Can the North and South get in step?

While industrial nations have been dragging their feet, poor nations have been learning moves that will spur their development while countering climate change. But to pick up the pace, they'll need a helping hand - not finger-pointing - from their rich partners in the North.

Climate diplomacy took a David-and-Goliath twist in the closing days of the Kyoto summit last December. With the protocol negotiations teetering on the verge of collapse, U.S. Vice President Al Gore flew to Japan to address the historic gathering. Expectations were high that Gore, among the first to bring climate change into the political arena, would break the deadlock.

But Kinza Clodumar, president of the Republic of Nauru, outranked the vice president and was to speak first. His colorful robe bobbing in a sea of surrounding dark suits, Clodumar described a frightening future for his homeland - a tiny coral atoll island in the South Pacific that scientists believe is one of the nations most vulnerable to rising seas in a changing climate. Without immediate action by the industrial countries to curb their carbon output, he warned, Nauru will face "a terrifying, rising flood of biblical proportions." To allow the "willful destruction of entire countries and cultures," he argued, "would represent an unspeakable crime against humanity."

The Pacific Islander reserved special criticism for the world's top greenhouse gas emitter, urging Gore to abandon his government's hard-line position in the talks. "No nation has the right to place its own, misconstrued national interest before the physical and cultural survival of whole countries. The crime is cultural genocide; it must not be tolerated by the family of nations."

Clodumar's confrontation with Gore underscores an important trend in the climate debate over the last decade: Southern countries are growing increasingly assertive in challenging the sluggish steps of their more industrial neighbors in the North. While public attention has to date focused on the actions - and inaction - of industrial nations, developing countries have taken prominent roles in climate negotiations. Representing four-fifths of humanity, developing nations today comprise more than 80 percent of the signatories to the first international accord on climate change, the 1992 Rio treaty, and more than half of those to the 1997 Kyoto Protocol.

However, this greater Southern involvement in efforts to stave off global warming has been endangered in the past year by aggressive U.S. posturing and demands for additional commitments from developing countries to address their emissions. In July 1997, the U.S. Senate passed a resolution threatening to withhold support for any treaty that did not require developing countries to agree to legally binding commitments within the same time period as industrial nations. This resolution isolated the United States from the rest of the world, and made for strained North-South relations before and during the Kyoto negotiations. A subsequent U.S. State Department "diplomatic full court press" to achieve the "meaningful participation of key developing countries" so far has done little but draw fouls.

Despite their questionable intentions and poor timing, the awkward U.S. overtures to the South have illuminated a major challenge of the post-Kyoto debate: that of enabling both developing and industrial nations to play fair and equitable roles in the global effort to reduce greenhouse gas emissions. This challenge need not be framed in the antagonistic manner of the moment. Instead, the now-contentious "developing country issue" can be reframed and worked out in ways that will provide economic and environmental benefits for both North and South, and help stabilize the Earth's climate as well.

THE LOW END OF THE BOAT

For small island inhabitants, paradise is being stolen away by the ocean swelling of the last century, which scientists estimate has raised sea levels more than 18 centimeters. Between Tuvalu and the Bahamas, island elders speak of shrinking shorelines while scientists document other sea-level rise manifestations - erosion, inundation, salinization of freshwater supplies, property damages, lost tourism - with unusual frequency. Explained a Fiji hotel manager to the Christian Science Monitor in July, "I never believed in global warming before. Now I do because the tides flood the land not twice a year as before, but at any time." Should sea level rise another meter over the next century, as scientists project, several of these islands could be literally erased from world maps. Island cultures, bound to their homes for centuries, face the devastating prospect of forced migration as their land vanishes. Jorelik Tibon, the environment agency manager of the Marshall Islands, says that the country - a scattering of low-lying coral atolls - is at risk of completely disappearing: "Sea-level rise is something so horrible here that people just don't want to think about it, especially since there's nothing they can do to stop it."

