ECO Newsletter

Yesterday the ADP contact group finally got down and dirty on the potential finance content in the Paris deal when negotiators discussed the finance section of the co-chairs non-paper. There is no point in denying that ECO was shamelessly excited to finally start the discussions on what must be an integral part of the 2015 agreement. Whilst probably not surprising to anyone that has been following the UNFCCC for more than a few minutes, it was a bit of a let down to have the first half of the session wither away in a flurry of process confusion.

When the dust had settled sufficiently for substantial talks to begin, ECO’s enthusiasm was curbed further. The US led the charge by requesting all references to the adequacy, predictability and additionality of finance removed. ECO almost suspects the American negotiator was deliberately speed-talking to hide the desperately dismal nature of the suggestions.

With onset depression, ECO, listened to the Swiss delegate start off on a constructive note by pointing to the paragraphs they would like to see in the actual agreement, the ones that could be addressed in other decisions and the parts they didn’t agree with. However, without warning they suddenly launched a frontal attack against the idea of an ex-ante process leading to quantified finance commitments.
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Germany has a problem. Europe’s biggest economy currently risks missing its national 2020 mitigation target of a 40% reduction from 1990 levels. Despite the boom of renewable energies, Germany’s emissions have been on the rise again for the last two years. If you think this is due to the country’s nuclear phase-out, then think again. In reality, with 27% of German electricity production originating from renewables today,this clean technology represents a higher share than nuclear power used to have. The real reason for Germany’s rising emissions is the continuously low price for emission certificates in Europe’s creeping Emission Trading Scheme. With no credible CO2 price signal, the burning of coal remains highly profitable for energy suppliers in Europe. In Germany, this is causing not only higher emissions but also a huge surplus of electricity.

To address this, Germany’s Environment Minister Barbara Hendricks, when traveling to Lima next week, will have some news in her baggage. Today, the government presents an “Action Plan”on how to fill the emission gap and reach Germany’s 2020 climate target. In this plan, following public debate, Germany is announcing an additional reduction of 22 million tonnes of CO2 from the electricity sector.Although ECO finds that the formulation is vague and the reduction too low, the facts behind the Action Plan are clear: For the first time ever, Europe’s biggest economy intends to remove a part of its coal power capacity from the grid.
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It’s a fool’s game to think that polluters might get away with not paying for the loss and damage they have contributed to. For Typhoon Haiyan 6,300 people of Tacloban paid with their lives only a year ago, and 4 million of their friends and relatives paid with their houses. 13 million people in Kenya paid with hunger in the drought ending in 2011. And the people of the Pacific, and other low-lying regions, are paying with their land and homes. Someone has to pay for the loss and damage — the inevitable result of low mitigation ambition and inadequate levels of adaptation support provided by rich countries. At the moment it is the poor who are paying.

Clearly this is not tolerable, and Parties recognised this in Warsaw by incorporating the need for support within the functions of the Warsaw Loss and Damage Mechanism.

However, the current interim Executive Committee (ExCom) has been incapable of dealing with this obvious need in an adequate manner. As a result, finance, technology and capacity building are clearly lacking in the draft work plan – something that Parties must address. In short this means that Parties will have to decide whether a newly constituted ExCom will have the courage to deal with this gap.
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Peruvian civil society organisations and grassroots movements are seizing the hosting of COP20 by Peru to join efforts in elevating environmental issues on the government’s agenda, particularly as part of the country’s development policies.

Climate change impacts have already reached Peru. People in Peru are already experiencing the negative impacts of climate change such as water scarcity, thus adding to existing environmental and social challenges.

While the Presidency of the COP20 should have been an opportunity for the Peruvian government to show leadership in environmental issues, its recent national policies show that the environment has become less and less of a priority. For example, in July this year the government approved the so-called Ley 30230 (also known as ‘Ley Paquetazo’), which reduces the importance of environmental standards with the aim to attract investment in the extractive industries.

The promotion of extractive industries has already led to cases such as that of Maxima Chaupe, a female farmer. She was sued by Yanacocha – one of the biggest gold mining companies – for living on the land where Yanacocha was planning its Conga extraction project. Maxima and her family were not only ordered to leave the land, they were also asked to pay Yanacocha a compensation fine of about US$2,000.
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If you have read yesterday’s ECO (or the IPCC’s newest report), you know why we need ADP Workstream 2 (WS2). We need to close the ambition gap ASAP to avoid the worst impacts of climate change. To stay below 1.5°C, we need to phase out all fossil fuels and phase in 100% renewable energies, with energy access for all by 2050 at the latest. To achieve this transition, we have to avoid any further lock-in into unsustainable high-carbon infrastructure.

