At the Copenhagen Climate Change Conference in December, nations “took note” of the Copenhagen Accord; and were asked to submit their 2020 greenhouse gas reduction target by January 31, 2010 as the first step in a year-long process to transform the Accord into a comprehensive and legally binding agreement. As of February 3rd, over 80 countries responsible for over 80% of all man-made GHG emissions have reported. (note: this 80% coverage compares to the 30% of total emissions generated by those nations with Kyoto Accord obligations). Most importantly, all of the 39 countries (the 27 members of the EU and 12 other large nations, including Canada) that have been participating directly or indirectly in the parallel Major Economies Forum have now registered their 2020 GHG targets, with the developed MEF nations seeking absolute reductions and the developing MEF nations seeking reduced carbon intensity per economic unit. (note: if one treats the EU as one jurisdiction, the 20 largest emitters are responsible for 80% of all man-made GHG emissions.)

To date, one nation (Cuba) has informed the United Nations that it will not be a party to the Copenhagen Accord. Cuba was one of the five nations that openly dissented and therefore prevented the adoption of the Copenhagen Accord by consensus, (the other vocal dissenters being Venezuela, Bolivia, Nicaragua and Sudan).

The US has committed to make an economy-wide greenhouse gas reduction from 2005 levels “in the range of 17% in conformity with anticipated US energy and climate legislation, recognizing that the final target will be reported in light of enacted legislation”. The US also noted that the pathway set forth in current legislation envisaged “a 30% reduction in 2025 and a 42% reduction in 2030, in line with the goal to reduce emissions by 83% by 2050”. (note: the initial target proposed by Congressmen Waxman and Markey of “20% less than 2005” was reduced to 17% during the House legislative process; this figure then becoming the starting point in the ongoing US Senate deliberations.)

The Government of Canada has stated its policy will be to match American efforts going forward in order to avoid arbitrary distortions in the integrated North American economy. Accordingly, Canada has changed its target from “20% less than 2006 levels” to “17% less than 2005 levels”, with the caveat that the target “would be aligned with the final economy-wide emissions target of the United States in enacted legislation”.

If one assumes that enacted US climate change legislation will continue to include targets for the period beyond 2020, and that the Canadian principle of comparable efforts with the US will apply to the entire 2010-2050 period, the new Canadian target constitutes a reduction in Canada’s effort for the period until 2020, but an increase in the stringency of the Canadian target into the longer term. As a practical matter, the actions that must be taken in the near term to achieve the 2020 target are identical to the old - it is merely the odds of success that have (slightly) changed. This shift is also consistent with the practical reality that the development and commercialization of new clean technologies and the installation of new clean energy infrastructure is more likely to produce reductions during the 2020’s, rather than by 2020.

Other targets of greatest relevance and interest to Canada include those of China, (which has already surpassed the US as the world’s largest emitter), NAFTA partner Mexico, Australia (like Canada, a major resource exporter and carbon-intensive economy) and the EU, where Canada is engaged in comprehensive trade and investment negotiations. China has indicated it will “endeavour” to reduce the carbon intensity of its economy in 2020 by 40-45% from 2005 levels; and that this target will be binding under domestic legislation and is not conditional on the commitments of other nations. Mexico’s 2020 target is to reduce its 2005 level of carbon intensity by 50%.

Australia has set an unconditional 2020 target of 5% less than 2000 levels, with escalating conditional targets of 15% and 25% relative to 2000 levels. (note: an Australian target of 15% less than 2000 levels is roughly equivalent to Canada’s Copenhagen pledge).

The EU-27 nations have now signed on to the Copenhagen Accord with a stated 2020 target of 20% less than 1990 levels. The combined emissions of the EU-27, which totalled 5748 Mt in 1990, fell nearly 6% in the period 1990-1997 to 5434 Mt. due primarily to the shutdown of the old communist era facilities. Annual emissions have remained essentially flat in the years since the signing of the Kyoto Accord, totalling 5446 Mt. In 2005. As a result, the EU-27’s 2020 target of “20% less than 1990” levels translates into “15% less than 2005 levels”, or approximately 90% of the North American effort going forward.

It is not widely recognized that the respective commitments of the major developed and developing nations bear a striking resemblance to the positions recommended in the late 2009 report of the International Energy Agency entitled, “How the Energy Sector Can Deliver on a Climate Agreement in Copenhagen”. (Formed in 1974, the Paris-based IEA provides policy advice to 28 of the 39 MEF nations, including Canada)

The 2009 IEA report was based on three key concepts. First, that all nations (both developed and developing) need to participate in the GHG reduction process in a meaningful way, while respecting their “common but differentiated responsibilities”. Second, that creating a market price for carbon is important, but insufficient. Immediate and substantial investment in energy technology is also critical to optimize the chance of timely innovations. Third, stabilizing the level of emissions in the atmosphere is a long-term objective, with 2030 as important as 2020, and both less important than 2050.

The IEA projects that developed nations can achieve by 2030 the outcome that environmental activists desire in 2020, without compromising the long-term 2050 objective. Through the implementation of mitigation measures, the IEA believes developed nations can generate a reduction from pre-recession (2007) emission levels by 2020 in the range of 17% (effectively the current North American target). And by commencing immediately a substantial investment program in clean technologies and clean energy supply, more reductions can occur during the 2020’s, so that 2030 GHG levels will be 40% less than 2007 levels (comparable to the pathway in the proposed US climate change legislation).

The IEA also calls on the major emitters in the developing world – China, India, Brazil etc– to commence immediately a complementary set of policies. Given their different circumstances, the IEA envisaged they will initially adopt carbon intensity - not absolute reduction - targets until 2020, when they would then join the nations of the developed world in a cap and trade system driving absolute reductions. The result would be emissions growth in these countries that would peak in 2020, with annual emissions declining throughout the 2020’s.

It can be seen that the January commitments of the major developed and developing countries essentially follow the IEA pathway. It remains to be seen whether the “voluntary” actions planned by China to reduce the carbon intensity of the Chinese economy will be sufficient to satisfy a majority in the US Senate, without resort to controversial carbon border adjustment mechanisms that could seriously damage “G-2” relations.

Also of interest: Post-Copenhagen Climate Change Update - A Special Gowlings Report, January 11, 2010.