Climate changes as universality enters global development lexicon

It’s easy to be cynical about the climate-change deal international leaders struck in Lima, Peru over the weekend.

After all, what binding commitments could really have been struck in a four-page document (available here)?

Fair enough. But the agreements made do catalyze action and offer an early taste of a brand new kind of international treaty-making that will gather pace in 2015 as member states of the United Nations forge la new set of Sustainable Development Goals.

The Lima agreement, known by its COP20 acronym and more formally as part of the Durham Platform, begun at another meeting on another continent, does not point to any binding deals. But it does ask that countries “ready to do so” – meaning all but the most threadbare states – submit for public review their self-determined national pledges on curving greenhouse gas emissions in the first three months of 2015. These pledges are to be at least an improvement on each country’s current efforts to cut carbon production.

Further details are to be hammered out at the big round of talks in Paris next year, which themselves come on the eve of the last mile of negotiations for the so-called SDGs, a set of long-term objectives to replace the Millennium Development Goals, which included hunger reduction and education-spreading initiatives for the world’s poorest.

Many people are skeptical that without binding treaties, the agreements will be abandoned the moment any political leader finds it useful to do so. But that view likely underestimates just how hard it is to obtain treaty agreements. Moreover, the very binding treaties related to the creation of Europe’s single currency were dubbed “stupid” – as in unworkable and unproductive – within a decade of the euro being launched. The continent’s leaders are still struggling to find an escape clause.

More significant this time is that getting any ink at all on the COP20 document meant that government leaders agreed that every country has to do something about climate change, even if precise numbers are lacking. For years that principle was not accepted, as major developing countries such as India argued, not without their share of reason, that the bulk of the world’s pollution was created by more advanced and richer nations, who therefore ought to take bigger and bolder actions.

This new universalist approach is a major regime change in the way global development is being handled. For decades the approach was to develop a framework that had de facto application only to low-income and middle-income countries, with an annex describing how high-income countries should foot the bill. The emerging universalist approach amounts to a recognition that issues such as social unrest and poverty in the so-called Third World are very much an organic part of rich-world history. It is a “profound conceptual pivot,” according to Ruth Levine of the Hewlett Foundation, which uses its $8 billion endowment to tackle global poverty and environmental and social problems.

Some cynicism is justified, but it is worth recognizing that a universality principle really should be about individual actors – nations in this case – writing their own destinies.

That said, the “who pays” question doesn’t go away. Poor countries obviously can’t foot their own development bill alone. Moreover, environmental problems clearly don’t respect national borders and represent a classic example of where a “global solution for a global problem” is required.

So the thing to watch here is how the money question will be tackled. The global sustainable development agenda needs about $3 trillion a year. Most of that, notes Homi Kharas, a senior director at the Brookings Institution, will in fact be funded domestically, even in the poorest countries. After all, the sum is more 100 times the World Bank’s infrastructure funding budget.

Many readers of East are familiar with the long, painful and so far inconclusive debate about some form of Eurobond or other device able to pool resources and scale up financial efficiencies. A much bigger one lies ahead, with even more political twists and turns.

But whereas the euro debate is mostly about how to write off debt that has been wasted, the new one is about finding a way to issue fresh debt for a new kind of counterfactual asset – basically putting a price on apocalyptic outcomes we would like to avoid.