Category: Previous Issues Articles

Early Thursday morning, EU institutions reached a final agreement on the reform of the bloc’s carbon market for the period 2021 to 2030. Covering around 40% of EU’s greenhouse gas emissions from the energy, industry and aviation sectors, the EU Emissions Trading System (ETS) is currently the largest cap and trade carbon market in the world. But with a notorious oversupply of pollution permits that has kept carbon prices hovering around 5-7 EUR/tCO2e for the past five years, the ETS has long been the region’s problem child. ECO remains disappointed at the new agreement.

A real reform of the system would have simultaneously slashed the enormous allowance glut, sent a strong decarbonisation signal to energy and industry, and made sure that auction revenues go to sustainable and clean technology. The success of the reform has to be judged on the delivery on all of these aspects.

It is now clear that the reform will not bring the scheme in line with the Paris Agreement climate goals or with mid-century decarbonization.  However, the EU did make some small improvements with regard to the permit surplus: For the first time, some unused allowances will not be released to the market and could be cancelled, potentially leading to a reduction of 2-3 billion allowances in the long term.
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ECO, with our usual nose-to-the-ground ability to stay up to date on the latest and greatest, has heard of an exciting new intervention in the loss and damage space. More than 50 civil society groups, and notable people, have just released a Climate Damages Declaration – calling on countries to agree on a two-year workplan to develop adequate and predictable sources of revenue for loss and damage finance, including a Climate Damages Tax.  What would a Climate Damages Tax be, we hear you ask?  It would be an equitable fossil fuel extraction fee – levied globally, but with developed countries paying the lion’s share for loss and damage. Countries on the frontline of climate impacts would use the Tax at home for climate purposes. Who would pay and who would receive the funds would be based on a sliding scale.

Why on earth do we need new sources for more money? Well, at some interesting side events yesterday, ECO saw a graph depicting current development/humanitarian/climate finance versus future needs.  And it turns out that tinkering at the edges, and a continued overemphasis on insurance, is not going to generate the scale of finance we need. We will instead need to think big with innovative sources of finance, such as a Climate Damages Tax.
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While countries are discussing how to implement the Paris Agreement to avert the worst impacts of climate change, the UN aviation body, The International Civil Aviation Organization (ICAO), is having their own conversation on climate. The 36 members of ICAO’s Council have preferred to do it in private so they can make their own rules on their carbon market and alternative fuel sustainability criteria without making too much fuss.

Who wants to complicate the discussions, anyway? When it comes to carbon offsets and biofuels, the aviation industry must be deciding that it is easier to just accept them all and deal with the environmental and social consequences later.

 ECO is pretty impressed with the speed at which ICAO is checking off rules for their climate measures. We are going to have to figure out how to adapt when airlines start buying offsets and biofuels from countries with Paris pledges. Parties are counting all their emission reductions towards their climate targets. If airlines are claiming those same reductions for themselves then two targets are claiming one emission reduction. Doesn’t that invalidate one of the targets? We haven’t come up with any rules for dealing with that here yet … slow down ICAO you’re making us look bad!
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WHEN: Saturday, 11 November 2017 from 9:00 pm to 5:00 am 

WHERE: La Redoute, Kurfürstenallee 1, 53177 Bonn – Bad Godesberg.

PROGRAM: Concert at 10:00 pm by Makeda and Steal a Taxi, then DANCE PARTY with a DJ. 

Please be sure to bring your badge, as it is required to enter the party.

Should you have accreditation for only week two, kindly show your accreditation letter upon arrival to the security check. 

Please, do not forget to bring enough cash for the drinks and finger food. 

REMINDER: This party does not allow minors (under 18); the security might request your ID to check your age. The CAN Party has a zero-tolerance policy against all forms of harassment.  

 We look forward to conquering the night with you all!

After yet another year of extreme weather events, which devastated many communities across the world, it is clear that urgency of action has become more than a slogan – it is a reality! Delivering on promises of action and support in the pre-2020 period is not only fundamental to maintain trust among Parties (though it does that as well); to limiting the severity of growing climate impacts (yep, it does that too); or making it easier to increase ambition post-2020 (are you getting that this makes sense on many levels yet?); but’ simply put pre-2020 action is crucial to reaching the objectives of the Paris Agreement.

Without ambitious action now (we all know what ‘now’ means, right?), we cannot keep global temperature rise to 1.5°C or well below 2°C. The best available science tells us that greenhouse gas emissions need to peak by 2020 and decline thereafter.

Need we say more? This is why ECO believes that there is great value in having a dedicated space for discussions on Pre-2020 – while also using all existing channels to consider relevant efforts for advancing pre-2020 action and the necessary support to enable this action in all countries.

The negotiations on the Global Stocktake (GST) represent a key opportunity to advance one of the most unfinished areas of the Paris Agreement — differentiation and equity in the new regime. It’s an opportunity that we better take seriously, because right now we’re in danger of sliding back into unhelpful old patterns; instead of exploring new ideas on how to take into account countries’ different stages of development, levels of capability and historical responsibility.

