Tag: Finance

Cancun Building Blocks - Oct 2010

THE POST-COPENHAGEN ROAD

A fair, ambitious and binding deal is needed more urgently than ever. Climate science is more compelling by the day. Impacts are coming harder and faster. Disastrous flooding in Pakistan, heat waves and forest fires in Russia and hottest recorded temperatures around the globe, amongst other devastating climate-related events, all point to the need for urgent action. Levels of warming once thought to be safe, may well not be, 1.5˚C is the new 2˚C

Negotiations Post-Copenhagen
Copenhagen was a watershed moment for public interest and support for climate action – and people have not lost interest. More people in more countries than ever have put their governments on notice that they expect a fair,
ambitious and binding global deal to be agreed urgently. Trust-building is essential after the disappointment of Copenhagen. Developed country leadership must be at the core of trust building efforts. Countries must show
their commitment to the UNFCCC process by driving it forward with political will and flexible positions, rather than endless rounds of repetitive negotiations. Many countries are troublingly pessimistic for Cancun, and are working to lower expectations. While others, including countries most vulnerable to climate change, maintain high expectations.

Challenges ahead of Cancun
There are many challenges to getting a full fair, ambitious and binding deal at Cancun, including:

  • Lack of a shared vision for the ultimate objective of the agreement, and the equitable allocation of the remaining carbon budget and emissions reduction/limitation commitments;
  • Sharp divisions on the legal form of an eventual outcome;
  • Failure of the US Senate to pass comprehensive legislation this year; and
  • Current economic difficulties facing many countries, which make it difficult to mobilize the substantial commitments to long-term climate finance needed as part of any ambitious agreement. 

Positive moves afoot
However, more and more countries, both developing and developed, are stepping up their efforts to pursue low-carbon development and adaptation, despite the absence of an international agreement. This can be seen in a variety of ways:

  • Investments in renewable energies have continued their exponential growth, increasing to 19% of global energy consumed;
  • Progressive countries are working to move the negotiations forward;
  • There is a growing perception that low-carbon and climate-resilient development is the only option to sustainably ensure the right to development and progress in poverty reduction. 

So, what does a pathway forward look like?

Firstly we must learn the lessons of Copenhagen. The “nothing’s agreed until everything’s agreed” dynamic from Copenhagen could mean that nothing would be agreed in Cancun. An agreement in Cancun should instead be a balanced and significant step toward reaching a full fair, ambitious & binding deal at COP 17 in South Africa. This will require parties to work together in good faith to create sufficient gains at Cancun, and a clear roadmap to South Africa. This paper outlines how that could be achieved. 

CAN Letter to Chancellor Merkel and the G7 re: April Meetings, April 9, 2015

Dear Madam Chancellor,

2015 will be a decisive year for setting the course for climate policy. Germany is addressing the implementation of its Climate Action Program 2020 and the design of the power market while the EU is discussing how to put its emissions trading system on track again. At the international level a new global climate agreement is to be concluded at COP 21 in Paris in December. In view of this we very much welcome that “climate action” has been chosen as a key topic for the G7 agenda. Climate Action Network International, the broadest civil society coalition aiming at overcoming the climate crisis, kindly asks you to consider the following proposals for your G7 presidency.

Many countries have already started transformational processes at the national level, including increasingly basing their economic development on renewables and improved energy efficiency instead of fossil energy sources. Since renewable energies have undergone significant price declines in recent years, they have become competitive in many regions of the world thereby creating new development opportunities and expanding access to energy. These developments have to be strengthened and expanded by providing favorable political framework conditions.

