simon zadek

Copenhagen was a structured, sovereign-state based negotiation with clear rules of engagement (albeit abused). It had a beginning, middle and (at least in theory) an end. It was designed to reach agreement on a specific set of activities entirely focused on the public good. It was also a veritable ‘walk through babylon’ (as my video clip painfully illustrated), and as we now all know deteriorated into a shambolic, ego-laden, mecantilist dog-fight.

Davos is designed as the elite market place for anything the globe has to offer. Intellectuals, activists and would be politicians ply their trade as casually as the attending traders normally do so glued to their phones, computer screens and wallet books. It is ordered along the lines of chaos, legitimacy is a matter of power, money, influence or stardom through the arts. There is no one deal to be done, no obvious rules of the game (there are some less obvious ones, to be sure), and governments compete for airtime with the latest bestselling writer, and the rowdiest Texas oilman.

Davos is a spectacle to behold, always threatening to reflect our worst Darwinian inclinations. Copenhagen, on the other hand, was meant to reflect humans at their best, open to collaboration for the public good. And yes, you have guessed it (you smart, cosmopolitan blog readers), life has its way of inverting the expected. Copenhagen actually demonstrated humans’ capacity to be petty, narrow-minded, and deeply tribal. far from being focused on the public good, it was focused on the private gain of vested interests largely not in the room, whether they were businesses, parochial politicians or even short-sighted populations of citizens who should have known better.

And Davos…well it is what it says on the tin, in one moment abstracted from any sense of reality, at another exhibiting the human ego at its most profoundly revolting. Yet it somehow unlocks the participants’ passion, innovation and a will to imagine and take risks. In muddling up the public good with private gain, it evokes much of what is amazing about our species and without doubt explains how we have survived to date (for better and worse). It is in Davos that investors in green technology have the stage,

yes aching for public subsidy if they can get it, but in truth knowing that they will fund the low carbon economy if it is going to happen. It is in Davos that the Chinese business community schmoozes with Western Governments and vice versa. It is on these snowy hills that more irreverent potential is discussed than could be dreamed of in any formal multilateral procedure.

Yes, a Managing Director of the World Bank was right when she reminded us at Davos that the farmers we were discussing were not in the room. And who knows what complex political equation Strauss Kahn from the IMF was making when he supported Soros’s proposal to unlock capital to fund climate management. And it is slightly crazy making when Sarkozy proposes to rewrite the rules of capitalism (better than his Italian counterpart though), and it makes you wonder when Davos declared itself ‘green‘ on the back of a half-hearted labelling of carbon-spewing, attending SUVs. But frankly such weaknesses are chicken-feed when compared to the cynical nonsense that stalked the corridors of the Bella Center in Copenhagen just weeks before.

You may well despair, and I might join you for an accompanying drink when you do, but Davos is more about our future than Copenhagen will ever be in bringing more of the right people to the table, and providing more opportunities for the deal making that is needed to safeguard our children and theirs in turn. We can bemoan the elitism, the false dawns too often announced and then neglected forever more, and the fly-in humbug of much that is said and neither meant nor even heard. But through this there is an authenticity in the demonstration of real power, truly extraordinary wealth, unbelievable innovators (for whatever reason and end), and a will to grasp the world as it is and shape it into the future. The tens of thousands leaving Copenhagen were angry, burnt out, and deeply exhausted. Those leaving Davos will be tired, often confused, but in the main better informed, connected and able and willing to act.

Have I drunk the Davos Kool Aid for too long to have any remaining sense? Well maybe, self-diagnosis is not humankind’s speciality, far from it, and I am no exception to the rule. Certainly Davos exhibits in technicolor more than it resolves what I called in an earlier blog this week sustainability’s very own Valley of Death, in a nutshell our ’struggle to innovate at scale in a timely way in addressing the world’s toughest problems‘. But its more likely that the solutions lie lurking beneath the canapes at Davos than the decrepit cheese sandwiches of Copenhagen if only because the folks in the former are actually treated with respect, treat each other in the main with respect, and have a will to live rather than just survive.

“We have an Accord that has some of the elements of a legally binding agreement that we need”, opined Achim Steiner from UNEP, “do not under-estimate what we have achieved. And on the trade regime, another year gone and hundreds of millions or billions of dollars investment and income generating on hold and at risk”.

Saturday afternoon, exhaustion showing on peoples’ faces, but an almost full room of folks ponder on the topic of trade and climate. “”it is about competition”, says Egyptian Trade Minister Rachid Mohamed Rachid, “will a climate deal lead us to be penanalised in an approach that we are not fully engaged in, that is, protectionism”. Pascal Lamy, doyen DG at the WTO, reflects with typical cautious flair, “I am mostly concerned with open trade, but i have a duty to care about the environment, i have an order of priorities, which we need to respect…Copenhagen is a step forward”  …”there is the potential of a multilateral framework that may work”, he adds making an art out of optimistic conditional statements, or perhaps conditional optimism. Madame Leuthard, Swiss President, “climate arrangements could be trade distorting…we have considered but failed to define ‘environmentally friendly products’, so we cannot factor this into trade arrangements, and does this discriminate against nations that cannot afford clean technologies, as claimed by the Indians and others”.

