The problem of climate change is now, almost universally understood and acknowledged. This is in itself a major achievement. But now is the moment to get serious about the solution.
 
Such a solution has to be global. It must include America and China.
 
It has to be radical. It must put the world on a path away from carbon dependence to a new and green economy.
 
It has to be realistic. It has to take account of the completely legitimate right of people - especially the world's poorest - to enjoy the benefits of economic growth and prosperity spread to all.
 
There has been a vast amount of work to get us to here. The UN process led brilliantly and often heroically by Yvo de Boer has set out the international community's roadmap to a deal; which will culminate in the negotiation in Copenhagen in December next year.
 
The IPCC panel of experts led with such distinction by Dr. Pachauri has examined and laid out the scientific consensus.
 
Here in Japan, we can see how the political agenda has been shaped and changed, first by PM Abe's Cool Earth policy and now under the leadership of PM Fukuda, who leads this year's G8.
 
Ours is a report drawn up by experts but guided by a politician.
 
Our work is split into two phases.  Phase 1 is for this G8 .Phase 2 will be for next year's.
 
Phase 1 is an attempt to clarify and order the agenda for the solution.  Phase 2 will attempt to set out what the solution might be.
 
Phase 1 is in part analytical and technical; in part about how to make sense of the political process.
 
It is about trying to unite the scientists and experts with the political leaders and decision-makers.
 
As such it is explicitly designed to be a practical way through; not yet another campaigning polemic to wake the world up to the challenges of global warming.  The world has woken up.  But now it needs to know what to do.
 
The report warns of the danger of a yawning chasm between, on the one hand the calls for radical action from scientists, environmental groups and people rightly alarmed at the effect of greenhouse gas emissions on the planet; and on the other, the anxiety of decision makers in politics and business, who share the aims of the radical action but worry about whether that action is realistic.  Long-term everyone accepts that the needs of economy and environment are in partnership.  Short-term there is a clear tension.  And we live in the short-term.
 
The report tries to design a way to bridge this chasm.
 
There is a blunt reality that we need to acknowledge amongst all the talk of targets, goals and obligations.
 
The climate demands, over time, a radical, transformative change in the nature of the world economy, moving from growth built on carbon dependence, to environmentally sustainable development.
 
But we need to be clear about the size of the task.
 
The US emissions are still growing.  So are those in Japan.
 
In Europe they are static.
 
China and India are set, rightly, to industrialise and move their vast hundreds of millions of poor people from subsistence agriculture to the modern economy.
 
We are talking of a global 2050 target of at least a 50% cut in emissions.  But let's be clear.  This date is decades away and decades beyond the political life of any government.
 
The key challenge is to describe a realistic pathway to it.
 
That implies shorter term goals.  But these are immensely demanding, asking developed economies to move from growth in emissions to significant cuts within 10-15 years.
Europe has very bold 2020 targets and it will take very bold action to achieve them.  The recent Warner-Lieberman Bill before the US Senate implied 5% cuts in emissions by 2020.  That would be a big step forward but, according to some scientists, it falls short of the cuts necessary for world emissions to peak in 2020. China has set a target of a 20% cut in energy intensity by 2010; a huge step forward. This is again immensely demanding but even if met, will not cut overall emissions, given China's need for growth.  India, again wanting to act, also wants to grow.
 
So the challenge is truly profound.  It is as technically and scientifically complex, as politically sensitive and as institutionally fraught as any the international community has had to deal with since the post-war Bretton Woods economic settlement.
 
And, above all at this point, it should be noted, our knowledge of the issue is constantly evolving.  Though we talk as if the science were certain - its overall purport may be, the precise details are often open to substantial debate.
 
Therefore what this report proposes, is an approach to the Copenhagen agreement at the end of 2009 that does not attempt a deal that tries to resolve all issues up to 2050 or even 2030 or 2020. But instead begins a process that will then undergo revision and adjustment as our knowledge improves and the facts become clearer.
 
