It’s all about the money this year
Countries will gather in Bonn, Germany from June 5-15 for the United Nation’s mid-year climate conference, also known as the meeting of the Subsidiary Bodies (SB58).
The conference will be led by two bodies within the UN Framework Convention on Climate Change (UNFCCC) — the Subsidiary Body for Scientific and Technological Advice (SBSTA) and Subsidiary Body for Implementation (SBI). It will lay the groundwork for the 28th Conference of Parties (COP28) to the UNFCCC in December.
COP27, hosted by Egypt last year, precipitated the establishment of a loss and damage fund, which had been negotiated upon and delayed for over three decades. On finance, the Parties called for the reform of multilateral development banks and other global financial institutions.
For adaptation to the impacts of ongoing extreme weather events and slow onset events due to climate change, the Parties agreed on the establishment of a framework for the Global Goal on Adaptation, which would allow them to generate ambition and track progress under the global stock take process.
While the proposed goal of phasing down fossil fuels did not achieve consensus, COP27 reiterated previous calls “towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies” and called for a just transition to renewable energy.
“2023 is a crucial year to drive equitable climate ambition. Countries in the Global North, which have already appropriated a giant share of the carbon budget should not be given a free pass on the continued use of natural gas, a significant contributor to warming. The global energy transition pathway has to be for all fossil fuels,” said Sunita Narain, director-general of Delhi-based non-profit Centre for Science and Environment.
"We also need a global deal on renewable energy for energy access for the poorest and most vulnerable in the world,” she added.
Since COP27, the Intergovernmental Panel on Climate Change has published its Synthesis Report from the Sixth Assessment Cycle, which reiterated the urgency of halving emissions by 2030 if we are to stand a chance of achieving the goal laid out in the Paris Agreement of limiting global warming to 1.5 degree Celsius.
Elsewhere, the Russia-Ukraine war is yet to see an end, and energy security continues to dominate the priorities of countries. Wealthy countries have doubled down on their attachment to natural gas, particularly LNG, as evidenced by the G7 announcement at Hiroshima, Japan last month.
Large, emerging economies have been at the centre of the discussion on energy transition, with experts at CSE and beyond calling for the transition to be equitable so that the development goals of these countries are not compromised.
Most importantly, the conversation on finance has elevated this year. The question of much-needed reforms to the global financial architecture that is disadvantageous to developing countries in many ways has become a central priority for the climate community.
So, what will countries discuss at the mid-year climate conference in Bonn?
Global Stocktake (GST): 2023 is the year that GST — the report card on the Paris Agreement’s goals — culminates. It provides an opportunity to “correct the course we are on”, according to UN Climate Change Executive Secretary Simon Stiell. In Bonn this month, the third meeting of the Technical Dialogue will be held, and thereafter, the information collection and technical assessment phase of GST will conclude, leading to the final political phase. The GST process, once completed, must act as a “ratchet mechanism” to create more ambition for climate change mitigation, adaptation, finance and technological support in line with equity.
Loss and damage: The second Glasgow Dialogue will take forward discussions held in the two meetings and a workshop of the transitional committee (TC) on Loss and Damage. The TC was established with 24 members (14 from developing countries and 10 from developed countries) to decide upon the sources of finance for the loss and damage fund (LDF), established at COP 27, and its functioning and governance. Bonn will be a good opportunity for Parties to correct course and make LDF fully operational by COP 28, as divergent views about the scale and scope of the fund have emerged in the two meetings of the TC.
Mitigation: The Mitigation Work Programme will take discussions to the next level in Bonn with a Global Dialogue planned, followed by an Investment-Focused Event. The co-facilitators have set the tone by choosing “accelerating just energy transition” as the theme for discussions in 2023. This Work Programme has the potential to offer a constructive space for developing countries to lay out their financing and technological needs to drive more climate ambition.
Adaptation: The 6th workshop of the Glasgow Sharm El-Sheikh Work Programme on the Global Goal on Adaptation (GGA) will be held in Bonn, June 4-5. At this workshop Parties will take forward the discussions from the 5th workshop held in March that discussed transformational adaptation taking into account the knowledge of indigenous communities around the world, various cross-cutting issues and changing mindsets. The theme of the 6th workshop would be discussions around metrics, indicators and methodologies for establishing the framework for GGA. This would pave the way for the 7th and 8th workshops.
Finance: While the $100 billion climate finance goal may be met this year, discussions on the New Collective Quantified Goal (NCQG) on climate finance will continue at Bonn. The Sixth Technical Expert Dialogue will deliberate on the "quantum" of money for the new goal as well as “mobilisation and provision of financial sources”.
Article 6: Under Article 6 of the Paris Agreement, the SBSTA will further the work on the development of the necessary rules and procedures to implement the cooperative approaches outlined in Article 6.2. Regarding Article 6.4, the body will work to shape the responsibilities of the supervisory body and the participating parties in the mechanism. Additionally, the body will consider matters such as the appropriateness of including emission avoidance and conservation enhancement activities under Article 6.4.
For our collective progress to line up with considerations of equity, this year, above all, is about money. “For countries of the Global South, the focus should be on the lack of concessional finance to drive the energy transition. And we need to find ways to ensure that countries come up with sectoral trajectories for decarbonisation, and that these pathways list the financial gaps for which funding should be secured,” said Narain.
The spotlight must be on finance in various concrete forms — filling up a loss and damage fund, concessional finance for the energy transition and decarbonisation in developing countries, more financing for adaptation and progress on the NCQG towards an ambitious new goal reflective of the true needs of the developing world.
The United Arab Emirate’s COP 28 tenure is being headed by the chief executive of the Abu Dhabi National Oil Company, who is also the chairperson of Masdar, UAE’s renewable energy developer.
Of course, wishing away conflicting interests does not make them disappear, and it will be the challenge this year for civil society and UNFCCC multilateral process to push through equitable climate ambition.
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