Climate change is the mother of all complex issues. It is like chess in six or seven policy dimensions " energy, environment, economy, security, develop- ment, trade " and now geo-politics. It is a global and inter- generational challenge that both extends out over 50 years and demands immediate policy and investment decisions to transform our energy, infrastructure and transportation sys- tems. We’re perplexed by how to reconcile the time scales or the pace of change required.

Compound this challenge by bringing 193 countries together in a dysfunctional negotiation and create high public expectations for a near impossible outcome: one comprehensive, legally binding climate change treaty to replace the controversial Kyoto Protocol in two weeks. Sounds like a recipe for failure " which is what we got.

Or perhaps we got a strong dose of reality. A global cli- mate deal within a recovering global economy is going to be bloody hard to achieve. Not impossible but it will require both more pragmatism and more innovation than we have seen so far. As President Barack Obama suggested at the end of the conference, countries need to reorient themselves, spending more time looking forward than looking back. He noted, ”œThis is going to be hard. It is hard within countries and it is going to be even harder between countries. Hard stuff requires not paralysis but going ahead and making the best of the situation at hand and continually making progress from there.”

If we need one global climate change deal before 2012, then perhaps the failure of Copenhagen can be seen as an important first step, though disappointing on many levels. But we can’t ignore the lessons or the hard realities facing Canada, the US, the UN and other international processes in 2010.

More than 30,000 people came to Copenhagen to attend the conference and several thousand more from across Europe came for the show. It was the largest and most connected global gathering in history. The majority were told to expect one outcome: a comprehensive, legally binding agreement. In the end, what happened was what Danish President Lars Rasmussen signalled in October 2009: a political framework with technical details to follow. But there’s no denying that, after a tumultuous and largely para- lyzed two weeks of negotiations inside and drama outside the Bella Centre, it still took an extraordinary 11th-hour intervention by an ever smaller group of world leaders to cre- ate the final three-page document, the Copenhagen Accord. This analysis examines what happened beneath the surface and suggests ways it will shape climate talks in 2010 and possibly future international diplomacy, green and otherwise.

But first here are some vignettes from a 21st-century exhibition.

Copenhagen was by far the most connected conference in history, with an impressive IT infrastructure of cable and Wifi supporting literally thousands of laptops, PDAs, Kindles and cellphones each and every day. There were cyber- cafés and Skype-friendly video links. Cisco sponsored state-of-the-art virtual conferencing rooms with massive screens. Bandwidth was an astonishing 2 GB per second.

The reach was amplified by the more than 3,000 members of the media who participated in Copenhagen, everyone from major print/electronic journalists from more than 100 countries to video bloggers and social media campaigners posting thousands of updates daily. It made the news most nights here in Canada.

The weekend protests were largely peaceful in support of a deal, not opposed to one, even if the media were looking for conflict. And, at the street level, Copenhagen was more Woodstock than WTO riots and saw the democratizing of the climate space, so that activist environmental groups shared the public space with savvy students from around the world, church groups, scientists, young fami- lies, women’s groups and children’s advocates. There were costumes, sit- ins, singalongs, banners and photo exhibits of the world’s most vulnerable natural environments. On the middle Sunday of the conference, church bells rang out across the globe in solidarity for ”œclimate justice” " including in some 200 Canadian communities.

Over the two weeks, there was a smorgasbord of side events in and around COP15, hundreds cover- ing everything from OECD and International Energy Agency (IEA) studies to foreign aid, trade policy and removing black carbon in the Arctic. These were serious events that served to educate people about the technical aspects of the meetings. Businesses tracked the negotiations inside the Bella Centre but they also discussed technology innovation, financing and carbon trading systems. Through the ”œHopenhagen” campaign, they were exhibiting the Gretzky model of brand and product development: go where the next generation of markets and customers will be.

So the role of youth was edgier in 2009 than ever before. They were coveted consumers, next-generation vot- ers and future leaders all rolled into one. They turned a few heads among the more seasoned negotiators with the slogan on their orange T-shirts: ”œHow old will you be in 2050?”

There was also the ”œFossil of the Day” shaming campaign that Canada won hands down, for its low profile at the negotiations and its oil sands development.