So we propose:

1. Set a clear direction in Copenhagen and get the action under way.  Do not try to put a spurious precision on each and every aspect.  Set a realistic target and get the change started.  Make Copenhagen the beginning but not the end of a process that will require constant adjustment over the years.


2. Carry on through to next year's G8 the informal process whereby G8 and the developing world major economies continue to try to resolve core questions.  Together G8+5 and MEM represent three quarters of the global emissions.  A steer from them is an essential precondition to a deal.  This doesn't supplant the UN process.  It supports it.


3. There are a plethora of really tricky questions that need answering before a serious negotiation can work.  We detail these in the report.  It is surely wise to commission work and research on them, making full use of the enormous range of non-governmental bodies, institutes and experts, many of whom contribute to the UN's work.

1. The global target


2. An interim target


3. Developed world commitments and carbon markets


4. Developing world contributions


5. Sectoral action


6. Financing


7. Technology


8. Forests


9. Adaptation


10. Institutions and mechanisms of action

For many reasons, now is the time to act. The challenge is to set a framework that allows change to happen at a pace that is (a) sufficient and (b) sensible. The good news is that there is a large degree of consensus as to the nature of the challenge and the need to deal with it.

Most people no longer need persuading that the changing climate poses a serious risk to humankind. Everyone, with oil at over $100 a barrel and with resources scarce, agrees that energy security is a crucial issue. There is now agreement that we should shift our economies away from carbon dependence. Again, most people agree that a framework for national and international action is needed to incentivise, encourage and oblige such a radical shift.

The question is: how? What is the framework that is sufficiently radical about where we have to go; and sufficiently realistic about where we are and the speed of travel? If we are not radical enough in altering the nature of our economic growth, we will not avoid potential catastrophe to the climate. If we are not realistic enough in setting a framework to get there, we will fail to achieve agreement.

Our citizens are alarmed at growing damage to the climate. Our citizens can also be alarmed at the radical scale of action necessary to prevent it. The task of political leadership is therefore to achieve the right national and international action that puts the global economy on a path to low-carbon growth, but does so in a way that does not hinder the completely legitimate aspirations of people - especially those in the poorer parts of the world - to enjoy the material and social benefits of growth and consumption. Given the complexity of the issues involved, the imprecision of much of the data, and the extraordinarily tricky interplay between the political, the technical and the organisational, answering the question of "how?" is as difficult as any the international community has grappled with since the design of the post-war Bretton Woods economic institutions.

The UNFCCC is charged with making the Global Deal and there is no route to such a Global Deal except under its authority. The purpose of this report is to lay out the issues, bring together the information currently available, and suggest a process for resolution. This is meant as an aid to the proper, formal UN process.

But we should be open about the substantial present political risk.

There is a danger of a yawning chasm between, on the one side, those in the scientific, NGO, and expert community who want very radical action immediately to cut greenhouse gas emissions; and on the other side, those in positions of political leadership who fear they are being asked for something beyond their power to deliver without damage to economic growth.

Just test it in this way. The core demand many make is for a 2020 interim target to be agreed in the UN negotiating process at Copenhagen at the end of 2009. The target demanded for developed countries is of the order of a 25-40 percent cut in emissions. It is a very bold commitment indeed. But, on closer analysis, it is even bolder than it appears. The target is set on a 1990 baseline - i.e., our progress in the next 11 years is to be measured against what happened almost 20 years ago. But many developed nations have seen emissions rise since 1990, not fall. In the US they have risen by over 16 percent; in Japan by over 7 percent. Some European countries - notably Germany and the UK - have seen falls. But just in the last 3 years, in Europe as a whole they have been roughly static. So a baseline of 1990 makes the target even tougher than it sounds.

Essentially, we are asking North America, Europe and Japan to move from a situation of rising or static emissions in the last 12 years, to a significant, unprecedented cut in the next 12 to allow global emissions to peak by 2020.

Scientists will say: it is essential.

Political leaders will ask: is it possible?

