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A ray of hope: Changing Climate at Bonn

President Bush's recent decision to repudiate as "fatally flawed" the Protocol adopted in 1997 at the COP-3 meeting in Kyoto had cast a shadow on the entire climate change initiative and in particular the Global Conference on Climate Change (cop-6) that was to be held at Bonn in July this year. It appears other nations have been able to convince the United States to agree to work "constructively" with other countries at negotiations on the Kyoto Protocol. The outcome is more positive than expected with US deciding not to block other countries moving forward on Kyoto. After 48 hours of negotiations all the parties to the UNFCC except US agreed to implement the Protocol. In order for the Kyoto accord to come into force without the US, the governments of the EU, Japan, and Russia needed to ratify. At the same time the US spokesperson asserted that the US intends to maintain leadership role in climate change priorities of developing countries. With the developments at Bonn, the shadow seems to have lifted somewhat from the Climate change issue. Though still there are thorny issues that would require long drawn out negotiations. These are mechanisms and issues on use of three funds set up as an outcome of Bonn Agreement. The funds are a special climate change fund, a fund for the least developed countries (LDCs) and an adaptation fund under Kyoto Protocol. The funds committed so far $ 410 million from European Union and $ 10 million from Canada still fall short of US $ 1 billion that was talked of in the earlier conferences.

Perhaps, the most significant outcome of the Bonn Agreement is that the Kyoto protocol has survived and one can look at the Climate change initiative with hope. A related development, cause for cheering up, is the setting up of Chicago Climate Exchange under grant from Joyce foundation. Several companies are reported to be signing up at the exchange. The utility companies involved in the design phase of the Chicago Climate Exchange (CCX) represent almost 20 percent of greenhouse gas emissions in that region. They include energy providers such as multinational oil, gas, and solar giant BP; Calpine of San Jose, Calif.; and Alliant Energy of Madison, Wis. Combined market capitalization of the 33 participants amounts to $425 billion. The CCX would enable participants to get credit for voluntary emissions reductions and to buy and sell credits to find the most cost effective way to reduce their emissions. There have been years of discussion about the potential for trading carbon emissions, but the Chicago Climate Exchange will permit the first test of the concept on a regional scale with global potential. In times to come, perhaps, CO2 emissions saved by some of the ESCOs in India can be traded on the exchange. This would significantly improve the financial viability of energy conservation measures in the Industrial sector in India.

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