Eco Digital Blog

now that our love affair is truly over, you’ve got us singing the blues:

You never compromise anymore when we reach the limit

And there’s no commitment like before when you ratified the KP

You’re trying hard to provoke us,

But comrade, comrade, I know it,

You've lost, that lovin' feelin',
Whoa, that lovin' feelin',
You've lost, that lovin' feelin',
Now it's gone...gone...gone...wooooooh.

We could go on, but ECO really is not in the mode for singing anymore. You send your Top Gun here and let him strut and fret his hour upon the stage, waste two weeks of negotiating time, and for what? We understand you gave him the option to step off the stage, and he decided to continue to obstruct, just because he could. Is it just for the sake of his ego, or to try to elevate his prestige in Moscow, or just pure stubbornness?

If your excellent diplomat really has any good ideas for improving COP decision making processes, we haven’t heard them yet. So are we going to leave Bonn with a cloud the size of Siberia hanging over the negotiations? How dark will the storm clouds be over Warsaw when we arrive? Would we be better off not going?

ECO is amused by the blind belief in carbon markets the European Union maintains, while its own emission trading scheme has become a zombie. In the ADP, EU has argued that “new market mechanisms will deliver ambition”. Really? At home, Europe’s own emission trading is currently blocking ambition, and in fact encouraging a shift from gas to coal, as the emission allowance prices have crashed.

The reality is that demand for carbon market units is at an all-time low. Current prices are looming at around 0.4 Euro for Clean Development Mechanism (CDM) offset credits and at around 4 Euros for European allowances. The EU flagship policy is close to dead due to the reluctance of German Chancellor Merkel to fight for her legacy as a “climate chancellor”. This has allowed the conservatives in the European Parliament to block even the back loading of EU ETS (EU jargon for a temporary, short-term fix to the ETS).

Sandbag, famous for its brilliant carbon market analysis, estimated in its blog yesterday that in 2012 Europe's emissions fell 27% below 1990 levels, once offsets surrendered into the EU ETS are factored in. This renders EU’s 20% by 2020 target irrelevant, and means that the EU’s ETS will remain useless in the foreseeable future. This is very unfortunate, not only for EU’s own climate investments (which now lack an incentive) but also for climate finance, because low price and low demand means low revenues.

The EU always wanted to link up with emission trading schemes in China, California and the like. But now the question is, why would they link up with the EU, when all EU has to offer is a zombie market with no demand? Without a much more rigid climate target, or CO₂ taxes that guarantee a minimum price for the pollution allowances, the market approach plays into the hands of those who want to invest in fossil fuels.

ECO wonders how Merkel, Tusk, Hollande and Cameron can explain their inaction to the citizens of Europe, who have been seriously affected by the unprecedented heavy rainfalls and consecutive flooding. Due to the lobby pressure of a few industries, the lives, homes and livelihoods of Europeans will be further put at risk.

But European leaders have a chance to fix it. This autumn, the European Commission will present a proposal for new 2030 climate and energy targets, and the time for the European leaders to make decisions is in March 2014. The COP in Warsaw will be the first litmus test for Tusk, Merkel (yes, there is an election before...), Hollande and Cameron on whether Europe will be able to phase out any investment into new, coal fired power plants, put renewable energies at the forefront of energy supply (and not catastrophic, highly risky nukes) and take energy efficiency seriously. The impact on the UN talks could be significant.

Europe will host two COPs within the next two and a half years. They have a particular responsibility to lead us to a good treaty in 2015. Continuing “business as usual” would mean putting the livelihood of millions of European (and other) citizens at risk.

As the road to the 2015 agreement is beginning to be paved brick by brick, ECO wants to help Parties by giving them a direction in which this road should be built. Parties will be making submissions around how to further develop and operationalise the ADP work program. Here are a few questions that Parties should address in their submissions, which will help us to get closer to a fair, ambitious and binding deal.  

Equity

How could the principles of the Convention be operationalised into objective criteria and indicators to guide countries in seeking to identify their fair and adequate contributions to the globally needed mitigation effort and adaptation support and provision of the means of implementation?

What could be the suitable timelines up to 2015 to a) identify objective ex-ante criteria to develop an agreed list of indicators for identifying each country’s fair efforts, b) for countries to submit initial mitigation and finance commitments and c) assess and revise commitments based on the ex-ante agreed list of indicators?

Mitigation

What should be the global carbon budget and subsequent long term emission pathways indicative of emission levels at 2025, 2030 and 2050?

