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Backsliding, straitjackets and finance: A pre-Lima primer on the climate negotiations

Parties expect to build on previous negotiations in Lima, contributing to clarity and agreement on REDD+.
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It's up to UNFCCC negotiators to navigate the complex issues and global politics towards meaningful climate solution.
It’s up to UNFCCC negotiators to navigate the complex issues and global politics towards meaningful climate solution.

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At a glance :

  • With major developments made in climate commitments in the past couple of months, it is up to UNFCCC negotiators to navigate the complex issues and global politics to chart the path to a meaningful climate solution through the ADP.
  •  Key issues for discussion at Lima include finance for forests, land use and near-term mitigation potential and attempts to complete elements of the embryonic ‘Paris Protocol’.
  • We can also expect negotiations on the scope of INDCs and may see further clarity around ideas such as LUCFA and ‘concentric differentiation’. Parties may begin to provide more insight into what their contributions, including REDD+.
  • Parties may build on previous negotiations and explore issues such as safeguard measures, gender considerations, human rights, and local and traditional knowledge of indigenous peoples in the new agreement.

The last meeting of the Ad Hoc Working Group on the Durban Platform (ADP) ended with statements of dissatisfaction from many Parties calling for a ‘shift’ in the way in which the climate change negotiations are undertaken. Countries continually emphasized not only the urgency of the climate crisis but also the absence of ratifications for the Amendments made to the Kyoto Protocol in Doha and the lack of ambition demonstrated by developed country Parties. The European Union sought to take some leadership and announced its new target of at least 40% emission reductions below the 1990 level by 2030, and the incoming Peruvian COP 20 President warned the Parties that “the world will not accept failure . . . and Lima must be successful to pave the way for Paris”. It was clear that with COP20 only weeks away at that point, negotiators were feeling the heat in more ways than one.

Admittedly, the ADP October session followed a hard act. The New York Climate Summit in September saw the largest gathering of Heads of State with 120 in attendance and an unprecedented public mobilization around the issue with hundreds of thousands of people around the world taking to the streets. Both public and private sectors made important announcements, including on a controversial Declaration on Forests, which received support from a mix of businesses, Indigenous organizations, governments and civil society organizations. The non-legally-binding New York Declaration on Forests seeks to achieve several goals, among which are to at least halve the rate of loss of natural forests globally by 2020 and to strive to end natural forest loss by 2030. It also seeks to eliminate deforestation from the production of such agricultural commodities as palm oil, soy, paper and beef products by no later than 2020.

Since October we have seen further major developments: China made a commitment to peak emissions and achieve 20% zero emissions energy by 2030; the US announced it will reduce emissions by 26–28% on 2005 levels by 2025; a reluctant Australia gave into pressure during the G20 meeting in Brisbane to include climate finance in the final Communique; and, most recently, around US$9.3 billion has been pledged to the Green Climate Fund. It is now up to the UN Framework Convention on Climate Change (UNFCCC) negotiators to navigate the complex issues and global politics to chart the path to a meaningful climate solution through the ADP.

Finance for forests, land use and near-term mitigation potential

A combination of the Technical Expert Meetings (TEMs) held as a part of the ADP Workstream 2 negotiations, the New York Declaration on Forests, the emerging focus on finance for forests in the Standing Committee on Finance (SCF) and the Green Climate Fund (GCF) decision to adopt a results-based payments (RPBs) Framework for REDD+ has provided a new opportunity to see an increased emphasis on finance flows to land use and forests in the period 2015–2020. A number of factors play a role in this increased emphasis, including the near-term high mitigation potential from the sector(s), the near completed REDD+ Warsaw Framework and the urgency to take immediate measures to mitigate and adapt to climate change.

