Tagged: Finance

14 Mar, 2014

Post-2020 contributions — information needed!

ECO appreciates the efforts made by several countries in their submissions this month to address the issue of the types of information Parties should submit with their initial post-2020 nationally determined mitigation contributions. A paper launched this week by the World Resources Institute outlines how this information could vary for countries whose contributions are in the form of economy-wide GHG mitigation goals, versus for those countries putting forward intensity-based or sectoral contributions, policy-based contributions, or contributions consisting of discrete projects or NAMAs.

Clarity and transparency of contributions is important to:

Build confidence in the robustness of the economic, technological, and policy assumptions underlying the proposed national contributions;
Enable comparison with other Parties;
Improve the assessments of individual country and collective global emissions reductions resulting from the proposed contributions; and
Foster a constructive dialogue amongst Parties on the principles of equity and common but differentiated responsibilities and respective capabilities, and how they translate into the level of ambition and effort undertaken by each Party.

ECO underlines the need for Parties to make substantial progress on this issue at the next Bonn session in June, as many countries are already starting to prepare their national contributions. The earlier that Parties have clarity on what information is going to be expected of them, the better.
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10 Mar, 2014

ECO’s 1-2-3 for Parties at this ADP

Has the extreme winter weather that’s gripped North America, the devastating flooding in the UK or the [insert your own top-of-mind climate-related disaster here] made a case for more ambitious action with you and your Party yet? If not, the release of Working Group II’s 5th assessment report on climate impacts at the end of this month surely will. ECO has long said 2014 must be the year of ambition, so let’s start off on the right foot and make the most of our five days together in Bonn.

There are 3 tasks this ADP session must deliver on to ensure that a draft text is developed by Lima and that countries come to the Ban Ki-moon Summit with ambitious pledges for Paris to close the gap in the near-term.

EIN: Agree on the structure and process for developing a draft negotiating text for this year. We all know what building blocks will form the basis of the deal in Paris — mitigation, adaptation, finance, technology and capacity building — but now it’s time to get into the specifics. It’s imperative that critical elements, like the legal architecture for the 2015 agreement including the compliance regime; an MRV framework that will ensure transparency and environmental integrity; a review mechanism to ratchet up ambition over time; and progress on fleshing out the loss and damage mechanism agreed in Warsaw, not fall off the table.
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27 Nov, 2012

Climate Finance: Up and Not Down!

To our freshly arrived negotiators, get ready for a major wake up call (or at least a loud and not particularly polite noise) on finance, when the countries most vulnerable to climate change will be rightly asking: what happens when Fast Start Finance runs out at the end of this year?

And what happens now that we know Fast Start Finance (the money pledged between 2010 and 2012) was mostly a false start? Yes, ECO did the maths and estimates only 33% of FSF was “new” money (that is, additional to existing, pre-Copenhagen pledges), and around 24% additional to existing aid promises. Only one-fifth of finance was spent on adaptation, and less than half was available as grants. It seems developed countries need to re-learn some basics about climate finance. Which part of “new and additional, predictable, and adequate in relation to rapidly spiralling needs…with balanced allocation between mitigation and adaptation” are they failing to understand?

And to those who need illustration of “spiralling needs”, please count the unprecedented number of climate related disasters in 2012 which – along with sea-level rise, and the gradual but deadly effects on agricultural and fresh water systems – mean that the bill from carbon pollution just keeps going up and up.
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5 Sep, 2012

Keep up your end of the bargain, Parties

In Durban, Parties agreed to a package – the adoption of a second commitment period of the Kyoto Protocol, a successful conclusion of the LCA, urgent action to close the pre-2020 mitigation gap between the 2 degrees goal and the collective pledges now on the table, and collective movement toward a fair, ambitious and binding agreement in 2015. Parties must honour this political bargain.

Let’s start with the KP. Those trying to get another bite of the negotiation cherry by dragging out submitting their carbon budgets (QELROs) have to understand that this will be perceived as acting in bad faith. Australia – ECO remembers the brinkmanship with your QELRO last time. So for you, as well as New Zealand, Ukraine and others on the fence on the Kyoto second commitment period, ECO demands to see your QELROs up front. And, of course, just any old KP second commitment period won’t suffice. We must have a robust, ratifiable agreement that respects the original intention of the KP to raise ambition and create real environmental integrity. The AOSIS and Africa Group proposals will facilitate this endeavour. Effectively eliminating surplus AAUs and ensuring the environmental integrity of the CDM is also essential – you can’t have your cake and eat it too.
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5 Sep, 2012

Finally, Finance?