We are not assisted by the fact that many of the figures used are open to intense debate as our knowledge increases. For example, we talk of a 25-40 percent cut by 2020. But, to state the obvious, 25 is a lot different from 40 percent. Some will say that to have a reasonable chance of constraining warming to approximately 2°C, we need greenhouse gas concentration to peak at 500 parts per million by volume (ppmv); some 450 ppmv; some even less. Some insist that 2020 is the latest peaking moment we can permit, beyond which damage to the climate will become irreversible; some, though generally not in the scientific community, say 2025 or even 2030 may be permissible.

Then there are important facts and deep political realities that we can easily miss.

• Energy efficiency would provide around one quarter of the gains necessary and, incidentally, save money, but its significance is often ignored.
• The vast majority of new power stations in China and India will be coal-fired; not "may be coal-fired"; will be. So developing carbon capture and storage technology is not optional, it is literally of the essence.
• Without at least some countries engaging in a substantial renaissance of nuclear power, it is hard to see how any global deal could work.
• Around 70-80 percent of the current stock of CO2 emissions in the atmosphere was created by the developed world.
• But if the US meets the boldest targets for reductions while China continues on its present path, and India follows, the climate will still suffer irreversible damage.
• For developing countries to grow sustainably they will need funds and technology, otherwise they will not be able to peak and then reduce emissions within the necessary timescale.
• Deforestation amounts to around 15-20 percent of the entire emissions problem.
• Certain key sectors like cement, steel and of course power most of all, account for a huge percentage - almost half of all emissions.
• Airline and shipping emissions, though only 5 percent today, are a fast growing part of the problem.
• Done right, the costs of abatement will be manageable and probably less than predicted; and there are potentially real opportunities for the new low-carbon economy that will develop.

There is another crucial political reality. The science is developing all the time. The one certain thing is that what is said today, in 2008, will not be quite the same as what is said by the time of Copenhagen, let alone in 2012 or 2015. Our knowledge is growing the whole time. Another pretty safe prediction: technology will develop in ways we cannot predict. But, for sure, if a clear set of incentives are given, the market willrespond, human creativity and ingenuity will get to work, answers will be given tomorrow that cannot be contemplated today.

There is also an immense political danger which anyone who has participated in intricate and politically sensitive multilateral negotiations understands. If the Copenhagen meeting happens without a clear political direction already having been given, then it will be a negotiator's nightmare. What is more, the danger is that countries then approach Copenhagen with minimalist positions, knowing concessions will be dragged out of them; rather than setting out genuinely the maximum that they think they can realistically achieve. The consequence will be an agreement of lowest common denominator, with a hotchpotch of complicated mechanisms that leaves the world little further forward and public opinion disillusioned and dissatisfied.

There is a different and better way of approaching a global deal. What is essential is that the world, especially the world of business, gets from Copenhagen a clear, unequivocal, radical direction. The exact speed of travel may vary and will be adjusted in time. But everyone needs to know that the direction is plain and unambiguous. Such a deal can be based around the following points:

A    The trend of opinion - scientific and political - is clear, for reasons of energy security as well as climate change: we have to change the way we grow, to reduce radically our dependence on carbon. That is why a 2050 target of at least a 50 percent reduction in emissions should now be able to be agreed.

B    The crucial thing at Copenhagen is to set a clear direction in order to achieve such a reduction, both for the developed and developing world. I.e., get the process of change under way; establish the pathway with interim targets for developed countries; but realise that between now and 2050 a lot will change about what we do and what we know.

C    The Hokkaido Toyako G8+5 and the Major Economies Meeting (MEM) should set out the agreement to the critical 2050 target and identify the core elements that go into the global deal.

D    There should then be a requisitioning of the necessary research and analysis so that the core elements have a real and substantial factual underpinning to support agreement on them.

E    The G8+5 and other major economies (for example, as with the MEM) in Italy in 2009 should then get agreement on the core elements and how they fit together, and this should feed in to the Copenhagen process of the UN, which then can make the Global Deal.

F    The Copenhagen agreement should be the maximum that is politically realistic and achievable at this time, i.e., 2009.

