Tag: Finance

The 5-year mission of the AWG-LCA is about to end, without going anywhere very boldly, or finding much new life. The frustrated and deeply divided crew of the USS Bali are already packing their bags, and preparing to jump over to the Durban Platform as soon as they dock in Doha in a few months.

The AWG-LCA will leave in its wake some new institutions, actions and achievements on various fronts, which may yet prove their worth. But in one crucial area there remains a gaping hole – sources of financing for the next year and out to 2020. Without adequate scaled up financing, most of what has been achieved by the LCA will be merely an empty shell. Yet with three months to go, there are no firm commitments or assurances of financing after 2012, when the Fast-start Finance period ends.

Having created the Work Programme on Long Term Finance, and mandated it to report directly to the COP in Doha, developed countries in the LCA are now claiming mission accomplished. That is clearly not the case. Right now, there is little confidence that scaling up climate finance will be given the attention it so desperately deserves.

Once the report of the Work Programme is finalised, there will only be a short window in the Doha COP itself to consider its contents and recommendations, decide on the scope of a COP decision and generate and negotiate the actual text. This is a risky strategy, and is unlikely to do justice to the issue or the Work Programme report, especially since some developed countries are keen to shut down any discussion of scaling up finance.

This is why ECO backs the call by developing countries to keep finance on the LCA agenda and work up some draft text here in Bangkok for a decision in Doha. Political decisions are needed that guarantee sources and scaling up of financing. These are a central element of efforts to achieve the objectives of the Convention and ensure it won’t drop off the agenda or be sent to languish in the SBs.

The list of finance issues that need to be addressed in Doha, either by reaching some conclusions or finding a future home, is substantial. The LCA can lay the groundwork now for an adequate outcome at COP18 by getting some clarity on the scope of the issues to be addressed, and creating some draft text. Of course, the final decision will only be decided in Doha, informed in many areas by the report of the Work Programme on LTF. When the COP considers the report of the Work Programme on LTF in Qatar, it can be informed by the deliberations of the LCA, and perhaps then find creative ways to divide up the different issues requiring decisions.

So what issues need decisions in Doha?

1.) Commitments of climate finance from 2013 to 2020, or at the very least for the mid-term period from 2013-2015. There must be at least a doubling of Fast-start Financing levels from 2013, with agreed criteria for new and additional finance

2.) Commitments to the initial capitalisation of the Green Climate Fund, of at least US$10-15 billion over the period 2013-2015

3.) MRV of financial support

4.) Outstanding institutional issues

5.) Clarification of where ongoing discussions about the various elements of long-term finance will take place after Doha – whether in the Standing Committee, as a continuation of the Long-term Finance Work Programme or under the ADP.

ECO sees potential benefits and downsides of different options for continuing the finance discussions beyond COP18, and urges an open discussion among Parties on the issue. And let's not forget that adaptation finance needs a suitable home, too...

ECO shares G77’s “strong feelings”. In the 1(b)(i) session this afternoon, the Group’s passion for their proposal on what needs to be agreed in Doha was evident. The Group's strong and eloquent intervention clearly set out an understanding of what is needed from developed countries under the LCA track to help achieve fair ambition pre-2020, building on some of the common frameworks that will help to inform the negotiations that will take place in the ADP on a new, global deal.

Helpfully, the G77 proposed decisions for Doha on the following essential elements of developed country mitigation:

-          Increasing pre-2020 ambition for all developed countries – those in the KP and those still refusing to (re)join – in line with the latest available science

-          Conversion of the 1(b)(i) pledges of non-KP developed nations into tonnes of CO₂e, AAUs or a carbon budget, rather than point targets for a particular moment in time

-          Common accounting rules for all developed countries

-          Clarification of how the common accounting rules might alter actual levels of ambition

Though we appreciate the EU, Switzerland and Norway's expressed support for common accounting rules and transparency to allow comparability of efforts by developed countries, these countries should form common cause with the G77 proposal and show greater willingness to seize the opportunities for ambitious and comparable efforts under the LCA. After all, developed country modalities have already been negotiated, so there are clear precedents, developed over years of careful negotiations, to guide the work to a speedy conclusion.