ECO is heartened to have heard that a group of developed countries is considering putting concrete numbers on the table for long-term finance in Doha. In the last year of Fast Start Finance, and with few firm commitments for finance from 2013 onwards currently on the table, this is none too soon. Substantial new and additional climate finance commitments could really help to give a boost to the negotiations going into Qatar.

As ECO has long argued, such commitments would give developing countries some needed reassurance that climate finance is not about to fall off a cliff, but rather start the steady climb towards the US$100 billion per year promise made in Copenhagen and Cancun. Rhetorical reassurances during the negotiations are no match for concrete numbers committed on paper.

Let’s hope that more developed countries reach this enlightened conclusion before Doha. There will be nowhere for them to hide if a group of countries makes a pledge, while they turn up empty handed.

But ECO would also hope that developed countries have learned some lessons from the Fast Start Finance experience, and apply them as they consider their pledge. Don´t forget that ECO has a beady eye for creative accounting tricks that may artificially inflate finance pledges that are actually not new and additional.
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5 Sep, 2012

Markets On Our Mind

While most developed nations remain unwilling to commit to legally binding targets for CP2, discussions about market mechanisms have been (un)surprisingly vivid. The fact that carbon market prices are at a record low and surplus allowances threaten to bring prices near zero hasn’t added much urge to increase ambition.

ECO wonders why the many carbon market industry lobbyists haven’t made it clear yet that markets can only flourish with vigorous demand, which can only be created by binding reduction commitments. Let’s get that right: allowing emissions trading schemes from countries without enough demand to reach their voluntary targets with international offsets won’t help. The recent announcement of the Australian ETS linking up to the EU ETS has stirred worries that the lack of an international accounting framework will create a fragmented market that will undermine the environmental integrity of carbon markets altogether.

My dear negotiators, would you honestly buy the right to pollute with Japanese Yen from an Indian company if you don’t know whether the emissions reductions are calculated in watts, horsepower or feet? ECO presumes not. However, it’s definitely maths time: do the numbers and calculate the emissions reductions you need for your market to work.

Not only that, we also need a common accounting framework (look to your left) that ensures 1 tonne is 1 tonne.
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4 Sep, 2012

LCDSs: Something For Everyone!

In Cancun, 1.CP/16 paras 45 and 65 respectively stated that developed country Parties “should” develop low-carbon development strategies and plans, and developing countries “were encouraged” to work on such strategies and plans. In Durban, both groups were invited to submit progress towards the formulation of their LCDSs during this year’s workshops. ECO is disappointed that LCDSs were not a strong part of the 1(b)(i) and 1(b)(ii) workshops on Sunday – especially since such plans help fulfil the Convention’s Article 4.1b mandate, respecting “specific national…development priorities, objectives and circumstances”. Although some nations have prepared them or their equivalent, Parties should actually make a strong effort to do this national climate planning, since such plans can cater to the diverse interests, and here is why:

Developed countries: invest in future-proof infrastructure and avoid lock-in

Developed countries need to have achieved near-complete decarbonisation of their economies by 2050. This is not going to happen unless firm foundations are laid now through a vision of the kind of economy, society and environment they are aiming for in the long term, and working backwards to realise this vision. This is not simply a question of technology and infrastructure changes, but also the way to create a just transition for society as the changes are made.
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4 Sep, 2012

AAU Elephants

Negotiators are truly having a tough time putting the pieces for a second commitment period together. But soon they will face the enormous elephant in the room. A recent UNEP report estimates that up to 13 billion tonnes CO₂ of surplus AAUs could be carried over to the next commitment period. This is almost three times the annual emissions of the EU. With the supply of hot air AAUs much higher than current reduction commitments (that are well under the 25-40% below 1990 levels by 2020 actually needed), carry-over would lead to no emission reductions compared to business-as-usual emission projections by 2020. As a matter of fact, CP2 commitments as they stand would likely lead to another surplus. This would be the case even if the large quantity of Russian surplus is excluded. Additionally, carbon credits from the CDM and JI that can be carried over would further lower actual emission reduction levels by 2020 by roughly 6%.

But there is hope! A proposal by the G77, which is technically sound and politically feasible in addressing this enormous loophole, could do the trick. Europe showed in Durban that it can pull its weight internationally by being the driving force behind the agreement for a new climate accord by 2015.
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