That’s why ECO was pleased that the draft decision text on WS2 calls for its continuation until 2020 and for enhancing the technical expert meetings (TEMs). The TEMs have highlighted many opportunities for additional action and their multiple benefits – particularly for deploying renewable energy and energy efficiency measures. But, how do you move from identifying options to implementing effective action on the ground in terms of reducing GHG emissions?

ECO has a few suggestions:

1. Establish a process building on the TEMs for Parties to announce which of the identified policy options they plan to implement either on their own or in partnership. This should be the objective of a regular high-level ministerial engagement – and the decision needs to say so.
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Now that the new IPCC compendium has been worked on by the world’s leading climate scientists and published for all to see: What conclusions should countries draw from it? How about the need to phase out fossil fuels ASAP, starting today?

In the next two days, a Structured Expert Dialogue will assess the adequacy of the long-term global goal (i.e. keeping global warming below 2°C), possible strengthening of the goal to 1.5°C (yes please!), and the overall progress made towards achieving the goal.

On Tuesday, IPCC experts will bring in the fresh science from the Fifth Assessment Report (AR5), while on Wednesday UNEP, IEA, FAO and others will present their analysis on the matter.

A realistic understanding of where we’re heading and where we should be going to avoid catastrophic impacts is fundamental for negotiating a successful deal in Paris. Therefore ECO is pleased to present this special issue on the future of our climate as assessed by the world’s review panel, the IPCC.

There are many who consider a 2°C limit for global temperature rise to be an unacceptable climate risk. For them it’s “1.5°C to stay alive,” and the new IPCC report shows that they have a serious point.

The IPCC’s newly updated “Reasons for Concern” indicators (sometimes called “the burning embers,” refers to a chart showing increasing risk for the key indicators in yellow, orange and red colors) show that 2 or even 3 out of 5 key risks would could be at dangerous levels with 2°C warming.

The risks play out most at a regional scale, so let’s have a look at what could happen with just 2°C warming globally (recognising that warming also varies by region):

For Africa, of 9 key regional risks, 8 pose medium or higher risk with 2°C warming, even with high levels of adaptation. We’re talking fundamentals like water stress, reduced food production and the spread of diseases.

For Small Island States, highly vulnerable to sea-level rise and high-water events, and dependent on ocean ecosystems, 2°C would be a disaster.

For Asia, risks of catastrophic flooding and lethal heatwaves would be in the medium or high range even with high levels of adaptation.
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Ok, so we have a long-term goal of keeping global warming below 2°C/1.5°C, but what does this mean in reality? Enter the IPCC AR5 cumulative emissions budgets! This is the maximum amount of tons of CO2 the atmosphere can take before crossing these limits.

According to the AR5, after 2010 we can only emit an additional 1,000 billion tons (Gt) of CO2 into our atmosphere if we want a higher than 66% likelihood of limiting global warming to below 2°C. To keep warming below 1.5°C the remaining carbon budget is consequently smaller.

Since 2010 we have already spent about a tenth of this budget. Oops! Freezing our annual global emissions to current levels would use up the remaining budget completely in just 25 years, and almost one third of it would be gone by 2020. With current growing emissions we’ll have used up our budget even sooner.

What does it mean? It means that peaking and starting the decline in emissions soon is fundamental for achieving the long-term goal.

It also means we’re no longer in the business of managing emissions. We have to phase them out to zero, and it needs to happen fast. If you thought we had time until the end of the century, you’ve misunderstood the IPCC’s conclusions.
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Australia, Austria, Belgium, Ireland, Iceland, Greece, Portugal and the European Union are the An-nex 2 Parties yet to make their pledges to the Green Climate Fund. ECO notes the same is true for Poland, Hungary and a few others. Five years ago, developed countries had not only promised to set up the fund but, also fill it. ECO, optimistic as ever, is convinced that all of them know rather well how much in these negotiations depends on the GCF getting off to a good start. They will not let us down.

ECO stands ready to welcome any further and ambitious pledges, so that at least the lower threshold of the unofficial US$10-15 billion target range can be crossed here in Lima. If this comes with an explicit understanding that the GCF will grow bigger over time, we have taken the first step. Parties could then focus on the second, third and fourth steps, including ministers agreeing to craft a 2020 roadmap that spells out how developed countries are going to fulfill their $100bn promise, and to anchor climate finance in the new agreement, with collective targets and individual commitments as part of wealthy countries’ fair share in the global effort.