Even as a few developed countries started to put some money on the table to show their commitment to mobilising funds for climate change, none of the issues related to finance could be resolved by the negotiators till late on Monday night at the climate change conference here.
At the two-week year-ending climate conference in Katowice, Poland, countries are trying to finalise the rulebook, containing the processes and guidelines, for the implementation of the landmark 2015 Paris Agreement that seeks to keep the global average temperatures from rising above 2 degree Celsius from the pre-industrial times. The issues under discussion here are mainly procedural in nature and deal with the details of the processes and mechanisms through which the provisions of the Paris Agreement will be implemented. Many of these are also extremely complicated and contentious.
After the first week of talks, negotiators had left all the contentious issues for their ministers to decide at the high-level segment that started on Monday. Ministers discussed the issue on Monday but were unable to reach a conclusion. At least five groups of ministers were formed, each having a minister from a developed and a developing country, to lead the discussions on one particular area where there were major differences between countries. These groups have been asked to facilitate the dialogue, while also holding informal meetings with countries to narrow down the differences.
The ministerial group on finance, comprising Egypt’s Minister of Environment Yasmine Fouad and the German state secretary at the federal Ministry for Environment, Nature Conservation and Nuclear Safety Jochen Flasbarth, had a long list of issues to resolve. Among them is the fight over the nature and level of reporting that needs to be done by the developed countries on the finances they provide to the developing world to deal with climate change.
Developed countries are under an obligation ‘mobilise’ at least US$ 100 billion every year from the year 2020 to help the developing countries fight climate change. The Paris Agreement requires the developed countries to report information every two years about the money it was likely to provide in future, and the money that it had already provided in the previous two years.
How this will be done, and the nature of information to be provided, needs to be spelled out in the rule-book. But some developed countries have now been arguing that they were not in a position to report advance information on the money they were likely to provide in future because of constitutional and budgetary constraints. The developing countries, on the other hand, have countered saying they were only seeking “indicative” amounts.
Developing countries also want to ensure that money provided by developed nations was “new and additional” to the money already flowing in other forms, and want specific mention of this in the rule-book. However, the phrase “new and additional” is not mentioned in the Paris Agreement, and developed countries do not want it in the rule-book either.
There were several other issues related to finance under discussion, like the future of Adaptation Fund, an instrument under the Kyoto Protocol, which runs till 2020 before being replaced by Paris Agreement. Developing countries have been asking for a smooth transition of the Adaptation Fund, which was being used to fund adaptation projects, to the Paris Agreement, and this needs to be specified in the rulebook. But there is no consensus as of now on how to achieve this.
Similarly, there is this issue about enhancing the climate finance target beyond the US$ 100 billion per year. The Paris Agreement says the finance commitments of the developed countries needed to be revised upwards from 2025, but neither does it specify the revised amount, nor does it say anything about what this revision needed to be based upon.
Several studies now say that the amount of climate finance required to meet the global objective of meeting the 2 degree target ran into trillions of dollars per year. Incidentally, the US$ 100 billion figure was not based on any assessment. It was announced by then Secretary of State Hillary Clinton at the Copenhagen climate change meeting in 2009, mainly to instil trust and confidence in the negotiations after the near-collapse of the talks.
Developing countries are now asking that the revised amount should adequately reflect the requirement. For this, they have been arguing that a need-assessment be done. Developed countries, on the other hand, say that it was too early to talk about the revision which was to happen only in 2025.
The ministerial group on finance has to resolve these and many other matters over the next two days. The high-level segment continues till Wednesday.
Amidst the stalemate on finance negotiations, some of the developed countries announced new financial commitments. France, for example, said it would provide 15 million euros to the Adaptation Fund, and another 20 million euros to the LDC Fund, an instrument aimed solely at funding projects in the least developed countries.
European Union separately pledged new 10 million euros for the Adaptation Fund, while Sweden said it would contribute 50 million Swedish krona (about 5 million euros) each for the Adaptation Fund and the LDC Fund. Germany promised a new commitment, of as yet undisclosed amount, for Adaptation Fund, while New Zealand pledged three million USD over three years.
Additionally, Switzerland promised to provide 13 million USD over four years to the LDC Fund and a Special Climate Change Fund.
Elsewhere in meeting rooms, ministers were trying to resolve the other difficult issues. There were a whole lot of issues related to transparency that needed to be resolved. Transparency is a cross-cutting issue, concerning every topic in the rulebook and there are serious differences amongst the countries on how to ensure transparency in processes, mechanisms, accounting and reporting of actions, and also in financial flows and technology transfers.
Negotiators also have to finalise the provisions for a new market mechanism for carbon trading, to replace the Clean Development Mechanism of the Kyoto Protocol. The Paris Agreement provides for the establishment of a new carbon market, but its rules and procedures have to be specified in the rule book.
Sue Biniaz, former lead climate lawyer and negotiator for the United States under the Barack Obama administration said the ministers had been burdened with too many issues, and too technical and complicated subjects, and it was not practical to expect them to resolve all these over the next two days.
Several negotiators have been conceding in private that Katowice would probably not deliver a completed rulebook and that many issues would have to be left to be resolved at a later date.
The implementation of the Paris Agreement begins only on January 1, 2021, after the expiry of the Kyoto Protocol in 2020.