Almost a year after the signing of the Paris Agreement in December 2015, the parties of the United Nations Climate Change Conference will begin their annual Conference of Parties (COP) summit in Marrakesh, Morocco from today (November 7). The COP22 meeting, slated to go on from November 7-18, 2016 has been deemed an ‘Action COP’ for implementation of the Paris Agreement and formulation of the rule book of several components of the agreement for which only basic guidance and clauses are in place.
The agreement entered into force on November 4, much earlier than the initially expected 2020 timeline for entry into force. While negotiations regarding the rule book of the Paris Agreement are unlikely to be finalised this year, they are expected to happen by 2018 when more countries would have ratified the agreement and would be party to the decision-making process in the making of the rulebook. However, the COP summit in Marrakech (also Marrakesh) may be crucial for negotiations on some long-standing issues at the UNFCCC, which may define the course of future negotiations. Deliberations on standout issues of the Paris Agreement are likely to be but a starting point for future implementations of the agreement.
Below are some key areas, especially pertinent to India and other developing nations, which are likely to feature prominently in this year's summit:
The topic of agriculture has mostly been skirted so far by the UNFCCC and is not even mentioned explicitly in the Paris agreement. But agriculture is one of those key nodes in the climate change equation that cannot be ignored for long. As global population expands, there is a need for expansion in agriculture as well but at the same time agriculture contributes about 15 per cent of total emissions which go up to 30 per cent when emissions from forestry and other land use changes are taken into account. One issue of contention between the developed and developing countries is to treat mitigation of climate change impacts on agriculture as an issue that brings "co-benefit" to both sets of nations.
Another big talking point regarding agriculture will be international cooperation in terms of finance and technology transfers. Small countries such as Bangladesh have asked for international support in order to reduce emissions from agriculture beyond five per cent. But international funding for adaptation and mitigation in agriculture has been a trickle so far. The GCF and ODA have facilitated some international funding of climate-smart and climate-resilient agriculture projects. INDCs offer a starting point in climate negotiations on agriculture but action will have to be landscape or region-specific. In Morocco, it is likely that parties start talking about common standards that are needed to implement strategies and improve monitoring. Recently, 27 African countries signed an initiative named Adaptation of African Agriculture (AAA) Marrakech declaration, whereby they have agreed to place agriculture at the heart of climate negotiations during the COP22.
Adaptation (Article 7 of Paris Agreement)
The Paris Agreement, for the first time, put mitigation and adaptation to climate change on equal footing. Many of the current Intended Nationally Determined Contributions (INDCs), mainly of developing countries, have a clear adaptation component in them. Paris Agreement encourages parties to periodically submit an “adaptation communication” reporting on their adaptation efforts and/or needs and establishes a “global goal on adaptation” but does not define what it actually is.
The agreement also provides for enhanced adaptation support for developing countries, and says their adaptation efforts “shall be recognized.” But while the agreement underlines commitments, a coherent plan of action is lacking. The adaptation fund, which was formed in 2001, has lately suffered from the dipping carbon prices and has depended mostly on donations from countries and private entities. The UNEP’s 2016 Adaptation Finance Gap Report projects that, by 2030, adapting to climate impacts would cost between $140 and $300 billion per year. Therefore, the current level of adaptation finance currently projected at $20 billion by 2020 has to be scaled up many folds.
Decisions also have to be made and adopted on following points:
1. modalities for recognising developing countries’ adaptation efforts
2. methodologies for assessing adaptation needs
3. methodologies for reviewing the adequacy and effectiveness of adaptation and support
Therefore, Marrakech provides an opportunity to start working on coherent strategies to mobilise finance and develop standards to implement interventions and monitor progress.
