How Can Spain Benefit from a Climate Deal in Copenhagen?

Spain, on its own, is not a key player in the negotiations for the potential successor of the Kyoto Protocol that is expected to be ‘politically agreed’ at the Climate Change Summit in Copenhagen. It is well known that this ‘honour’ is reserved for the US and China, the world’s two main emitters of Greenhouse Gases (GHG). However, Spain can play an important role in that it will occupy the Presidency of the EU during the first half of 2010. Moreover, Spain could influence the negotiations towards win-win situations for the country. In this working paper we argue that the economics and politics of climate change provide few incentives for countries to engage in an ambitious deal that would drastically cut carbon emissions. However, we expect the Copenhagen summit to deliver a workable successor of the Kyoto Protocol, whose main mechanisms are two types of partnerships: (1) developed countries with developing countries; and (2) public and private partnerships. Spain can benefit from an agreement like this given the first-mover advantage it has acquired in the deployment of clean technologies, the importance of its energy firms and their strong links with Latin America. However, among other initiatives needed, the country must adapt its energy and environmental policy to facilitate the transition towards a low-carbon economy. This is a complex task because energy and environmental policy objectives are intertwined, and in some cases trade-offs are inevitable. This paper presents some principles put forth by evolutionary economics that could guide policy makers in this endeavour.