What information should Parties include about their targets and commitments in order to allow individual and aggregate assessment against adequacy and equity, including their views about a timeline that allows for this assessment and revision of targets well before COP21?

How to raise the level of ambition for developed countries’ 2020 targets?

How to close the pre-2020 ambition gap through advancing concrete solutions?

Adaptation

How should Parties scale up public finance for adaptation and ensure at least USD 50bn international public finance annually?

How are Parties going to deal with inter-connectivity between lack of mitigation ambition and increased need for adaptation, along with addressing loss and damage?

Finance

How to assess overall financial needs, as well as the links between the scale of financial needs for adaptation, the scale of loss and damage likely to be incurred and the level of mitigation ambition?

How do Parties see progress on applying both “polluter pays” and the principle of CBDR to generate new streams of finance?

Technology

What issues related to technology support need to be addressed by the ADP and how can technology transfer best leverage increased ambition?

Listening to the ongoing discussions in the ADP Workstream 2 on short term mitigation ambition, ECO suspects that some might not have read—or have forgotten—the size of the pre-2020 mitigation ambition gap. For all the rhetoric in the room, one might be convinced that nations have forgotten that they have the power to decide whether the world will remain below the 2°C threshold  scientists maintain as critical. Technologically and economically feasible trajectories to remaining below the 2°C level have been outlined. Without acting now, they are wilfully choosing to neglect the known mitigation ambition gap science has shown, as well as the opportunities that exist to bridge it.

In this context, ECO would like to remind delegates of what India, China and others have helpfully underlined during Workstream 2 (WS2) discussions thus far: the time has come for developed countries to do their “fair share” in reducing emissions by at least 40% by 2020 (and reflecting on their consumption patterns).

The 2014 Kyoto Protocol ambition review is one opportunity for nations to reflect on the comparable upward revisiting of pledges; for instance, the EU has achieved its 20% target years ahead of schedule but with no expressed intention, yet, to step up its own ambition until 2020; or Australia, for whom, recent research shows, upping their pledge from 5% to 25% comes at essentially zero net costs.

A cornerstone in WS2, clearly, are those International Cooperative Initiatives, of which we need many, given the size of the gap - but (as suggested by a few Parties) those must lead to new ambition rather than window-dressing existing (low) ambition. Right-on! Addressing international bunkers emissions from marine and aviation transport would be two prime ICI candidates, if ECO was to suggest a few, alongside phasing-out HFCs under the Montreal Protocol, which would also allow for making use of its existing funding mechanism. Another additional initiative would be to start, in earnest, what South Africa has called for during the early days of this session: immediate phase-out of fossil fuel subsidies in developed countries. Doing so, notes ECO, would free up billions of Dollars, Euros, Pounds or Yen for climate finance, including support for developing countries to gradually shift their fossil fuel subsidies both to renewable energy and energy efficiency.

ECO continues to be pleased by the engagement of AOSIS and their pragmatic approach of a step-by-step technical process to identify best practices suitable for scaling-up, overcoming the barriers to, and creating incentives for, new action in the areas of renewable energy and energy efficiency. Moreover, ECO commends their calls to elevate the results of the technical analysis to the ministerial level for agreeing to concrete action in 2014.

Yes, surely there are other mitigation areas to cover, too. And ECO could not agree more with the Philippines (and others) that similar approaches are needed in order to enhance pre-2020 adaptation – but ECO suggests this happens in parallel and need not stop us in advancing on other joint action. What ECO likes about the AOSIS proposal is that it could develop concrete plans to mobilise the entire UNFCCC architecture (e.g. for an action programme on renewable energy) with no new burdens for countries, yet the opportunity to participate in initiatives to expand renewable energy use. In that vein, ECO was pleased with Switzerland’s affirmation (from earlier this session, supporting India’s) that WS2 is not about shifting burdens from developed to developing countries. After all, such joint action to identify barriers and possible incentives could also help to better understand the financial and technological needs of developing countries, creating another pull for developed countries to deliver on their 100 billion per year by 2020 financing promise from Copenhagen and Cancun.

Funding, alas, remains key, as South Africa stressed yesterday once more, calling for scaled-up financing trajectories by developed countries in time for the Warsaw finance ministerial roundtable, and early and regular replenishment of the empty Green Climate Fund (GCF). The GCF could become a central pillar in the upward spiral of increased climate finance helping to trigger increased ambition. Meanwhile, the lack of clarity on scaling up short and mid-term climate finance is likely hampering ambition. Perhaps another theme for the upcoming Warsaw climate finance ministerial roundtable?