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As negotiators gather in Barcelona for a final round of preparatory talks for the Copenhagen meeting and as Germany’s “Climate Chancellor” Angela Merkel (the rare world leader with a PhD in quantum chemistry) addresses a joint session of Congress, there is no mistaking the fact that time to Copenhagen is running out fast. This blog reviews recent good news on the negotiations, acknowledges the road blocks that have rightly galvanized attention, and asks whether there is a possibility for a change in dynamics.

Progress…

Indonesia deserves praise for its bold plan to cut emissions by 26 percent below business as usual (BAU) by 2020 without international support, and by 41 percent with support. The goal is ambitious, but Indonesia’s National Action Plan is a good starting point, and a study by McKinsey has already pinpointed opportunities for reducing emissions by more than one-third below BAU.

More good news may be in the making, as India prepares to unveil “a domestic cap-and-trade programme, [where] the cap will be on energy intensity, not carbon.” Similarly, President Hu of China reaped kudos for his pledge to reduce emissions intensity by a “notable margin” by 2020. Some worry that the goal, to be specified during the bargaining process, may come to be about 20 percent intensity reduction, not quite enough to chart a path to stabilization. Yet, the International Energy Agency sees China reducing its energy emissions by 12.5 percent below BAU by 2020 with a portfolio of actions already under discussion, and the WWF’s Beijing climate chief Yang Fuqiang told a German newspaper that such actions might even imply a 17–22 percent reduction below 2005 levels. This puts China in the neighborhood of the 15–30 percent decrease necessary to avoid warming more than two degrees Celsius. China, India, and other major developing-country emitters have also made a real concession toward enhancing emissions monitoring.

The EU has at last opened the discussion on funding and proposed making €50 billion ($74 billion) per year available in public funds to developing countries by 2020, with an immediate €5¬7 billion in “fast-start” funds. While Europe was immediately chastised for failing to nail down its own contribution, it has at least begun discussing allocation formulas that would have it contribute about half of the total sum.

Finally, in the United States, the joint initiative of Senators Graham (R-SC) and Kerry (D-MA) appears to promise progress on climate legislation. The Obama administration has also made some headway, arguing that weak action would hamstring the country in the race for leadership on clean technology.

… and stalemate

At the same time, agreement remains elusive on the core questions of burden sharing: funding and the allocation of emission cuts.

The United States’ refrain remains that there can be no agreement without commitments by major developing-country emitters, and that it can only join a ‘bottom-up’ scheme in which all countries specify domestic initiatives without generating international treaty obligations.

U.S. insistence on (and EU support for) this approach has profoundly dismayed developing countries. At the same time, the United States urges understanding for the obstacles its own legislation faces in Congress, especially given the current preoccupation with health-care legislation.

But international sympathy has been limited. Observers have been quick to point out, for instance, that Senators Baucus’ (D-MT) concern that “[his home state Montana] cannot afford the unmitigated effects of [the Kerry-Boxer] climate change legislation” sits awkwardly with the Environmental Protection Agency’s estimate that the bill would cost U.S. households all of $100 per year. And besides, competing priorities of great human importance are seen to be the rule, not the exception.

Many, however, agree that the world would stand little to gain if the Obama administration were to ignore Congress’s misgivings. As India’s Environment Minister Jairam Ramesh has pointed out,

“The US is making small steps [on climate change]. Remember, without the US there will be no international agreement. So there is no point in hectoring or beating up on them like the Europeans seem to be doing.”

Yet, with action in Congress before Copenhagen unlikely, and developing countries yet unwilling to agree to the bottom-up approach, all but every global leader has been busy lowering expectations for Copenhagen. The emerging consensus was articulated by Ramesh, who called on his colleagues to “clinch those elements of the deal that we can clinch. … Then we can come back to Copenhagen in the summer of 2010 to clinch the larger agreement.”

Is there scope for a game-changer?

The prize question of the negotiations has long been whether the Obama administration has an ace up its sleeve and can put something new on the negotiating table. Yet, the administration seems to have determined that it must go with whatever Congress legislates and that it must clinch an agreement that does not require a (67-vote) treaty majority in Congress. Beyond this, it tries to leverage its limited flexibility—chiefly in technology cooperation—through bilateral negotiations.

Meanwhile, the EU and Japan have already staked out progressive positions and have little more leverage (short of imposing trade sanctions, as France and Germany have threatened). This really leaves only one potential game-changer, a yet bolder commitment from China or India.

In this respect, the most intriguing recent development was the debate in India following the leak of a memo from Environment Minister Ramesh to the Prime Minister. Ramesh suggested that India adjust its tough negotiating stance in its own national interest. He proposed that India ease off its opposition to the bottom-up framework (while retaining differences in the type of action different countries take), propose its own actions without guarantee of funding from developed countries, and permit external verification. This, he argued, would both help limit climate impacts on India’s vulnerable economy and enhance India’s international reputation (India has been increasingly portrayed as a less helpful player than China, despite its much lower emissions).

The proposal was met with acerbic commentary from parts of the Indian media and commentators like the Centre for Science and Environment’s Sunita Narain With little backup from his own party, Ramesh was attacked from the left and the right, with the Hindu nationalist BJP’s general secretary calling the proposal “[the governing coalition’s] Diwali gift to the United States and other developed countries at the cost of India’s poor.”

The future of India’s stance is unclear. Both Ramesh and the Prime Minister have since re-stated India’s original position. Yet, Singh also has taken steps to build domestic consensus on moving to a revised stance.

A bold move of the type advocated by Ramesh remains the most obvious contingency that could change the negotiating dynamics. Some suggest that such decisive action would come in exchange for influence in the IFIs or the Security Council. Whether there is such an explicit quid pro quo or not, what seems clear is that some developing countries are weighing the possibility of doing more on climate than they are ethically obliged to do. There are real costs to such a stance, and it is for developing countries alone to decide whether it is worth considering. Yet, the moment clearly holds a rare opportunity for conspicuous leadership of the kind that re-makes international systems.