In this context, the international climate negotiations play an important role. Decisions made within the context of the UNFCCC attract worldwide attention. They provide long term orientation and can give clear signals to investors that low carbon development is not only inevitable but also a real economic opportunity. During your last G8 presidency you were instrumental in defining the “2°C limit”. This has been a groundbreaking first step. We call on you to consolidate the achievements of the past during your current G7 presidency:

  1. Based on the L’Aquila declaration from 2009, and taking into account the G7’s particular responsibility, the G7 should make the next step and commit to a more specific and actionable long-term goal. In accordance with the high probability scenario of IPCC to limit global warming to two degrees Celsius or even 1.5 degrees Celsius it is necessary to phase out fossil fuel use and to phase in 100% renewable energies by 2050, providing sustainable energy access for all people.
  2. This long-term goal should be backed up with a substantial increase in efforts to reduce greenhouse gas emissions, both in the run up to 2020 as in the post-2020 period for which countries are currently making pledges that seem insufficient to avoid dangerous climate change. For example, G7 countries should commit to deadlines for phasing-out domestic use of coal. 
  3. The G7 should confirm its commitment to the goal of mobilizing $ 100 billion in climate finance by 2020, as enshrined in the Copenhagen Accord. This should be backed with a corresponding pathway including increasing annual public contributions until 2020.
  4. G7 should commit to a global goal of ensuring climate resilience to all people by developing, implementing and financing developing country National Climate Adaptation Plans and respective robust and effective national and international frameworks to reduce and manage climate risks and losses that go beyond adaptation capacities. We welcome that Germany plans to enhance the G7 commitment to strengthen climate risk management in vulnerable developing countries. We ask you to ensure a strong focus on the needs of particularly vulnerable people and communities, espeically women. 

However, in CAN’s opinion, initiatives taken by G7 states should not only be limited to the UNFCCC process. While the above steps could in particular support progress in the UNFCCC process, the G7 should take complementary initiatives aiming at fostering trust building between developed and developing countries by launching projects and initiatives to facilitate the transformation process towards a low carbon and climate resilient future. Therefore, we call for your support to:

  1. Terminate the international financing of coal and lignite fired power plants including related infrastructure through the G7's development banks, other public banks and export credit agencies.
  2. Initiate new or significantly strengthen existing initiatives and financing instruments to promote capacity building, technology transfer and investments in renewable energies and energy efficiency in developing countries with ambitious climate and energy strategies.
  3. Mobilize new and innovative sources of climate finance including a Financial Transaction Tax (FTT).
  4. Accelerate efforts to end subsidies for fossil fuels by 2015 in the G7 countries, which have all signed the respective G20 agreement in 2009.

​Madame Chancellor, we are looking forward to further exchange views on these issues and remain at your disposal.

Kind regards, 

Wael Hmaidan

 

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Homework between now and Bonn

The Geneva session ends today—step one on the road to Paris. Ten months and just three more negotiating sessions to go!  The world is eagerly awaiting an international agreement that represents a turning point and brings us significantly closer to keeping warming below 1.5°C, ensures protection for the most vulnerable by ramping up adaptation to climate change,  and helps countries cope with loss and damage — the impacts of climate change that go beyond adaptation.

ECO looks forward to continuing the collegial atmosphere here in Geneva at the next session in Bonn, building on what we are sure will be frequent formal and informal consultations, within groups and between groups, over the next three months. Of course, Parties, listening to your commitment to transparency, civil society expects to be engaged in these discussions and is ready to provide constructive input.

So how can Parties best use the time between now and Bonn?  First and foremost, they must talk to each other, so that they come to Bonn with a clearer understanding of what each others’ proposals mean, where they see options for “editorial streamlining”, and how to maximise ambition in the Paris agreement.

Differentiation

The elements text is peppered with options for differentiation, in which “developed”countries are required to do one thing and “developing” countries are required to do another. In practice, there are two matters at stake here: (1) should there be multiple groups that have different requirements for target types, finance obligations, and reporting requirements? and (2) how do we determine, numerically, when countries are doing their fair shares in terms of domestic mitigation on the one hand and international means of implementation on the other?

