Climate Change Comes of Age: Reflections of the 15th Conference of the Parties, Copenhagen 2009

Forty-five thousand people descended on the fifteen thousand person, Bella Center in Copenhagen in early December to participate in the COP15, the UN’s Climate Change Summit. A logistical nightmare on the outside; needless to say, not all the pre-registered and credentialed attendees got into the venue. After standing in line in snow and subfreezing temperatures for 13 hours over two days, I was one of the lucky ones who got in. A failed result on the inside; the acknowledgment of the creation of the non-binding, BASIC Copenhagen Accord. A step forward…yes, progress…yes, but not what the, perhaps unachievable, pre-conference rhetoric called for. The conference was unprecedented in many ways. Every one of the 192 UN member states was represented at the meeting, which was attended 119 heads of state, the largest such gathering outside of the UN’s New York City headquarters. In many respects, this was the “coming of age” event for climate change on the global stage. What follow are highlights of my personal thoughts and reflections from participating in this amazing event and what lies ahead:

1. What happened in Copenhagen was a failure of the process, not a lack of commitment by the Parties.
   
   Attempting to create a binding treaty of this complexity with unanimous vote of 192 highly diverse members is challenging in the face of a clear and present threat, impossible on a complex issue such a climate change. First, look for the structure to evolve toward that of the WTO & WHO, smaller consensus-based subgroup, with clear voting rules and the focus to be sharper on the development of the framework of goals, monitoring, verification and enforcement policies. Second, look for increased emphasis on building financial, intellectual resources and knowledge sharing capabilities to effectively and equitably deal with climate change as a “commons” problem. There’s a big role for business schools in this arena.
   
2. COP15 was more about development than about climate change.
   
   Several countries, particularly poor low-lying or drought-stricken countries are feeling the effects of climate change now and are intensely focused on the CO2 emissions issue. For most others, the fundamental discussions in Copenhagen always revolved around questions of economics. How could development nations balance their responsibilities while protecting job and economics competitiveness? How can poor countries protect financial subsidies promised by developed countries in Kyoto and Bali? How do fast growing emerging economies minimize restrictions and continue to grow? If Copenhagen taught me anything, it taught me that economics and climate charge are even more inextricably interwoven than I have understood in the past. All of which is context for business.
   
3. Sub-national regions step into the spotlight.
   
   Arnold Schwarzenegger generated more buzz than Al Gore. Schwarzenegger along with Jose Serra Mayor of Sao Paulo spoke of the future and how sub-nationals regions such as California, Sao Paolo and others are paving the way toward green economies that are delivering both economic growth and reduced environmental impacts in advance of national initiatives. Yes, an emotional story of hope and promise, Arnold never the less spoke of actions being taken, results being delivered now and path for moving forward. Given, the outcome of COP15 and the time it will take to move to the next step, look for the groups to become immediately more active taking action on their own.
   
4. Climate Change involves politics, get used to it.
   
   Much of the world looks to the U.S. for leadership and to take a leadership role, not because it is the biggest, the most powerful or bears the greatest responsibility, but because it is one to the few nations that can and historically its record of success if pretty good. As the World looks to the United States for leadership, transparency is critical, such that its intentions and actions are clear and coherent. What others must keep in mind when looking to the U.S. for leadership is that our leaders in the Executive Branch much work with the Legislature and within the Constitution when making promises and commitments to its nation partners. This is the political process. It requires procedure and must follow protocol to be effective, and must ultimately answer to the electorate. This is true in many of the other 192 countries that have effective, representative government.
   
5. China came to play
   
   Much has been made of China’s role in the negotiations in Copenhagen and only those close to the discussions really know what went on behinds closed doors. That said, let there be no doubt, China came to play. Flexing its political and economic muscles on the world stage, China firmly established that the climate change negotiations are in integral part of an overall strategy to gain the leadership position for the coming Low Carbon Economy. Game on.
   
6. The Elephant in the Room
   
   Battling climate change is a global challenge where technology will play a central role, in many ways analogous to that of vaccines and pharmaceuticals in fight for global health. Most fundamental research and technology development will occur in the developed world with a need to be transferred and deployed, whether in its original or locally modified form, in many third world countries. As with the intellectual property issues of pharmaceuticals in global trade environments, I expected to learn about Intellectual Property Rights (IPR) issues being central to the discussion in Copenhagen.
   
   While IPR was not a prominent theme of the week and language was not explicitly included in the Copenhagen Accord IPR is the elephant in the room. Moving forward beyond Copenhagen IPR solutions could follow a number of paths ranging from; developed countries having no patent protection on green technology, to setting up a patent pools for green technology, to ensuring that developing countries can make full use of the flexibilities found in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) - including compulsory licensing - and cooperation on future research and development of green technology. Stay tuned.
   
   7. For Want of a Price
   
   Governments want it. Economists want it. Regulators wanted it. Investors want it. Industry wants it. NGOs want it. What is it? Honest, fully–cost pricing, where environmental costs (carbon emissions) are incorporated in product pricing. Copenhagen didn’t provide it. Without a regulatory framework in place and resulting price set for carbon emissions, market forces cannot be leveraged to address these challenges on a universal basis. While pricing was not to be and should not be set in a forum such as the UNFCC, the failure to achieve a binding agreement puts the carbon markets into limbo for at least another year, until COP16 in Mexico.

Climate change came of age in Copenhagen, but much work remains to be done. Research-oriented business schools in large universities, such as Boston University, are in a unique position to participation in the coming transformation to a sustainable economy. Not only will this experience find its way directly into my teaching this spring and it also shines a light on emerging field, rich with research opportunities and new curriculum development in areas such as, of policy, economics, finance, operations, innovation and technology commercialization, while shaping a vision of the future an the role academic institutions will play in the development of the sustainable economy.