Technical Expert Meetings: Talking the Talk

The TEMs held as a part of the ADP negotiations are a relatively new approach within the UNFCCC intended to enhance mitigation potential. This year we have seen several TEMs including on land use, renewable energy, carbon capture, use and storage and non-CO2 greenhouse gases. Negotiations in Bonn focused partly on enhancing pre-2020 climate action and determining how the TEMs will be reflected in decision text in Lima. The TEMs are recognized as having provided important information to date, but they have been criticized for not including sufficient information on how countries can implement their pre-2020 ambitions and scale up mitigation. Emphasis was placed on the need to enhance the effectiveness of the TEMs for activities on the ground and their linkage to UNFCCC Institutions including the GCF, the Global Environment Facility (GEF), the Technology Executive Committee (TEC), the Climate Technology Centre and Network  (CTCN) and the Adaptation Fund. Countries have called for, among others, a menu of prioritized policy options to guide them with more coordination to help move the TEMs work into real-world prioritized concrete outcomes at the national level and to put in place a process for this through the UNFCCC.

A summary session on TEMs was held in Bonn, which included representation from the GCF, the Food and Agriculture Organization (FAO), UN-Habitat, the TEC, the CTCN, the GEF and the World Bank. The land-use TEM held in Bonn in June was discussed and the FAO presented on emerging work around demand commodity chains and the need for research. They identified that many are seeing the mitigation co-benefits associated with adaptation activities and vice versa, and the importance of the relationship between CO2 and non-CO2 emissions from the agriculture sector. The World Bank presented on the significance of the pledges and targets included in the New York Declaration on Forests, in particular the extent to which the private sector is becoming increasingly engaged; the presentation also noted that the focus now needs to shift to how these targets will be achieved.

A TEM on non-CO2 greenhouse gases was also held during the October session; this TEM looked at emissions from the energy sector, industrial processes, agriculture and waste. According to the Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report (AR5), these four sectors constituted around 25% of the global GHG emissions in 2010. The meeting identified co-benefits as major drivers of mitigation policies. Relevant co-benefits identified in the agriculture sector include: food security; efficiency gains in agricultural production; increased resilience to climate change; and environmental and health benefits. The TEM identified that up to 80% of emissions from the agriculture sector could be reduced by 2030 through appropriate measures. Potential policies and actions to achieve this reduction include soil conservation; soil productivity and erosion control; nitrogen use efficiency; rice management; research; and what has become widely known as ‘the landscape approach’.

There is broad support for the continuation of the TEMs during and after 2015, possibly up to 2020 with ongoing reviews of their effectiveness. Suggested future TEMs include transport, carbon pricing, further work related to the land sector, information on the TEC and the CTCN in particular concerning agriculture technology, and knowledge of local and Indigenous Peoples. 

The Green Climate Fund: Taking Sideways Steps on REDD+

The GCF held its 8th Board meeting in October in Barbados. One of the primary goals of the meeting was to adopt the decisions necessary to capitalize the Fund and begin disbursing money next year. These included decisions dealing with accreditation of entities to the GCF, policies for contributions, trustee arrangements, and legal arrangements for contributions. Despite having to work well into the night to reach agreement, the Board eventually finalized the decisions needed for the Fund to receive contributions. Of particular relevance to forests is the decision on results-based payments for REDD+, which lays out how REDD+ contributes to the GCF’s overall mitigation objectives. In addition, the set of accreditation decisions are relevant for entities that intend to implement activities relating to land-use and forests.

The Logic Model for Results-Based Payments for REDD+ focuses on results as emissions reduced through REDD+ activities. There was some debate about this focus at the Board level because of ongoing negotiations in the UNFCCC on non-carbon benefits and how they should be incentivized in REDD+. After several rounds of revisions, the annex containing the logic model now notes that it is a work in progress and will need updating based on future COP decisions. It also references key requirements of results-based payments, such as submission of the most recent safeguards information system (SIS) summary demonstrating that all the REDD+ safeguards are being addressed and respected. The model does not set out how compliance with safeguards will be assessed, among other things, which makes it unclear precisely how the Board will prioritize funding for REDD+ activities.

The Board also adopted a series of decisions on how entities will be accredited to the GCF, building on previous decisions related to environmental and social safeguards as well as project approvals. Entities will be accredited using a fit-for-purpose approach, meaning that they will be accredited based on their ability to handle different levels of social, environmental and fiduciary risk. The Board formally appointed an Accreditation Panel that will be responsible for reviewing applications and recommending entities for accreditation to the GCF. The Panel will assess the entities’ social and environmental management system and track record in dealing with relevant risks. Proposals for activities from those entities will then be vetted separately during the GCF’s proposal approval process.  Currently, the GCF is using the International Finance Corporation’s performance standards as interim safeguards. There is no explicit reference to the UNFCCC REDD+ safeguards in the accreditation decisions, which may cause confusion given the requirements for results-based payments for REDD+ as set out by the UNFCCC and recognized in the GCF’s REDD+ logic model. The Board is expecting to begin accrediting entities by its ninth meeting in February 2015.

