As Aaron noted earlier,  the Guardian reported on a leaked Danish draft agreement that has seriously miffed the developing world. This draft, being called the 'Danish text', squarely ignores some of the most frequently quoted demands of the developing countries and would therefore be unacceptable to the G77.

The draft was circulated among some of the key countries (both developed and developing) last week and leaders from developing countries have spoken vociferously in public against it. A G-77 negotiator from the African bloc said, “In effect, the Danish proposal amends the whole UNFCCC (United Nations Framework Convention on Climate Change) balance of obligations and could eventually kill Kyoto (Protocol). The draft creates obligations for developing nations as well for mitigation and adaptation,”

The draft was made on 27^th November and it is not known what the latest version looks like. But most of the fundamental principles would probably still remain.

With the developing country negotiators miffed with the developed nations, day two in Copenhagen suddenly looked more like Barcelona, when developing countries led by Australia and Canada first proposed scrapping the Kyoto Protocol.

On Sunday the BASIC bloc, consisting of Brazil, South Africa, India and China, responded to the ‘Danish text’ by releasing an alternate proposal to the G77 in hopes for drafting a combined proposal from the entire developing countries bloc and thus sharing a single negotiating position. Here are quick summaries of both the proposals that highlight their differences.

The Danish text:

-A new and alternate framework must be agreed upon instead of the Kyoto Protocol.

-The alternate framework would elicit from major developing countries, emission reduction targets and contribution to the climate change fund, according to their capacities. It proposes setting future CO2 peaking year for the developing countries and appointing World Bank as the institution to handle climate change funds.

-The mitigation targets for developed countries have only been represented as ‘X’ but aims to limit temperature increase to 2 degrees.

-All climate change mitigation actions by countries would be subject to an MRV (measure, report and verify) mechanism.

-According to analysts, the agreement would continue the inequity that exists between the rich and poor countries by limiting per-capita CO2 emissions of developing country citizens to 1.4 tons per year compared to 2.67 tons for a developed country citizen. It also sets a short term target of creating a USD 10bn annual fund for climate change adaptation and mitigation in ‘most vulnerable nations’.

-The text also suggests creation of a ‘most vulnerable nations’ category for the developing countries, all of which are currently referred as the non-Annex I parties by the UNFCCC.

The BASIC proposal:

-All climate change negotiations must be held under the UNFCCC framework and the Kyoto Protocol or Bali Action Plan must not be blurred.

-The developed countries will be expected to take the lead in reducing emissions and funding developing countries to adapt to climate change. The funding would have to be new and additional and not sourced from previously pledged aid funds.

-It also makes it abundantly clear that developing countries should not have to accept binding emission cuts or specify a peaking year for CO2.

-MRV (measure, report and verify) mechanism would be acceptable only for actions supported by finance or technology by developed countries.  Unsupported actions would be audited by the respective country.

The Danish text shows that perhaps not much has been achieved since Barcelona to reach a final deal. With a rift growing in the G77 as well over the BASIC proposal, there is a real danger for the Copenhagen conference to derail as disagreements on fundamental principles continue to be unresolved.

The Guardian recently revealed contents of secret documents that show EU plans to use existing aid money to finance developing countries to reduce their emissions and adapt to climate change. This latest stance is in opposition to a key demand from developing countries and is a major threat to the success of negotiations starting next week.

One of the resounding demands from developing countries (non-annex I parties in UN jargon) is for new and additional funds for funding their adaptation to climate change. Under the existing United Nations Framework for Climate Change (UNFCCC), all climate change adaptation and emission reduction actions that happen in developing countries have to be funded fully by the richest of developed nations (annex II parties).

Developing countries estimate the amount of financing required to be at least USD 400bn annually, approximately 1% of cumulative GDP of the annex II parties. Keeping in mind the principle of historical responsibility, the developing countries further demand this finance to be treated as ‘entitlement’ and not ‘aid’.