On the first question, national fair shares on mitigation and finance should be judged in terms of a basket of equity indicators: adequacy, responsibility, capability, adaptation need, and development need. For the second question, we’d like to hear from the Parties. Should the existing Annexes be kept? Kept but not operationalised? Redefined as dynamic annexes that are based on equity indicators, as in the Ethiopian proposal? Should we introduce more groups, as in the Brazilian proposal? Or should we just give up on having any overarching grouping system, and accept that we’re in a purely self-differentiated world (which seems to be the default path that we are on)? It’s clear to ECO that a constructive discussion is needed on these issues at the Bonn session in June.

Adaptation and loss and damage

There are plenty of good proposals in the text on guiding principles, the global adaptation goal, the link between mitigation, adaptation and loss and damage, national contributions and their communications, and institutional arrangements on loss and damage. Parties should spend the next few months making sure they understand these proposals better. Perhaps a Google hangout on the proposed institutional arrangements on loss and damage is in order?

As regular readers will have noted, ECO has spent some time this week emphasising the importance of both adaptation and loss and damage in the Paris agreement. When the schedule and focus of informal meetings between now and Paris is being decided, the importance of adaptation and loss and damage should be fully reflected.

There are several events in the weeks to ahead where Parties can build further consensus on these issues, including the April meeting in Bonn where LDCs and other countries come together to take stock of progress on their National Adaptation Plans, as well as the first meeting of the Warsaw Loss and Damage Mechanism Executive Committee.  When putting forward their INDCs, Parties should outline their adaptation plans and the support required to implement them.

Mitigation

In order to get us on a pathway compatible with keeping warming below 1.5°C, we need cycles and timeframes that will help to increase ambition over time. ECO recommends a five-year cycle for mitigation linked to a cycle for support, as well as regular, robust reviews, all guided by a clearly defined long-term goal.

And as any regular ECO reader will know, increasing ambition after 2020 is not enough to avoid dangerous climate change. We need action now, and we actually have a workstream for that purpose.

Parties should communicate to the co-chairs their priorities for the technical examination process; ECO suggests renewable energy, energy efficiency, and fossil fuel subsidies reform. The technical examination process (TEP) needs to consider concrete actions, barriers, and support needs. It is also time to start thinking about how an ambition mechanism that builds on the experiences from Workstream 2 can continue after Paris.

Finance

On climate finance, ECO is pleased that several helpful suggestions made it into the text, including five-year-cycles for setting, reviewing and updating collective targets for the provision of financial support, a requirement that developed countries and others [in a position][willing][happy] to do so contribute to achieving these targets, and that they regularly communicate what they are providing. The text also includes a proposed process through which developing countries would be enabled to identify what support they need to enhance action, again, in cycles.

Although not on the ADP agenda, many corridor conversations in Geneva circled around pre-2020 finance. Even the most stubborn developed country delegates seem to understand that clarity on the $100-billion-promise is a must-do for success in Paris.  So here’s a friendly warning: the roadmap to $100 billion must not be a cheeky accounting exercise, but must reflect a real scaling-up of public finance on top of levels that were already being provided or mobilised in 2009 when the promise was made.  ECO hopes this issue will be on the menu when finance ministers meet at the spring World Bank/IMF meetings in April, and that positive movement will be evident well before Paris — perhaps even by the June session in Bonn.

Long-Term Goal

Last, but not least, ECO expects Parties to appropriately respond to the accumulated insights coming from the conclusion of the three year-long Structured Expert Dialogue (SED). Here’s a quick summary: there is evidence for dangerous climate change even with 2°C warming, and we are not even close to on track to stay under that limit. And if you prefer, a tweet:

#TimeForClimateAction WAKE UP, PEOPLE! We are heading for a horrible climate catastrophe, and we really, really need to act.

Starting in Bonn, countries must work towards language in the Paris agreement that clearly expresses our need to phase out fossil fuel emissions by mid-century, and to build a global economy based on 100% clean, renewable energy resources. The science is clear: to stay below a temperature increase of 1.5°C, we must do no less.