And it turns out a well-reported and connected meeting also means a leaky international negotiation. Besides the Climategate science scan- dal in the weeks leading up to Copenhagen, no fewer than five draft negotiating texts went viral over the course of the two weeks. Not necessar- ily a big deal, except that it served to undermine the multilateral negotia- tions at critical points. When the first sensitive text leaked on the second day, the Danish chair was accused of having a hidden agenda and an already fragile trust with developing countries was never really recovered.

In so many ways, the Copenhagen climate change conference can trace its roots to the globalization debates focused on the World Trade Organization in the late 1990s. They climaxed with rioting in the streets of Seattle in 1999, by protesters opposed to a globalized economy and the injus- tices it would bring. Ten years later, we have learned that our globalized econ- omy is indeed interconnected, with opportunities for large and small coun- tries, and when the downturn came, we turned to the G20 finance minis- ters and leaders to come up with solu- tions that would benefit all.

We understand, too, that green- house gases emitted in the US or Bangladesh or Egypt have a cumulative impact on the atmosphere, so no country can solve this one alone. As the American industrialist John D. Rockefeller famously said, ”œI believe that every right implies a responsibility, every opportunity an obliga- tion.” Now that we have the rights and opportunities of a globalized economy, there are responsibilities and obliga- tions. But adapting to the new reality is messy and complicated.

For better or worse, the Copenhagen Accord is also a child of the 1992 Rio Earth Summit that signed the UN Framework Convention on Climate Change (UNFCCC), which was followed by the Kyoto Protocol in 1997. These two agreements created two tracks for the 193 participating coun- tries " basically those that signed Kyoto (Annex 1) and those that did not, the G77/China today (really the G132) plus the US and a few others. The inabil- ity to blend the two tracks and graduate to a post-2012 agreement paralyzed the meeting, almost from the first day.

The deepest divide between the rich and poor countries remains over the future of the Kyoto Protocol in the post-2012 world. The Kyoto Protocol includes binding targets for the devel- oped world to reduce emissions along with a number of flexibility mecha- nisms, such as the Clean Development Mechanism (CDM) or global carbon market, that allow for the developing world to benefit from emissions reduc- tion projects. While emerging economies are now willing to take on targets, the developing world was hanging onto its only true point of leverage in the post-2012 negotiation: the fact that the Kyoto Protocol is a legally binding document.

This was not resolved either in the technical negotiations or among lead- ers at the end. And even US Secretary of State Hillary Clinton’s surprise late- stage offer of $100 billion a year in funding by 2020 for the most vulnera- ble countries could not break the dead- lock between developed and developing countries, particularly in the tense final 48 hours.

As we watched it all inside the Bella Centre, there was an eerie sense of fiddling while Rome burned. While delegations from the most vulnerable countries talked about disappearing coastlines, desertification and potential migration of their populations, many negotiators restated well known posi- tions and refused to move into smaller brokering groups to try to advance the negotiations. So the same paralyzed tables where they had been for months continued, and as the likelihood of a binding agreement dimmed, the calcu- lation was made in some delegations that not one single bracket should be surrendered until the 2010 rounds.

In those last two days, 119 world leaders gathered in Copenhagen. In contrast to most international meet- ings, they were not there for hand- shaking and photo ops. Leaders would have to get their hands dirty. By the Thursday evening at the state dinner, leaders were well aware that failure was a distinct possibility, since little progress had been made in the previ- ous 10 days by negotiators to close the gaps. Shockingly, it didn’t get better while they were there.

On the same night across town, there was a twilight moment where the technical negotiators at the Bella Centre became quite territorial and refused to support the Chair’s request to brainstorm or broker options for their leaders a few miles away. There are certainly better ways to work through difficult negotiations than to surrender complex issues to political leaders, but it was surreal that negotia- tors preferred stalemate over engage- ment. A bizarre moment.

Late on Friday afternoon, a group of approximately 27 leaders gathered with UN Secretary-General Ban Ki- moon to try to close the gap on a high- level political agreement. The makeup of the group was unique because for the first time it included both emitters and some of the most vulnera- ble ”œadapters” like the Maldives and Grenada, representing small island states; Ethiopia, Algeria and Lesotho for Africa; plus Bangladesh and Colombia. It is impor- tant to remember that none of these countries sit at the G8, the G20 or the Major Economies Forum (MEF), which are essentially clubs representing the highest GHG emitters (see table 1).

