4th Letter from Madrid

‘COP25’ – the 25th United Nations Climate Change conference held in Madrid, ended yesterday. Henrique Schneider was on site and represented Switzerland …

Dear counters of beans!

Today, let’s get to the Who is Who. But first this: Climate summits are a progressive science. Our markets made quite a stride. We even managed to get some text going. Text is important, because work is concluded, in this process, by adopting decisions. Decisions are texts, and texts need to be drafted.

What did we agree? We will have a thin decision text stating some principles on how the new markets should work. And we will have annexes developing a work program on what to think about. The question is now, what gets into the decision. Two issues are salient: SoP and OMGE.

SoP means shares of proceeds. The poorest nations want to get money for every transaction in the market; regardless of who is involved. OMGE means overall mitigation in global emissions. This means that regardless of which market transaction, there has to be an additional discount for the atmosphere.

Example: If you reduce one ton, you cannot sell the full ton to another party. You can only sell, say 0.9 ton. But the acquirer pays the full value plus the shares of proceeds on the full ton.
Are you irritated by me calling this a market? You should be! At least, I counter it – in the name of Switzerland – heads on. And am almost decapitated by everyone else.

If you dislike this granularity of discussions, let’s return to the who is who: According to the provisional list published by the United Nations, there is a grand total of 26706 participants registered for COP25.This breaks down into: 13643 people representing specific parties, 9987 from observer organizations – such as those living on government handouts (aka. scientists), the munchers and looters and subvention-addicts (aka. business groups), or various demented or perverted (aka. non-governmental organizations) – and 3076 pursuers of the hermetic arts (journalists).

Overall, that amounts to around 4000 more participants than at COP24 in Katowice last year. The number of party delegates is approximately the same as in Poland, but there are around 2500 more delegates from observer organizations and almost twice as many media. (It’s in Spain, right…?)

The country with the most delegates is, by some distance, Côte d’Ivoire with 348. The Democratic Republic of the Congo (DRC) come second with 293 people. Making up the rest of the Top 5 this year is Spain (with 172 delegates), Brazil (168) and the Congo (165).
Despite the United States’ recent decision to start the formal process of withdrawing from the Paris Agreement, its delegation is 78 people. In Europe, France has 125 people and Germany 102. The European Union’s delegation is 125 people. Switzerland, of which delegation I am a member, has 17. The UK has 48.

It saddens me to observe that Bolivia (the plurinational state of) sends no one this year. Venezuela (the Bolivarian state of) remains quiet. These two have provided us with many hours of bizarreries in the past. They seem caught up in the web they have spun.

I have been reminded to state that I am writing this on my behalf. This and any other issues of Markets in Madrid reflect not the views of the Swiss Delegation, the Swiss Federation of small and medium-sized enterprises, or any other institution. This or any other issue of Markets in Madrid contains no views. Just facts.

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.