For governments, scientists, NGOs and businesses struggling to reduce the effects of Greenhouse Gases on climate change while remaining competitive, the UN Copenhagen conference held out great hope for a consensus and a clear road map for the future. However, the conference only resulted in a non-binding accord. Business Vision asked Flavio Gomes, Bureau Veritas Certification’s Global Product Manager for Climate Change and a participant in the Conference, assesses the impact this outcome will have on clients.

The UN Conference on Climate Change held in Copenhagen in December of last year was a disappointment for governments, institutions and industries who were hoping for a clear vision of future global efforts to protect the Climate. In your view, was the result of the Copenhagen Conference really that bad?

Flavio Gomes:   First of all, although it is true that a consensus was not achieved, a non-binding accord was in fact reached, and it is one that provides a sound basis for developing the future process. Other significant progress was also made. A political accord with a two degree target was reached. A new mechanism for REDD (Reducing Emissions from Deforestation and Forest Degradation) was further developed. This means that more emphasis will placed on the importance of forests and more money will be transferred from rich nations to poor nations to preserve their existing forests and thereby help to attenuate the effects of climate change.  Furthermore, many countries made voluntary financial pledges to these efforts. A partial reform of the Clean Development Mechanism (CDM) was also initiated; the CDM has now established the mechanism for appeals of rejected projects with the Joint Implementation (JI) aspect of CDM being left intact and likely to be continued and strengthened in Cancun. The CDM/JI Program of activities will be enhanced, especially now the United Nations has appointed Cristiana Figueres, known as the “mother of the programmatic CDM,” as the new head of the UNFCCC. Finally, all key emitters announced targets and included them in the accord.   Clients should be focusing on post-2012 and should be aware that other alternatives to CDM/JI will be available, such as trading emissions reduction credits in regional or bilaterally emissions reductions schemes. 
The follow-up conference, scheduled in Cancun later this year, is intended to further clarify this non-binding accord, hopefully deliver binding emissions reductions targets and tie up a few more loose ends.

So why, according to media reports, did everyone leave so disappointed?

Flavio Gomes:  There were too many strands of negotiation and too many participants – over 35,000 registered! Weak leadership on the part of the Danish Presidency, the fact that the EU block was sidelined by China and uncertainty from the US concerning the US legislative process were also to blame.

How are clients reacting to the uncertainty leading up to Cancun? 

Flavio Gomes: We continue to see buoyant demand in the market and are receiving and booking project verification and validation orders well beyond 2012 because companies expect an extension of current mechanisms will come out of Cancun.

What do you anticipate as the likely outcome of the planned conference in Cancun?

Flavio Gomes: I envision two possible scenarios. The first and best possible outcome of the Cancun conference would be an agreement to an extension of Kyoto Protocol Mechanisms. It would address flaws like the fact that there is currently no appeals process if CDM projects are rejected with the same modus operandi.  However, if things remain cloudy at Cancun, there might be no agreement on a Kyoto extension or substitute. The result would be that local decisions and bilateral agreements would rule the day. Examples such as the CCX Chicago Climate Exchange might soon be joined by other local exchanges, like the one now being implemented for Tokyo, which establishes a mandatory cap or “allowance” on greenhouse emissions that must be verified. If companies overshoot their CO2 emissions limits they will have to buy more credits. 

Wouldn’t such a piecemeal approach further complicate companies’ strategies for dealing with climate change?

Flavio Gomes: Yes it would. This sort of multiplication of exchanges and local and bilateral agreements would make tracking and compliance more complex and costly for companies because it cannot be coordinated centrally. Bureau Veritas Certification is certainly well-placed to respond to this scenario as it operates locally everywhere. The recent mandatory South Korea Emissions Trading Scheme is a good example of our certification capabilities at the local level. The legislation has been passed and they are in the process of writing the technical rules. Bureau Veritas Certification experts are advising the technical people representing the South Korean authorities on these rules, sharing our experience with the so-called “capillarized” schemes, like the ones in Australia, New Zealand, or the US (RGGI: Regional Greenhouse Gas Initiative which encompasses the Eastern US and CCAR: California Climate Action Registry on the West Coast).

Do these solutions offer a happy medium or desirable workarounds?

Flavio Gomes: If there is no global agreement in the short term, which I think is likely, the quest for energy security will dominate policy-making and the biggest resisters to a global agreement will be players in the fossil fuel industry. Paradoxically, I believe the positive outcome of such a seemingly undesirable trend will probably be that it becomes the driving force for more bilateral and local agreements that will in turn lead to the spontaneous emergence of a global market, gaining unstoppable momentum along the way. We are seeing our clients focusing more on these local and bilateral arrangements for the near term.
We are well prepared for whatever scenario plays out and are increasing our sales and technical forces to cope with the increasing global complexity and demand. We have a truly global presence with offices in India, China, Southeast Asia and Brazil for example and have been adding new competency centers in Turkey, Morocco, Kenya and in Poland. Bureau Veritas Certification remains deeply involved in this process at every level and shares information on what we are doing with concerned clients.

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