G    A process should then be agreed to provide for periodic reviews of what has been done and what is necessary to do, so that the agreement can be adjusted. This should happen in a smaller forum of the key economies and feed into the UN process. So the idea would be for a rolling treaty, not a one-off resolution of an issue that cannot be concluded in 2009, or even shortly after.

H    Copenhagen can then do its work, knowing there is a political direction from the countries that account for 75 percent of emissions; knowing that it is not expected to solve, once and for all, all issues; knowing that there will be then a continuing political process that will allow for further radical steps as our actions and our knowledge become clearer.

Such a way of doing things rests on one fundamental assumption: that the problem today is not one of political will; that the political dilemma is not "whether" but "how". There are good grounds for making this assumption. The attitude of countries like China and India is no longer: you, the wealthy created this challenge; you can solve it. They know climate change is "our" problem not "yours". How we address it is a matter of equity. But the change in climate is the same whether the emissions originate in New York or Shanghai. And of course, the most vulnerable to the impact of climate change live in the poorest areas of the world.

Likewise, in the US today, there is a broad swathe of consensus that the primary responsibility for making near-term reductions in emissions rests with the developed world. Opinion in Japan, under PM Fukuda's leadership, has shifted. In Europe, there is a genuine and deep consensus about the need to act.

The challenge is not one of will. It is how to get a deal that sets us clearly on a path to a low carbon future; that is fair; and that is do-able. That is radical and realistic. In this report, we describe the elements that could go into such a deal and the thinking behind them.

Tony Blair

There is now virtually overwhelming evidence about climate change and its consequences; there remain uncertainties, but the risks of negative and irreversible consequences are clearly high.

• Over 2,500 scientists from over 100 nations participating in the Intergovernmental Panel on Climate Change (IPCC) concluded in November 2007 that "warming of the climate system is unequivocal" and human activity was "very likely" responsible.
• Recent research indicates that we need to limit warming to approximately 2°C; the indications are that moving beyond this level of warming will greatly increase the risks of irreversible and potentially catastrophic changes to the climate.
• In 2005 the atmosphere had a concentration level of carbon dioxide equivalents (CO2e, a measure of greenhouse gases) of 455 parts per million by volume (ppmv). When the impact of aerosols is taken into account the effective concentration is 375 ppmv.
• To have a reasonable chance of limiting warming to approximately 2°C, we would need to peak concentrations at around 475-500 ppmv CO2e (including aerosols), and then reduce emissions to stabilise concentrations at 400-450 ppmv by the 23rd century.
• The scientific consensus is that in order to meet such a concentration path for CO2e, we need to peak global annual emissions no later than 2020 and then cut global annual emissions by at least 50 percent versus 1990 levels by 2050 (1990 is the base year for the UN Framework Convention on Climate Change (UNFCCC) - though there is political contention over the use of this base year). However, peaking globally by 2020 requires rapid, major emissions reductions by developed countries, and there is doubt, today, whether this can be achieved.
• In 1990 the world emitted around 40 billion tonnes of CO2e. Today the figure is estimated to be 55 billion. Without action this would rise to 60 billion by 2030 and 85 billion by 2050. In order to meet the 50 percent reduction, we need to take it down to less than 20 billion tonnes by 2050.
• If, as projected, the world population rises to 9 billion people, this would mean an average of approximately 2 tonnes of CO2e per person per year by 2050. Today the average is 8 tonnes, with over 20 tonnes for the US, 10 tonnes for Europe and Japan, 6 for China and 2 for India.
• The implications of all of this are transformative for the world economy; in order to cut carbon to this degree and maintain current levels of economic growth, carbon productivity (GDP per tonne of carbon) needs to increase tenfold over the next four decades. This cannot happen without profound behavioural and technological change.

