In 2009, rich countries agreed to deliver $100 billion per year by 2020. They did so in recognition of their undeniable and overwhelming share of historical pollution. Hillary Clinton plucked the $100 billion figure from thin air, presumably because she thought it sounded like a lot. In fact $100 billion pales in comparison to the real needs which developing countries have to cope with climate change while developing sustainably.
To deliver their conditional pledges of the Paris Agreement, poor nations would require $4 trillion in funding from rich countries. And, as we know, the Paris Agreement represents the baseline of ambition rather than the extent.
Every COP since 2009 has reiterated the $100 billion goal, but over time the language has been watered down. Developed countries have changed the wording from “deliver” to “mobilise” and then “leverage.” These words sound synonymous but are not. The subtle differences in wording mean a huge difference in policy. What percentage of climate finance will be grant-based vs. loans? Using “leverage” is a less serious commitment as you are not promising to stump up the cash yourself.
Academics have contested the methodology used by rich countries to demonstrate their progress towards this goal. And developing countries have long stressing that their finance needs are far from being met from any source. With things as they stand, they cannot implement their climate actions.
Where is the finance?
So to build trust at COP25, rich countries must show developing countries that they will scale up life saving funds. It’s not looking good in that regard. The Green Climate Fund, set up to support developing countries in their climate actions including adaptation, was recently promised $9.7 billion for its second replenishment. This falls short of the pledge of $10.7 billion that the GCF secured in its initial phase. Trump has not only withdrawn the US from the Paris Agreement; he has withdrawn $2 billion that Obama pledged. Australia has also refused to contribute.
The loss of this $2 billion undermines the agreement made at last year’s COP24. In Katowice countries agreed that developed countries will “continue their efforts to channel a substantial share of public climate funds to adaptation activities and to strive to achieve a greater balance between finance for mitigation and adaptation.”
Stumping up the cash is not a nice thing that rich countries do. It is their moral and, perhaps more importantly, their legal obligation. They are trying to escape this responsibility by changing the language and blurring the lines between themselves and developing countries. Rich countries do not want to be identified as rich. They would like to hide the fact that they are rich because of centuries of plunder and pollution. And they would like for poor countries to pay for the climate crisis despite not causing it.
A New Goal
In Madrid, developing countries will be fighting for new and adequate finance in several fora. One critical battleground is on long-term finance. The Paris Agreement extended the $100 billion/year by 2020 goal to 2025. But countries have not agreed on a future goal beyond that. Last year in Poland they agreed to begin a process to set a new collective goal over $100 billion. In June they discussed the matter in a workshop and will now consider the report from that workshop. In another they’ll discuss the “effectiveness” and “provision” of finance – how much money is flowing and what good it’s doing.
Developed countries are, as expected, against talking about long-term finance. They are resisting any move to assess their finance contributions. At the same time, they will try to restrict certain developing countries from accessing funds. The US has already tried to block Iran, China and Palestine from accessing finance from the GCF and GEF.
The Great Escape
Now the developed countries also want to change the membership of the Adaptation Fund Board. The Adaptation Fund is for developing countries to directly access funding for adaptation. It was created under the Kyoto Protocol and is much beloved of developing countries despite being chronically underfunded.
The Fund gets its resources via a “share of proceeds” from the Clean Development Mechanism. Countries agreed last year that the Fund would now serve the Paris Agreement exclusively, and any country which is a Party to the Agreement is eligible to sit on the Board. A consequence of serving the Paris Agreement is that the Fund will depend on a share of proceeds from the new Sustainable Development Mechanism, once in operation.
As part of their Great Escape agenda, developed countries want to re-write the composition of the Board. They want more developed country representation for starters. But they also want to remove the reference to “Annex I” and “non-Annex I” countries. These terms refer to developed and developing countries respectively and signal the differentiated responsibility each set of countries has.
Finance is always a fiercely fought topic wherever it appears in the agenda. COP25 is no different and we may see fireworks later in week 2 when the stakes are raised.
Rich countries have utterly failed to limit their pollution despite knowing for decades the negative effects it causes. They have also failed to support poor countries in developing cleanly instead of with fossil fuels.
As a result, we live in a world that is already 1C warmer than a couple of hundred years ago. That might not seem like a lot, but all the climate change disasters we are witnessing show that even 1 degree warming represents unsafe territory for many millions of people.
