OPEC Statement to the 4th Conference of the Parties to the UN Framework Convention on Climate Change - Buenos Aires, November 1998

By HE Dr. Rilwanu Lukman, OPEC Secretary General

THE ONGOING CLIMATE change negotiations can be conveniently described as seeking to balance the ideological with the practical. We are talking about the establishment of universal codes and procedures which provide for a healthy planet and, at the same time, are equitable and - as far as possible - consistent with other fundamental objectives of development. To bring this about clearly requires cooperation and compromise. But at what level do we pitch this compromise?

In its practical application, we are faced with an issue which extends far beyond any proportionate response to the risk of climate change. Decisions on so-called remedial measures could seriously damage the economic and social fabric of countries far and wide. Some countries may end up as net winners and others as net losers - this is clearly against the spirit of the negotiations and the letter of the UN Framework Convention on Climate Change itself.

Especially vulnerable are the oil-producing developing countries, the core of which constitutes our Organization. While OPEC countries themselves would clearly not be immune to the purported effects of climate change, our principal revenue-earner, petroleum, is inextricably associated with the downside of the climate change negotiations. Although the same is true for other fossil fuel exporters, it is important to ensure that measures taken to combat climate change do not place an unfair burden on oil.

If there is a large-scale introduction of climate change-induced measures, we are likely to see our economic well-being jeopardised by the resultant heavy reduction in demand for petroleum, which may in turn result in an annual loss of tens of billions of dollars of export revenue, according to our research.  Indeed, other estimates of economic damage from mitigation measures consistently identify fossil fuel exporters as the key sufferers.  To minimise the damage, appropriate compensation mechanisms are essential. Indeed, the Group of 77 and China called for this principle to be recognised at Kyoto last year. Special consideration of the needs of these countries is already mentioned in the Framework Convention. Without a favourable disposition towards the compensation issue among the Parties to the Convention, how can fossil fuel producers be expected to give their wholehearted blessing to measures that could wreak havoc with their economies?

Emissions trading, the clean development mechanism and joint implementation are all being discussed as means of reducing the costs of introducing climate change measures. But this, in itself, raises many inescapable issues. Will such measures mean that some countries, which may ironically be traditional high-polluters, can actually escape having to take any action at all within their own national borders?  What are the opportunity cost implications?  Furthermore, although there is agreement that investment related to these flexible mechanisms should be above and beyond commitments to aid, would this actually be the case? Could these mechanisms result in the surreptitious inclusion of additional commitments for developing countries?

Any movement towards a system that involves developing countries must have, as a central tenet, the objective of equity, but this is rarely heard in the negotiations over these mechanisms. Moreover, we must ensure that the objectives contained in the Framework Convention, the Berlin Mandate and the Kyoto Protocol are fulfilled before any new commitments are introduced. It is not surprising that there is a fear that the picking of "low-hanging fruit" in developing countries will be largely to the benefit of a far too narrow selection of countries elsewhere in the world. Let us, therefore, confirm our understanding that efficiency goals are concomitantly balanced with a parallel concern for sustainable development in non-Annex I countries.

Surely it is time to address head-on the deep concern of countries whose economies are in danger of being severely damaged by the measures under review, including the oil-producing nations? Only in this way can these negotiations be seen to be addressing the twin objectives of equitable and sustainable development, which, after all, are the key responsibilities of everyone in the scientific, socio-economic and political communities.

In conclusion, while OPEC countries share the common desire for a cleaner, safer world in which to live, the cost of achieving this must be borne as fairly as possible by all nations.