Mass exodus is already a grim reality for poor populations along low-lying coasts, who face rising seas in concert with another signature of climate change: more frequent and extreme weather events. September's submersion of two-thirds of Bangladesh - the worst deluge in the country's history, resulting from record-long monsoon rains - left 21 million homeless. Yet scientists project that 70 million people will eventually be displaced as 18 percent of Bangladesh's land area is expected to be lost as the coast is further inundated. Hundreds of millions living in river basins face similar risks, like the 56 million refugees from August's deluge in China's Yangtze River basin - that nation's worst flooding in 44 years.

Like China, many developing nations occupy arid and semi-arid regions, making them particularly prone to experience the climate variables of drought, floods, fire, tropical disease, and heat waves. This is overwhelmingly revealed in a review of the past year's news headlines: forest fires and drought in Indonesia, Brazil, and Mexico; floods, famine, and fevers in Africa; dry spells and torrential rains in India; heatwaves and water shortages in the Middle East; floods, drought, and and cholera in Latin America. Many of these situations persisted, or even worsened, well after the highly publicized El Nino weather phenomenon ended. For example, after El Nino Mexico's prolonged drought - the worst in 70 years - was followed by the country's most severe flooding in a century.

Industrial nations also face grave impacts: several harbor densely populated and highly vulnerable coasts; the ocean currents that warm Europe could halt, ushering in a localized ice age; severe droughts could dry up agriculture in the breadbasket of the U.S. Midwest. But a hotter and more intensely wet and dry planet will be most unkind to the nearly 5 billion of its poorer inhabitants - particularly the 1.3 billion mired in extreme poverty - who are already confronted with a daunting array of environmental pressures from urban air pollution to land degradation to water pollution.

The developing South, in other words, is faced with double jeopardy in the climate gamble, being by virtue of geography and economic conditions more susceptible to the impacts and less able to adapt to them. The U.N.'s team of experts on climate change, the Intergovernmental Panel on Climate Change (IPCC), conservatively estimates climate-related damages in developing countries could reach 2 to 9 percent of their gross national product, compared with 1 to 2 percent in the industrial countries. The human dimension is more stark. Hurricane Andrew killed 34 in the United States in 1992, while a 1991 cyclone of the same intensity killed over 200,000 in Bangladesh. This summer's spate of heat waves saw 100 deaths in Texas, but nearly 1,300 in India. IPCC chair Robert Watson places their plight in cool scientific language: "Developing countries would be most vulnerable to the adverse consequences of climate change in terms of human health, ecological systems, and socio-economic sectors."

BY CAR OR BUS

Even as evidence mounts that climate instability may seriously impair their development, some Southern countries worry that industrial countries are using the climate treaty to the same end. U.S. posturing before Kyoto raised such fears anew, forcing developing countries to become increasingly defensive toward any discussion of their future commitments - particularly in light of the difficulties industrial nations were having in taking even modest first steps. An editorial in the China Daily put it this way: "There are those who are unwilling to see China progress and who are trying to contain its development by pointing their fingers at the world's environmental problems."

With only a fifth of the world's population, industrial and former Eastern Bloc nations account for 74 percent of the carbon emitted since 1950. These countries produce 60 percent of today's annual emissions (see [ILLUSTRATION OMITTED], page 25). From this perspective alone, a discussion of new developing country commitments could be seen as an attempt by rich countries to avoid changes in their wasteful energy habits by shifting responsibility to the poor. As China's lead negotiator put it to an American journalist: "In the developed world only two people ride in a car, and yet you want us to give up riding on a bus."

Rich nations, meanwhile, point out that developing countries, while responsible for just 26 percent of carbon emissions since 1950, are quickly becoming major emitters in their own right. Today, the South produces 40 percent of the world's carbon total - 2.5 billion tons. And, as industrial countries emphasize, booming population and economic growth is fueling an explosive increase in carbon emissions in the South (see [ILLUSTRATION OMITTED], page 21). The U.S. Department of Energy projects that carbon output from developing countries will, in the absence of any new policies, outgrow that of their neighbors as early as 2020, with China eclipsing the U.S. as the world's leading emitter by 2015.

