COP17: what's all the fuss about?

The United Nations Framework Convention on Climate Change (known as the UNFCCC) is the key UN treaty on climate change.  Each year, the countries that have signed up to the treaty (known as ‘the parties’) gather to discuss international climate policy (at what are known as “COP” meetings).

The COP3 meeting in1997 led to the Kyoto Protocol, which essentially committed countries to reducing their emissions levels to 5.2% below 1990 levels.   COP17 at Durban opened yesterday and despite being a critical meeting for the future of climate change, media expectations seem to be much lower than previous year’s meetings. 

Unfortunately, if agreement is not made at Durban, the Kyoto Protocol will lapse at the end of 2012, leaving either a gap between commitment periods or a permanent void.   A simple repeat of the Kyoto Protocol would also be unwise – as the US is not involved and signed up nations only account for 15% of global emissions. 

However, the political differences that need to be overcome can appear huge.  Some countries feel that any commitment should be non-binding and be little more than the pledges made two years ago at COP15 in Copenhagen. Other countries feel that reduction targets should vary by country and specifically that it is unfair to impose reduction targets on countries that are still developing. 

Emissions reduction would be the main goal for the negotiations. However, at the moment the outlook is more promising for firm agreement on the shape of the new green climate fund. Created at COP16 Cancun, this aims at channelling $100billion of finance into developing countries for adaptation.

So why do we as insurers care? Greenhouse gas emissions need to peak and begin to fall by 2020 to reach the emissions target of 5.2% below 1990 levels.  Without this achievement, the societal and economic impact will be devastating. 

Extreme weather in the form of heat waves, tropical storms and increased flooding have all been linked to climate change. According to Munich Re, of the 950 natural catastrophes recorded in 2010, 90% can be related to the weather. The potential cost of future climate risks could overwhelm many insurers, businesses and society as a whole.

All eyes should be on Durban over the next week to see if past promises can be fulfilled…

Find out more about COP17

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