Building bridges to 2020 and beyond: the road from Bali

What would the shape of a realistic, yet ambitious, package for the climate regime after 2012 look like? How do we obtain a package deal starting in Bali but building bridges to a post-2020 climate regime? A fair, effective, flexible and inclusive package deal has to strike a core balance between development and climate imperatives (mitigation, adaptation, dealing with the impacts of response measures, technology transfer, investment and finance) to create bargaining space and establish a conceptual contract zone. Within a continuum of possible packages, two packages in the contract zone are identified: 'multi-stage' and 'ambitious transitional'. The latter is ambitious, combining domestic cap-and-trade for the USA, deeper cuts for Annex B countries, and quantifiable mitigation actions by developing countries. It is transitional as a possible bridge to a more inclusive regime beyond 2020. Multi-stage is defined around mechanisms by which countries move through increasingly stringent levels of participation, and must be based upon agreed triggers. Our assessment of political dynamics is that multi-stage is not yet in the <italic>political</italic> contract zone. Key to this is the absence of a 'trigger from the North', in that the largest historical emitter must act earlier and most decisively. But progress will also depend on continued leadership from Annex B countries, as well as more proactive, incentivized leadership in the South. Agreeing on the transitional stage is the critical next step in the evolution of the climate regime. Negotiating any package will require an institutional space for bargaining, political leadership and trust, and a clear time-frame.