Because rich countries have also failed to help countries and people on the frontline of climate change to adapt, we must now face up to the economic, social and cultural impacts from climate change to which we can’t adapt. This is what policy-makers and experts refer to as “loss and damage”. Small island nations first raised the alarm back in 1992, but were fobbed off with insurance schemes. Nowadays, though, insurance providers won’t cover for many of the effects of climate change as they have become too common.
This year Parties are due to review the loss and damage mechanism, so COP25 has become the moment to make it fit for purpose. Since being set up, the Warsaw International Mechanism (WIM) has made decent progress in terms of knowledge generation and coordination on loss and damage, particularly on climate-induced displacement.
However, it has made zero progress on the critical and issue of facilitating financial support to poor countries so that they can avert, minimise, and address loss and damage.
Frontline communities around the world need resources to be able to cope with a rapidly warming world. In the negotiations, developing countries want to set up a comprehensive finance facility. This facility would funnel large sums of mostly public funds towards dealing with loss and damage. They also hope to set up an expert group on action and support for loss and damage, and to conduct a needs assessment for loss and damage in developing countries.
Poor countries like Dominica, Mozambique, and the Philippines are already facing huge amounts of loss and damage. In the case of Dominica, the country suffered damages worth 224% of its GDP in one hurricane. Therefore, they argue, the finance must be up to scratch.
Rich countries could contribute directly from their national budgets. Supplementary funds can come from new and innovative sources such as air and maritime levies, a Climate Damages Tax on oil, gas and coal extraction, and a “Robin Hood” Financial Transaction Tax. Together these sources can generate badly needed additional funds.
Though it is hard to estimate the total costs, a coalition of civil society groups have called for at least USD $50 billion per year by 2022, rising to USD$150 billion by 2025 and USD$300 billion by 2030. The coalition have calculated that the fair share of the US alone is 30-40% of the global effort to address loss and damage.
COP25 should recommend other measures such as immediate relief on all debt due to be paid by developing countries who face the current climate emergency. This could take the form of an interest-free moratorium on debt payments, which would open up resources currently earmarked for debt repayments to immediate emergency relief and reconstruction.
A question of governance
The Warsaw International Mechanism was set up under the COP, but loss and damage is also an issue in the 2015 Paris Agreement (Article 8) which has its own governing body known as the CMA. (Shorthand for the absurd “Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement”).
The “scope” of Article 8 of the Paris Agreement is narrower than how loss and damage has been defined under the COP. Because of this, developed countries are keen for the review to conclude that the Warsaw Mechanism should be governed exclusively by the CMA. Developing countries insist that the COP and CMA jointly govern the WIM. What seems like a technical quibble is actually a highly political battle.
Many observers have touted COP25 as the loss and damage COP. But with the Chilean Presidency and many developed countries’ attention focused more on the market mechanisms of Article 6, and with rich countries refusal to accept their responsibility, vulnerable countries will have to fight tooth and nail to make sure COP adopts decisions that take loss and damage seriously.
The Group of 77 + China (a negotiating bloc of 134 developing countries) have submitted a proposal to the COP. In it, they outline their ideas for what COP25 should decide regarding loss and damage. With the moral high ground, they should be successful. But the vested interests against them are strong. Keep checking our coverage to see how to debate unfolds.
Since the early years of the UN climate talks, governments responsible for needing to make the deepest emissions cuts have repeatedly attempted to divert this responsibility. They have done so in several faulty and flawed ways: by creating and advocating for “market mechanisms” to trade units of carbon, by incorporating carbon capture technologies into emissions reductions plans, and by advocating for “techno-fixes” including dangerous and untested geoengineering technologies.
Offsetting emissions through market mechanisms is the antithesis to a true climate response from the global community, and from industrialized countries in particular. The science is clear: keeping warming below 1.5 degrees Celsius will require strong emissions cuts, beginning in the developed world, which needs to achieve actual zero emissions as soon as possible. Mechanisms that rely on offsetting delay meaningful action and don’t address the fundamental gap between the 1.5 degree target and countries’ weak progress in emissions reductions.