The documents show that EU finds the requirement of financing to be ‘new and additional’ as unacceptable. Thus the pool originally pledged for development aid will be diverted to fund climate change actions. This would no doubt be a deal breaker for the poor countries who depend on the crucial aid to fund programs for hunger, poverty, health and basic infrastructure.

Presently the EU estimates that USD 150bn might be committed annually at the COP15, although the division of burden among the developed countries is not clear. With the developed countries still recovering from the recession, their unwillingness to pledge more, though understandable, is going to be a major contentious issue in Copenhagen.

Last week Gordon Brown proposed a new USD 10bn climate change fund for developing countries amidst much fanfare, but even this money will come from other aid programs. This is a contradiction to UK’s previous statements calling for additional climate change financing.

Diverting development aid is counterintuitive because climate change exacerbates the very issues that the development programs target. Poverty, disease and hunger will only increase as the world becomes warmer. Vulnerability of the poor citizens is high especially because of their fragile economic and social conditions, the very things that development programs aim to improve.

The 50 nation strong African Union has already threatened not to sign any deal that will decrease their aid. As urgent it is to act on reducing emissions, development problems are undoubtedly more urgent. It would be infinitely inhuman and immoral to let people die of hunger while the money is used to fund expensive renewable energy or energy efficiency projects in an effort to reduce emissions.

With such an EU stance, achieving the voluntary pledges of emissions cut by developing countries such as Indonesia, Brazil, India and China seems improbable because they’ve clearly stated all their reductions had to be financed by developed nations.

Under the Kyoto Protocol developing nations are expected to make submissions called as NAMAs (Nationally Appropriate Mitigation Actions) which outline actions that will tilt their economies away from an emissions intensive growth path. All the outlined actions are to be financed fully by developed nations because a key principle recognizes that the 'economic and social development and poverty eradication are the first and overriding priorities of the developing nation parties'.

This principle treats emissions reduction and development as two mutually exclusive ambitions and assumes that any expenditure of a developing nation on decreasing emissions would lead be a diversion from expenditure on economic and social development.

But that is not always the case.

India faces the formidable challenges of inclusive growth and sustainable development. Nearly 500 million Indians have no access to an electric grid and connecting them to the grid is a major developmental challenge being tackled by the government. A key strategy should be promoting private sector investment in decentralized electricity generation from renewable energy in the far flung rural areas. This would add millions of people without a carbon footprint to the grid and jumpstart local economies. Quite a few solar lighting companies are already trying to provide low cost lighting options to the rural citizens, but the present incentives and subsidies are just not attractive enough for electricity generation projects.

The dual goals of improving energy security and addressing climate change are not irreconcilable: achieve adequate, dependable and economical energy supply for India while decreasing emissions of greenhouse gases into the atmosphere. Decreasing our dependence on import of coal and oil- our primary energy sources- by replacing them with scalable low carbon sources like renewable energy would enhance energy security. India currently imports 70% of its oil The Energy Research Institute predicts that by 2021 our import dependency will be 81% in a BAU scenario which would rise to 90% by 2031. As the recent Iran developments show, energy security is a major national concern especially with mounting Chinese competition for oil.

Indian cities are straining under problems of congestion, safety and pollution in transportation. Simply introducing fuel efficiency standards and improving public transport by introducing bus lanes or rapid transit systems and funding this by increasing taxation of personal vehicles, would decrease the problems. Currently the major Indian public transport is the bus system, which is getting crushed under the rapidly growing demand. TERI and IEA reports show that India can achieve as much as 10% savings in 2030 by introducing CNG in commercial vehicles, fuel economy standards and improving the public transport sector.

Similarly, enforcing building efficiency standards and electrical appliance standards would decrease electricity consumption and ease the pressure on our grids. The demand for electrical appliances in India is nowhere near the developed world but with the market is set to explode with increasing urban wealth. All Indian cities suffer from power deficits and unreliable electricity because of which most commercial buildings have standby generators that run on diesel.

The developing world needs to start taking steps to make structural shifts in their economies to puruse low carbon growth in the future and these steps do not have to be motivated solely by an interest to reduce emissions.

Image: Flickr