2nd Letter from Madrid

by Henrique Schneider*

The 2019 United Nations Climate Change Conference, also known as COP25, is the 25th United Nations Climate Change conference. It is being held in Madrid, Spain, from 2 to 13 December 2019 under the presidency of the Chilean government. The conference incorporates the 25th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC).

Henrique Schneider is on site and represents Switzerland …

Dear friends of contentious issues

On the second day, two issues dominated this year’s United Nations’ climate change summit: The Turkey-issue and the Ukraine-issue. Both are indicative of the process in these halls, rooms, corner, and dens.

Turkey is, according to our procedures, a developed country. As such it is a nation with a self-imposed obligation to reduce greenhouse gas emissions under the Kyoto Protocol. So far so good. Back in 2015, Turkey realized that under the then-yet-to-come Paris-regime, being a developed country entails paying hundreds of millions into byzantine structures for financing developing countries. So, understandably, Ankara decided that it is not developed. It wants to be (counted as) poor.

Back in 2015, France’s approach was to promise everything to everyone. Consequentially, La Grande Nation promised to Turkey that Turkey would have an option to switch. Turkey, then, accepted the Paris Agreement (but did not ratify it yet) and all were merry. Now comes the problem: everyone forgot that specific promise. Now that the rules are being set, Turkey demands to be seen, catalogued, and counted as poor, so it may become recipient of disbursements of the rich, rather than a disburser.

The Ukraine is an independent nation in the middle of Europe, or so they claim. Russia invaded parts of the country and controls it through puppet regimes, mafia, and other friendly societies. In the climate process, the Ukraine does not seem to object to that geopolitical hiccup. In fact, the Ukraine and Russia belong both to the Umbrella Group, a group of nations that value their respective independence (other umbrellians are the US, Canada, Japan, Australia, New Zealand, or Norway sometimes).

The problem of the Ukraine is greenhouse gas emissions. More precisely, those emissions being emitted in the occupied / rebellious / uncontrolled part of the country. The Ukrainian position here is that emissions being generated there cannot be attributed to the Ukraine. But rest assured, fellow Ukrainians, the government did not give up those territories, just their emissions.

How does one deal with these issues? In the COP, they become agenda-items. This means, they are negotiated – by 200 or so countries. Everyone can have their say, as for example Tuvalu, which expressed its sincere feelings that Turkey should remain among its rich friends, or South Africa suggesting creating two register-entries for Ukraine, West and East. This is how the niceties begin.
And the markets; how are they doing? After all, that’s why I am here for. In the market-bubble, our group is taking it easy. Three days in and we are discussing how we want to discuss.

More on Markets in Madrid to follow.
Best,
Henri

*Henrique Schneider is a professor of economics at the Nordkademie University of Applied Sciences in Elmshorn, Germany and chief economist of the Swiss Federation of Small and Medium Sized Enterprises in Bern, Switzerland.