COP 27 with modest results

 By Luis Fierro Carrión (*)

Twitter: @Luis_Fierro_C

The 27th Conference of Parties (or COP) of the United Nations Framework Convention on Climate Change (UNFCCC) just concluded on November 20 in Sharm-el-Sheikh, Egypt.

Although it had been announced as the COP of “implementation” and focused on adaptation to climate change, in practice it got bogged down for several reasons:

- Developing countries demanded that a new "compensation fund" be created for "Loss and Damage" caused by climate change (China, a member of the G77, has not indicated whether it will contribute to such a fund, despite being currently responsible for a third of greenhouse gas emissions). The creation of the fund was finally approved on Sunday the 20th, but the details are yet to be defined (including who should contribute and who can receive the resources).

- The small island developing countries, and the European Union, insisted that ambition in reducing emissions should be increased, in order to keep alive the goal of limiting the increase in temperature to less than 1.5 degrees C. Others said that this goal was no longer feasible, but an effort had to be made to not exceed a 2 degree increase in temperature.

The event had to last two days longer than expected, given the difficulty in reaching consensus. There is no voting rule in the COP (not even a super-majority of 2/3 or 5/6), which is why it is understood that decisions must be unanimous (in some cases, when one or two minor countries have objected, the conference chair has indicated that it was his “sense” that there was consensus).

In my science fiction novel “The Last Human”, I anticipate that if a voting mechanism cannot be established, humanity will not be able to find a solution to this existential threat, and the temperature will continue to rise, and with it the sea level, natural disasters, droughts and floods in various regions, famines, among other catastrophic consequences.

More on Substack:

https://luisfierro.substack.com/p/cop-27-with-modest-results

(*) English translation of a column published in “El Universo” newspaper in Ecuador, November 24, 2022

https://www.eluniverso.com/opinion/columnistas/cop-27-con-modestos-resultados-nota/

Presentation on Climate Change, the Paris Agreement and Climate Finance

Updated presentation on Climate Change, the Paris Agreement and Climate Finance, through November 2021 (Glasgow COP26).

Presentation given to the Course: Finance for the Common Good at the University of Dayton (Prof. Gabriela Vivero).

Table of Contents:

1. Context and Background

2. Climate Change

3. The Paris Agreement

4. National Mitigation and Adaptation Commitments

5. Climate Finance

6. Low Emission Development Strategies

Includes Nationally Determined Contributions (NDCs), Long-Term Low Emission Development Strategies (LTS) and net-zero pledges made through November 12, 2021.

https://drive.google.com/file/d/1noCkRO_qKYN3g2nsBPAhsV4Oso2U5-74/view?usp=sharing

Presentation on Climate Change, the Paris Agreement and Sustainable Development

Presentation on Climate Change, the Paris Agreement and Sustainable Development

VIII Forum on "Sustainable Development and the Environment", IDEAS PERU Organization

Cuzco, Peru

June 18, 2016

Revised and translated version:  September 2, 2017

Luis Alberto Fierro
Climate Finance Adviser
Latin American Finance & Consulting, LLC

1. Context and Background
2. Climate Change
3. The Paris Agreement
4. National Mitigation and Adaptation Commitments
5. Low Emissions and Climate Resilient Development Strategies


Note: I am grateful for the input and lessons of my former colleagues from the AILAC Support Unit: Isabel Cavelier, Alexa Kleysteuber, Giannina Santiago and Irene Suárez.

https://drive.google.com/file/d/0B2keH2NAJ6iOSzlOaHdTMzdfUGM/view?usp=sharing

AILAC achieved success in its climate finance priorities

By Luis Fierro Carrion (*)

The Independent Association of Latin America and the Caribbean (AILAC) achieved a complete success in its negotiating strategy on climate finance for the Paris Agreement on Climate Change.

All of the priorities, red lines, and "bridging proposals" made by AILAC were considered in the Agreement and the Decision that adopted it; and the concepts developed by AILAC were the core aspects of the climate finance "package" in the Agreement.

Thus, AILAC achieved an incidence well above its weight in the world economy (measured by GDP, population or greenhouse gas emissions). This was achieved due to the positioning of AILAC as a group of ambitious developing countries willing to make commitments on mitigation and adaptation, and with a capacity for dialogue with developed countries (promoting the notion that an ambitious agreement on reducing emissions required adequate counterpart funding commitments by developed countries). The role of Peru as the COP20 Presidency was vital, as well as the leadership of Colombia (Colombian delegates were appointed as Co-Facilitator for Adaptation and as a member of the Group of Legal and Linguistic Experts).