Many developing nations question the fairness or relevance of this point, noting the Rio treaty's acknowledgement that "per capita emissions in developing countries are still relatively low and that the share of global emissions originating in developing countries will grow to meet their development needs." They add that most of the emissions growth in the developing world results from providing basic human needs, while that in the industrial world supports a standard of living well above the world average. And on average, the carbon released by each person in the South is less than one-fifth of that emitted by a person in an industrial country (see [ILLUSTRATION OMITTED], page 20). Inter-country differences can be even greater: an average American is responsible for eight times as much polluting carbon as a Chinese citizen, and twenty times as much as an Indian. According to India's Centre for Science and Environment, even when Southern emissions equal those of the North, 20 percent of the world's population will still be releasing half of its carbon.

In reality, most countries emphasize different views of the same picture to their own advantage. Past and present emissions of the rich are critical, but so are the future emissions of the now-poor. And though the consumption patterns of those who have industrialized are a major problem, so are the population trends of the rapidly growing developing world.

DIVERSITY OF OPINION

While the South often speaks in the climate negotiations with one voice - as the "Group of 77 (G-77) and China" - there are different perspectives among these countries themselves on how exactly to reach an equitable solution. But these differences are not hindering some Southern countries, which have begun to move beyond the stifling international political struggles and are now experimenting with possible solutions.

Southern divergences first emerged in 1990, between the members of the Organization of Petroleum Exporting Countries (OPEC) and the Alliance of Small Island States (AOSIS). The oil-rich countries, fearing lost petroleum profits, began to question the science underlying climate change and have since argued for a "go-slow" approach and special compensation for their foregone oil royalties. The coalition of small island countries, deeply concerned about sea-level rise, remains the leading voice for aggressive worldwide action and proposed far more ambitious targets than those agreed to in Kyoto.

India and China, constrained by powerful domestic interests intent on maintaining heavy fossil fuel dependence, have led resistance to calls for developing nation commitments on the grounds of equity. They define the problem as one of highly uneven per-capita emissions and argue that every person should be granted an equal "entitlement" to pollute the atmosphere. Indian negotiators stress that their people should not be limited to a few "survival emissions" while those supporting above-average standards of living in the North are consuming "luxury emissions." China has stated that it will assume no burden for reducing emissions before 2020. In earlier negotiations, one Chinese delegate declared: "The position of the G-77 and China is clear: no new commitments in whatever guise or disguise."

A handful of Asian countries have moved closer toward middle ground on the climate issue. Former "Asian tiger" South Korea has announced its intent to voluntarily assume emissions limits beginning in 2018. The Philippines, meanwhile, has brokered several North-South discussions over technological cooperation and attempted to engage a range of Asia-Pacific political leaders on the climate issue. But it remains to be seen whether the recent financial difficulties of these nations will lessen - or heighten - their commitment to these forward-looking climate efforts.

A progressive role has also been assumed by a group of Latin American countries that recognize the economic opportunities of taking part in climate protection. Costa Rica, Honduras, Nicaragua, Belize, and Panama - the Central American "emissions entrepreneurs" - are home to 17 pilot energy and forestry "joint implementation" projects, under which countries or companies emitting excess carbon can receive partial credit for taking part in emissions-reducing projects in other nations. Further south, Brazil has brought broad Southern coalitions together, and is at the forefront of North-South dialogues over financial and technological assistance. Argentina has supported the idea of voluntary developing-country commitments and has placed the topic on the Buenos Aires agenda. These nations take a less ideological, more pragmatic approach to the issue, as seen in the exhortation of then-Costa Rican President Jose Maria Figueres in Kyoto for developing countries to "do our own part."

"DECARBONIZING" DEVELOPMENT

Costa Rica has, in fact, done more than most nations in trying to match its call for climate protection with deeds. This small country has established a comprehensive set of policies: a goal of phasing out fossil fuel use for electricity generation by 2010; a 15-percent carbon tax (a third of the revenues support tree-planting by farmers); and an emissions-trading program to sell credits on the Chicago Board of Trade for its share of carbon reductions. It has already certified 16 million tons of carbon credits through nine joint implementation projects in clean energy and forest protection. (Forests absorb vast amounts of carbon - see "Bogging Down in the Sinks," page 28.) And in anticipation of commitments, the government is entertaining offers from industrial countries to buy them at prices of $15-20 per ton. In April, the government announced it would protect 1.25 million acres of its tropical rainforest by selling some of these emissions offsets to companies; the project is expected to offset more than 1 million tons over its lifetime, while generating $300 million in government revenues.

