN Special Envoy for Climate Change and Co-Chair of Global Leadership for Climate Action (GLCA) zum Gleneagles-Dialog - 3. Ministerkonferenz (in englischer Sprache)

Speech by Ricardo Lagos, President of the Club of Madrid, UN Special Envoy for Climate Change and Co-Chair of Global Leadership for Climate Action (GLCA)

Chairpersons, Excellencies, Distinguished Delegates, Ladies and Gentlemen: Good Morning.

We are grateful to the Federal Government of Germany for giving us this opportunity to present a proposal of the Global Leadership for Climate Action - GLCA for short.

The GLCA is a collaborative effort of the Club of Madrid, of which I am the President, and the UN Foundation, headed by Senator Timothy Wirth.

The GLCA was set up as a bold experiment to mobilize political will and offer a vision for the international negotiations at Bali and beyond.

We are from 20 different countries, half developed/half developing. Ours is the first comprehensive framework to be offered and we are honored to present it here in Berlin. Our members are no longer in office so we are not constrained by political correctness; our recommendations focus on what we think are the best, most effective means of addressing climate change.

We determined four major issues to overcome:

1. Departing from Kyoto, we believe the split between developed and developing nations is no longer valid - there are countries that are developed, countries that are rapidly developing, and those that are least developed.
   
   
2. Putting a price on carbon - preferably through taxes
   
   
3. Spurring a global technology revolution; and
   
   
4. Financing technology, development, mitigation and adaptation.

Before reviewing our recommendations, let me touch on our membership.

The GLCA consists of 25 members, 13 former heads of state and government and 12 who have headed (or currently head) business, civil society or inter-governmental organizations.

Senator Tim Wirth, President of the United Nations Foundation and I have had the privilege of Co-Chairing this group.

Mohamed El-Ashry, who is also present at this Dialogue, facilitated our work.

We also benefited from a Panel of 7 Senior Advisors from developing and developed countries.

Given the scale of response required, we recommend a comprehensive, long-term, post-2012 agreement under the auspices of the UNFCCC. This will send a clear signal to the market; and offer countries the flexibility to implement emissions reduction strategies that are most appropriate to their national circumstances.

In addition to setting a timetable for negotiating a comprehensive post-2012 agreement, the Parties in Bali should agree on four pathways for negotiation that address mitigation, adaptation, technology, and finance.

First we need to agree on a long-term global target. We recommended that all countries commit to reduce collectively global emissions by at least 60% by 2050. This is more ambitious than the 50% target suggested by Canada, the EU, and Japan.

Developed countries would commit to reduce their collective emissions by 30% by 2020.

Rapidly industrializing countries should initially reduce their energy intensity by 30% by 2020 (an average of 4% per year) and agree to emissions reduction targets afterwards. Reducing energy intensity would moderate growth in emissions while enabling developing countries to continue to pursue their sustainable development objectives. China has set a goal of reducing energy consumption per unit of GDP by 20% between 2006 and 2010, which amounts to an average annual rate of 4%.

Other developing countries should commit to energy intensity targets differentiated by their responsibilities and capabilities.

Finally, our framework recognizes that all emissions sources and sinks are relevant to the solution and must be included in a future agreement.

As the Stern Review said, "Establishing a carbon price, through tax, trading or regulation, is an essential foundation for climate-change policy." The preferable mechanism is a system of harmonized, universal carbon taxes.

Carbon taxes could reduce emissions and generate financial resources that could be used for developing clean energy sources and for adapting to climate change. Carbon taxes are relatively easy to implement and are economically efficient.

Cap-and-trade schemes are generally welcomed by industry, as they tend to reduce the cost of complying with targets. If a cap-and-trade approach is adopted, emissions allowances should be auctioned to generate revenues that can be used for other purposes.

The poor in developing countries are the most vulnerable and the least able to adapt. Strong mitigation measures are needed to minimize the cost of adaptation; without them, adaptation may be impossible in some countries.

