TOKYO, Dec 16 – Nobody is happy with the Kyoto conference on climate change that ended last week, but no one walked away from it either. As with all successful negotiations, it reached a clumsy end without a catastrophic breakdown, a fear that was very real at the end of the first week.

In the negotiations, developing countries stood firmly against any new commitments until the developed North could demonstrate concrete action to reduce greenhouse emissions.

This forced industrial countries to reach a compromise among themselves at the penultimate hour, leaving each contending party, from governments to Greens, with less than what it wanted, but more than what it would have gotten if the process had failed. This means everyone has much to fight for in the months ahead till the Fourth Conference of Parties (COP-4) in Buenos Aires in November 1998.

In the end, the Kyoto agreement provided for an average 5.2 per cent in greenhouse emissions by industrialized countries by the year 2012 and no formal commitments for developing nations.

There were three categories of interests at the huge jamboree called the Third Conference of Parties (COP-3) at the United Nations Framework Convention on Climate Change, held from Dec 1 to 10 in Kyoto, Japan.

The first was the business community, which believed that the market and not government regulations should decide on solutions. Even within this community, there were different attitudes.

Big oil, nuclear, automobile and coal interests were the business hawks. Their goal was to preserve the freedom to conduct business as usual through a three-pronged strategy: discrediting the science of global warming by citing uncertainties, scaring governments of the North and South with dire economic consequences if they signed a binding protocol, and pleading that cuts in greenhouse gas emissions be voluntary and not mandatory.

Within the energy industry, they were seen as flexible dinosaurs fighting to retain their preserve against the increasingly hostile climate of public opinion.

On the other hand, smaller industries were exploring possibilities of renewable energy supplies such as photovoltaics, wind power and fuel cells. They were seen as more adaptive mammals allied with environmental activitsts against carbon fuels.

The insurance industry, which believes global warming is already underway, broke ranks with the business group and sided with the environmentalists on large emission cuts. Since 1987, this industry has suffered serious losses in “billion dollar” storms mostly in the United States and Europe, which forced it to raise premiums and limit coverage for climate-related disasters.

Development projects in the South that need insurance against disasters will be heavily affected, because projects will now be more costly. With annual revenues of more than two trillion U.S. dollars, the insurance industry’s concerns will be hard for governments of the North and South, or even big oil, automobile and coal interests, to ignore.

Apart from the business community, the second major presence at Kyoto was the group of environmental canaries, represented by hundreds of NGOs warning of dangers up ahead for all life on this planet. Their target was to secure a strong and binding protocol that had a high emissions reduction target for the industrialized North, no loopholes and a stiff penalty system for those that failed to meet their targets.

This group saw itself, much to the irritation of business and bureaucracies, as the standard bearer of the high moral ground, pricking the conscience of profligate business and uncaring governments.

Though this multi-coloured gathering of NGOs was generally in agreement on the need for large, effective cuts in emissions, it made strange bed-fellows with governments of developing countries.

The environmentalists supported the position of the South (G-77) which held that developing countries would not undertake any new obligations to reduce greenhouse gases until industrialized countries (known as Annex I countries) made significant cuts first, as promised in Rio in 1992 and in Berlin in 1995.

It was a political alliance of the moment that served both the economic interests of the South and the need of the Northern Greens for a moral pressure point on their governments, which were coming under the influence of dinosaur energy industries.
This alliance served them well in Kyoto, but may not do so in the months ahead till COP-4 in Buenos Aires next year. Given strong fears in industrialized countries that such a walkover for non-Annex I countries would shift jobs to the South, the U.S. has been pressuring for “meaningful participation” by key developing countries such as China, India, Brazil and Indonesia prior to ratification of any treaty by its Senate.

Given their rapid development, these countries will become major emitters of greenhouse gases early in the next century. Unless G-77 countries coordinate more effectively among themselves, environmentalists and the renewable energy industry for a common position – the industrialized countries can exploit this contradiction and split the alliance of G-77 and environmental groups of the North.

For a credible response to U.S. pressure in Buenos Aires, G-77 countries must work on sorting out the energy efficiency and equity issues with their social activists, instead of tarring them with the “anti-development” brush.

The most unenviable position in Kyoto was that of national and international bureaucrats, including those from the large think tanks. Caught in the crossfire rhetoric of environmental doom versus economic gloom, their painful mission was to find a workable balance between the two that would sell well with their politicians, and to maintain semblance of control over the process of managing climate change.

In the end, the Kyoto protocol includes a little bit of everything - from including all greenhouse gases to specific but low targets for industrialized countries, to silence on the commitments of non-Annex I countries or funding for their green energy development.

The protocol does not please the greens, the business hawks or particular governments. But it does signal a change in course for the world’s energy industry or governments: it is not going to be “business as usual”. Emission cuts will be mandatory, renewable sources of energy will be promoted, and developing nations will be dealt with more leniently than the traditional polluters of the North.

But the bureaucrats at Kyoto did not come up with the proper means or mechanics for monitoring compliance and sealing loopholes. This means that they will have enough work to keep them busy till COP-4, industry can continue to come up with more clever solutions, and the Greens can again get on their moral high horse to warn everyone that the danger is far from over.