AILAC, initially formed by Colombia, Costa Rica, Chile, Guatemala, Panama, and Peru, was consolidated throughout 2015 with the entry of Paraguay in June and Honduras in December. AILAC had a very active role within the Group of 77 and China (the group of 134 developing countries), and in the Cartagena Dialogue (a space for dialogue between developed and developing countries which share a progressive and ambitious position). Several of its member countries also joined the "High Ambition Coalition " that emerged in the course of COP21, which grew to more than a hundred countries, including the United States, Canada, the European Union, and Brazil.

Priorities defined by AILAC

Since 2014, AILAC defined the following priorities for the climate finance component of the Paris Agreement:

• A collective quantitative target for the provision and mobilization of climate finance, to be defined periodically (AILAC proposed every five years), and to take as a "floor" the existing commitment to mobilize $ 100 billion per year from 2020.

• Developed countries should periodically communicate "ex - ante" the funding that they will provide developing countries (AILAC proposed a biennial communication).

• A qualitative long-term goal that would lead to all investments and financial flows being gradually directed towards promoting a low-carbon and climate resilient development.

• Ratifying the existing obligation of developed countries to provide climate finance; initially, it was proposed to invite "other countries in position to do so" to also provide funding. Eventually, AILAC introduced as "bridging proposal " a sentence ratifying the obligation of developed countries, and another one inviting other countries to contribute (in a voluntary manner).

• to maintain all developing countries as recipients of climate finance; avoiding giving preference to any specific geographical regions.

• Promoting a more balanced finance for adaptation.

• Increased transparency of information on the provision of financial support.

• Strengthen the Operating Entities of the Financial Mechanism of the Convention, which should serve the new agreement.

• Allowing the development of new international markets for the exchange of emission reduction certificates.

(These priorities were mentioned in a blog article in August 2015, http://goo.gl/uOi1Fz).

The concepts were introduced by "Submissions" presented at COP20 and during 2015; and also verbally during the ADP sessions in 2015.

It was decided that the main strategy to promote these priorities would be through the G77 & China, which was achieved by incorporating most of these positions in the "Submissions" presented by the G77 & China as a whole. In some cases, when there was no consensus within G77 & China (for example, with respect to qualitative long-term goal, and the invitation to other potential donors), dialogue continued with different groups of developing and developed countries.

An ongoing dialogue was maintained with the European Union, the Environmental Integrity Group (EIG) and NOAK (Nordic countries, including Norway); and also with the Cartagena Dialogue. In October a dinner was organized with various groups of developed and developing countries (including the United States, European Union, Switzerland, Mexico, AOSIS, LDCs) to promote the AILAC priorities in financing.

The concepts that faced greater resistance on behalf of developed countries were the quantitative collective goal to be reviewed periodically; as well as the ex - ante communication of the financing to be provided. Gradually, throughout 2015, these countries realized that these elements were essential to providing balance to the Paris Agreement as a whole.

How were AILAC priorities reflected in the Agreement and the Decision?

In the end, as was already mentioned, all of the AILAC priorities were reflected:

1. Quantified Collective Goal: Para. 54 of the Decision: "Also decides that, in accordance with Article 9, paragraph 3, of the Agreement, developed countries intend to continue their existing collective mobilization goal through 2025 in the context of meaningful mitigation actions and transparency on implementation; prior to 2025 the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement shall set a new collective quantified goal from a floor of USD 100 billion per year, taking into account the needs and priorities of developing countries".

2. Ex-ante communication of financing to be provided: Art.9.5. "Developed country Parties shall biennially communicate indicative quantitative and qualitative information related to paragraphs 1 and 3 of this Article, as applicable, including, as available, projected levels of public financial resources to be provided to developing country Parties. Other Parties providing resources are encouraged to communicate biennially such information on a voluntary basis".

3. Qualitative Long Term Goal: Art 2.1.c.. "Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate- resilient development."

4. Ratification of obligation of developed countries to provide financing / invitation to others to do so: Art 9.1 and 9.2 "9.1. Developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention. 9.2. Other Parties are encouraged to provide or continue to provide such support voluntarily."

5. Keep reception of resources open to all developing countries: Article 9.1. already mentioned, as well as 9.3 and 9.4. There is no reference to specific geographic regions.