Equity, like science, is an overarching principle of the GST that needs to guide all of its workstreams. First though, ECO wants to remind everybody that equity in the context of Article 14 refers to equity between countries. Equity and differentiation allow us to consider how national actions contribute, at different scales and in different ways, to real collective progress.

Key inputs are already exist in the NDCs. Many Parties have already explained their views and perspectives of differentiation and equity in their NDCs and we suggest that one key task in the GST is to look at them. Likewise, civil society and research institutions are already developing approaches and methodologies for relevant analyses. The GST should allow them to be taken into account.
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With all the talk of “skeletons” in the APA informals, ECO knows that the enhanced transparency framework will be the true “backbone” of the implementation guidelines of the Paris Agreement, providing instructions for the reporting and reviewing of Parties’ commitments and actions. The transparency framework needs to have strong bones if it’s going to truly support the responsibility of building trust and confidence between Parties and promoting effective implementation.

Many aspects of the existing transparency system work well and should be built upon, but it’s still far from perfect. Delays and incomplete information not only impact understanding, but also hold up critical review efforts to identify capacity-building gaps and needs. ECO believes the Paris Agreement means moving to a world where “common modalities, procedures and guidelines” will both allow transparency and comparability of all Parties’ action and support; and deliver benefits for developing countries in enhanced capacity (with adequate support). ECO believes that it is possible to have a certain level of flexibility for countries that need it without jeopardizing transparency or a common approach that drives continuous improvement overtime.

With so much at stake, it seems worth pointing out the overarching benefits of an effective and robust transparency framework.
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This Wednesday, UN Environment launched its third Adaptation Gap Report, which focuses on global assessment. The report puts a much needed spotlight on the (perhaps conveniently forgotten) Global Goal on Adaptation (GGA) of enhancing adaptive capacity, strengthening resilience, and reducing vulnerability to climate change, which is part of the Paris Agreement. The GGA not only aims to contribute to sustainable development, but also to ensure an adequate adaptation response globally to climate change, in the context of the temperature goal referred to in Article 2 of the Paris Agreement.

ECO would like to remind Parties that no substantive work has been undertaken to unpack its elements or operationalize the GGA since the adoption of the Paris Agreement. 

The UN Environment report was released on the heels of its latest Emissions Gap Report, which warns that current mitigation pledges point towards a likely temperature increase of around 3 °C in 2100. Last year, the same agency published the landmark Adaptation Finance Gap Report, which brought to light that the costs of adaptation in developing countries could range from US$ 140 billion to US$ 300 billion US dollars per year by 2030. 

To state the obvious, we not only have to urgently strengthen mitigation ambition but also scale up adaptation actions to minimize loss and damage.
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 Ludwig has heard about a new proposal for carbon markets and international cooperation that sounds almost too good to be true.

Brazilian negotiators were particularly enthusiastic about the idea. As one negotiator explained, “Imagine if you could make a transfer from your bank account to another account to pay a debt. Suppose they could get paid and your bank balance doesn’t change. Sounds great, right!! We have found a way to do that with carbon credits.”

This proposal is called the “Katowice Double Counting Mechanism”, a rebranding of the proposed Sustainable Development Mechanism. The idea, Ludwig has learned, is to turn the CDM — which has been plagued by low demand for credits, rock-bottom carbon prices, and concerns about dodgy additionality rules — into something that, after 2020, can be a win-win-win for everyone involved: buyers, sellers, project developers, etc. Everyone except the climate and the victims of climate change, but Ludwig understands you can’t please everyone.

Traditional orthodoxy would claim that any time a carbon credit is transferred from one country to another and used to allow increased emissions in that country, the source country has to deduct this from reductions needed to meet their cap. This is called “corresponding adjustments” under the Paris agreement.
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ECO was excited to be part of the Presidency’s Open Dialogue yesterday. The event was unique because it allowed Parties and Non-Party Stakeholders (NPS) to gather around the same table and participate in a discussion, unlike the usual style of statements or interventions in plenaries, where typically observers get only very short slots at the very end.

ECO appreciates both the Presidency’s and Secretariat’s efforts which paved the way for this very much needed form of conversation between Parties and NPS. It was also great to see so many Parties participating in this event.

Two topics were selected for this session: “NDC enhancement and implementation” and “enhancing observer access to and participation in formal meetings”. Both are close to our hearts! Our hearts are also exceptionally warm since our representatives had the opportunity to make points on the importance of the Talanoa Dialogue as perhaps the last opportunity to increase mitigation ambition in order to bring us to a 1.5°C-compatible pathway. Additionally, our colleagues stressed NPS’ role of creating platforms for cross-border collaboration and that this form of conversation should continue.

We found these exchanges quite useful. However, ECO also believes there is room for improvement in regards to the methodology of the discussion.
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