Loss & Damage (Article 8 of Paris Agreement)
Climate-related impacts are increasing in severity and developing countries bear the maximum brunt of these impacts. It has taken almost two decades in climate negotiations for loss and damage to be treated as an issue needed to be addressed. The Warsaw International Mechanism (WIM) was established in 2013 with a view to:
1. enhance knowledge and understanding of comprehensive risk management approaches to address L&D
2. strengthen dialogue, coordination, coherence and synergies among relevant stakeholders
3. enhance action and support, including finance, technology and capacity-building
The Article 8 of the Paris Agreement provides a separate section on loss and damage and provides legal basis to anchor the Warsaw International Mechanism to the Agreement, although without the element of liability and compensation which were unacceptable to developed nations. It also clarifies that action on loss and damage shall be cooperative and facilitative and shall be undertaken in coordination with competent bodies inside and outside of the UNFCCC structure. Further, it outlines possible fields of cooperation in a non-exhaustive list. The recognised areas of cooperation under Article 8, Para 4 are as follows:
1. Early warning systems
2. Emergency preparedness
3. Slow-onset events
4. Events that may involve irreversible and permanent loss and damage
5. Comprehensive risk assessment and management
6. Risk-insurance facilities, climate-risk pooling and other insurance solutions
7. Non-economic losses
8. Resilience of communities, livelihoods and ecosystems
At Marrakech, there will be a review of the loss and damage mechanism, including its structure, mandate and effectiveness with a view to adopt an appropriate decision on the outcome of this review. The review of the two-year work plan of the Executive Committee (Excom), which carries out the functions of WIM, will also take place and a five-year work plan be devised.
Finance (Article 9)
Finance has always been a contentious issue in climate negotiations. In Paris, developed countries were asked for a roadmap to mobilise $100 billion in climate finance for developing countries by 2020. This roadmap was released in October 2016. The OECD has released a roadmap detailing the mobilisation of about $67 billion from national commitments and further $22.8-25.5 billion from private entities by 2020. While the roadmap details a doubling of the adaptation fund by 2020, critics have pointed out that the climate financing relies heavily on market-based loans and export credits which should not count as funds. The Indian government is currently vetting the roadmap and is expected to present a rebuttal at the COP22 conference.
Under the Paris Agreement, the issue of finance has differentiation in it with developed countries mandated to help developing countries with funds for mitigation and adaptation. “Other countries” are also encouraged to provide support voluntarily. The Subsidiary Body for Scientific and Technological Advice (SBSTA) is tasked with developing modalities for the accounting of resources provided through public interventions. Developed countries commit in the agreement to report every two years on support provided and mobilised “through public interventions,” and to provide “indicative quantitative and qualitative information”. The COP 22 has to identify the indicative information to be provided on future support. Reporting rules may also be reviewed to make the process of finance reporting and monitoring more streamlined and transparent so that progress can be assessed in a standardised manner every five years. The SCF aims to finalise the review and recommendations in time for adoption during the COP23 in 2017. The developing countries will push for pre-2020 financial commitments from developed countries.
Information on Nationally Determined Contributions (NDC)
The Ad Hoc Working Group on Paris Agreement (APA) is tasked with developing further guidance on the information to accompany future NDCs—for instance, whether it should vary according to the type of NDC, or be left to parties’ discretion. The APA also will develop guidance on the “features” of NDCs, which could entail a set of principles or a common template for better reporting and comparability. It also has to devise common time frames for NDCs. In the current round of NDCs, most parties have set timelines for 2030 while some, including the United States, chose 2025.
Global Stocktake (Article 14)
The global stocktake, mentioned in Article 14 of the Paris Agreement, serves as a crucial review exercise, to periodically assess collective progress toward the agreement’s long-term goals and enhance implementation of the agreement and scale ambition over time. The first global stocktake would be undertaken in 2023 and every five years thereafter, unless decided by the parties otherwise.
The stocktake process is global and comprehensive in nature and covers all elements of the climate change issue: mitigation, adaptation and means of implementation (finance, technology transfer and capacity building). The Decision text under the Paris Agreement also establishes a facilitative dialogue scheduled to be conducted in 2018. The scope of this facilitative dialogue is not comprehensive unlike the global stocktake and is intended to review progress toward the Paris Agreement’s long-term mitigation goal and to inform the preparation of nationally determined contribution, the next round of which is due in 2020.
