When I read the news last week that the US and China had reached an emissions reduction agreement, I almost choked on my croissant. Who would have thought that the two biggest greenhouse gas emitters would have found common ground, let alone made such a bold declaration of carbon reduction? Shortly after, I met with the US chief negotiator Todd Stern and asked that very question. He was coy, but clear. The issue is too important for us not to go the extra mile. I asked Todd if he had any more CO2 reduction rabbits to pull from the hat before the end of the year. One rabbit at a time seemed to be the answer.
China's commitment to peak its CO2 emissions by 2030 bears scrutiny. In reality it will mean that between now and 2030 China must create the equivalent of the entire zero emissions capacity needed to power Australia, every year; in total 800-1000 gigawatts, the capacity of the whole US grid.
The US-China agreement is timely. In less than two weeks at Lima, the UN framework convention on climate change will bring together most of the world’s nations to reach an agreement securing a reduction in global temperatures of two degrees centigrade. We will see for the first time what countries are bringing to the table, and what they are expecting to take from the table too. I will be part of the European parliament delegation participating in the conference, so it will be an opportunity to hear the debate, meet the players, and understand the state of play. It will be the last chance to do so before decision time in Paris in December 2015.
Agreement at Lima - if indeed it is secured - will centre around two key strands. First, nationally defined carbon reduction contributions; if other countries match the commitment of the US and China, then we will be well on our way to reaching a binding agreement in Paris. However, if some countries follow the lead of Australia's prime minister Tony Abbott, who campaigned to remove climate change from the recent G20 summit because of his government's climate scepticism, then there could be trouble ahead.
Second, effort sharing and the green climate fund. How much is committed to the fund and by who will be important in securing a comprehensive deal. Without sufficient targeted funding, many nations with the heaviest load to lift will not be able to make a meaningful commitment. The US has already committed €2.4bn to the fund; the UK will shortly announce its contribution too. However, as always, the devil will be in the detail and negotiators will be working round the clock to ensure that the funds can be spent in a politically sensible way. It won't be easy to satisfy the demands of so many from a finite fund.
Without progress in these areas, reaching a deal in Paris will be a challenge. As has been shown time and time again at previous climate change gatherings, there needs to be a reality check on all proposals. If it smells fishy, chances are it is. Scotland has among the most ambitious climate change targets in world, but sadly continues to fall short of actually meeting them. That is not to say the challenge is not worth pursuing, but there must be a dose of reality in the setting of targets; failure to meet the targets year on year undermines the credibility of the ambition.
The EU is at the forefront of efforts to decarbonise the globe. Until recently the 'forefront' was a relatively lonely place to be. Our endeavours, while laudable, risk undermining our competitiveness and creating unintended policy challenges for our businesses. However, with China and the US catching up on the inside lane, and other nations considering their position, we have a serious opportunity of finding a global solution to a global problem.