Furthermore, these mechanisms are rife with loopholes and often allow polluters to increase their emissions and profit from participating in such schemes, all while claiming the false banner of climate leadership. More recently, so called ‘Nature Based Solutions’ have formed the battleground in the fight to extend the concept of commodification of carbon to all ecosystems, with soil carbon, biodiversity and other values being measured and commodified.
What is a carbon market?
A carbon market is a scheme that views atmospheric space in “units”. These units are essentially the right to pollute for a price. The assumption of a carbon market is that if polluters are made to pay per unit of emissions, they will be incentivised to invest in alternatives or pollute less. Yet the opposite has proven true.
For industries and countries with more wealth, carbon markets simply allow them to continue with business as usual while outsourcing their emissions elsewhere. The established market mechanisms, such as the Clean Development Mechanism (below) are riddled with loopholes and have actually resulted in an increase in emissions.
Repeating the same mistakes
The 1997 Kyoto Protocol established the so-called Clean Development Mechanism (CDM), a highly controversial, contested scheme which eventually proved to be ineffective in meeting the targets of the Kyoto Protocol.
The intention of the CDM was to help developed countries meet their emissions reductions targets under the Protocol through the purchase of emissions reductions credits, but the actual result was that some businesses made a lot of money selling “credits” to entities who wanted to pollute more but not have said pollution on their books. The CDM was also widely criticised for harming local people and violating human rights, especially the rights of Indigenous Peoples, as well as failing to actually cut emissions.
For years afterwards, international negotiations on markets usually ended in no agreement between countries, although of course some countries did set up their own domestic markets which they hoped would one day allow for international trading.
Countries that are strongly in favour of market approaches include the European Union, Japan, New Zealand, Australia, Norway and the US, while countries including Venezuela and Bolivia have strongly resisted such offsetting mechanisms. It is not clear how the recent turmoil will affect Bolivia or whether its “transitional” government will do a u-turn or simply remain silent.
After a frenzied two weeks of negotiations in 2015, Article 6 of the Paris Agreement ended up allowing countries to “choose to pursue voluntary cooperation in the implementation of their nationally-determined contributions (NDCs) to allow for higher ambition in their mitigation and adaptation actions and to promote sustainable development and environmental integrity,” and to engage “on a voluntary basis in cooperative approaches that involve the use of internationally transferred mitigation outcomes (ITMOs)” which can count towards their NDCs so long as they promote sustainable development, avoid double counting and ensure environmental integrity.
Thus the door was opened to conflate carbon trading and offsetting with “cooperative approaches” to tackling climate change. The reference to “ITMOs” has also opened the door for the establishment of an international carbon market – contentious given the years of debate on this matter never arriving at an agreement, and laden with pitfalls and risks.
The ITMOs also pose the difficult question of whether a country can use such international transfers for anything other than fulfilling its Paris pledge. Can they, for example, be used in the global offsetting scheme under the International Civil Aviation Organisation, known as ‘Carbon Offsetting and Reduction Scheme for International Aviation’ (CORSIA), which is not under the UNFCCC and which could potentially rely on 2.6 billion tonnes of ‘credits’ from supposedly avoided deforestation.
Rather than focus on more meaningful, equitable methods of cooperation like technology sharing, capacity building, and finance, Article 6 decided that a “Sustainable Development Mechanism” should be set up. Like the CDM before it, this new market mechanism, if it is established, is likely to fail in delivering emissions reductions targets outlined in countries’ National Determined Contributions under the Paris Agreement.
COP25 and the fate of Article 6
Last year at COP24 in Katowice, the section of the “Paris rulebook” dealing with Article 6 was not agreed and became a major sticking point. The talks nearly collapsed in spectacular fashion as Brazil wanted the certified emission reduction credits (CERs) it had obtained under the Kyoto Protocol’s Clean Development Mechanism to be counted towards its pledge under the Paris Agreement, and refused to accept rules to prevent double-counting. Eventually the formal conclusion was that no agreement could be reached. The same thing happened at the next round of talks in Bonn this June.
The scene is therefore set for a pressurised round of talks in Madrid, as COP25 is the deadline to conclude this last remaining section of the Paris rulebook. Agreement will be difficult as double counting remains an unresolved issue and wealthy countries such as Australia continue to insist on double-counting their Kyoto credits towards their Paris commitments.