Efforts are also continuing with regard to mobilization of financial resources. The GCF Pledging meeting came to a close last week, and has provided total pledges now standing at more than US$9.3 billion. This falls short of the US$10–15 billion that developing countries have called for to kick-start the GCF, and the impact it will have on COP20 remains to be seen.

During a presentation at the October ADP session in Bonn, the GCF Secretariat confirmed that the GCF Board is working with a sense of urgency and is focused on near- and medium-term outcomes such as readiness activities, strengthening Nationally Designated Authorities, national strategies and implementing entities; the Board is also concentrating on developing an initial pipeline of projects and programs. It was asserted during the negotiations that the GCF will only work well if it forms a part of the new climate agreement and the discussion concerning intended nationally determined contributions (INDCs) and the outcomes of the TEMs will be important to the GCF when making decisions on where to prioritize funding.

Standing Committee on Finance: Highlighting Forests in 2015

The UNFCCC Standing Committee on Finance (SCF) was established in 2010 at COP16 in Cancun to assist the COP in exercising its functions with respect to the Financial Mechanism of the Convention, in terms of improving coherence and coordination in the delivery of climate change financing. As a part of the Warsaw REDD+ Framework, the UNFCCC Conference of the Parties provided the SCF with the mandate to focus on issues related to finance for forests, including coordination and cohesion of finance for forests; ways and means to transfer payments for results-based actions; and provision of financial resources for alternative policy approaches.

Regardless of where this discussion goes, it remains important for there to be flexibility for Parties to amend their contributions and avoid them becoming frozen in time

The Authors

The SCF was also requested by the COP in Warsaw to focus its soonest possible forum on the issues of forests and finance and is now planning the 2015 Forum. Background papers identify the multiple sources of forest finance, with an emphasis on REDD+, as well as REDD+ recipients of finance, with India, Brazil and China having received the majority of the available finance to date. The SCF is currently seeking ‘inputs’ to a background paper that seeks to identify all relevant stakeholders related to financing for forests both within and outside of the UNFCCC process in a broader context.

The 2015 Forum on Finance and Forests comes at a time when pledges are being made to the GCF, the Forest Carbon Partnership Facility is putting final arrangements in place for countries to access finance through the Carbon Fund and countries are advanced in terms of readiness and are beginning to submit their forest reference emissions levels. Further, an increasing number of examples of the synergies between adaptation and mitigation in the context of the land sector and forests are emerging from science and actions on the ground, which will inform the discussion on alternative policy approaches.

The Paris Protocol?

International negotiations towards a new climate agreement continue to take place at a high level, with an expectation that the new agreement will be premised on broad principles that enable more detailed technical work to be undertaken between 2015 and 2020 to enable implementation after 2020. Emphasis on the elements – mitigation, adaptation and means of implementation (capacity building, finance and technology transfer) – remains central to the discussions. However, the scope and assessment of INDCs have become increasingly important. Countries are expected to submit their INDCs to the UNFCCC Secretariat in the first quarter of 2015 and a decision on the matter is expected in Lima. Draft text has been prepared.

International negotiations and divergence on contributions

Although there appears to be agreement that Parties will submit their contributions concerning mitigation, it remains unresolved as to whether the information to be provided in 2015 will be broader in scope and include adaptation and Means of Implementation (MoI). The international community remains divided on this issue and on the issue as to whether the contributions will be assessed during 2015 to inform the negotiations towards a new agreement. INDCs are considered to be a cyclical process, which will be used to update contributions on a regular basis; therefore, a system to enable this needs to be agreed. It has been put forward that the land sector be included in INDCs and it is expected that countries will rely on REDD+ for contributions. A question here emerges in the context of ‘scope’ concerning information related to actions to address both the demand and supply side drivers of deforestation and forest degradation as well as safeguards information.