Costa Rica is quietly subverting the assumptions of many economists that slowing global warming must slow development. Indeed, while the developing world may have the most to lose in a changing climate, it will also benefit the most by finding ways to emit less. Nations from Argentina to Zimbabwe have undertaken a range of emissions-reducing initiatives - solar energy in rural areas, forest preservation, wind power installations, energy efficiency improvements - that, if multiplied and spread, could significantly rein in the future emissions trajectories of these countries. Zhong Xiang Zhang of the University of Groningen has shown, for example, that China's energy conservation programs since 1980 have lowered the country's carbon output to half of what it would have otherwise been. In removing burdensome energy subsidies, developing nations have clearly outperformed industrial nations during the 1990s (see table, page 26). The U.N. Development Programme (UNDP) estimates that removing all energy subsidies in the developing world would bring $35 billion in environmental, social, and economic benefits.

What is telling about these projects and policies is that few were planned with climate change in mind. Instead, most were designed to employ sustainable technologies and techniques to alleviate economic hardships - providing power to some of the 2 billion who lack it; creating jobs among the 1 billion "underemployed"; lessening urban health emergencies; and lowering reliance on oil imports. Argues Atiq Rahman of the Bangladesh Centre for Advanced Studies, "The South didn't create the problem but is responding to the challenge."

The South might also get a headstart in some of the next century's most promising high-technology industries, rather than relying on a one-time "parachute drop" of new technology from industrial countries. A 1997 report by the UNDP points out that "developing countries have the opportunity to become market leaders for various state-of-the-art and emerging sustainable energy technologies." A study from the U.S. Pacific Northwest National Laboratory echoes this sentiment, observing that China could become a market leader in manufacturing and commercializing energy-efficiency and renewable energy technologies - as it has with compact fluorescent light bulbs.

China is well-positioned to accomplish this: its existing use of wind, biogas, small hydro, and tidal energy already displaces 223 million tons of carbon - 26 percent of its current emissions - that would have been produced by coal-fired power plants. Other developing nations are making similar early strides. The world's fourth-leading user of wind power is India; its largest energy efficient-lighting project can be found in Mexico; its biggest home solar photovoltaic program is located in Indonesia; and its largest renewable energy program, using sugarcane-derived ethanol in cars, is in Brazil.

As Jose Goldemberg of Brazil's University of Sao Paolo sees it, developing nations have a historic opportunity to avoid retracing the past route of industrialization, and "leapfrog" to new technologies that are not yet widely in use. Many nations in Africa, Asia, and Latin America will witness a surge in demand for energy services in the near future, and the new energy devices - small in scale and locally situated - will be an attractive alternative to the massive investments that central power plants and electric grid extensions require. Developing countries thus have a strong interest - economically and environmentally - in gaining access to the technologies that can help them cut back on carbon.

SHARING BENEFITS

The Montreal Protocol to protect the Earth's ozone layer may provide a helpful map for negotiators navigating the current climate discussions. A key step to securing stronger developing-country participation in the ozone effort was the creation of the Multilateral Fund - an innovative international body set up to direct rich nation funds and technologies toward helping developing countries curtail their chlorofluorocarbon (CFC) use. In Montreal in 1987, industrial nations alone took on specific goals for reducing CFC use, while developing countries argued for the right to use as many ozone-depicting technologies as they wished, and for as long as possible. But over the next few years, many developing nations realized that it was in their interest to move as quickly as possible to the new alternatives - and to secure help from the fund in doing so.

