CONSERVATIVE MEP FOR SCOTLAND

COP22 - What’s it all about?

A guide to the main issues being discussed at the UN climate change conference in Marrakech

14.11.2016.

‘Like Webster’s Dictionary, we’re Morocco bound’. Me and about 9,999 other folks it would seem. The UN Climate Change Conference is in town, and hunkering down in Marrakech, will be the Conference of the Parties (COP[1]) trying to work out how to make the Paris Accord a reality. Gathered around them will be the usual travelling circus of important, almost important, self important and colourful individuals you might expect. Not quite sure which category I and my fellow MEPs fall into but we are here too.

Back in December 2015 the world came together in Paris and agreed (against expectation) to hold the rise in global temperature to 2oC, with a nod to 1.5oC. (The world is currently on course to warm by 3oC, with all its challenges and horrors). On that December day, the nations put their ‘emission reduction’ cards (termed Intended Nationally Determined Contributions, INDCs) on the table and they came up trumps. (More on the less celebrated Trump later). The agreement was greeted by much whooping and dancing on tables. Indeed a glass or two of liquor may have been taken.

Marrakesh is the morning after the night before. An anxious time, as participants try to work out exactly what they said, what they agreed, and whether there are any embarrassing pics or tweets. The magnitude of the challenge is slowly dawning upon the erstwhile happy dancers. Much has happened since Paris, indeed much has happened since the Marrakech COP sat down only last week.

The US role in combatting climate change cannot be underestimated. Pre-Paris the agreement between the US and China heralded the final agreement. This time the Trump triumph has cast a shadow over proceedings. I will return to Trump in a future blog but let us say that, for now, the role of US Secretary of State, John Kerry, who is also in town, has been subtly diminished.

So what then are the issues on the Moroccan climate change agenda?

Money talks

Addressing climate change is going to cost a mint. The spend will fall into three broad categories: (i) Money for mitigation, to stop the problem getting worse, so investment in clean energies, decarbonisation etc.; (ii) Money for adaptation, required to address the problems already caused by climate change, think sea level rise, flooding, desertification, etc.; and (iii) Compensation for Loss and Damage, which is a bung for historic damage. The total cost: $100bn a year from 2020, forever.

The first COP I attended, Peru 2014, asked the globe to cough up funds toward one-off payment of $10bn to establish a Green Climate Fund. Whilst the commitments finally came, the hard cash took a little longer. In the end the big contributors were the USA ($3 billion), Japan ($1.5 billion), UK ($1.2 billion), France ($1.035 billion) and Germany ($1.005 billion). There is no doubt that the folks round the big table have their work cut out for them.

The negotiators in Marrakech will have to determine the rules of finance, since not all contributions will come in monetary form. They need also work out how to keep track of the funds, who has given what to whom, and whether the individual contributions measure up to the original commitment. In due course it will fall to somebody else to determine whether the money has actually reduced emissions or dealt with the consequences of climate change. We won’t really know what progress has been made until 2018 when the first Facilitative Dialogue takes place. And we wont really be sure until 2023, when the first actual stocktake takes place (a process to be repeated every five years thereafter).

Show me the money

The $100 billion goal was first set in Copenhagen in 2009:

‘In the context of meaningful mitigation actions and transparency on implementation, developed countries commit to a goal of mobilising jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries. This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance.’

As is the norm with global climate change accords, the text is vague.  Whilst on the surface it may be clear who should pay (developed countries) whom (developing countries), how much ($100 billion) and how (through a variety of sources), there are no details or definitions.

The who

The UNFCCC (the UN Framework Convention on Climate Change) divides the world into two categories – Annex I and non-Annex I countries, which roughly translates as developed and developing nations accordingly. However, the Copenhagen Accord does not explicitly make this connection in defining who should pay whom, leaving the door open for countries like China, classified as non-Annex I (developing) when the system was set up, to put cash into the pot, particularly important given China’s emergence as the world’s second largest economy and largest emitter.

So far China has not contributed a penny nor has it pledged to contribute to future climate instruments such as the Green Climate Fund, leaving countries like the USA, Canada, the UK and the rest of Europe to pick up the tab.  Underpinning the division between rich and poor is the notion of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), or each according to his own capabilities. While the Annex I and non-Annex I split reflected the CBDR-RC of the day back when the UNFCCC process began in 1992, a cursory glance at global economic and emissions trends over the last 35 years would certainly produce a different split today.  Whether this is acknowledged in the Marrakesh talks remains to be seen.

How much and how?

Much like the headline 2oC target, the $100 billion per year figure has no roadmap detailing how it will be achieved.  The Paris Agreement said very little on climate finance, save for the fact that developed countries must scale up how much they contribute.  In response to this call, developed countries, led by the UK, have published a roadmap[2] assessing contributions to date, and how they may be increased to meet the $100 billion goal.

The roadmap estimates that the aggregate volume of public and private climate finance mobilised by developed countries to be spent in developing countries reached $62 billion in 2014, up from $52 billion in 2013.  The word estimate is important here, because despite the various mechanisms and funds in place, nobody can quite pin down exactly how much is given and by what means.  What we do know is that in 2014, $23.1 billion was provided on a bilateral basis, $20.4 billion on a multilateral basis, $1.6 billion in export credits (export credits are a type of investment tool to incentivise low emissions technology) and $16.7 billion was contributed by private finance through one or more of the development banks, such as the European Investment Bank or the Asian Development Bank.

The roadmap goes on to assert that public finance will grow to $67 billion by 2020, with the remaining $33 billion mobilised privately thus reaching the $100 billion level. It must be noted, however, that the roadmap is based on trends, projections and stated pledges of countries – not proven, mobilised finance.

Also important to stress that this funding model must be repeated on an annual basis, although acknowledgement of this fact is hard to come by in the official text.

To finance what?

As if raising the capital were not challenge enough, there is a serious and contentious debate about what the money can and should be spent on.  Everyone’s favourite confrontation - Adaptation v. mitigation- will once again be front and centre in Marrakech.  The recipients of climate funds, the developed nations, would like the money to be spent on adaptation measures (broadly money to combat the effects of climate change), whereas donor states traditionally prefer funds to mitigate the problem (money to finance the prevention of climate change in the first place).

The Paris Agreement commits donor states to up their rate of financing for adaptation significantly, with recipient countries benefiting directly through cash for, for example, new infrastructure such as flood defences. The roadmap also commits developed nations to ‘significantly’ increase adaptation financing, whilst projecting a doubling of adaptation financing by 2020, compared to 2013-14 levels. Again, however, this is just a projection, and in Marrakech developing countries will demand to know exactly how the cash will be spent.

What would a win look like?

The simple answer is ‘unity’. In Paris there was much talk of the ‘High Ambition Coalition,’ whose commitment to serious emission reduction and willingness to put their money where their mouth was carried the day. The path ahead, without the certainty of US leadership or commitment, remains unclear. If the coalition holds, then progress can still be made. If it fails or falters, then there will be trouble ahead

 

 

[1] For those of you who don’t know your COPs from your CMAs, or your INDCs from your CBDR-RCs), i have put together a handy guide, which you can access on my website

[2] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/562317/Roadmap_for_UK_website.pdf