New Delhi: Former chief economist of the World Bank (2000-03) Nicholas Stern is also an accomplished climate change economist—he authored the Stern Review on the Economics of Climate Change during his stint as adviser to the UK government between 2005 and 2007. Stern, who has taught at the Indian Statistical Institute in Kolkata, is a veteran India hand and has been involved with some seminal research work on agriculture in the country. Stern has been part of the debate on climate change, which has now entered a critical phase with less than a month to go before a decisive summit opens in Copenhagen. During his visit to India earlier this week, he spoke to Mint, highlighting the fact that Copenhagen may throw up only a political deal; a positive shift in the global perception of India and the changes in its negotiating stance; and how the Obama presidency has improved chances of the US being part of a new climate deal. Edited excerpts:
Role recognition: Nicholas Stern says the perception of India as being difficult and intransigent has changed; now it’s being seen as constructive ‘and that wasn’t true about a year ago’. Ramesh Pathania / Mint
What are your expectations from Copenhagen?
My hopes from Copenhagen are a strong political deal. I think it is now recognized that you will not get a formal treaty at Copenhagen; in some sense that makes it easier to focus on structure. And, if we get a good structure to begin with, then the details can be worked out. It means clear targets for the coming decade, 2020, 2030 and 2050 for the world as a whole; clear reductions for rich countries—at least 80% by 2050 with a credible path from here to there. That would give an overall framework with global reductions by strong, rich countries. Then the other element is finance. And, I think we should be looking for at least $100 billion (Rs4.65 trillion) per annum from rich countries to poor countries by 2020. But even more important is the clarity on at least $50 billion per annum from rich countries to poor countries by 2015; because, I don’t think the higher figure by 2020 is credible without clarity for the nearer date. But also, even more important, developing countries that are putting together climate change action plans have to feel complimented that they have got the right kind of support.
This seems very optimistic given the signals coming out from key countries. We also do not see any preparations that indicate the world’s political leadership will be present in Copenhagen?
I said that this is what I hoped. Now that means we must have clarity about what we are working towards; to be optimistic or pessimistic is irrelevant at this stage. What really matters is having clarity about what would be a good outcome and asking what would be the best method to work towards that. Only recently has it become clear that the political agreement is an essential agreement at Copenhagen. And, now, governments around the world are talking as to what it should be. There was a discussion at the G-20 meeting of finance ministers over this weekend; and, really for the first time they started to get to grips with the problem. They did not come up with final agreements, but I suspect that’s because that has to be seen in the overall context of what a deal might look like; you can’t just pick the bits. …I think there is an opportunity now that we are clear that we are not going to get a treaty and (instead) focusing on the key elements; asking what the key elements are. I think there is a good chance that we will make progress on those key elements and that the political leaders do and will recognize that their presence is very important. The decision of whether to go will be taken quite late in the day.
How do you perceive the recent signals out of India with respect to its stand on climate change? Environment minister Jairam Ramesh seems to be articulating a new position.
Over this last year, the international perception of India has changed from a broad perception—never my own—that India was being difficult and intransigent. That has changed. India is now seen as challenging, making strong arguments—particularly about the importance of combining the action on climate change and overcoming poverty, but at the same time being constructive. And, India is seen as recognizing the importance of wanting an agreement, trying to work out what can be done. That, I think, is now the correct impression of what India is doing. I think we should recognize that India is now seen as a very constructive partner and that was not true about a year ago.
Is a meaningful deal possible without the Americans coming on board?
It is not possible to have a political deal without the US. They roughly equal China as the world’s biggest emitter by country; they are very strong in technology and would have to be a major player in finance. What you have in the US is a completely different administration at the federal level from last year; it is night and day in terms of approach to climate change. And, there is a strong willingness to engage, strong recognition of this problem with overcoming poverty—which most people will recognize is the defining challenge of this century.
Is there a need to revisit the Kyoto Protocol?
People mean different things when they say revisit the Kyoto Protocol. I would prefer to talk about the Bali road map; which, is what was agreed two years ago. There the principles of Annex-I and non-Annex-I countries were reaffirmed at least for a while. What does that mean: There is a group of countries, mainly rich countries, who should be taking on clear binding commitments through reductions; and, (the others, the) non-Annex-I countries should be taking strong action but with no strong binding commitments on emissions. I think that distinction is necessary for a while—meaning five or 10 years. And, mostly I think that’s what the poorer countries refer to when they are talking about Kyoto Protocol and Bali Action Plan. I think that distinction does matter. But I think we can look forward now and try to, in at least two ways, be quantitative about some targets for developing countries. Let me give you an example: China is talking now about targets for emissions; that is more specific. And I think those targets are likely to be strong; I have been talking to some people in China who are working on the 12th five-year plan that begins in 2011. That is for China to work out... That is one way in which I think we can move forward—not just generalized climate change action plan, but with climate change action plans with specific policies and some internal targets that may not be an overall emission target—that is for the individual countries to work out. China is an example; Brazil is another—a week ago President Lula da Silva said 80% reduction in deforestation by 2020; that’s a clear specific target where Brazil is adopting and looking for support ...The second thing is to start discussing circumstances in which developing countries could begin the process of taking on explicit targets. My view is that there will be strong conditions that developing countries could place. One is real progress in rich countries’ emission reduction targets. The second is promised support in finance. And the third is technology sharing. I think it is now possible to discuss those circumstances; what I prescribe is preserving the Bali road map, but moving beyond the very vague version to greater specificity. And I see that a way forward that could find an agreement.
There is a fear that the UNFCCC (United Nations Framework Convention on Climate Change) is getting bypassed with the emergence of alternative forums such as G-20. Do you share this perception?
I think we have to recognize that there is a basic structure, which is UNFCCC, but also with nearly 200 member countries it is quite difficult to make progress. We have to also recognize the biggest 20 emitters are responsible for 80% or more of the emissions; so from the point of view of responsibility of emissions I think the G-20 has a role to play. That does not mean it does not have a dominant role to play. I think the right place for the decisions has to be UNFCCC.
On the issue of technology sharing, wouldn’t intellectual property (IP) be a key stumbling block?
I think IP is overrated here.
Why do you feel so?
If you think of low-emission cars, these are questions of engineering skill, quality control, production, management; and, if you think of carbon capturing and storage that is quite similar in some respects in the techniques involved in the oil industry—like geology, finance, investment, management, organization. Now in the car industry and oil industry there will be a few issues of patents; but are those industries driven by patents? No. Not in the same way as the drug industry...so my first point is that IP is only a part of the story. I think technology sharing and sharing of know-how is very important and I wouldn’t narrow it down to IP. To be sure that it should not cause a problem; some funding should be designated to buy out IP where it turns out to be an issue would be a good idea. But, it should be placed in a broader issue of technology sharing, which I think is extremely important.