As the Multilateral Fund's specifics were fleshed out in the 1990 London amendments, developing nations began, one by one, to accede to the revised protocol. China and India created a temporary impasse, seeking a guarantee of access to cleaner technologies, but eventually they were persuaded that market forces and the fund would provide this access, and both nations joined the protocol. China, in fact, announced that it would not make use of the ten-year grace period to increase CFC use, but strongly preferred to convert rapidly to cleaner technologies and lessen its contribution to ozone layer destruction. Richard Benedick, chief U.S. negotiator in the Montreal talks, believes the ozone negotiations "showed that as soon as cost-effective technologies become available, the developing countries will be eager to acquire them, mainly through the market, rather than be left behind in the march of progress."

A somewhat analogous fund, the Clean Development Mechanism (CDM), is taking shape under the Kyoto Protocol. This mechanism, a blend of both developing and industrial country proposals, has the potential to break the negotiations logjam over North-South commitments to emissions reductions. CDM has its roots in Brazil's protocol proposal, which called for a "Clean Development Fund" that would levy a fee on industrial nations that miss their targets and use the funds to support technology transfer and adaptation programs in developing countries.

In Kyoto, the Brazilian idea blended with the U.S.-pioneered concept of joint implementation, where countries can receive credit for taking part in emissions-reducing projects in other nations. Late in the Kyoto meeting, a hybrid North-South institution had emerged - offering a refreshing reminder that behind the scenes, far from the political posturing for the meeting's media circus, countries were quietly working together to achieve compromise and cooperation.

The objective of the CDM is to help the South further its development goals in a less-carbon intensive fashion, while offering the North some flexibility in meeting its Kyoto commitments. As envisioned, the fund would channel Northern investment, technologies, and practices into developing country projects such as solar installations, wind farms, efficient industry boilers, and tree-planting programs. In doing so, the CDM would underwrite important Southern domestic development projects and allow Northern partners to credit the emissions avoided by these projects against their domestic goals. A share of proceeds from the mechanism will be used to help particularly vulnerable developing countries, such as small island states and Bangladesh, cover the costs of climate disruptions by conducting assessments and developing strategies for projects like sea-wall building.

As it stands, the Kyoto Protocol provides only a rough outline of the CDM's structure and function. It is to be responsible to all parties to the protocol, and supervised by an executive board and "operational entities." These entities are to ensure projects are voluntarily approved by all parties, bring about real, measurable, and long-term benefits, and achieve emissions reductions that are "additional" to what would have occurred otherwise. Private companies as well as governments may participate in the CDM, under the guidance of the body's executive board. Reductions obtained as early as 2000 can be used to achieve compliance in the first commitment period.

But before the CDM can begin multiplying the 20 pilot joint implementation projects now underway between industrial and developing nations (another 55 now exist between just industrial nations), many issues remain to be ironed out - beginning in Buenos Aires. A major task of these talks will be to grapple with the CDM's governance and the need to make it transparent, efficient, accountable, and therefore credible. Membership in the executive board, for example, will need to delicately balance North-South representation. Another tricky issue will be determining emissions baselines for developing countries - a prerequisite to figuring out whether projects pass the "additional" litmus test.

The pre-Buenos Aires debate over the CDM has centered on the appropriate roles of private and public players. The United States views the institution as a passive entity, simply certifying the projects that emerge from a free market-driven process. Developing countries, in contrast, believe it should be more of a quasi-public mutual fund that pools money from investors and funnels it into a range of projects carefully selected for their development and climate benefits.

Developing nations also share Europe's worry that the CDM will be exploited by some industrial countries to avoid domestic reductions, though the group is split on the European call to exclude carbon "sinks," such as newly planted forests, from eligibility (see "Bogging Down in the Sinks," page 28). Some are concerned about surrendering their "low hanging fruit" of cheap reductions to industrial countries, and are working out a formula for sharing credits in the event that they eventually assume their own emissions limits. All would like the CDM's projects to be evenly distributed throughout the developing world - not clustered in Central America and absent in Africa, as joint implementation projects have been. And many stress that its funds should be additional to existing flows of multilateral and bilateral aid. Raul Estrada Ouyela, [TABULAR DATA OMITTED] former Argentine ambassador to China and chair of the Kyoto Protocol negotiations, has "a lot of doubts about this system," believing that the CDM could create "transaction costs" - time and paperwork - that will be much higher than standard investments in offset projects.