“A large part of this planet is underdeveloped”, argues Anil Sharma, “lets not kid ourselves, the discourse needs to be very honest, you cannot separate us from history, the situation has been brought about my unsustainable production and consumption. this is not a blame game, its just true. The entire agreement on carbon credits is unethical, ‘i have enough to pay you for my past sins rather than solving them’, Copenhagen has come out with a disappointing soft landing…so what shall we do where people die of hunger, what shall we tell them, your wealth was based on our resources, resources and technology have to be made available to poorer countries free…nations like India are in a position to be partners, but we have to be agreed on the goal that the poor nations will be supported freely…we can talk and talk, but will we address it honestly…on trade, we are committed to a fair regime that honestly corrects historical distortions, that is why Doha must come to a correct conclusion”.

“Trade might contribute to climate, it is not always damaging because of transport”, intervenes Lamy offering a technocratic anecdote to the preceding comments…”the Montreal Protocol on CFCs shows how it can be done, it did not create problems with trade…we have to try to reach the same point with climate”.

Polite, informed, and profoundly disfunctional.

Leuthard: “overcoming subsidies must be part of the solution, even although it would be hard, just as we have to consider ways to benefit environmentally friendly goods”.

Rachid: “to use trade to manage climate we need to resolve existing distortions first, which is what lies at the heart of the current negotiations…we have to accept the need for rational carbon border adjustments, to agree on environmental goods and services, and we have to agree on the issue of transport”.

Sharma: “the fundamental issue is about people, are those made poor in the past going to be held in poverty for ever…when you have one billion people denied food security, what do we say about biofuels…do we want to feed SUVs or people”.

Lamy: “We have an agreement that allows for protection of the environment, this is not protectionism…when is protection protectionism, that is what we have a mechanism for resolving such things”.

Steiner: “30 years from now there will be two powerful ministries in each government, one will be about financial capital, and the other dealing with natural capital…we are in a race against time and not progressing because of history…in change people get hurt and we need to deal with this…the current technology diffusion model is not credible, we have to focus on the economy, the low carbon economy…our debate is too abstract, too protective”.

Lamy: “can we join the two negotiations…there is no real trade off between these issues, more within these issues…there is a legal bridge, so we can connect already…that they are stuck is about domestic vested interests in both cases…so my simple answer is no”.

Muhtar Kent leads a breakfast discussion about the global challenge of water, leveraging a report launched entitled Charting Our Water Future prepared by McKinsey with numerous other folks. “The global needs of Coca Cola is the equivalent of 8 months use across Mexico City”, we are told alongside Coke’s commitment to become a ‘zero water take’ company.

“We cannot stay as we are, we need to look for another approach…there is a way to deal with the growing gap…today withdrawals are growing at 2% a year, there is a gap of 40% by 2030 between demand (7000 billion cubic meters) and supply…productivity improvements will only deal with 20% of the overall gap, and there is a further 20% of the gap that can be closed by increasing supply in historic ways…that leaves a 60% gap where ‘something different’ needs to be done to address.”

McKinsey has applied the ‘cost curve’ methodology to water and brought crystallized data to the discussion at a high level (see Project Catalyst for how this method has been applied to carbon mitigation).

“Looking at India, the analysis suggests that the water gap ‘can be solved’, that the vast majority of the solutions lie in water productivity improvements in agriculture, and that the net costs are about US$6 billion per annum, ‘not a huge cost for a country like India’…”.

“South Africa is facing a gap by 2030 of 3 cubic kilometers (without taking climate change into account, with this factored in, goes up at least a third)…there are many things that can be done…the ‘new way’ is to take the least cost solution and it can be dealt with, at a cost of US$300 million a year, but the ‘new cost’ given that saving arise would offset all these costs at a national, aggregate level…many countries face a crossroads, this least cost solution approach is how we all need to go if it is to be affordable”.

“Water is a social not an economic good”, explains a South African Minister, “we do understand that water is finite, but we have to take account of the socialist nature of our society…we have to develop an approach sensitively”… “there have to be other ways to incentivise better use of water, not just economic pricing”, argues an Indian chief executive… “pricing comes second, first is knowledge, we know how to do far better before pricing becomes the problem…we need a campaign to achieve best practice”, asserts a German water expert… “we have seen successes, also in the poorest communities in South Africa, “where we can get people to value water without charging them…this message has to be understood at the national level”…. “we do need to price water in agriculture, but we cannot leave this to market forces, water is key for food security, addressing poverty and other policy goals”, says a gentleman from the national federation of agricultural producers.

Contrary to rumor, money does not make the world go around – but making the maths work does help.

Money, at least on the surface, is the blunting edge of the deal. Estimates vary but there is a convergent focus on total incremental costs rising to about US$100-140 billion per year by 2020. Depending on how one draws the line between here and then, the total bill on this basis that is not going to be paid for by private commercial money might be of the order of US$1 trillion. of the course the number could be smaller, especially since China led the way in accepting that it is not going to receive international support for its own incremental costs. Some political leaders have talked about far less: US$10 billion a year from 2010-12 (fast start), US$25 billion a year from 2013-2015, and more or less US$50 billion a year from 2016-2020, or about US$300 billion over this period.

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