UN climate change talks could face a clarity ‘time bomb’, says KPMG

The wording of the last international climate agreement has left the UN process with a potential “time bomb”, according to a new paper from KPMG International.

Yvo de Boer, KPMG’s Special Advisor on Climate Change & Sustainability, warned that negotiating a global deal is a slow, frustrating business.

“While the last COP at Durban made great progress towards a new mandate, it left a time bomb in the form of the wording of the agreement, which calls for ‘a process to develop a protocol, another legal instrument or an agreed outcome with legal force’. No one is quite sure what this means and the lack of clarity is sure to muddy the negotiating process,” said Mr. de Boer.

KPMG’s Sustainable Insight paper, entitled Will Doha deliver a deal?, predicts problems with the commitment made at the 2011 UN conference in Durban, South Africa. Focusing on implications for the business community, the paper looks the next round of UN climate talks, COP 18, which take place in Doha, Qatar from 26 November to 7 December 2012.

Mr. de Boer said for the agreement to succeed, the benefits of green growth need to be clearer to everyone.

“Political consensus is important to building a strategy that will survive electoral changes, but the business community must also play a central role. The private sector is going to do most of the heavy lifting when it comes to green growth, so it is important that it makes the case effectively for low-carbon investments,” said de Boer.

The paper identifies three important gaps KPMG says the 2012 climate talks must address to address the concerns of business:

• The Kyoto Gap: the fate of the Kyoto Protocol is still unclear after being abandoned by Japan, Russia, Canada and New Zealand. The treaty was never ratified by the US.

“Agreement on a new commitment period matters because it gives business certainty about the direction of travel for policy in the long term. Knowing that governments have committed to carbon reduction targets gives companies the confidence to take their own actions,” said de Boer.

• The Ambition Gap: it is clear that current international commitments to reduce carbon emissions are insufficient to restrict average temperature rises to 2 degrees Celsius, the maximum “safe” rise recommended by most climate scientists.  Businesses will be watching the outcome of Doha closely to see what new commitments emerge, whether they will mean companies are required to take on more stringent targets and whether new opportunities in low-carbon sectors will be created

• The Finance Gap: agreement was reached in Durban on the Green Climate Fund to support low carbon transition in developing countries, but negotiators have only just agreed where its headquarters will be – in South Korea – and it is still not clear where the USD 100 billion a year will come from.

Despite the challenges the process faces, de Boer said: “When you consider that last year the entire structure of multilateral climate negotiations was under threat, the fact that we are now talking about filling the gaps in the structure is a sign of real progress.”

Mr. de Boer led the UN climate process before joining KPMG International in 2010.