B    The challenge can be met

• We can meet approximately 70 percent of the abatement required over the next two decades with existing or near-commercial technologies.
• Energy efficiency alone could cut energy demand by 20-24 percent and save hundreds of billions of dollars per year.
• There are low-carbon energy sources already in large scale use today that can be expanded, e.g., wind, nuclear, and solar.
• Biofuels, particularly sugarcane-based and next generation lignocellulosic biofuels, offer significant potential in transport, but strict policies and incentives are needed to ensure they are sustainable, with less impact on food and land use.
• There are new technologies that are near to deployment: carbon capture and storage (CCS); new transport technologies; new forms of solar; and the use of information technologies to monitor energy use. All offer the potential for huge reductions in emissions.
• Preserving the world's natural carbon sinks, i.e., forests, has massive benefits. Deforestation now accounts for 15-20 percent of CO2e emissions.

C    The challenge can be met without damaging the economy

• Various estimates indicate that abatement will have an impact on the economy, but both the IPCC and the Stern Review have found that it is likely to be relatively low - significantly less, for example, than the recent oil price rise.
• Costs would likely be financed by private sector and government borrowing over time, and are modest compared to normal capital replacement cycles; thus the actual impact on GDP growth in a given year is likely to be minimal or even positive.
• There will be major investments, creating jobs and business opportunities, in the move to a new low-carbon economy. For example, over 2 million people are today employed in renewable energy; investment in new environmental technologies rose from $10 billion to $66 billion from 1998 to 2007.
• Trade will be a sensitive issue, but evidence indicates that the impact on trade flows is likely to be modest.
• Experience from past environmental issues such as acid rain and CFCs indicates that costs are often overstated; costs in both cases turned out to be less than a third of original estimates.

D    Addressing climate change leads to energy security

• Around 50 percent of potential abatement actions - energy efficiency, renewables, biofuels, nuclear - result in increased energy security. Other abatement actions are mostly energy security neutral and less than 3 percent of potential abatement runs counter to energy security.
• Pursuing energy security without consideration for climate could, however, lead to negative climate effects; notably from increased use of coal and energy-intensive sources of oil such as tar sands.
• However, pursuing climate and energy security together would create far more diverse energy supplies, greater scope for local energy production, and reduced dependence on imported oil and gas.
• Not addressing climate and energy security increases the risk of future conflict resulting from climate effects and resource scarcity.

E    Adaptation will be a necessity, not a choice

• Climate change is already occurring and will continue to occur even with strong action.
• Over a billion people live in coastal regions prone to flooding, and will likely be affected even if radical action is taken.
• Droughts, shifting agricultural patterns, greater storm intensity, and spread of disease areas are all effects that will need to be addressed - particularly for the poorest and most vulnerable nations.
• Insurance will become a major issue, to provide effective safety nets through local insurance and global reinsurance systems. New forms of micro-insurance will be needed for low-income families.

F    Waiting is risky and expensive

• The science has become more, not less, alarming on the dangers of climate change as time has passed.
• The longer we wait, the more expensive the reduction will be, the more painful and abrupt the economic transformation, and the more we will be required to spend on adaptation. Recent US reports have shown that delaying the start of emissions reductions from 2010 to 2020 will almost double the annual rate of reductions required.
• China and India and developing countries will make many of their major energy investments over the coming decade. We have a short window of opportunity to make that power infrastructure as energy efficient as possible; it will be far more expensive to achieve this later.
• Deforestation has to be reversed - otherwise we will deplete carbon sinks irreversibly, requiring us to take more expensive actions elsewhere.

Given the above, a global deal on climate change is essential. Without it, individual countries can act, but the cumulative impact will be much less than concerted action within a framework that accelerates the process of change in both developed and developing nations. The Bali Action Plan agreed in December 2007 under the UN Framework Convention on Climate Change (UNFCCC) provides the overall direction for the post-Kyoto treaty negotiations that will occur in Copenhagen in December 2009. The purpose of this report is to describe the building blocks that need to be in a global deal and the research necessary to broaden and deepen our understanding of them and how they interrelate. A future report for the 2009 G8 will then try to show how these elements could be put together in a coherent deal.

We have identified ten core building blocks for a global deal.