So there you have it: five easy pieces. If Parties come to Bonn prepared to engage on these issues, the prospects for the deal we need in Paris are bright indeed.

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INDCs for Parties

INDCs Image

Parties: as you return home to do your INDC homework, ECO reminds you that sequencing is important. Remember to do so on your commitments on finance, mitigation and adaptation assignments, and to do so with fairness and equity in mind. For the first batch of students with submissions due in March, your tasks are clear:

  1. Ensure that the INDC presents enough information so that you can determine the amount of greenhouse gas emissions that will be emitted over the entire commitment period. Ask yourself: “Can I tell how many tonnes my country is going to emit over this period?”. Then add more information until the answer is: “Yes!”
  2. Ensure that the type of the mitigation INDC fits your country’s profile. All developed countries capable should provide an economy wide GHG emissions carbon budget to 2025. Other countries in a position to join them should do so—the more the merrier!
  3. Ensure that the INDC provides clear and transparent information on the role of the forest and land sector. A full proof way is to count the tonnes that the atmosphere sees.
  4. For countries with high responsibility and capability, the INDC should include a finance contribution. For countries that will require financial support, the INDC should indicate financing needs.
  5. Ensure that you provide a description on how your INDC is fair and ambitious. Here’s a simple way to do this is to answer the following questions. 1) In your opinion, what’s left of the carbon budget, and is it compatible with 1.5°C and 2°C and the objective of the convention? 2) How many tonnes of this budget do you do you intend to claim? 3) Why is this your country’s fair share? Before getting too creative, reflect what would happen if other countries applied your criteria.
  6. Outline what your country is doing to cope with the ever-increasing impacts of climate change, and if you are a developing country, describe your needs for finance and capacity building to implement adaptation strategies that are up to this challenge.
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There are still new ideas under the sun – If you know where to look…

Dear delegates, after an [exhausting][exhilarating] week here in Bonn some of you might be feeling tapped out of new [ideas][text]. But ECO is here to assure you that there are some new-old and new-new ideas still out there to be taken advantage of in finance.

The UNEP Adaptation Gap report gave the full rationale for exploring these ideas. It is clear that [new] [innovative] [alternative] sources of finance offer significant potential to raise new, additional and predictable finance for adaptation and loss and damage. In fact, we could raise between USD 26 and 115 billion by 2020 from just 3 of these sources:

  • A Financial Transaction Tax (FTT) in the EU has been given a new lease on life by President Hollande, with his plan to host a meeting of 11 interested Eurozone nations this year. The opportunity is there to commit FTT revenues to the GCF.
  • A clear signal from the Paris agreement that international transport emissions must be addressed by international aviation and maritime bodies ICAO and IMO.  This could unlock new finance, whilst helping diminish a projected BAU emissions growth of up to 270% in this sector by 2050.
  • Despite 87% of auction revenues from the EU ETS going to climate finance, less than 20% of this, from just five countries, has gone to international climate finance,. This offers an opportunity to change the rules so that all allowances are auctioned, increasing total funds and committing participating countries to providing revenue to international finance.
  • The idea of a Fossil Fuel Extraction Levy, to be paid into the Loss and Damage Mechanism, offers the opportunity to raise substantial new and predictable finance from the fossil fuel industry, rather than treasury coffers, to pay for loss and damage.
  • Finally, there is the matter of the millions that could be freed from the largely dormant funds in the UNFCCC’s Sustainable Development Mechanism unit, as well as the CDM scale-up fund, and redirected either to the Adaptation Fund or towards capacity building.

Thanks to a group of forward-thinking Parties, we have the option to explore these new sources of finance in the text. We need Paris to agree to kick this effort off immediately in 2016, with a view to identifying and mobilising these alternative sources of finance by 2020, or 2025 for the sources that will take longer to come to fruition.

