UN climate talks: little progress in first week

No consensus on Green Climate Fund, loss and damage arising from climate change impacts

By Arnab Pratim Dutta
Published: Sunday 17 November 2013

The first week of the 19th Conference of Parties (COP 19) at Warsaw has come to an end, but climate negotiations have made very little progress. As an India negotiator put it, this was supposed to be an “implementation COP”, where some decisions like financial mechanism and loss and damage arising from climate change impact were to be put into action. This meant finalising the modalities of the Green Climate Fund (GCF) and setting up a mechanism on loss and damage. But there has been little consensus during negotiations on these two subjects between the developed and the developing countries.

Japan goes back on pledge

The real bad news came from Japan, which announced that it was drastically cutting down its emission reduction pledge from 25 per cent over 1990 levels to 3.8 per cent over 2005 levels. If the Kyoto Protocol benchmarks are to be applied here, the new targets are actually an increase of close to 3.1 per cent over 1990 levels.

While there were apprehensions that Japan would cut down on its carbon reduction commitments post Fukushima nuclear disaster, a net increase in emissions targets over the 1990 levels came as a surprise to many.

The decision to set up a GCF was taken in 2010 at COP16 in Cancun, Mexico. The $100 billion long-term finance that was promised in a meeting by the developed countries was to be managed under this fund. One of the expectations from the current COP was to see the operationalisation of this GCF from next year. GCF would be the institution, which will set up the mechanism that would determine how monies from the developed world would be delivered to the developing world. The fund was to be operational next year with a clear time frame for  flow of funds.

Public v private funding

But the decision text is completely non-binding, says Brendon Wu of Action Aid USA, and there is no guarantee that the funds will flow. A G77 negotiator says that the developed countries are yet give a commitment on how this fund would be monetised—with public funding or private money. “The developed countries have tried to push for private finance, which is not predictable,” he said.

Since the announcement of this fund, one of the major sources of discontent has been how this fund would be monetised. Developing countries have resisted suggestions from developed countries about raising money from the private companies.

India has argued in this conference that private finance should only be supplementary, with most of the money coming from governments. “The developed countries are saying that the $100 billion could be from private finance with no link to the Green Climate Fund,” an Indian negotiator says. This could be private investment, which is radically different from climate aid.

Part of the problem of encouraging private investments is the fact that this money cannot be used for adaptation to climatic vagaries, a key concern of the developing world. Investments also require a favourable economic environment which could vary widely between developing countries.

GCF is not yet functional, but a number of the adaptation activities were carried out by another fund called the Adaptation Fund, set up in 2001. A primary source of money for this fund was from the Clean Development Mechanism (CDM). A cess of two per cent was put on every Certified Emission Reduction (CER) or carbon credit, which was to become the revenue for this fund. But with the near collapse of CDM, the revenue for this fund has dried up. One of the key demands that has emerged from the board of the Adaptation Fund as well as the developing countries is a sum of $100 million to keep this fund going.
The developing countries had expected that announcement of $100 million in the first week of the conference, but no such announced has been made. “It is a very small sum of money, a symbolic sum, to instil confidence that the developed world is serious about climate finance,” a negotiator from the African group said.

Rift over loss and damage
One of the key expectations from COP19 was setting up of a mechanism on loss and damage, but on this too the conference seems to have its feet stuck in glue. Very little has moved on this issue since G77 and China put in a conference paper on the third day of the two-week summit. There are deep differences on the form of this mechanism for assessing and compensating for loss and damage arising out of climate change impacts between both the negotiating blocks. Meena Menon of the Third World Network, a Malaysia-based NGO, says that the developed countries are making excuses not to engage in this subject. The G77 and China paper clearly suggested a “financial facility” that will comprehensively address loss and damage from adverse effects of climate change in the short-, medium- and long-term.

The European Union has insisted that no new institution should be formed to address this demand. Jurgen Lefevere adviser, international and climate strategy at the European Commission, DG Climate Action, said: “One of the key challenges that we face here is that how do you structure climate change into different organisations.” EU also wants this new mechanism to be delinked from UN Framework Convention on Climate Change (UNFCCC). Countries like Australia have already said they are averse to giving money for loss and damage. The US, it seems, wants the new mechanism to be clubbed under adaptation.

Leaked cable documents of US State Department to its envoys, accessed by The Hindu newspaper, states, “It’s our sense that the longer countries look at issues like compensation and liability, the more they will realise this isn’t productive avenue for the UNFCCC to go down.”
It also goes on to say, “We are strongly in favour of creating an institutional arrangement on loss and damage that is under the Convention’s adaptation track, rather than creating a third stream of action that’s separate from mitigation and adaptation,” it adds.

In first week of COP19, typhoon Hayian, was the major talking point. But it did precious little to move the negotiators out of their sleep. In the coming week the world’s environment ministers would descend on Warsaw. Would they manage a magical nostrum to take the talks forward?


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