The Kyoto Protocol treaty has now entered into force for the nations who have joined it so far. Now is the time to start thinking about how to engage all nations, including large emitters, in conversations about what to do after the treaty's expiration in 2012. This is exactly what the European Commission did recently by providing its first strategy for a post-Kyoto era, which will be discussed by the European Council next March.
While the protocol represents only a modest reduction of carbon emissions in industrialized countries -- 5.2 percent between 2008 to 2012 relative to 1990 levels, with varying targets for individual countries -- real progress can be made in sustaining development efforts and preserving our planet.
But first, all countries must integrate climate concerns into policy planning, and improve their governance in key sectors such as energy, infrastructure and transport. We must act in accordance with the recognition that climate change and its effects on people in both rich and poor countries remains a threat to global security.
At the end of the day, the long-term approach is likely to include a rules-based system, an incentives system and investments in technology change. Increasingly, adaptation at the national level will be recognized as a major issue that will require appropriate funding. Dealing with the impacts of climate change and with emission reductions should not be mutually exclusive, but complementary.
Looking ahead to the post-Kyoto world offers us the chance to start a new dialogue and to look at new options on climate change. Nations could set the more ambitious goal of limiting the long-term change in the earth's temperature, and then assign emissions rights among countries in such a way that will eventually limit temperature increases to an acceptable level. This would require increasing investments in energy research and development for new and improved technologies -- a process that needs to be supported by stronger public-private partnerships.
Up to now, with only 15 percent of the world's population, rich countries have been responsible for more than 75 percent of global carbon dioxide emissions, and thus most of the environmental damage. However, it is the developing countries -- and thus the world's poor -- who are most vulnerable. It is unrealistic to ask poor countries, where more than 1.6 billion people do not have access to clean energy and technologies, to bear the costs associated with the much needed technological change.
Working with partners, the World Bank is supporting strategies to assist developing countries in meeting the costs caused by climate change. To date, over US$1 billion dollars in Global Environment Facility (GEF) grants, together with about US$8 billion in co-financing, have been committed to programs related to climate change.
While the regulatory mechanisms of both Kyoto and the European Trading Scheme have contributed to the establishment of an emerging market for carbon trading, interested parties are now concerned about the immediate future. Without a regulatory framework beyond 2012, the window of opportunity for initiating project-based transactions will close by next year or 2007.
Given the long lead time between project preparation and the first benefits of emissions reductions, project developers have only a few years to act before carbon payments cease to make a meaningful contribution to project finance in the current context. Developing infrastructure projects is a long process that requires three to seven years from identification, through licensing, financing and construction and finally to the first certification of carbon emission reductions.
Therefore, projects need to be operational at the latest by 2007. The bank has been instrumental in advancing carbon finance as a viable development tool, and in facilitating private-sector participation in the market. It is focused on representing the interests of its borrowing countries, helping them to develop assets for carbon trading according to their own priorities.
But, without a commitment by governments to limit greenhouse gas emissions beyond 2012, the carbon market will remain uncertain, and the private sector -- vital to the market's success -- is unlikely to expand its participation in a meaningful and sustained way. According to a recent World Bank-supported survey of companies interested in carbon finance, only one in five respondents declared that they were interested in buying post-2012 emissions reductions.
Now is the chance to look forward and enlist the global community -- with no exclusions, although with differentiated responsibilities -- in the pursuit of a more secure world, one that avoids the dire risks of environmental degradation and social conflict implied by inaction.
Ian Johnson is vice president for sustainable development at the World Bank.
Copyright: Project Syndicate
The conflict in the Middle East has been disrupting financial markets, raising concerns about rising inflationary pressures and global economic growth. One market that some investors are particularly worried about has not been heavily covered in the news: the private credit market. Even before the joint US-Israeli attacks on Iran on Feb. 28, global capital markets had faced growing structural pressure — the deteriorating funding conditions in the private credit market. The private credit market is where companies borrow funds directly from nonbank financial institutions such as asset management companies, insurance companies and private lending platforms. Its popularity has risen since
The Donald Trump administration’s approach to China broadly, and to cross-Strait relations in particular, remains a conundrum. The 2025 US National Security Strategy prioritized the defense of Taiwan in a way that surprised some observers of the Trump administration: “Deterring a conflict over Taiwan, ideally by preserving military overmatch, is a priority.” Two months later, Taiwan went entirely unmentioned in the US National Defense Strategy, as did military overmatch vis-a-vis China, giving renewed cause for concern. How to interpret these varying statements remains an open question. In both documents, the Indo-Pacific is listed as a second priority behind homeland defense and
Every analyst watching Iran’s succession crisis is asking who would replace supreme leader Ayatollah Ali Khamenei. Yet, the real question is whether China has learned enough from the Persian Gulf to survive a war over Taiwan. Beijing purchases roughly 90 percent of Iran’s exported crude — some 1.61 million barrels per day last year — and holds a US$400 billion, 25-year cooperation agreement binding it to Tehran’s stability. However, this is not simply the story of a patron protecting an investment. China has spent years engineering a sanctions-evasion architecture that was never really about Iran — it was about Taiwan. The
In an op-ed published in Foreign Affairs on Tuesday, Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) said that Taiwan should not have to choose between aligning with Beijing or Washington, and advocated for cooperation with Beijing under the so-called “1992 consensus” as a form of “strategic ambiguity.” However, Cheng has either misunderstood the geopolitical reality and chosen appeasement, or is trying to fool an international audience with her doublespeak; nonetheless, it risks sending the wrong message to Taiwan’s democratic allies and partners. Cheng stressed that “Taiwan does not have to choose,” as while Beijing and Washington compete, Taiwan is strongest when
RSS