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In Defence of an objectives section

Let’s start with the big questions: Why are we here? Is it the beautiful mountain panorama overlooking a magnificent lake, the long working days or the joy of spending more money, than average, for just about everything? No, ECO doesn’t think so either. We’re here to save civilisation, secure our children’s future, keep global warming below 1.5 C; and to pave the path to get there.

The agreement needs to send a signal to the rest of the world that we’re heading in the right direction towards a transition to a carbon-free future. It’s not rocket science that putting the common objectives section at the beginning of the document sends a signal that this is exactly what we will do.

Clarity at the start of the document will give structure to the text and establish the overall goal supported by all of the subsequent elements of the agreement. Ergo, ECO will defend Section C until it runs out of ink to voice our never-ending support. It’s Section C that will provide a clear direction knitting together all the pieces, outline the drivers and our shared aspirations.

Section C on objectives must:

  • Set the direction towards a resilient world in which we phase-out fossil fuel emissions and phase-in renewable energies, as soon as possible, and no later than 2050.
  • Reflect requirements for finance, technology and capacity building for creating that resilient world and outline the MOI for developing countries; to help them peak their emissions before subsequently reducing them, ensure human rights, indigenous rights, gender equality and a just transition to decent work opportunities for all.
  • Make clear that Parties understand the need for adaptation and preparedness will depend on on how fast emissions may be reduced.

We all know climate change is a systemic challenge. An agreement that does not start with a frame to enable a systemic response simply wouldn’t work. We need to get this right from the start.

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What’s this about streamlining?

It’s Wednesday, and the spirit with which we began the week seems to be vanishing. And quickly at that. ECO wants Parties – facilitated by the ADP Co-Chairs – to continue negotiating with the same spirit they started off with, robustly and with purpose. It’s great that Parties feel ownership of the text, and this can be gauged by the inputs made to the text. Now is the time to begin identifying ways to streamline the text, while ensuring all inputs for an ambitious Paris agreement are retained.

The draft contains some promising ideas that must be nurtured and developed further in order for the text to remain ambitious. ECO knows Parties are busy this week, so we wanted to remind them of these core ideas so they don’t get lost in the streamlining. In the context of reminding Parties of the need to have a long-term goal within the text, ECO is particularly happy to see references ensuring we stay on a 1.5°C trajectory. This trajectory can only be achieved through a phase-out of fossil fuel emissions and phase- in of 100% renewable energy, enabling sustainable energy access for all, no later than 2050. This goal should be complemented with commitments by Parties to close the short-term mitigation gap, and to operationalise enablers like finance, technology and capacity building to fill in the foundation for achieving this goal.

An adaptation goal reflecting the co-dependency between mitigation ambition and subsequent adaptation needs is crucial, as is incorporating a public adaptation finance goal. Related but separate, remember Parties: a loss and damage mechanism should be given enough breathing room in the text to accommodate the growing needs of vulnerable communities, and should also be given its own source of finance.

ECO hopes it is clear that the ambition called for by science requires major scaling-up of finance. A clear pathway with milestones for reaching US$100 billion annually by 2020 would be a start. That treatment must be just the beginning though. Also important is a clear understanding of innovative financial mechanisms, as well as a plan for continued scaling-up of public finance. These are key elements that must be reflected within the text alongside a broad public finance target.

Last, and by no means least, a review mechanism enabling timely, 5-year assessment periods and an increase in ambition across various elements is critical to guarantee accountability and environmental integrity in the new agreement.

ECO has flagged only a few of the key elements here; there are many others requiring elaboration and a common understanding as the streamlining process proceeds. We look forward to Parties keeping these key elements in mind as the text is reviewed.

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Finance: What to put (back) into the text

Negotiations will shift to the finance section of the elements text today, and there are several key items still missing—partly due to the weak outcomes in Lima—on climate finance. Here are a few examples of areas where the text must be strengthened.

The idea of global collective targets for finance appears here and there in the text, but nowhere is it captured in a sufficiently comprehensive and clear manner. A durable agreement has to set collective targets for the provision of financial support to developing countries, one for mitigation, and one for adaptation – and regularly review and adjust these targets as part of the agreement cycles. In particular, a collective target for public finance for adaptation is key in light of the large gap between what is required and what is currently offered on that front.