Adaptation should be anchored in poverty reduction strategies. Because financing will be required to advance these plans, we recommend development of a climate fund, which I will come back to in a moment.

Traditional ODA also has a role to play since climate change will impede development efforts, frustrate poverty alleviation programs, and exacerbate migrations from waterlogged, water-scarce or food-scarce regions. We make the case for increasing official development assistance (ODA) to finance adaptation measures.

New technologies are also required for adaptation. Future cropping systems, for example, will have to be more resilient to a variety of stresses to cope with the direct and indirect consequences of climate change.

New centers should be established to address adaptation in agriculture in developing countries, especially by the CGIAR in Africa.

If the world continues on its current energy path, dominated by fossil fuels, energy-related CO2 emissions in 2050 will be two and a half times their current levels. When fully commercialized, existing clean energy technologies can help stabilize emissions. However, reducing global emissions by at least 60% at acceptable costs will require a technology revolution, akin to those in the space and telecommunication sectors.

Unfortunately, investments in both public- and private-sector energy research and development programs have been declining for the last two decades.

We recommend doubling the aggregate amount of public funds devoted to energy R&D to about US$20 billion per year. This is line with the recommendations of the Stern Review.

The formation of a Consultative Group on Clean Energy Research, as suggested by the International Task Force on Global Public Goods, could facilitate international collaboration on the development of a new generation of cleaner, more efficient, and lower-cost technologies and the exchange of information about these technologies.

It is important to all countries that clean energy technologies are made as widely available as possible. It may be beneficial to conduct research and demonstrate technologies in the South. A CGCER could support such research and pay for patents or licensing fees to enable cleaner technologies to be deployed in theSouth.

As I noted earlier, the existing funding sources (for example, the GEF and the multilateral development banks) are too small for the scale of assistance required. They should be strengthened and their resources enhanced.

The costs of adequately addressing the risk of climate change, according to the Stern Review, are of the order of 1% of annual gross world product. Some of that investment will come from redirecting existing flows, and some will be additional. Funds will be required for increased assistance to developing countries for the adoption of energy efficiency and clean energy technologies, and for avoided deforestation. Funds will also be required for greening power sectors, for adaptation, and for increased R&D and deployment in all countries.

The average net public financial flows from all developed countries (including loans) were US$58 billion per year between 1996 and 2005, or about 0.23% of GDP, of which about US$7 billion per year was for energy.

We recommend a climate fund and estimate that about US$50 billion per year will be needed for activities in developing countries in support of a comprehensive climate change agreement. The first phase of such funding could initially be about US$10 billion per year.

The CDM has encountered administrative and technical hurdles. Initial projects have been limited to a few countries and a few gases and have been plagued by bureaucratic procedures, and with little contribution to sustainable development. These weaknesses result because the CDM was created as a project-based instrument; however, the Executive Board recently approved the inclusion of "programmes of activities" in the CDM.

In order to promote policy reform, underwrite technology development, and stimulate investment flows at a scale that is truly transformational, an additional market mechanism must take a sectoral approach.

With its limited time frame, participation, and inadequate provisions for monitoring, the Kyoto Protocol was never seen as a solution to the climate problem. It was meant to be a first step. As we embark upon a more comprehensive and inclusive agreement, we need to build on the experience gained from Kyoto, particularly in international emissions trading.

Above all, we need to build trust between countries at all levels of development and establish an equitable basis and new modalities for genuine international cooperation to address the linked challenges of energy and climate security.

We also need to build on the experience of cities, states, communities, businesses, and individuals who have voluntarily undertaken important steps to address climate change. They have shown that determined action presents substantial opportunities for economic growth and job creation, based on the development and deployment of clean energy technology.

Further information:

• Presentation by Ricardo Lagos: Framework for a New Global Agreement on Climate Change
• www.bmu.de/gleneagles-dialogue