1    The global target

From this, all else flows. There has to be a clear direction given by a global target. There is a growing consensus that we need a cut in CO2e emissions of at least 50 percent by 2050. There are however different views as to what the baseline should be. The UNFCCC has been working off a 1990 baseline, but there are those who want to work off a more recent baseline. The key is that annual emissions should be reduced to below 20 billion tonnes by 2050.

Further work

• How should such a target be expressed? As a percentage versus a baseline or as an absolute amount?
• If a percentage, should the baseline year be 1990, or more recent? What are the implications of the baseline year for national targets?

2    An interim target

Leaving it all to 2050 doesn't allow us to describe the pathway to change or prevent a rise in emissions that becomes irreversible. The science says it is critical to constrain the date by which global emissions peak.

Further work

• For which date should the target be set - 2020 or later?
• What should the target for reductions be by that date? What does this require from developed nations?
• Should the target be expressed as an absolute amount? A percentage reduction? A peaking date?

3    Developed world commitments and carbon markets

The developed world needs to start peaking and reducing emissions soon. The primary mechanismfor achieving thisshouldbea set of binding emissionscaps and an international carbon market for trading emissions permits. Developed countries should also put forward national action plans as to how they will meet their emission cap obligations. An important question is what the baseline year should be for the caps. 1990 was agreed as the baseline year for the UNFCCC, but much has changed since then.

Further work

• What overall level of reductions should developed countries target?
• What should the process be for determining national caps?
• How should the national caps be expressed? Absolute reductions or percentage off of baseline? If baseline, what year?
• How should existing and planned national/regional carbon markets be integrated into a global market?
• How should the Kyoto Clean Development Mechanism (CDM) be reformed as a part of a carbon market developed at Copenhagen?
• How should the international carbon market be regulated?

4    Developing world contributions

Bali agreed there should be "common but differentiated" contributions toward meeting the global goal from developing nations. There need to be obligations: to work to national action plans to abate emissions as far as possible consistent with growth; to peak at a certain point; and thereafter to reduce emissions. Meeting these obligations will require technology and funding to support them. Developing world mechanisms may also include a reformed CDM and "no lose" incentives for energy efficiency and carbon productivity improvements at the industry sector level.

Further work

• How are the national action plans to be formed?
• When should developing country emissions peak?
• What reductions are then possible?
• What additional obligations, with the availability of technology and funding support, should developing nations undertake?
• How to distinguish between rapidly industrialising, less rapidly industrialising and very poor nations?
• What sector-level schemes might provide incentives and investment for deeper and more rapid action?
• What other ways might developing nations participate in the carbon market?

5    Sectoral action

A carbon price will be necessary to drive the needed changes but may not be sufficient. Action at the industry sector level may also prove an important tool for driving transformation. Developed countries may use sector targets as a part of their national policies, and one-sided sector-based incentive schemes may help developing countries accelerate their efforts. Where similar opportunities exist in many countries, sectoral approaches may benefit from international cooperation, and enhance the delivery of national targets.

Further work

• How can sectoral schemes be most effectively used by developed nations to deliver cap commitments?
• How might one-sided sector-based incentive schemes be designed for developing countries?
• In which cases might international cooperation on sectors help countries take on and deliver more ambitious targets?
• Are sector-specific schemes needed for sectors currently outside of national caps, e.g., international aviation and shipping (so-called "bunker fuels")?

6    Financing

The world has a much stronger chance of hitting global targets, and the overall mitigation of emissions will ultimately be less costly, if developed nations provide significant funding tosupportacceleratedactionbydevelopingnations;fortechnologydevelopment and deployment; for adaptation; and for halting deforestation. The size of the flows required is comparable or larger than current overseas development aid (ODA) flows and will thus be challenging to deploy and manage effectively. Some of the funding is needed immediately, some over time.

Further work

• What institutional structures are required to manage large new climate funding flows? New institutions versus existing? How can we ensure effectiveness and accountability?
• How can we maximise funding for key technologies, especially CCS, by major contributor countries?
• Can we auction developed country permits as a way of raising money to accelerate developing nation action?
• How can we ensure that financing for climate issues is incremental to, but integrated with, ODA?

