No money means no teeth in Paris agreement

As rich nations fail to put in sufficient money into the Green Climate Fund, emerging economies are left with very little financial resources to respond to the challenge of climate change

Lack of money from developed to developing countries is likely to significantly weaken the Paris Climate Agreement as it comes into force on January 1. Pledges to the Green Climate Fund (GCF) totalled USD 9.7 billion in the latest replenishment round last week, and the fund continues to struggle because rich nations are far from fulfilling their 2009 pledge to provide USD 100 billion a year to poor nations from 2020 to fight climate change.

Five weeks prior to the last climate summit before the 2015 Paris agreement comes into force, ministers from BASIC countries (Brazil, South Africa, India, China) met in Beijing and were left bemoaning the situation.

Meanwhile, climate change is gathering pace, and its impacts are being felt around the world. Two recent reports from the Intergovernmental Panel on Climate Change (IPCC) has underlined the threat to the earth’s oceans and the ice-bound areas and to land.

Last year, the IPCC had clearly pointed out the advantages of keeping average temperature rise since pre-industrial days to 1.5 rather than 2 degrees Celsius. At the beginning of this decade, it had said climate change would make droughts, floods and storms more frequent and more severe. That is exactly what has happened, but even that failed to move entrenched interests.

At a pre-summit meeting this June, Saudi Arabia vetoed all references to the 1.5-degree report in climate negotiations conducted under the UN Framework Convention on Climate Change (UNFCCC). The UNFCCC summit scheduled December 2-13 will be the last chance to finalise the Paris agreement rulebook. But from the joint statement that came out of the October 25-26 BASIC ministers’ meet, it is not going to be easy.

Pledges to the GCF

The pledges to the GCF at last week’s meeting in Paris are not going to make things easier. A few developed countries doubled their initial contributions, but most of the rich nations fell short. With US President Donald Trump having declared that his government would exit the Paris agreement, it was known that the US would not pledge any money at all. Nor did Australia. On top of that, climate activists were particularly critical of Canada, the Netherlands, Portugal, Luxembourg, New Zealand, Austria and Belgium, saying they “failed to deliver their fair share”.

Wendel Trio, Director of Climate Action Network (CAN) Europe, said, “Several European countries set the bar high and threw real money on the table. This is a good start but in no way adequate to meet the needs on the ground. Countries who pledged below their fair share and failed to live up to their obligations must urgently top up their contributions. All countries who have not pledged so far need to put money on the table as soon as possible, to help the poorest countries scale up their climate targets in 2020.”

Lidy Nacpil, Coordinator of the Asian Peoples Movement on Debt and Development and GCF Active Observer for Developing Countries, said, “We would like to remind developed countries of the USD 100 billion annual target they have committed to. The amount pledged as of today is very far from the USD100 billion and much much farther away from what is actually needed to finance urgent climate actions in developing countries that are needed not only by people of the South but by the whole world.”

The shadow of WTO

Apart from the immediate financing problem, negotiations at the World Trade Organisation (WTO) are casting their shadow on climate negotiations. The BASIC ministers said, “Unilateralism and protectionism undermine the open and free international trade system and the prospect of global economic development and growth, which will end up with damaging global efforts against climate change. It is imperative to focus on safeguarding the multilateral process and the fulfilment of commitments.”

The ministers who attended the Beijing meeting were Li Ganjie, Minister of Ecology and Environment of China; Xie Zhenhua, Special Representative for Climate Change Affairs of China; Prakash Javadekar, Minister for Environment, Forests and Climate Change of India; Roberto Castello Branco, National Secretary for International Relations, Ministry of the Environment of Brazil; and Maesela Kekana, Chief Director of International Climate Change Relations and Negotiations of the Ministry of Environment, Forestry and Fisheries of South Africa.

G77, the developing country grouping that negotiates at UNFCC together, is now chaired by Palestine – its ambassador Ammar Hijazi was present. So was Mauricio Carabelli of Chile, the country scheduled to host the December summit (Conference of Parties 25, or COP 25) and take over the presidency of the global group.

This group of emerging and developing countries was clear that “the key outcome of COP25 will be to conclude negotiations on robust rules to ensure environmental integrity under Article 6 of Paris Agreement and to achieve progress on climate finance which is one of the key enablers for developing countries to implement ambitious climate actions.”

Article 6 is about what countries are promising to do to combat climate change and what rich countries are giving to poor countries to help do so. Nearly four years after the Paris agreement was signed, there is still no agreement on the details, nor on the degree of transparency developing countries seek when it comes to climate finance from developed countries.

Poor nations are worried due to their experience of the 1997 Kyoto Protocol, in which a host of promises by rich nations have remained unfulfilled even as the protocol dies a nearly-unlamented death at the end of this year. A set of amendments agreed in 2012 have not even entered into force, as the number of countries that have to ratify the amendments is falling short by 10.

Hardly any money for adaptation

All this legalese becomes important in the real world because much of climate finance is still going towards mitigation of the greenhouse gas emissions that are warming up the planet. The poorest of the countries get little of that, because they emit little. But they are facing the worst of the climate impacts, and what they need is money to adapt to climate change. Money under that heading is in serious short supply, and the BASIC ministers said, “These gaps (in financing) should not be transferred to the post-2020 period to present additional burdens on developing countries.”

Overall, “Ministers expressed their deep concern on the insufficiency and inadequacy of the support provided by developed countries to date, and underlined that the climate finance should be new, additional, and with significant public funded component. They urged developed countries to fulfil their climate finance commitments of providing USD 100 billion annually by 2020 for developing countries in a transparent and grant-based manner.” The BASIC countries wanted a “detailed roadmap and timetable” for this purpose.

And then there is the knottiest problem – how do developing countries get paid for the mitigation actions they have undertaken so far? Under the Clean Development Mechanism of the Kyoto Protocol, poor nations received certificates for these actions, and theoretically they could sell these certificates in a stock exchange dedicated to carbon emissions. But carbon emission prices crashed, so these governments held on to the certificates. Now rich countries are saying these certificates cannot be taken forward beyond the end of 2019. That will turn them into so much waste paper.

The Brazilian government holds an enormous amount of these certificates, and took up the strongest position when the matter came up for discussion at the 2018 climate summit. The issue remained unresolved, and it will be one of the biggest obstacles to a successful climate summit this year.