Carbon Market Watch estimates that there are some 20 billion units under the Kyoto mechanisms that could potentially be transferred into the Paris mechanism, rendering the Agreement’s 1.5 degree C goal impossible to achieve. But it gets worse.
[s]ome countries’ Nationally Determined Contributions under the Paris Agreement have low targets which will be easy to over achieve. This means that these countries could potentially create between 18.7 and 28.3 GtCO2e worth of credits – or ‘hot air ’- that they can sell without reducing a single tonne of greenhouse gas emissions.
Market fundamentalists will want to leave Madrid with detailed technical guidelines to allow them to forge ahead with international carbon markets. Many others, notably those who do not stand to profit financially from these market mechanisms, will want only general guidance to try and ensure that if, or when, international markets are established they are regulated and do not threaten human rights or environmental integrity as they have under Kyoto.
Guidance, such as that offered by Carbon Market Watch below, can be quite simple:
Only emission reductions that take place after 2020 can be used towards the NDCs
Countries that over achieve their targets because they were set below business-as-usual emission levels in the first place should not be allowed to transfer these hot air credits to other countries that have adopted more stringent targets
Countries with hot air in their current NDCs should not be allowed to transfer it to subsequent NDC periods to meet future targets
Emissions should not be compensated through the use of excessively old credits, representing emissions which took place a decade or more earlier
With everything else in the Paris rulebook “package” having been wrapped up, it’s hard to see what exactly the horse trading will be but we can be sure of some.
The only way to reach real zero emissions as quickly as possible is to reject these dangerous distractions outright, and simultaneously for developed countries to embrace meaningful, real solutions to achieve the deep emissions cuts they are responsible for, while unconditionally financing the same in developing countries. There is an abundance of real, feasible, cost effective action across all sectors that can be implemented here and now, many of which will have immediate effect.
These include things like but not limited to investing in infrastructure of electrified, mass public transit, with free or heavily subsidized fares; rapidly transforming industrial agriculture towards agroecological practices through proper incentives and policies combined with removal of perverse subsidies, and phase out artificial fertilizers; embracing community governed forest conservation; planning for and transforming energy systems away from centralized corporate-controlled fossil fuels and other harmful technologies to clean, safe systems that empower people and communities.
Article 6.8 of the Paris Agreement provides an opportunity to address the real drivers of emissions by advancing policies and practices via voluntary cooperation among countries that can help deliver deep emissions cuts while advancing equity, environmental protection, and wellbeing. A work programme on how to enhance linkages and create synergy between inter alia, mitigation, adaptation, finance, technology transfer and capacity-building and how to facilitate the implementation and coordination of non-market approaches is under discussion at COP25.
Click here to learn more about what carbon markets are and how they work
Click here to learn more about how carbon markets are a threat to people and planet
Click here to learn more about what real international solutions to the crisis look like
Click here to learn more about the nitty gritty of Article 6 negotiations
Even a cursory glance at the latest climate science makes it abundantly clear that the commitments to the Paris Agreement (“Nationally Determined Contributions” or NDCs for short) are simply not good enough. But rich countries are wriggling around to escape from any attempt to revise those plans in light of science and equity before they take effect in January 2021.
There is a pattern here: in 2012, countries agreed the Doha Amendment of the Kyoto Protocol. This decision contained binding targets for rich countries to cut pollution from 2013 – 2020. Seven years later and the Amendment has still not been ratified. For comparison, the Paris Agreement was ratified in under a year.
Several rich countries (Canada, Russia, and Japan) actually said they would no longer participate in agreements to reduce aggregate emissions by 18% below 1990 levels and revise this target in 2014.
The so-called “pre-2020 action” has been shown by civil society to be wholly inadequate and unjust as it transfers the burden of tackling climate change from rich to poor. What should be a case of “why put off to tomorrow what you can do today” has become a case of kicking the can further and further down the road. A review of this pre-2020 action, or lack thereof, is scheduled to take place in two stages in Madrid. The first stage on December 4th will be technical followed by a high-level segment on December 10th.
However, the EU, Canada, Japan, Australia, Russia and the US are unwilling to let the review be more than just a talk shop, as was the case with previous reviews. This is hardly surprising given that ten years of UNEP Emissions Gap reports have basically stated that these countries have spent the last decade doing the exact opposite of what they should have done.