7    Technology

There are certain key technologies that require rapid development to offer medium term reductions. The principle one is CCS - without this technology, achieving the targets described, will either be unfeasible or significantly more costly. A broad portfolio of technology investments is required, including solar, nuclear, sustainable biofuels, IT and "smart grid" technologies, as well as basic R&D for the third generation of low-emissions technologies. New mechanisms are required to encourage low-emissions technology diffusion in developing countries and to reduce barriers to intellectual property access.

Further work

• How do we accelerate CCS? How do we engage governments and the private sector to make the investments required to get CCS to commercial viability and widely deployed?
• For countries committed to nuclear, how do we expand nuclear capability?
• How do we create incentives for and support a broad portfolio of technology innovation?
• How do we integrate technology diffusion in developing countries with overall economic development?
• What is the best intellectual property rights regime for encouraging low-emissions technology development and transfer?

8    Forests

There will need to be a specific plan for tackling deforestation. This should differentiate between the forestry needs of different nations; should have a proper system of monitoring; and should develop the incentives to encourage the action necessary to stop deforestation.

Further work

• What are the incentives/obligations necessary to prevent deforestation?
• Are market-based incentives feasible and under what circumstances? Where is programmatic funding required?
• What is the right system of monitoring?
• How will funding be raised to support necessary in-country action?
• How can in-country capabilities be built to support forestry efforts?
• What can be done to encourage economic development that is compatible with forest preservation and expansion?

9    Adaptation

Climate change is occurring today and adaptation is required, particularly for the most vulnerable countries. Estimates on funding required vary, but it will be significant. We should also look at innovative ways in which the private sector can play a role through the global insurance market.

Further work

• What funding will be needed for adaptation by which countries, for what applications, and over what time frames?
• What should the sources of this funding be?
• What institutional mechanisms are required to deliver funding, integrate it with development agendas, and ensure effectiveness?
• What role might the insurance industry play?

10    Institutions and mechanisms of action

It is apparent that the scale, complexity, and range of action will require effective institutional structures and mechanisms. These can be existing institutions. They can be created. They can be partnerships between the private and public sector. We should attempt to construct non-traditional and non-bureaucratic means of acting.

Further work

• What overall governance structures are required for the actions arising out of a new Copenhagen treaty? How can we strengthen the UNFCCC?
• How centralised should the governance structures be versus a principle of subsidiarity? Should there be different, customised solutions to each aspect, or one over-arching body?
• What is the best way of informing and monitoring the overall performance of the treaty and its various mechanisms (e.g., carbon markets)?
• What is the best way of encouraging continued research and development of our knowledge base? How can we ensure that growing knowledge is incorporated in future target setting and other mechanisms?
• What is the role of the World Bank, the International Energy Agency (IEA), and other multilateral institutions?
• What role can the private sector play and how can public/private partnerships be an instrument of action?

In order to have productive negotiations in Copenhagen, we must be actively working on these questions now.

The G8 Hokkaido Toyako Summit - with the +5 and others in attendance - and the Major Economies Meeting (MEM) chaired by the US offer the chance to agree:

• That these elements should indeed be the building blocks of the global deal.
• To take certain key decisions now, e.g., the global target of at least 50 percent ; funding for CCS development and deployment; and actions to advance the concepts of carbon markets and equitable contributions by developing nations.
• To put in place a process for developing these building blocks in the run-up to the Maddalena G8.
• To commission further work.

In that way, the UNFCCC meeting at Poznan at the end of 2008 can move the process forward, and the Maddalena Summit in 2009 will be a major opportunity for the G8 to build on progress in Hokkaido, provide leadership and create positive momentum in the months leading to Copenhagen.

If the G8 nations are committed to take action themselves, transform their economies, lead in new technologies, and support the nations of the developing world, then the chances of a successful and perhaps even historic outcome in Copenhagen will be greatly increased.