House Chair, hon Ministers, hon members, in less than three months over 15 000 delegates will arrive in Durban for the next edition of the United Nations Framework Convention on Climate Change negotiations, known as COP 17. We wait with anticipation to see if the Kyoto Protocol, first adopted in 1997, will survive the negotiations and, importantly, if a second commitment period will be agreed to. The burden of managing these highly complex negotiations now falls squarely on the shoulders of South Africa, which is president of the upcoming COP.
We need to examine what happened at COP 16 in Cancun, Mexico, last year and at COP 15 in Copenhagen, Denmark, in December 2009, to understand that prospects for extending the Kyoto Protocol in Durban are difficult. There were high hopes for a binding legal agreement and an extension of the Kyoto Protocol at Copenhagen. Instead, what emerged was a political agreement known as the Copenhagen Accord, which outlined various voluntary commitments by countries. South Africa, along with the other Basic countries and the USA, was integral to the formation of this accord. It is important to note that the accord is not legally binding and does not commit countries to a binding successor to the Kyoto Protocol, whose present round ends in December 2012. The accord does, however, loosely endorse the continuation of the Kyoto Protocol.
Copenhagen ended in acrimony. Wen Jiabao of China said that the weak accord was due to mistrust between nations. Gordon Brown of the United Kingdom accused a small number of nations of holding the negotiations to ransom.
It is important to reaffirm why a binding global agreement on climate change is ultimately necessary. Because climate change will have consequences around the world, and because it is expected to have disproportionately high consequences for developing countries, whether they be decreased rainfall, rising average temperatures, or extreme events such as flooding and droughts, irrespective of the fact that developing countries are historically least responsible for the emissions of climate change-inducing greenhouse gases, climate change can be regarded as perhaps the largest example of the classic environmental problem known as "the tragedy of the commons".
A well-crafted agreement would allow countries to exploit the most efficient opportunities to cut emissions. But climate change is not just a challenge of the environment; it is a challenge for the world economy. In fact, the solutions can have profound effects on specific industries and foreign trade, and hence it affects jobs. Climate change negotiations are thus very much about domestic politics, at least for the developed countries that fall in Annex 1 of the Kyoto Protocol.
The reason the USA has not ratified the Kyoto Protocol is its domestic politics. President Obama used his political capital on health reform, and has more recently been burnt by the debt crisis. At the federal level the USA is unlikely to sign up to any binding emissions reductions, at least to the degree that it should, for some time to come.
It is worth affirming, though, that the transition to a lower carbon future will also create new industries, particularly in the fields of energy, transport and energy efficiency, and has the potential to be a major job creator. But how do we get to a low-carbon future? Determining how low, in terms of carbon, that future is, is what makes negotiations complex. Possible short-term economic shocks, increased costs of doing business in the interim, and further stresses for the consumer are of concern for negotiators from developing countries and the major emerging economies. Their terms of political office are far shorter than the time it will take to make a transition to a low-carbon future.
In Cancun last year ambitions and hopes for the negotiations were considerably more tempered. The future of the Kyoto Protocol was hardly addressed, although some countries, including Japan, were openly hostile towards its continuation. The political landmine of the Kyoto Protocol was sidestepped. Cancun did offer some light and that is that progress does not have to be all or nothing. It does not have to be a binding treaty or bust. Notwithstanding that, a binding agreement remains the desired outcome.
Cancun also codified emission reduction pledges made by approximately 80 countries in Copenhagen. What is interesting about the way that this happened is that the distinction between Annex 1 and non-Annex 1 countries is somewhat blurred, which is a step in the right direction. Cancun also officially, in terms of the UN document, agreed that the average temperature rise needs to be kept below 2C.
The Copenhagen Accord at the Cancun negotiations essentially became part of what is known as the Long-term Co-operative Action track, LCA track. So, now there are only two tracks to the negotiations, the LCA track and the Kyoto Protocol track. If the Kyoto Protocol track had been more actively engaged upon in Cancun, then the negotiations may have ended in acrimony. Was Cancun a success? The outcomes will not satisfy everyone, but in general the fact that the negotiations are still alive is probably the greatest success. The US and China engaged with each other with civility. There were incremental steps in the right direction, and realism triumphed over idealism.
At COP 17 in Durban there will need to be progress on operational issues that came out of the Cancun negotiations, in particular on measures to set up the Green Climate Fund, as well as on measures to strengthen procedures related to measurement, reporting and verification practices.
But in Durban the issue of the Kyoto Protocol cannot be sidestepped as it was in Cancun. It will be difficult to engage on the Protocol with so many major emitters growing increasingly hostile to it. If there cannot be a binding agreement, then some kind of political agreement is what the South African Presidency of the COP needs to achieve. It may have to be that Kyoto is kept on life support to salvage its key elements, and that they then be built into a new response at future negotiations that bring the USA and major emerging economies on board.
Whatever happens in Durban, there is a greater realisation now that many of the most important initiatives for addressing climate change will occur outside of the UN process, despite how important that process is. Countries, states and cities around the world are taking action. Businesses have identified climate change both as a risk to and an opportunity for their operations, and are engaging with governments. So, while there may be despair in some quarters, there is also plenty of hope.
South Africa made various commitments in the Copenhagen Accord to reducing emissions against a business as usual trajectory. There has been a Green Paper on Climate Change this year, and in October the White Paper on Climate Change will be released. There has also been discussion on a Treasury proposal for a carbon tax.
No doubt South Africa wants to show, as the President of the upcoming negotiations, that it is prepared to play its part in securing a low-arbon future. South Africa is a bridge between the developed and developing world when it comes to these negotiations. Our commitments thus far are admirable.
However, we must be cautious that we do not take on voluntary commitments and the associated instruments that place us in a position that affects our efforts at economic growth and job creation. We must remember that it is the developed world that owes the rest of the world the greatest commitment to action.
South Africa must act, but we must also be cautious. The South African negotiating team is ultimately accountable to the South African public at large. Its mandate is not without limits, and it must be sure that what it argues for is possible, reasonable, and to the best of its ability, in our own national interest. Thank you. [Applause.]