The G27 agreed to craft the key ele- ments and came up with a com- promise. What happened next will be analyzed and written about by histori- ans for decades to come. After a break and some diplomatic breaches between China and the US, Wen Jiabao, Premier of China, President Lula da Silva of Brazil, President Jacob Zuma of South Africa and Prime Minister Manmohan Singh of India caucused in a small meeting and President Obama joined the meeting to broker final terms.

Stiff conversations followed and, over the objection of negotiators, the five leaders agreed to the language of the Copenhagen Accord. The accord was released to the media as a ”œmean- ingful deal” and then taken into the full UN plenary. During a tortured 13- hour overnight session, a small group of countries (Bolivia, Venezuela, Cuba, Nicaragua, Tuvalu, Sudan) criticized the agreement, and the UN consensus decision-making process prevented the adoption of the accord. The UN plena- ry simply ”œtook note” of its existence and member countries were invited to sign up to support the accord by January 31, 2010. In the end, it was the adapters included in the G27 table ear- lier in the day who acted as a bridge to the rest of the developing world. The President of the Maldives pleaded, on behalf of his grandchildren, not to have the UN process kill the accord.

The UNFCCC process maintained the two-track negotiations that will resume in June in Bonn and then at COP16 in Mexico City from November 29 to December 10, 2010. What is not clear is whether different configurations of countries " G2, G5, G8, G20 or G27 or the MEF" could replace or run in parallel to the UN process to break the deadlock on a post-2012 agreement. Canada would certainly have an opportunity when it hosts the G8 and G20 meet- ings this June to choose specific ini- tiatives to advance.

The Copenhagen Accord created a common global target to limit climate change to a maximum temperature increase of 2 degrees Celsius, consis- tent with the scientific advice. It also marked an important shift because for the first time, both developed and developing countries will have 2020 targets and will agree to measurement, reporting and verification by the international community. The criti- cism is that these targets will not be legally binding as they were in Kyoto. There is skepticism that these asym- metrical and voluntary country tar- gets will actually limit temperature rise. Analysis will come only after the January 31 deadline when countries were supposed to ”œregister” their sup- port. Canada has already signed on for its 20 percent reduction from 2005 levels by 2020.

The accord creates an innovative ”œQuick Start” Fund " a $30-billion transition fund for the developing world to support technology transfer and adaptation projects between now and 2010. The fund would continue and grow to $100 billion per year by 2020 from ”œa wide variety of sources, public and private, bilateral and multi- lateral including alternative sources of finance.”

The European Union and Japan have already committed $10 billion for the first phase. The US and Canada both said they were in, although exact amounts are not yet clear. These funds would immediately be sent to the nearly 50 small island states, sub-Saharan African countries and those states dealing with the impacts of deforestation. It is now understood that China would not be eligible for " nor want " any financ- ing. Interestingly, an emerging economy, Brazil, has suggested that it too would be prepared to support the most vulnerable nations by contributing resources.

The accord also creates four new institutional arrangements: a Technology Mechanism, a Green Fund, a formal mechanism to support deforestation work and a high-level panel on alternative sources of financ- ing. Interestingly, there is only a pass- ing reference to the use of markets and a new reference to providing incen- tives for developing countries that fol- low ”œa low emission pathway.”

The devil is always in the details, so it is hard to know what impacts these new instruments will have or how they will relate to the existing Kyoto rules for the CDM, guidelines for international credits/offsets or the expansion of an international carbon market. Judging by the 10 percent drop in carbon prices on the EU exchange after the meeting, interna- tional business hates uncertainty about climate rules as much as Canadian business does.

Though limited, the Copenhagen Accord offers lessons and marks a shift from the underlying philosophy of the Kyoto Protocol in several impor- tant ways.

The future path, though tentative at the end of 2009, is toward collective global effort on GHG emissions reduc- tions, as opposed to industrialized economies acting first " and alone.

There’s a new geo-political bal- ance of power, at least in the climate change and energy universe. Copenhagen saw negotiations among 119 world leaders and then among combina- tions of G2 and G20+, con- cluding with the never before seen G27 and G5 (see tables 1 and 2). For now, the negotiating power shifts south and east.

At the same time, the traditional China/G77 voting block that worked in Kyoto doesn’t work now. They are no longer a homoge- nous group with homogenous interests and must be reformed. There is no question that emerging economies effectively flexed their muscle to dic- tate the terms of the political accord, but the interests of the most vulnerable states and Africa will continue to diverge.