The agreement must include regular cycles of finance commitments by developed countries (and countries with similar responsibility and capability) to contribute to the fulfilment of the two targets mentioned above. So far, developed countries have completely rejected this concept – ahem! No commitments? Isn’t this what treaties are about? What you do and what I do (and what we do collectively)?

To better understand where the gaps are, the Paris agreement should establish a process or mechanism that enables developing countries to iteratively identify the support they require for ambitious action, beyond what they can do without that support.

New sources of finance is another item that makes an unsatisfactory appearance here and there in the text. To proceed in a more organised manner, ECO suggests a proper process to develop alternative sources of finance should be initiated to secure additional finance for the Adaptation Fund, the GCF and the Warsaw International Mechanism for Loss and Damage. There are lots of potential sources out there to explore—revenues from the EU emission trading scheme or the forthcoming financial transaction tax, a global levy on fossil fuel extraction, and so forth. The point is that none of these will be unlocked if Parties doesn’t just get on with it.

Phasing out fossil subsidies is also mentioned in the text, but only as a source of finance, even though it s a great tool to shift investments away from the dirty stuff. There is also no clear indication that finance will be shifted towards renewable energy and energy efficiency.

ECO also suggests the inclusion of text that would lead to a code of conduct for responsible investments (for both public and private actors). This will help direct investment away from unsustainable fossil fuels and put in place social and environmental safeguards, including the do-no harm principle, as well as free, prior and informed consent for people affected by climate-related investments and for all actions with impact on people.

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Loss and Damage requires institutions and finance up to the task

Dear delegates, perhaps you’ve lain awake at night wondering how you will feed your family now that your livestock has died in the most recent drought? Or perhaps you’ve wondered if your family can rebuild your home yet again after two typhoons in a row? Or how long your children will be able to live on your ancestral land that is being encroached upon by king tides?

ECO can only assume that, at least for now, you’ve been spared the climate loss and damage that some of our most vulnerable kin are already experiencing. It is simply not possible to adapt to the worst impacts of climate change—this is why we must build institutions capable of dealing with this multi-faceted challenge.

The Warsaw International Mechanism for Loss and Damage is a good start—but we must be vigilant to ensure it addresses the needs of the most vulnerable, and we must be open for new steps if it doesn’t suffice. Furthermore, we must secure a reliable source of finance for loss and damage—acknowledging that the lower the mitigation ambition is and the less adaptation support is provided, the more the costs of loss and damage will mount.

It would only be fair to raise the necessary resources from those who are most responsible for the greenhouse gas emissions that are causing catastrophic climate change impacts.

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CAN intervention: Joint high level segment of COP and CMP - statement from observer organizations, COP20, Dec 11, 2014

Thank you Honorable Ministers and Distinguished Delegates,

My name is Mariela Rumiche and I am speaking on behalf of Climate Action Network.

In September, the climate change movement made history, and yesterday in Lima thousands of people told world leaders we need to see real world action now to prevent irreversible climate impacts.

Here in Lima, governments must show clear and tangible progress on an agreement that will be finalized in Paris, which must be fair and equitable and accelerate the ongoing transition away  from dirty fossil fuels to 100% renewable energy by 2050.

That transition must begin now; in order to meet 1.5°C we cannot delay action until 2020.

Adaptation and Loss and Damage are equally important. From the typhoon in the Philippines to impacts in my home country of Peru people are suffering from the impacts of climate change already.

Finance is key to deliver on mitigation and adaptation. 10 billion dollars, although a good start, is clearly inadequate to address the challenges we are facing in the near term. Also here in Lima, we must agree for a roadmap until 2020 to reach the absolute minimum 100 billion dollars in new and additional public finance.

Thank you Honorable Ministers and Distinguished Delegates

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