Celsias attends the Carbon Finance World 2007 Conference

I attended day one of the Carbon Finance World 2007 conference in Chicago today. Attended by a mixture of carbon policymakers, financial services providers, and other professionals in the energy production and carbon mitigation sectors, the conference shows a unique and complicated side of the fight against climate change. For me, the most interesting moment came this morning when Yvo de Boer, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC) spoke. We've mentioned Mr. de Boer before, even criticized him for claiming that rich nations should not have to reduce their own emissions so long as they finance emissions reductions in other nations. However, aside from our qualms with this theory, Mr. de Boer presented a view of the Kyoto Protocol today that was for me, both surprising and interesting.

De Boer claimed that the Kyoto Protocol, which we described briefly here, should be viewed so far as the reverse of Neal Armstrong's famous moon-landing saying. De Boer's new version, "One small step for mankind, one giant leap for man" acknowledges that the actual effects of the Protocol to date have been small. However, he claims, Kyoto remains important because it lays the framework for a post-2012 cap-and-trade regime that really will have the intended effects. This framework is the giant leap that man has taken in preparing for the real effort to fight climate change. Remember, the second phase of Kyoto starts January 1, 2008 and runs until December 31, 2012. There are currently no plans beyond 2012.

Yvo de Boer, head of the UN Framework Convention on Climate Change (UNFCCC)

I wasn't surprised so much that de Boer admitted the lack of intended environmental effects resulting from Kyoto so far. However, de Boer seemed to be giving up on the next phase (2008-2012) as well, and concerned only with the period for which we currently have nothing planned (2012-infinity). I asked de Boer what the benefits of Kyoto would be between 2008 and 2012, if any. His response surprised me further. He claimed that it is important for developed countries to meet their Kyoto targets in the meantime because it sends an important political message to the developing world. By showing that they take their own reductions seriously, developed countries eliminate some of the concern from the developing world that they are being forced to take on the global issue themselves.

This seems to be in contrast with de Boer's previous statements that developed countries should be able to pay developing countries to reduce pollution for them. So which is it? Should developed countries meet their own goals in order to "prove" that they take their own emissions reductions seriously, or should they not worry about domestic reductions and focus entirely on financing developing nation-projects? I would personally respond that a mixture would be best. The purpose of carbon trading with developing nations is to make changes where it is truly infeasible to do so domestically. De Boer might agree with me, but that viewpoint is not emerging so clearly from his speeches.

Bali and the tipping point of carbon trading

Another interesting portion of de Boer's talk revolved around the upcoming United Nations Climate Change Conference that will be taking place this December in Bali, Indonesia. According to de Boer, the "Road to Bali" is the most important time in history for a global climate change regime. De Boer claims we are in a unique period in which a number of factors have converged to force international cooperation. First, the Intergovernmental Panel on Climate Change (IPCC), the largest and most respected international scientific body examining climate change, has recently published its report describing the certainty of humans' responsibility for climate change. Second, United States President Bush has (finally) admitted publicly in his 2007 State of the Union address that climate change is a serious issue. Third, the European Union has committed itself to at 20% reduction in greenhouse gases, signaling its intentions as described above. Finally, a number of developing countries such as China and Mexico have set ambitious goals for themselves to reduce emissions. All these factors make it critical for formal negotiations and a strong international agreement to emerge from the Bali conference.

De Boer seems to be saying that we have reached something of a "tipping point" for a global climate change accord. A "tipping point", as described by Malcolm Gladwell in his book of the same title, is "the name that is given to the moment when a virus reaches critical mass." Joel Makower argues in his wonderful blog that we have not yet reached such a tipping point for green business. In other words, green business hasn't yet become an epidemic, so to speak. Rather, it is still an early-stage virus. Have we, however, reached a tipping point in international negotiations? De Boer hopes so, because he believes that if nothing were to come of this year's Bali conference, it might be another four years or more before another situation like this arises. Those are four years we don't have to spare.

While I'm still a little bit confused about de Boer's rhetoric on the point of the Kyoto Protocol, I do hope he's right that we've reached a tipping point for international negotiations. Whether or not you consider cap-and-trade to be the best solution, it is hard to deny that something needs to be done on the global scale if we want to seriously attack climate change. So here's to hoping on the "Road to Bali."