The majority of developing countries want INDCs to be considered within a broader scope, whereas many developed countries seek to limit the issue to mitigation. Reasons for this include a lack of expertise to measure and assess adaptation and a desire to avoid overloading the process and to keep it as simple as possible. The need to avoid ‘putting a straitjacket’ on the process was raised by several Parties. Concerns have been expressed that adopting a broader approach runs the risk of INDCs not being received when expected in early 2015 and preventing their assessment prior to COP21 in Paris if one is to occur.

Developing countries focus on the need for financial support, capacity building and technology transfer to achieve their contributions, as well as the linkages between adaptation and mitigation as the basis to argue that INDCs should be broader. The linkages between adaptation and mitigation are raised by some in support of the need for Parties to be empowered under the Convention to enhance the potential mitigation outcomes from adaptation activities. Many argue that there has been a lack of emphasis on adaptation and that it is a commitment under the convention and hence should be included as a way to ensure adaptation is enhanced and the Convention Objectives are met.

Several suggestions have been made to assist the negotiations to move beyond this impasse. Norway have proposed an alternative approach to INDCs whereby developing countries provide information on what they can achieve in terms of adaptation without financial support from developed countries and what extraordinary efforts they could undertake with financial support. It is suggested by some that a broader approach can be made voluntarily and a needs-based approach may also be taken to enable developing countries to identify where their needs exist to attract finance. Useful suggestions have also been made to resolve the issue concerning adaptation measurement with metrics such vulnerability metrics and metrics for resource allocation, reduction of economic losses, increases in research, pledges of support, environmental improvement and restoration, and integration of adaptation into national planning policies has been suggested gaining wide support. There seemed to be confidence in the room that appropriate metrics could be established. It has also been suggested that adaptation contributions should not be linked to the new compliance mechanism, which is considered by many as central component of a new agreement that should be facilitative and should serve as a serious deterrent for non-compliance.

There also remains no agreement on the proposed ex ante assessment on INDCs once they are submitted in 2015. It is proposed that the INDCs be assessed prior to COP21 to provide more clarity for parties on what is needed in a new agreement. China and Japan oppose this approach and argue that an ex ante process of this nature is outside the Warsaw mandate and would overburden the Secretariat.

Review and cycles

As the INDC discussions continue, the importance of linkages between this process and the current existing processes in place concerning Biennial Update Reports (BURs), Biennial Reports (BRs), International Assessment and Review (IAR) and International Consultation and Analyses (ICA) emerge. As reflected in the current draft INDC decision, there may be linkages with these processes, as well as processes for review. In this context Parties are looking at the adequacy of these systems and what, if anything is needed for their improvement.

These MRV systems have been in place for some time and the question has emerged as to whether this current two-track system should be conflated into one. Differences between INDCs and MRV have, however, been highlighted. One clear distinction between the systems is that the MRV systems are primarily focused on carbon and in the context of REDD+ do not take non-carbon benefits or safeguards into consideration. The draft text released suggests that the INDC information to be provided could be ‘similar to’ that which is provided through the established Biennial reporting systems.

When it comes to these more technical issues, there is some support for broad language and principles to be agreed for the new agreement and for further negotiations concerning methodologies to take place after 2015 taking advantage of existing processes such as BURs, BRs, ICA and IAR. Particular emphasis is placed on key principles related to the land sector to be included, which concern removals by sinks and emissions by sources to measure carbon stock changes over time. Interesting new terminology is reflected in the recent non-paper, namely ‘Land Use Change and Forest Activities’ (LUCFA). It is argued that such principles would need to be drafted in a way that ensures accounting for the land sector does not undermine ambition or allow for tricks with numbers. Many civil society organizations are calling for a ‘rights-based approach’ to be taken in these principles and a new climate agreement more broadly.