As for the Brollie Groupers, who either think that the promise of 1(b)(i) has been exhausted, or that seem to advocate “transparency” through a smoke screen of self-determined rules for reporting and accounting – remember that developed country leadership you signed up to in the Convention? Postponing your duty to increase your ambition until the new deal will kill any chance of staying below 1.5/2°C – and probably a whole lot else as well. Refusing to play by the rules gives an impression of acting like spoiled children who have taken more than their fair share of the sweets and are now trying to hide the wrappers.

And just like any good parent would, we have “strong feelings” about that kind of behaviour.

What do the Beijing and Manila floods, US drought and hurricanes, and record low Arctic summer sea ice cover tell us? That climate impacts are a reality and, particularly with respect to sea ice, are happening faster than we thought. Report after report also tells us that current mitigation pledges are insufficient. It is clear that a work programme on increasing ambition in the short term must be adopted in Doha, so that emissions remain within a trajectory compatible with a 2°C/1.5°C limit.  We need a Doha COP decision on closing that gap!! (Of course, that is not the only decision we need from Doha – others being the adoption of the Kyoto second commitment period amendment, a timetable and milestones for the 2015 deal negotiations and so on – ECO’s point is simply that near-term ambition is critical: do something!)

In the interest of ensuring Parties have time to take in the sights of Doha, ECO has graciously done some of the work for you – with this list you could even forward draft decision text from Bangkok! The COP decision on closing the gap must include: 

-  Strong and early action on short-lived climate forcers – particularly Black Carbon. Doesn’t Black Carbon sound scary – well it is, and getting rid of it has major benefits. A recent UNEP report concluded that ambitious actions to cut Black Carbon and Tropospheric Ozone could reduce global warming by about 0.5°C by 2050 and even 0.7°C in the Arctic, with additional benefits related to health and food security. Parties should agree text that requests appropriate fora for these emissions to take urgent action.

-  HFCs – This is a process laden with abbreviations – so why don’t we get rid of one and accelerate the phase out of HFCs?? Parties should request that the Montreal Protocol agree to phase out production and consumption of these gases as a matter of urgency at MOP25, while all Annex I Parties should also commit to an immediate ban on the use of HFC-23 offsets for compliance with Kyoto Protocol targets. Alternative technologies to HFCs should be made accessible to developing countries in a cost-effective manner. Up to 1.3 GtCO₂e could be saved annually by 2020, and we’d all be one abbreviation lighter.

-  Removal of fossil fuel subsidies: There is no better example of the idiom “killing two birds with one stone” than phasing out fossil fuel subsidies – which can contribute to both reducing emissions and act as a source of climate finance (with no disrespect for our friends at the CBD – we are, of course, referring to metaphorical birds).  Subsidy removal in Annex I countries should be prioritized both for its mitigation and financial gap filling potential. Plans for carefully supporting removal of subsidies in developing countries should be developed in the near term. A COP18 decision must establish the enabling conditions to achieve fossil fuel subsidy removal, including a timeline for phase out, identification of ways for some developing countries to pursue fossil fuel subsidy phase-out as a supported NAMA, and requirements to include fossil fuel subsidies existence and plans for removal as part of the National Communications and/or Biennial Reporting.

-  Develop low carbon development strategies as per the Cancun Agreements:  Establishing emission pathways consistent with the 1.5/2°C limit requires the steady transformation of economies away from a high carbon economic growth model – there is no reason not to start planning today!

These are but a few of the many options out there to reduce emissions in addition to developed countries raising their pollution reduction ambition.  It is clear that the COP decision should also mandate a technical paper to assess the overall level of ambition implied by mitigation commitments and long term low carbon development strategies, and identify any subsequent gap between this collective ambition and a trajectory consistent with a high probability of keeping warming below 1.5°C. We need to keep abreast of the size of the gap and ensure it is closed immediately.

But what about targets and actions? you may cry. How can that not be in your list, ECO? The answer is simple. KP Annex I Parties, including Australia and New Zealand, must move to the upper end of their ranges, enshrine these in an amendment to Annex B, along with removing false emission reductions by minimising carried over AAUs and improving CDM and JI rules. Non-KP Annex I Parties such as the USA must also increase their 2020 pledges so that the combined effort with the KP moves into the 25-40% range. Countries (we’re looking at you: Qatar, Argentina, Nigeria, Iran, Venezuela, Saudi Arabia, Malaysia, Thailand) that have not yet pledged NAMAs must do so in Doha, while developing countries that are in a position to do so should further strengthen existing pledges/NAMAs.