Having experienced it first-hand, world leaders are now painfully aware that there’s something terribly wrong with the UNFCCC negotiating and decision-making process. And once they are aware, it is impossible to pre- tend that the current process alone can lead to an agreement. In 1997, the Kyoto Protocol lifted the UNFCCC to a new stature among international insti- tutions, but the Copenhagen outcome challenges its authority and under- mines any claim it has to leadership on timely GHG reduction results. Having blown a historic amount of political capital, the UNFCCC has sig- nalled an appetite for reform.

Aspirational and comparative country targets were not the negotiat- ing currency this time. A number of countries came to Copenhagen with firm targets and no intention of last- minute horse-trading, particularly the US and China. The EU had offered a conditional 2020 target, suggesting it would move from 20 percent to 30 per- cent below 1990 levels if other coun- tries did more. No one even asked.

Targets will be set bottom-up by each country, according to the ”œnationally appropriate mitigation actions,” and will respect different peaking timetables.

The climate deal breaks new ground by becoming both an adaptation (responding to cli- mate impacts already upon us) and a mitigation (reducing GHGs) deal. Leaders have endorsed an unprecedented phi- losophy that global equalization payments are part of the climate bargain for the most vulnerable small island states, sub-Saharan Africa and countries where deforestation is greatest. This would have been inconceivable at the time of Kyoto.

Leaders are a little more cautious not to get too far ahead of their systems of government or their people (read voters in democ- racies). The move to straddle both the domestic and the international responsibilities recognizes, as Robin Sears notes elsewhere in this issue, cli- mate change is an ”œexquisitely painful political file.” Many will see this as weakening a scientific deal but it could also be a way of strengthening resolve for action.

Technological change is now under- stood to be essential to achieving the low-carbon future. The IEA released a report calling for $10.5 trillion in global investment by 2030. Now all countries understand that technological transfor- mation of our energy, infrastructure and transportation systems is required. For developed countries, that means chang- ing existing capital stock, diversifying energy supply, shifting industrial process- es and changing patterns of resource and energy consumption. For emerging economies like China and India, it means allowing their economies to grow, where possible re-directing new energy and transportation infrastructure to low- carbon options.

In a recent Financial Times article, Richard Haass of the Council on Foreign Relations suggested that the principal threat to world order is a suite of global issues, including climate change. His premise is we need a new kind of multilateralism, an alternative such as ”œfunctional multilateralism " coalitions of the willing and relevant.” His sentiment is echoed by those trade experts who wonder whether we need to move beyond a ”œsingle undertak- ing” mentality such as we have seen with the WTO Doha round, where the only option is a comprehensive deal or the perception of paralysis and delay.

In some ways, what we are seeing on climate change at the subnational level between provinces and states is a form of functional multilateralism. And what Prime Minister Harper is proposing by seeking a practical, working North American arrangement on energy, climate change and cap- and-trade would be the same thing. Perhaps Canada, through its leader- ship of the G8 and G20 in June, can build on the 10 technology action plans released by the MEF in December. These include strategies for renewable energy, smart grids, advanced vehicles, bioenergy, carbon capture and storage, and energy effi- ciency for both buildings and industry.

We really are in this together. But the implicit (rather than explicit) motivation for countries is competi- tiveness and participation in a global- ized economy. The EU, China and the US have made clean energy growth central to their economic future. Every American cabinet secretary in Copenhagen talked about climate change as facilitating the next indus- trial revolution and creating depend- able jobs that can’t be outsourced.

The question now is will we do it in lock-step, guaranteeing efficiencies by bringing new technologies and industrial processes to scale globally, or will we create high-carbon havens where countries with no GHG rules attract industry to keep the cost of production low. Put another way, rules on GHG emissions impose a premium on energy production and con- sumption. In today’s recovering and highly competitive global economy, we cannot stay para- lyzed. The next decade is critical for the transition and necessary capital stock turnover.

To find our way to a single post-Kyoto agreement, we may have to move on both fronts: implement forms of functional multilateralism but also develop a realistic timetable for when we could get a legally bind- ing and comprehensive treaty.

Perhaps the phoenix that can rise from the ashes of Copenhagen is that Canada’s own potential leadership in clean energy can shine through and make our place in a low-carbon world clearer.