8Smith School of Enterprise and the EnvironmentSmith instrument that would replace the Kyoto Protocol or two instruments, one to extend the Kyoto protocol and the other under the UNFCCC. There are divisions among countries, with developed countries generally preferring a single instrument and developing countries favouring two instruments [3]. So far the current phase of the negotiations has been unsuccessful in its aim to produce a new legal instrument for the period beyond 2012. Despite some advances made in other areas the global legal deal remains elusive. In a very important sense, the Kyoto process can be deemed a failure. The original objective, for the developed (Annex 1) nations to reduce emissions by 5 per cent below 1990 levels by 2012, although far too modest to halt global warming, will not be met without the use of the compliance system. Over the period since the adoption of the UNFCCC thousands of negotiators, meeting at least twice a year, have formed themselves into a negotiating community which is unable to move with the times. Since 1992 the science of climate change has become considerably more sophisticated, and the need to defossilise the global economy by the middle of the twenty-first century has emerged. Since that time, too, a group of nations representing a very large proportion of the world's population has formed a new category of emerging powers. China, India, Brazil, Mexico, South Africa and Indonesia can no longer be placed in a category of 'non-Annex 1' countries together with Ethiopia, Haiti etc. And CO2 emissions from China now match the US at the head of the world emissions table.Arguably, however, more progress has been made since 2000 outside the UNFCCC process. The British Government took a leading role in 2003, unilaterally declaring its intention to reduce CO2 Figure 2 - Timeline of climate change related political actions.Chapter 2Chapter

EnvironmentSmith School of Enterprise and the Environment9emissions by 60 per cent by 2050, and introducing its internal ETS in 2004. This was followed by the European Union's adoption of an ETS in 2005. In 2005 the UK Government decided to place climate change at the top of its international agenda, initiated by an international conference on the impacts of climate change, and followed by successive meetings of G20 science, energy and environment ministers, all leading up to the G8 meeting at Gleneagles, with the UK Government in the Presidency. Recognising the rising importance of the rapidly emerging powers, the heads of states of China, India, Brazil, Mexico and South Africa were invited for the top agenda item, climate change, thus creating the G8+5 grouping. Over subsequent years each head of state in the Presidency of the G8 retained the G8+5 format and maintained climate change as the lead agenda item. On the diplomatic front, Sir David King was tasked by the British Prime Minister in 2003 to travel widely abroad to speak on the importance of managing global warming, delivering around 70 lectures a year for the following 4 years, including many addresses to parliaments and discussions with heads of state, government ministers, and business leaders. The British Foreign Office expended considerable resource on raising the profile of climate change in key embassies around the world - including more than 20 experts in the Beijing Embassy. Most noteworthy, perhaps, was a Memorandum of Understanding reached between the British and Chinese Governments which enabled a British team, assembled by Sir David King, to work with a Chinese team on climate change flood risks in the Yangtze basin area, including Shanghai. The British team had used detailed climate models to examine flood risk to the UK out to 2080, and had produced an action plan for the UK to adapt to the risks [4]. The future risk to the Chinese economy from a combination of fluvial flooding down the Yangtze river and rising sea levels highlighted the critical threat of climate change to China's future prosperity [5]. The Chinese politburo clearly took a decision in 2006 to reduce China's dependence on fossil fuels and to push hard in international negotiations for global action. Their particular concern was the obstructive position of the Bush administration. The red lining of draft agreements in the G8+5 process by the US sherpas over this period was the major block towards further progress.With the European ETS inaugurated in 2005, a new factor emerged. As this new trading market in CO2 was established in London, the financial community and the business community became engaged in the issue of global warming, with important consequences. The CEOs of many major international companies became champions of the need for action on climate change. This was a very important message for the politicians. A major section of the business community was urging action. In addition, the number of pieces of legislation on climate change at a national level have increased considerably in the past few years. Whilst negotiations at a global level appear to have stalled, action at national level is progressing. The amount of action at this national level should be ramped up over the next few years.Chapter 2: The International Climate Change Negotiations2Chapter 2