To enable developing countries to increase their mitigation actions, public finance from 2013-15 must be at least double the amount of the Fast Start Finance. All this needs to be done in Doha and so would be superfluous to include in a COP decision on closing the gap. In today’s roundtable on raising near-term ambition in the ADP, ECO is anxiously awaiting constructive proposals, concrete commitments and draft text for an ambition COP decision in Doha. The climate crisis demands nothing less.

ANGELS and DEMONS?

Welcome again to the Krung Thep, the city of angels. ECO hopes that this location will inspire delegates to put aside their devilish disagreements and instead move forward in a spirit of angelic cooperation in the fight against climate change and its deadly impacts. The recent flooding in Manila, the typhoon coming ashore near Shanghai and widespread drought and crop failures in the U.S.A. are stark reminders that the impacts of climate change are real, global and growing.

The large majority of countries, especially the poorest and most vulnerable, are demanding a global response that has a very high probability of limiting global warming to levels that do not threaten their livelihoods and their very existence. The best available science indicates that this will require global emissions to remain within a strict carbon budget – and a collective and rapid transition to a low carbon global economy.  It requires both an ambitious post-2020 treaty regime and much greater ambition between now and 2020 – the two-track approach agreed in Durban.

Success in the negotiations towards a fair, ambitious and legally binding deal by 2015 depends on bridging one of the fundamental divides in these talks. On the one side, we have those countries that want a scientifically responsive and responsible, rules-based system. On the other side, there are those that don’t want too many questions asked about their failure to act. (Of course, at least one of these countries doesn’t put it exactly this way, and calls for a more “flexible” approach.)

To meet the global climate challenge, the new ADP architecture for the post 2020 period must be viable for the long term, with a negotiated renewal of targets and actions every five years. It must also be dynamic, with respective changes in responsibility and capability fairly reflected in each renewal of the framework. It must further ensure that countries are accountable for doing what they agreed to do in both mitigation and in providing and effectively utilising support, with common accounting rules and a common, but differentiated, MRV system to allow transparent reporting of progress and to spotlight freeloaders. ECO notes that these are exactly the design elements that so many have fought hard to uphold in the Kyoto Protocol.

Against this fair, ambitious and legally binding deal are just a few countries. For these countries, fairness is finger pointing, ambition is for others and legally binding is too much of a bind.  If their lack of political will causes the world to blow past the 2 degrees Celsius target that their leaders have endorsed, well, that’s just too bad.

So what do negotiators at Bangkok need to work towards to receive their halos?  At COP18 in Doha, the world needs to see:

·       A Doha amendment for a second commitment period of the Kyoto Protocol applying immediately to a range of developed countries, including Australia and New Zealand; this should include targets within the range of 25-40% below 1990 levels, with an adjustment procedure to increase ambition, and should enhance environmental integrity by minimizing carried over AAUs and improving CDM and JI rules to lead to real emission reductions.

·       Non-Kyoto developed countries adopting stringent QEROs, comparable in effort and transparency with Kyoto Parties. ‘Comparability’ requires common accounting!

·       Developing countries registering their mitigation actions and required support, and all developing countries to make pledges – including Qatar.

·       Agreement that global emissions will peak in 2015, which means that developed countries need  to reduce their emissions much more quickly, and provide support for developing countries to take more mitigation action.

·       Agreement on a detailed work plan for the ADP, both on the 2015 legally binding agreement and on ways to substantially raise pre-2020 ambition.

·       Commitment to at least $10-15 billion in new public finance for the Green Climate Fund over 2013-2015, together with meaningful steps to develop innovative sources of public financing and agree on a process to reassess the adequacy of financial pledges with the first reassessment in 2013.

·       Funding modalities for National Adaptation Plans in order to scale-up work immediately, and establishment of a second phase of the work program for loss & damage.

·       The rapid operationalisation of the GCF, the Standing Committee, the NAMA registry, the Adaptation Committee, the Technology Executive Committee and the Climate Technology Centre and Network. 

Laying the foundations for these successes in Doha means that this will be a busy week in Bangkok! As we all know, the devil is in the details. So, where better to get started than in the city of angels?