A divide remains over whether there should be a 5- or 10-year commitment and review cycle. Many countries see the importance of a 5-year cycle that needs to be linked with science with suggestions that the IPCC provide their reports at 5-year intervals as opposed to the current 7-year process. The argument in favor of 10-year commitment cycles with a mid-term review is primarily based on providing predictability for private sector investment and industry; however, this argument is contentious and it is asserted that industry can move faster than many suggest and the ability of emerging economies to respond should not be underestimated. Tuvalu made a strong assertion on behalf of Small Island Developing States that the 10-year proposal is ‘nonsense’ and accommodates slow movers and the dirty energy industry. A 10-year cycle will only allow two reviews before 2050, which many consider inadequate. As a means to compromise it has been suggested that there be 5-year cycles with 10-year indicative targets.

Regardless of where this discussion goes, it remains important for there to be flexibility for Parties to amend their contributions and avoid them becoming frozen in time. The Convention on the International Trade in Endangered Species (CITES) was cited as a good example of where a process to make amendments to ‘Annexes’ is in place that is flexible while contained in a legally binding international agreement.

Putting the I in differentiation

The binary approach to Party commitments using Annexes under the Kyoto Protocol and whether the new climate agreement should continue in the same manner have been ongoing issues in the negotiations since the ADP was formed. This has given rise to extensive discussions concerning the application of common but differentiated responsibilities (CBDR) and respective capabilities (RC), often referred to as ‘differentiation’.

During the October session, Brazil put forward a new concept concerning ‘concentric differentiation’, whereby developed countries present absolute targets (emissions reductions, finance etc.) and developing countries provide information drawn from a broader set of options with incentives to move to provide further, more detailed information over time. A Concentric Differentiation approach is proposed as purely self-differentiation aimed at incentivizing Parties under the Convention to move within their capabilities toward economy-wide emission reduction targets.

Despite some areas of convergence within the current discussions, the Parties are currently a long way from agreeing on text

The Authors

Some favor no differentiation based on the current Annexes and seek to explore the use of metrics and methodologies applicable to all Parties with different tiers within one framework to take into consideration all capabilities.

Concerns have been expressed over an agreement where each party determines the form and stringency of their own contribution, stating that it has potential to undermine the multilateral process and that there should be an internationally agreed set of rules concerning future commitments. Some countries suggest that a ‘pick and choose’ type of approach may be seen as a backsliding on the current rules under the Convention and on the Convention itself.

The new non-paper released by the ADP Co-Chairs refers to ‘evolving’ CBDR and RC, which is a new concept introduced into the discussions that intends to reflect the need for flexibility in addressing the issue over time.

A February Fall Back

As we move in the direction of completed draft text for a new climate agreement, Parties are becoming increasingly anxious about the potential for a repeat performance of Copenhagen, where many Parties had no ownership over the development of the Copenhagen Accord. Parties are seeking to be engaged in drafting the substantive text in Lima and hope to be provided with sufficient time to address contentious issues not addressed in Bonn such as Loss and Damage and Response Measures.

In Lima we can expect further negotiations concerning the scope of INDCs and pre-2020 mitigation potential as well as an attempt to complete elements of a draft text of the new agreement. We may see further clarity around ideas such as LUCFA and ‘concentric differentiation’ and Parties may begin to provide more insight into what their contributions will be, including REDD+. Parties may build on previous negotiations and explore issues such as safeguard measures, gender considerations, human rights, and local and traditional knowledge of indigenous peoples in the new agreement.

It is also hoped that the issue concerning guidance for REDD+ SIS is resolved, and that there is further elaboration of the meaning of ‘alternative policy approaches’ and the process that will be put in place to address this issue.

We will see the emergence of more emphasis on mobilizing finance for forests and potential future TEMs aimed at enhancing pre-2020 climate action concerning land use and forests. Prior to the Lima meeting we can expect a technical paper on the TEMs held to date for presentation to the COP.

It would appear that things are moving in the direction of a new agreement, or Paris Protocol as some have begun to call it, which will be broad language containing ‘hooks’ and ‘openings’ for further technical work to be undertaken leading up to 2020.

The first intercessional for 2015 was set down and will be held in Geneva in February, an interesting choice of dates given that the draft text must be made available by May 2015. Despite some areas of convergence within the current discussions, the Parties are currently a long way from agreeing on text. While Pope Francis has become more outspoken on the issue and is introducing a process for interfaith leaders on climate change next year, it may be that divine intervention is just the thing needed to prevent a failure in Lima that reverberates through 2015 to Paris.

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