Not only have we lost a decade to inaction, according to a new report our governments’ current plans for the coming decade involves the production of a whopping 120% more fossil fuels than we have the ability to produce without blowing past 1.5C warming.
As we hurtle towards, perhaps beyond, planetary tipping points, there are people in positions of power making a conscious decision to risk the basis for human civilisation — all in the pursuit of profit.
Of course, we cannot now get back the time we’ve lost. But the next critical decade does not have to be the same as the past. The future is not yet written. We know that global emissions must decrease by 7.6% annually starting now if we are to have any chance of averting a 1.5C warmer world. This would still be a world of incredible climate violence such as we have witnessed this year with forest fires ravaging California and Australia, flooding inundating Venice, and cyclones battering Mozambique, the Bahamas, and China.
“at a time of tremendous economic inequality and injustice, only a plan firmly rooted in both fairness and boldness has a hope of building the support necessary to take on the big polluters and win transformative climate action.”
This is plainly obvious and evidenced in recent protests in Ecuador as well as the Gilet Jaunes protests across France – both sparked by a regressive fuel tax. But the same idea of fairness must also apply at the global level, for the same reasons. As the IPCC put it in their landmark report on 1.5C warming:
“Public acceptability can enable or inhibit the implementation of policies and measures to limit global warming and adapt to the consequences. Public acceptability depends on the individual’s evaluation of expected policy consequences, the perceived fairness of the distribution of these consequences and perceived fairness of decision procedures.”
No country can stop climate change on its own. If one, even a large polluter like the US, managed to enact a just transition to zero carbon overnight, it would still experience climate change alongside the rest of the world unless all other countries vastly reduced their emissions too. The irrefutable need for an international approach is the basis for these negotiations. And that requires trust – something which has been severely undermined by decades of broken promises like we have seen with the failure to ratify the Doha Amendment and the failure to deliver the $100 billion per year of desperately needed climate finance.
Following massive anti-austerity and anti-government protests across Chile, the 25th United Nations’ annual climate change summit – Conference of the Parties, or COP for short – was relocated from Santiago to Madrid. By offering to host the summit instead, Spain gave the Chilean government a chance to escape the international spotlight that would have further exposed its violent crackdown of protests which were escalating in the run up to COP25. It is estimated that the state violence in Santiago is now the worst the country has seen since the Pinochet dictatorship, but the news cycle has moved on.
The change of location created logistical havoc and will severely limit participation in the debate. Tens of thousands of delegates had planned to travel to Santiago not only for the UN meetings but for large social fora such as the Cumbre de los Pueblos, or People’s Summit. Those hit hardest by the location change will as usual be groups that are primarily indigenous, grassroots movements, and from the Global South.
Chile is still presiding over the meeting in Madrid, but how domestic unrest and the sudden relocation will affect its leadership and legitimacy at COP remains to be seen – as does the exact nature of Spain’s role (Spain held its second general election of 2019 on November 10th and at the time of writing has yet to form a government).
Alongside this political turmoil, the chaos of climate change is intensifying at a terrifying rate. The world’s chance to avert catastrophic runaway climate change is quickly escaping. In November the World Meteorological Organization announced that greenhouse gas concentrations in the atmosphere have risen to a record high. The United Nations Environment Program’s 2019 “Emissions Gap Report” unequivocally stated that, in order to remain within the 1.5C warming threshold, global emissions must be reduced by 7.6% annually from now until 2030. This represents a five-fold increase in ambition compared to current plans as laid out in countries’ Nationally Determined Contributions (NDCs).
COP25 is the penultimate meeting before the Paris Agreement NDCs comes into effect in January 2021 and countries are expected to start implementing their commitments. However, in spite of growing numbers of people taking to the streets to demand action, the meeting threatens to be the latest installment in a years-long Great Escape of responsibility that rich countries have been enacting.
To escape from their responsibilities, rich industrialised countries are using dangerous distractions like carbon markets which undermine real solutions. They are deliberately forgetting their previous promises, delaying others from taking action by withholding vital funding, and shutting down any attempts to talk about compensation for climate damages.
We will explore each of these escape routes for polluters in the coming days as COP25 gets underway.
Before diving into the specific issues at COP25 it’s worth checking out the following links which contain important background to understanding the evolving dynamics of the climate change negotiations and the climate justice movements’ demands.