6. Greater balance in financing for adaptation: Art. 9.4. "The provision of scaled-up financial resources should aim to achieve a balance between adaptation and mitigation, taking into account country-driven strategies, and the priorities and needs of developing country Parties, especially those that are particularly vulnerable to the adverse effects of climate change … considering the need for public and grant-based resources for adaptation."

7. Greater transparency in financial support: Art. 9.7: "Developed country Parties shall provide transparent and consistent information on support for developing country Parties provided and mobilized through public interventions biennially in accordance with the modalities, procedures and guidelines to be adopted by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement, at its first session, as stipulated in Article 13, paragraph 13. Other Parties are encouraged to do so."

8. Strengthen the Operating Entities of the Financial Mechanism: Art 9.8 and 9.9. "9.8.The Financial Mechanism of the Convention, including its operating entities, shall serve as the financial mechanism of this Agreement. 9.9. The institutions serving this Agreement, including the operating entities of the Financial Mechanism of the Convention, shall aim to ensure efficient access to financial resources through simplified approval procedures and enhanced readiness support for developing country Parties, in particular for the least developed countries and small island developing States, in the context of their national climate strategies and plans."

9. Allow a market mechanism: this is reflected in Art. 6.4 and Paras. 38 and 39 of the Decision.

The Green Climate Fund (GCF) will become the main operating entity of the financial mechanism of the new agreement. During COP21, additional contributions to the GCF were announced by Norway, Canada, Vietnam, Estonia, City of Paris, and regions of Belgium; bringing the total committed to more than USD 10 billion. Similarly, additional donations were received for a total of USD 75 million for the Adaptation Fund from Germany, Sweden, Italy and the Belgian region of Wallonia (https://goo.gl/CKYgkz); 11 countries announced grants totaling USD 248 million to the Least Developed Countries Fund (LCDF); and several countries announced substantial increases in their climate financing in general (a summary of these announcements is available at: http://goo.gl/TZI01f).

AILAC Finance Team

One reason for the success of AILAC in the climate finance field was the strength of the team of delegates from AILAC that followed this issue. During COP21, the AILAC Finance Coordinators were Isabel Cavelier Adarve of Colombia and Jorge Gastelumendi of Peru. Other delegates that have played leading roles over the past two years include Maria Laura Rojas and Santiago Briceño of Colombia; Giovanna Valverde of Costa Rica; and Mirko Serkovic and Natalia Rojas-Jordan of Peru.

For me, it was a privilege to have supported the AILAC climate finance team, and to have contributed to the conceptual and strategic development that enabled these important achievements, which ultimately will make it easier for developing countries to pursue their mitigation and adaptation actions in the context of the Paris Agreement.

(*) Climate Finance Advisor for AILAC. The views expressed are personal and do not reflect the positions of AILAC or its member countries.

Why Paris won’t be Copenhagen: role of the INDCs in progress towards the Paris Agreement

By Luis Alberto Fierro, Climate Finance Adviser to AILAC (*)

As of August 3rd, 50 Parties have presented their “intended Nationally Determined Contributions” or INDCs.

The INDCs are the climate change pledges that all Parties to the UNFCCC are making, in advance of the 21^st Conference of the Parties (COP21) in Paris.  Countries agreed at COP19 (2013) to present them in advance of COP21 (December 2015).

As such, they are a way to operationalize what academics had determined to be the best cooperative solution in a game theory approach to climate change negotiations. 

For example, Peter Wood, in a 2010 research report on “Climate Change and Game Theory” (https://goo.gl/CP0yAl), concluded the following:

“In its simplest form, climate change mitigation is a prisoner’s dilemma. The prisoner’s dilemma has a Nash equilibrium that involves players acting non-cooperatively in a manner that is socially sub-optimal. When countries have a continuous choice about how much to pollute, the Nash equilibrium involves much more pollution than is optimal … There are several strong results about mechanisms that implement a cooperative outcome via subgame perfect equilibrium when there is a social dilemma. These include subscription games (Example 4.2), bargaining based on confirmed proposals (Example 4.3), and approaches where countries ‘match’ each other’s pollution abatement commitments (Example 4.4)... This suggests that when countries are willing to increase their emission reduction commitment if others do the same, cooperation is more likely. It also suggests that cooperation would be more likely if an international mechanism were to exist that would allow countries to make a binding conditional commitment”

In other words, the cooperation will be more likely if there were an international mechanism to allow countries to propose a “binding conditional commitment”, and have other countries “match” these commitments.