But a number of nations, many of them Latin American, are beginning to view the body as a potential new source of capital inflows. In the leadup to Buenos Aires, Ecuadorean nongovernmental groups and the governments of Chile and Brazil hosted workshops on the CDM, while representatives of Mexico met with those of the United States and Canada to explore potential North American projects. Christiana Figueres, of the Centre for Sustainable Development in the Americas, believes that a well-designed CDM can create a significant market for "decarbonization services" in the developing world. This would, she adds, enable the nations to attract foreign investment for advanced technologies and land-use practices that will promote their goals of forest protection, electrification, and pollution reduction. By moving the CDM forward, she concludes, developing countries can play a key role in the global effort to stabilize the climate and contribute to their own long-term economic development.

BECOMING BETTER NEIGHBORS

There is a growing consensus, in industrial and developing countries alike, that involvement in the CDM may be one of the most environmentally effective and politically constructive ways to achieve greater global participation in the climate effort. Its long-term impact, though, will depend on progress in the parallel and often paralyzing debates over U.S. ratification, emissions trading, and new developing country commitments. And it cannot alone accomplish the steep worldwide cuts necessary for avoiding dangerous climate disruption (see "Last Tango in Buenos Aires," page 10). But as a concrete example of North-South cooperation toward the actual act of decarbonization, the CDM can provide some much-needed forward momentum. By jumpstarting climate-friendly projects that stimulate development, it could have a snowballing effect, increasingly bringing rich and poor nations together around the common goal of realizing the advantages of reducing emissions. Indeed, one of the most significant benefits of the CDM will be to force the North and South to set aside their differences, roll up their sleeves, and work together toward common goals.

That climate protection presents tangible development benefits - both immediate and long-term - is a critical point that most governments miss. This is unfortunate, for a better gauging of these gains is essential to engaging developing countries fairly and more fully in the climate dialogue. And focusing on the advantages of climate action is imperative for leveraging badly needed domestic policy reforms, even as details over the CDM and other supplemental international instruments are hammered out over the coming months and years.

Indeed, while capital and technologies are poised to flow from North to South, a useful policy lesson seems to be migrating in the opposite direction. The limited but noteworthy steps made by developing countries in cutting back on carbon suggest that greater progress will be made in taking action to reduce emissions when the policies are designed to address other development concerns. That is, taking into consideration what the IPCC calls "multiple benefits" - cleaner air, greater energy self-reliance, added government revenue, more jobs, leadership in new industries - could tilt a country's climate policy calculus away from "analysis paralysis" and toward meaningful action, even before counting the avoided damages. Whether in the special interest-dominated North or the cash-strapped South, efforts to phase out fossil fuel subsidies, enact carbon taxes, improve energy efficiency, and promote clean energy technologies are unlikely to accumulate sufficient political support unless they can be linked to this broader framework of goals.

For countries to bridge the North-South divide abroad and close the gap between reality and rhetoric at home, will depend in no small part on the ability of governments to utilize these connections in far more opportunistic fashion than they have to date. The challenge of resolving the "developing country issue," it turns out, is mainly a conceptual one: to transcend today's fractious finger pointing and fixation on costs, and envision the Kyoto Protocol as a valuable and vital stepping-stone toward sustainability. Then all nations might better recognize, and begin to reap, the rewards of taking part in the great global endeavor to help poor nations bypass the fossil-fuel era of the rich en route to a carbon-free future.

Ultimately, Benedick's words on the Montreal Protocol ring even truer for Kyoto: "The North's interests in maintaining a healthy planet can only be achieved through aggressive efforts to support national economic advancement in the South." If we are to take real steps together toward a stable climate, we must become better neighbors in Buenos Aires and beyond, learning to share the air and the myriad benefits of protecting it. Argentina's Estrada puts it well: "We are all adrift in the same boat. And there's no way that only half the boat is going to sink."

Seth Dunn is a research associate at the Worldwatch Institute.