6th Letter from Madrid

by Henrique Schneider*

The 25th United Nations Climate Change conference (COP25) took place in Madrid, Dec 2 – 13. Henrique Schneider was on site and represented Switzerland …

Dear friends of the spiritual!

The Clean Development Mechanism, dearly called CDM, is a carbon market mechanism under the Kyoto Protocol. It is the sole multinational offsetting mechanism through a market mechanism that works (sort of). Yearly, its Executive Board receives further guidance from the COP. Usually, this guidance is to keep up the (sort of) good work and lift the spirits of a secretariat in need if something to do.

This year and keeping in mind that the mandate of the CDM ends in 2020, I suggested that its Executive Board takes notice of what is being developed under the Paris Agreement. Taking notice just means acknowledging that there is something happening. This spirit of openness not only did not fly; it scared negotiators to such a degree that is prevented them from taking a decision. For the first time in history, there will be no further guidance.

Why is this important? It is not (except, you are in the CDM). But it is indicative of the process.

So, why not take notice of what is happening? Because, as the developing countries argue, if you take notice, you realize that your mandate could end, and they don’t want that. If they don’t take notice, there is no end of mandate. Fair enough.

In the self-summoned spirit of compromise, the developing countries did want to urge the Executive Board to be prudent in the management of financial means. Nothing wrong with that. I blocked it anyway. Why? Because they inserted a little fragment of text “in order to maintain its further operation”. If your mandate ends in 2020, there is nothing to maintain. Switzerland says: no.
No decision; no further guidance. What now? I don’t know. I am not a minister. That’s why they are here this week. In any case…this second, ministerial week, seems to be tougher that the first week was. The spirits of compromise and friendship that roamed through the halls of this industrial park seems to be have encountered some ghostbusters in form of ministers.

Still writing in my own name and not possessed by any spirit,

*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.