Negotiations Falter at UN’s Copenhagen Conference on Climate Change

The United Nations’ Copenhagen Conference on Climate Change strained mightily and produced — a note. Co-authored by the United States and China as a last minute face saver, only five nations signed it. This wasn’t much, to say the least, for the years of work that preceded the conference. There was no binding commitment to lower carbon emissions to keep global temperatures from rising more than 2°C (3.6°F), which had been among the main goals.

Numerous reasons for the failure to reach a more definitive agreement have been put forth. On the “pro” side — it was the first time that nearly all nations, including the principal greenhouse gas producers — China and the United States — agreed there was a problem and that they have a responsibility to try and solve it.

On the “con” side — it was an overall failure, as all of the details were left to future negotiations to try and pin down, including how to verify that countries are actually adhering to any CO2 reduction programs they may initiate.

However, perhaps the meager outcome has taught the world’s politicians a lesson in how things should not be done. Ask yourself — would it really have been possible for 193 countries to agree on anything? The meeting was conducted under the same rules as the U.N.’s General Assembly. Every country had a voice and a right to speak. Any decision had to be unanimous. That’s no way to run a railroad. Even the U.S. Senate’s rules are better.

The fact that the United States and China, arguably the most important actors in this drama, were able to at least produce something, when 191 other countries couldn’t produce anything, is encouraging. It’s a sign that future negotiations must be conducted by those who have a real stake in their outcome. Countries such as Venezuela, Bolivia and Cuba, who are far more interested in demonizing the United States than they are in facing climate change, need not attend.

There have already been calls, notably from the insurance industry, whose voice was barely heard in Copenhagen, for exactly that kind of approach. In an address to an ancillary meeting in Copenhagen Lloyd’s CEO Richard Ward stressed that the industry needs “policymakers to set clear goals. There must be no wriggle room for governments or businesses.” He urged the “international community to, finally, act in complete unison. Regulation must be one level playing field across the globe. The insurance industry is beginning to come together, across different nations and different fields. The international community must do the same. This is truly a case of divided we stand, divided we fall.” (The full text of Ward’s remarks may be found www.lloyds.com)

Munich Re’s CEO Nikolaus von Bomhard issued a similar statement on the reinsurer’s Web site (www.munichre.com), where he also left no doubt concerning the disappointment he and the Group share following the failure to achieve any major agreement. “The outcome of Copenhagen has left me somewhat stunned,” he wrote.

As the head of the world’s biggest reinsurer, and Ergo, one of Germany’s largest primary carriers, von Bomhard can’t ignore the stark reality of climate change, and what it portends for the global insurance industry. “We need a strict climate agreement, and we need it fast,” he continued. “Climate change is a global problem and a challenge for humankind. If the players do nothing but pursue their national interests, we are headed for a climate catastrophe.”

Von Bomhard called for “leadership.” He stressed that it’s now “up to the USA, Europe including Germany, and China to cut the Gordian knot. Progress is likely to be made more easily on a small scale rather than at a climate summit with 193 negotiating partners and thousands of participants. In the light of the Copenhagen experience, I would therefore advocate a rapid resumption of talks with a small party of participants to get the negotiations moving again.”

He also didn’t mince words when he stated: “Climate change is a fact, and it is almost entirely made by man. It is jointly responsible for the rise in severe weather-related natural disasters, since the weather machine is ‘running in top gear.’

“The figures speak for themselves: according to data gathered by Munich Re (whose scientists have been studying it for over 20 years), weather-related natural catastrophes have produced $1,600 billion ($1.6 trillion) in total losses since 1980, and climate change is definitely a significant contributing factor.”

Maybe the failure in Copenhagen, and the flaws it exposed in the U.N.’s decision making process, will finally give the insurance industry a chance to play the role it deserves in making future decisions. After all, no industry has more at stake.

Topics USA China Market Training Development Climate Change