Fwd: Climate Talks Echo 50-Year Bretton Woods Process, Arms Accords

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Climate Talks Echo 50-Year Bretton Woods Process, Arms Accords
2010-11-21 23:01:00.0 GMT

By Alex Morales
Nov. 22 (Bloomberg) -- It took decades for negotiators to
write treaties that curb nuclear warheads and settle trade
disputes between nations, and by that measure, efforts to limit
global warming may just be getting started.
United Nations climate talks starting in Mexico next week
will resemble "sitting in Bretton Woods in 1944," said Harvard
University Environmental Economics Director Robert Stavins,
referring to meetings that devised a new world financial system
and envisioned an agency governing international trade.
"Climate negotiations are going to be an ongoing process,
much like trade talks, not a single task with a clear
endpoint," Stavins said in a telephone interview. "It took 50
years to build the institutions that led to the World Trade
Organization. It wasn't something that was done in a moment."
Momentum, even minimal, is needed to underpin global
carbon-dioxide markets as well as the $5.7 trillion that should
be invested in clean energy projects by 2035, according to
International Energy Agency estimates.
Trading in carbon-dioxide permits, which aims to curb
fossil fuel combustion that releases gases blamed for warming
the planet, will shrink 4 percent this year to $122 billion,
Bloomberg New Energy Finance has forecast,
After the talks failed to produce a treaty in Copenhagen in
December 2009 -- despite the attendance of world leaders
including U.S. President Barack Obama and Chinese Premier Wen
Jiabao -- investors scaled back bets on wind and solar power and
on carbon-reduction technologies. The WilderHill New Energy
Index of 87 companies developing or using low-carbon
technologies has slid about 18 percent this year, erasing $500
billion in market value.

'Signal' for Investors

Investors failed to get a "signal" from Copenhagen that
global rules would favor their investments, Fatih Birol, chief
economist at the IEA, said at a Nov. 11 conference. That "casts
a shadow over clean-energy technology prospects," he said.
"Expectations are incredibly low regarding any kind of
meaningful outcome" this year, said Robert Clover, global head
of clean energy research at HSBC Holdings Plc in London.
"People are looking at the talks to see how they might drive
national policies and regulation."
Prospects were bleak for completing an arms control accord
in 1979 after the Soviet Union invaded Afghanistan. The U.S.
responded by refusing to ratify the second Strategic Arms
Limitation Treaty. President Ronald Reagan withdrew from the
pact in 1986, halting discussions that dated to 1964.
Talks got back on track with the collapse of the Soviet
Union in 1991. Two treaties since then allowed U.S. and Russian
arms inspectors access to each other's nuclear arsenal to verify
reductions in warhead stockpiles. Obama is now trying to push
through Congress a new arms treaty with Russia after the last
one expired in December.

Bretton Woods

The summit in Bretton Woods, New Hampshire, in 1944 set up
the International Monetary Fund and led to the creation of the
World Bank. It envisioned a trade agency but didn't finalize the
charter. It took five more decades of talks to establish the
WTO, which has adjudicated trade disputes between nations since
it opened in 1995.
Global warming talks accelerated in 1992 when the Earth
Summit in Rio de Janeiro set up the United Nations Framework
Convention on Climate Change, which coordinates annual
conferences including last year's Copenhagen summit and this
year's round in Cancun. Now with 194 members, the body agreed in
Kyoto, Japan, in 1997 to limit CO2 output from developed
nations. The U.S. signed the treaty but never ratified it.

'Smaller Pieces'

"We've been at it for 18 years on climate change, but
that's not unique," Duncan Hollis, an associate professor at
Temple University's Beasley School of Law in Philadelphia and
editor of the "Oxford Guide to Treaties" to be published next
year. "Breaking this up into smaller pieces and trying to knock
off one piece at a time is certainly worth trying."
The UN talks seek to curb greenhouse gas emissions to limit
global warming to 2 degrees Celsius (3.6 degrees Fahrenheit).
Envoys have proposed as much as $100 billion a year to aid poor
nations for clean energy and spur low-carbon technologies such
as wind, solar power and electric cars.
When negotiators in Copenhagen fell short of a treaty to
replace Kyoto when its targets expire in 2012, Obama and Wen
were among about 30 leaders that formed the non-binding
Copenhagen Accord. The agreement, now joined by 140 nations,
included non-binding pledges to limit emissions from all the
world's biggest emitters.

'Hole-in One'

"The realization is we can't have a hole-in one, we can't
agree the big deal in one go," Danish Climate and Energy
Minister Lykke Friis said in an interview. "That's not the same
as saying the process is broken. Let's focus on what we can
agree upon and not on what we cannot agree to."
Christiana Figueres, the UN diplomat leading the talks in
Cancun, says she's aiming for progress on a package of measures
covering forest protection, climate aid and technology sharing.
A full-blown treaty isn't on the agenda.
"It is unrealistic to expect governments to move in one
big step toward a legally binding treaty," Figueres said at a
press conference in Bonn on Nov. 15. She told the UN General
Assembly in New York on Nov. 1 that "a silver bullet-solution
to climate change is not an option" and "progress has to be
made one step at a time."
Climate talks may be more complex than Bretton Woods
because they include developing countries such as China, India,
Russia and Brazil -- not just the U.S. and its allies. And the
divisions that prevented an agreement in Copenhagen remain.

U.S. View

The U.S. says it won't sign a treaty unless all major
emitters including developing nations are bound by it. China,
which spews the most greenhouse gases, says it's not ready to
enshrine its domestic goals in international law.
"You cannot build a system premised on the notion that
China should be treated the same as Chad, when China is now the
world's largest emitter," U.S. Special Envoy for Climate Change
Todd Stern said Oct. 8 in a speech at the University of Michigan
Law School in Ann Arbor.
Elections on Nov. 2 that cut the representation of Obama's
Democratic Party in Congress make U.S. action on climate change
even less likely for now. The Paris-based IEA estimates inaction
on climate change since Copenhagen raised the cost of curtailing
carbon emissions by $1 trillion to $18 trillion by 2035.
The Copenhagen pledges may lead to 3 to 3.9 degrees Celsius
of warming by 2100, the Pew Center on Global Climate Change
says. That could lead to sea levels rising more than 2 meters (7
feet), which would submerge much of nations such as the Maldives
and Tuvalu, according to the UN Intergovernmental Panel on
Climate Change's 2007 global warming assessment. Up to 30
percent of species would be in danger of extinction and hundreds
of millions of people would face water shortages, it said.
"We're running out of time," said Alden Meyer, director
of policy at the Cambridge, Massachusetts-based Union of
Concerned Scientists. "The atmosphere doesn't negotiate with

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--With assistance from Kim Chipman in Washington. Editors:
Reed Landberg, Todd White, Peter Langan

To contact the reporter on this story:
Alex Morales in London at +44-20-7330-7718 or

To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or