From Doha to Pyongyang: DPRK Progress and Development within the UNFCCC Framework
Robert Winstanley-Chesters again demonstrates an incisive ability to tease out subtle clues from the political fog of North Korea, where even a seemingly common event inevitably has political overtones and bureaucratic undercurrents. Winstanley-Chesters, who is concluding his Ph.D. at Leeds University, continues his journey for SinoNK wherein he describes how North Korea uses the environment as a political legitimizer. This discovery process also contains material that can be forged into new ways of engaging North Korea in practical and meaningful ways, when the political will exists to do so. –Roger Cavazos, Coordinator
From Doha to Pyongyang: Progress and Development within the UNFCCC Framework
by Robert Winstanley-Chesters
Almost in and of itself, the DPRK’s success in registering its first scheme under the United Nations Framework Convention on Climate Change (UNFCCC) tutelage sparked this author’s desire to generate a SinoNK virtual symposium in August of this past year. Considering the length of time — and bureaucratic manoeuvring — taken by the DPRK in order to get to the point of actually succeeding in registering any similarly large project, I thought the topic might offer a rich vein of analytical potential, both for investigating institutional process within the environmental aspect of DPRK governance and for examining further construction of the DPRK’s narratives of environmental legitimacy.
Moreover, the DPRK’s posture toward the climate change movement seemed to evoke, in the North Korean context, the possibility of large non-sanctioned financial rewards of hard currency. Through participating in the current Clean Development Mechanisms system (hereafter CDM, which were associated with Kyoto protocols) and other environment based financial instruments, the DPRK stood to earn large sums of hard currency without having to resort to extortion or creating an artificial crisis. North Korea gave public signs of this possibility: Witness the DPRK’s developing interest in climate change itself as evidenced in regular reportage presented through KCNA channels (see “Climate Change Affects Antarctica Faster Than Previously Thought: Study,” KCNA, February 10th 2012). There was also a financial aspect to a possible DPRK participatory role at the 18th Conference of the Parties (COP 18) meeting of the UNFCCC in Doha, Qatar.
Alas, it was not to be. The DPRK did not actually attend the meeting nor offer its credentials in any way, choosing instead to be represented by the G77 and China grouping. So there were to be no great, grandstanding or subtle presentations by representatives of the DPRK at the meeting.
In fact, to date, there has been no discernible comment from any institution of the DPRK related to outcomes of COP 18. Total radio silence. Dr. Benjamin Habib, who contributed to our virtual symposium in August has published a fantastic review of the entire UNFCCC process for anyone not au fait with the ins and outs and all the acronyms or current procedural matters within the process.
When it comes to practical matters however, since my posting in August and our virtual symposium here and the registration of the Hamhung Hydropower Plant Number 1 on the 16th of August, the UNFCCC and others have reported some project acceptance in North Korea under the Clean Development Mechanism scheme. These include the Paekdusan Songun Youth Power Station Number Two and Ryesonggang Youth Power Station’s number Two and Four.
Institutionally, and perhaps procedurally, this is something of a success for the DPRK authorities. Not only have they become adept enough at the paperwork element of this process and forged a connection with the Czech Ministry of the Environment, but have already sourced an external buyer for their credits, Topic Energo, a Czech Bio-Mass dealer.
Mythical Money Maker: Clean Development Mechanism | The Clean Development Mechanism is, perhaps, not the immediate enormous financial success that it may at first seem. The DPRK is currently accredited with 158496 tonnes of CDM carbon reductions valued at EURO 364,540 or roughly USD $487499 annually on the open market (until 2023), as the CDM credits are only currently worth Euro 2.3 a tonne. Directly they are worth even less, as the DPRK’s current emissions factor which is involved in the generation of a figure for direct claims on the CDM process is only 0.59018 a tonne based on a report from Department for Environment, Food and Rural Affairs DEFRA, 2012. Therefore, by this measure DPRK’s credits, in total, are only worth about Euro 215144 or roughly USD$287,712. Hardly a princely sum or enough to contribute any substantial amount to the exchequer.
Such apparent financial paucity of reward for the DPRK under the current CDM accreditation process may, of course, not be the end of the story. They may also, in fact, not be the fault of the DPRK or its institutions.
The failure of the UNFCCC and CDM process to set a decent and appropriate floor under a cap and trade schema around which a useful and utilisable carbon trading market is a highly researched, reported and contested process. Theoretically, the CDM credits should be worth Euro 23 or USD$30, a tonne at a minimum (Nordhaus, 2008).
A good guide to carbon pricing is UNEP’s “Equal Exchange” program publication “Determining a Fair Price for Carbon” which would generate nearly Euro 3.8 million or around USD$5 million, annually for the DPRK.
It is widely held that the CDM and UNFCCC process, as it is currently manifested, is undergoing a slow motion collapse and will be replaced eventually by a system which takes this necessity for the setting of an appropriate minimum into account; a system that in future will arrive at a more appropriate way of pricing; a monetised system for carbon credits.
For the DPRK, the most important part of this story is that it has participated in the first stage process and presumably, since such a future system which functioned correctly could be financially very lucrative to it, will be involved in the second stage of its development.
Sources and Notes
DEFRA (2012) – Emissions Factor Database – http://naei.defra.gov.uk/emissions/
Nordhaus (2008) – A Question of Balance Weighing the Options on Global Warming Policies, Yale University Press, New Haven.
*A disclaimer – this scholar is a Political Geographer not a Climate Economist, so apologies if my figures are skewed in any way. Also these figures derive from the CDM/CEF and Emissions Factor for November 2012 so may well have changed.
** Exchange Rates taken from www.xe.com on 13/12/2012