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Getting serious about climate change

By Andrew Hammond

In his landmark state-of-the-union speech on February 12, US President Barack Obama re-affirmed his intention to intensify US efforts to tackle climate change. He laid down a direct challenge to Congress to act with legislation, and emphasised that if this didn't happen his administration would continue to take executive actions "to reduce pollution, prepare our communities for the consequences of climate change and speed the transition to more sustainable sources of energy".

Obama's forceful rhetoric will be welcomed by many across the world, and comes during a period when it may seem hard not to be pessimistic about the global battle to manage the huge risks of climate change. For instance, the most recent UNFCC (United Nations Framework Convention on Climate Change) international summit in Doha, Qatar, in December made only modest progress, despite the fact that evidence mounts that our planet is heating up, and prospects of preventing dangerous climate change—which all countries have agreed should be avoided by limiting warming to no more than 2°C—seem to be receding.

However, far from this being the hopeless situation some believe, Obama's statement of intent underlines a growing possibility that we may potentially be reaching a point when the tide decisively turns on tackling climate change. To be sure, much more needs to be done, but if one takes a step back and examines what is already happening at national and sub-national level in countries right across the world, a relatively positive picture is beginning to emerge.

That is, domestic laws and regulations to address climate change are being passed at an increasing rate—in stark contrast to the pace of progress in international negotiations. In the past year alone, as described in a new report published by GLOBE International, 32 of 33 surveyed countries (which account for over 85 per cent of global GHG emissions), including the United States, have introduced or are progressing significant climate or related legislation and regulation.

This is nothing less than a "game-changing" development. In the last 12 months alone:

• China, after the publication of its 12th five-year plan in 2011, has proceeded with more detailed implementation guidelines, including rules for its emissions trading pilots, progress with drafting its climate change law and publication of an energy white paper. Moreover, at the end of October, sub-national legislation was passed in Shenzhen to tackle climate change—the first such legislation in China.

• Mexico has passed a general law on climate change—a comprehensive legislative framework packaged together with the first Redd+ readiness legislation to tackle deforestation.

• South Korea passed legislation to begin a nationwide emissions trading scheme by 2015.

• South Africa has proposed a carbon tax in its latest budget.

• There has also been some progress in the developed world, as well as in the United States. For instance, the European Union passed a new directive on energy efficiency, and Germany strengthened legislation relating to CCS and energy efficiency.

As these examples underline, it is mainly developing countries—which will provide the motor of global economic growth in coming decades—which are leading this drive. Many are concluding it is in their national interest to reduce greenhouse gas emissions by embracing low-carbon growth and development, and to better prepare for the impact of climate change.

They see that expanding domestic sources of renewable energy not only reduces emissions, but also increases energy security by reducing reliance on imported fossil fuels. Reducing energy demand through greater efficiency reduces costs and increases competitiveness. Improving resilience to the impacts of climate change also makes sound economic sense.

Many governments and companies have recognised that a green race has started, and they are determined to compete. They also acknowledge that, over time, those that produce in "dirty" ways will be increasingly likely to face border adjustment mechanisms which take account of the subsidy associated with their taking advantage of any unpriced pollution.

It follows, therefore, that advancing domestic legislation on climate change—and experiencing the co-benefits of reducing emissions—is a crucial building block to help create the political conditions to enable a comprehensive, global climate agreement to be reached. Domestic laws give clear signals about direction of policy, increasing confidence and reducing uncertainty, particularly for the private sector which can drive low-carbon economic growth.

With negotiations on a post-2020 comprehensive global deal scheduled to conclude in 2015, it is very unlikely that an agreement, with the necessary ambition, will be reached unless more of these domestic frameworks are in place in key countries. Sound domestic actions enhance the prospects of international action, and better international prospects enhance domestic actions.

Given this outlook, and as difficult international negotiations continue post-Doha, a potential danger is that some countries might lower their long-term ambition. At a time when the climate change debate could be undergoing such profound change, this would be ill-timed. Indeed, as in the United States, now is the right time for countries to invest more in tackling climate change, in order to help expedite creation of conditions on the ground that will enable a comprehensive global treaty to be reached.

• Andrew Hammond is an associate partner

at ReputationInc. He was formerly a special

adviser in the government of British prime

minister Tony Blair, and also a geopolitics

consultant at Oxford Analytica.

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