The APA is mandated to formulate modalities regarding global stocktake and also identify key sources of information that would be provided by the parties which would serve as inputs to conduct the global stocktake. The Paris Agreement gives a non-exhaustive list of inputs on:
1. The overall effect of the nationally determined contributions communicated
2. Adaptation communications and reports
3. IPCC Reports
4. Mobilisation and provision of support
A critical question regarding global stocktake is how to engage the observers in the process and how to align different components of the stocktake. The stocktake also will be informed by the transparency system. These issues of the global stocktake are likely to come up during the COP22 and the CMA1 (Conference of Parties of the Paris Agreement) that shall be held in Marrakech.
Transparency Framework (Article 13)
A transparency framework is established with common reporting and review requirements for all parties. There is a ‘built in flexibility” for developing countries with regard to reporting but it is not defined as to what it actually means, probably signaling at some sort of differentiation. A Capacity Building Initiative has also been established to help developing countries build domestic capacity towards meeting their requirements.
Under the Paris Agreement, all parties are required to report at least every two years on their GHG emissions and on progress in implementing their NDCs. In addition, developed countries are to report on support provided and developing countries on report received. The Paris agreement says that the new transparency framework will build on existing UNFCCC transparency arrangements. However, the relation between the two is not yet defined. The APA will recommend “modalities, procedures and guidelines” for implementing the transparency provisions for adoption by CMA in 2018. This process of finalising the guidelines to promote and maintain transparency in reporting of progresss regarding the agreement is likely to be initiated in Marrakech.
Accounting (Article 4)
Under the agreement, the parties have to account for progress in NDCs and their emissions in a way that “promote environmental integrity, transparency, accuracy, completeness, comparability and consistency, and ensure the avoidance of double counting.” However, the rules for accounting have to be clearly established to avoid double counting and also considering the heterogeneity of climate action plans. The parties are required to follow the accounting guidelines with second round of NDCs in 2020.
New Market Mechanisms (Article 6)
Article 6 of the Paris Agreement provides the initial framework for nations to voluntarily pursue cooperative approaches to reduce GHG emissions. It allows parties to voluntarily use “Internationally Transferred Mitigation Outcomes” (ITMO or trading units) to help meet their reduction targets, while ensuring that transparency and the environmental integrity of the regime is maintained. Thus, the Article assumes that countries will develop markets internally, and it says they can trade mitigation outcomes (ITMOs) among themselves to meet the targets they’ve set in their country-specific climate action plans, or the Intended Nationally-Determined Contributions (INDCs).
The same article establishes a new mechanism to “contribute to the mitigation of greenhouse gas emissions and support sustainable development”. Many commentators have referred to this as a new "Sustainable Development Mechanism" or the "ITMO Mechanism". The modalities and the details of the mechanism are yet to be devised. The Paris agreement only specifies that the mechanism shall operate under the “authority and guidance” of a body to be designated by countries who have signed the agreement, and a technical group under the UNFCCC, which would be formed later, would formulate rules governing the mechanism’s operation.
Major issues involved
Double Counting: The Agreement text notes that emission reductions outcomes cannot be used by two parties. However, there is no mechanism to ensure that the same mitigation outcomes are not transferred internationally twice, and/or are not used towards NDC twice, by different parties.
Registration of ITMOs: Considering that the content of NDCs is heterogeneous, the mitigation outcomes may not be in the form of units. A critical question emerges regarding the registration of internationally transferred mitigation outcomes (ITMOs) is whether standardised units will be introduced. Another closely related question is whether different accounting treatments will be required, depending on the type of NDC.
Challenge of sufficient demand: In the current context, it appears only very few countries, including Canada, Japan, New Zealand, South Korea and Switzerland are likely buyers of international offsets (ITMOs). The vast majority of other parties intend to participate as sellers. Hence, a balance must be struck between allowing for large participation of parties on the one hand and ensuring environmental integrity.
Implementation and Compliance (Article 15)
The agreement establishes a new mechanism to “facilitate implementation” and “promote compliance.” The mechanism will comprise a committee of experts of 12 members. The “modalities and procedures” have to be devised by the APA.
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