Late last month, the New York Times reported that President Obama will attend the 15th Conference of the Parties to the UN Framework Convention on Climate Change, to be held in Copenhagen in early December. More surprisingly, sources told the Times that Obama will pledge the United States to reduce its greenhouse gas emissions to “in the range of” 17% below 2005 levels by 2020. This is a surprising announcement given the deep uncertainty regarding passage of a senate cap and trade bill.
How should this pledge, brave as it is in the U.S. political context, be received by the international community? My answer is with a big fat asterisk next to that “17 percent.”
The reality is that all the serious proposals in Congress, if enacted, would not require emissions within the United States to fall by anything like 17% by 2020 (or 4% below 1990 levels), even if that were the target assigned for the cap and trade. S. 1733, the Kerry-Boxer bill picked this target for 2020 while H.R. 2454 (Waxman-Markey) went with something a bit stronger – a 20% cut by 2020. The difference between the cap and domestic reductions comes about because of international offsets.
If half of the pollution cuts that occur due to the US climate program occur in China, India, Brazil, and Indonesia, as envisioned in the Congressional proposals, can we really claim that US emissions have fallen by the same amount? This is more than just a theoretical question. EPA’s economists estimate that domestic reductions (US offsets plus reductions under the cap) won’t exceed purchases of international offsets until sometime after 2030 (see figure 1).
A key outstanding question for the international negotiation is who gets the credit for emission reductions that occur in the developing world but are financed by the developed world. The U.S. position on this issue is obvious. The outcome of the discussion on credit for developing country reductions financed by developed country dollars will have major implications for Obama’s pledge both in terms of public perception and international law.