This is basically how the INDCs were designed, and how they have been working thus far.  As of August 3rd, 22 INDCs have been submitted (representing 50 Parties, as the EU includes its 28 Member States), which include 58 % of total emissions.  Of major emitters, China, the United States, the European Union, Russia, Japan, Mexico, Canada, and South Korea have already presented their INDCs.  Still missing among major emitters:  Australia, India, Brazil, Indonesia, Iran, Saudi Arabia, South Africa, Turkey, Ukraine and Thailand.  


Among Developing Countries, the following have already presented their INDCs:  China, Ethiopia, Gabon, Kenya, Marshall Islands, Mexico, Morocco and Singapore.  Of these, the Marshall Islands is the first and so far only developing country with an absolute emissions reduction target, meaning its emissions have already peaked and the country will now continue to reduce emissions.  This is of huge significance, as this type of mitigation goal has traditionally only been utilized by developed “Annex I” countries.

AILAC member countries have reaffirmed their commitment to present theirs before October, in time for the compilation by the Secretariat (http://goo.gl/6YRoYY).  The President of Colombia, Juan Manuel Santos, announced to the country’s Congress that emissions would be reduced 20 % by 2030.

The following graph, developed by the World Resources Institute (WRI) illustrate the top 18 emitters, highlighting in particular the top 10 (and which sectors are involved).

The different mitigation pledges are difficult to compare, as they use different base years, different target years, and in some cases are not quantified economy-wide emission reduction targets, but rather deviation from “business as usual” baseline projections, or carbon intensity targets (reducing the CO2 emissions per unit of GDP).

Switzerland proposes a 50 % reduction of greenhouse gas (GHG) emissions by 2030, from 1990; the European Union, Norway and Liechtenstein propose a 40 % reduction in GHG from 1990 to 2030.  The United States proposed a 26-28 % reduction from 2005 to 2025.  New Zealand proposed a 30 % reduction by 2030, based on a 2005; this has been estimated as an 11 % reduction from 1990. Canada also proposed a 30 % cut from 2005 to 2030. 

Russia proposed a 25-30 % reduction from 1990 to 2030; however, since emissions fell after 1990 (after the collapse of the Soviet Union), this in fact could imply an increase of 41 % in emissions between 2012 and 2030.  This is an example of how the way that pledges are formulated can actually imply an overall increase in emissions, rather than a reduction

China did not propose an emissions reduction, but rather to reach a peak emission in 2030 (with a “best effort” to peak earlier).  China has also pledged to source 20% of its energy from low-carbon sources by 2030 and to cut emissions per unit of GDP by 60-65% of 2005 levels by 2030.

World Resources Institute (WRI) has estimated that the INDC pledges represent an annual reduction of -2.8 % in GHG for the European Union and the United States; -2.3 % per year for Japan; and -1.7 % for Canada (http://goo.gl/lRgV5W).

Climate Action Tracker (CAT, http://goo.gl/XXEp4c), a group of climate scientists and policy experts, considers that the following INDCs are “inadequate” towards meeting the 2 degree C temperature increase limit: Canada, Japan, New Zealand, Russia, and South Korea; it gave China’s carbon intensity target an “inadequate” classification, whereas it gives a “medium” rating to its national policies and actions, including the increase of its non-fossil fuel share of primary energy to 20 %.

According to CAT (http://goo.gl/lNSHzr), “Current policies place the world on a path towards 3.6 to 4.2°C warming above pre-industrial levels, whereas the unconditional pledges or promises that governments have made, as of early 2015, would limit warming to 2.9 to 3.1°C above pre-industrial levels. In other words, there is still a substantial gap between what governments have promised to do and the total level of actions they have undertaken to date. Both the current policy and pledge trajectories lie well above emissions pathways consistent with a 1.5°C or 2°C world.”

It is not clear how the “intended” contributions would be strengthened to close the “ambition gap”. Some Parties (including AILAC) had proposed a robust ex-ante assessment process, but Parties were only able to agree to let the Secretariat of the UNFCCC carry out a synthesis report of the aggregate effect of the INDCs, which is due to be published by November 1st. There will also be an informal review in Morocco.

The UN's Intergovernmental Panel on Climate Change (IPCC) in its Fifth Assessment Report (AR5) estimated that a 40 to 70% GHG emissions reductions is required by 2050 compared to 2010, and net emissions levels near zero or below in 2100, in order to keep the temperature increase under 2 degrees (http://goo.gl/b63SI9).

As major developed countries are reducing emissions, some major emitters in the developing world are continuing to increase theirs.  India has not yet announced a “peaking year”, citing economic growth and development imperatives.

Paris Agreement

In any case, however the INDCs are “finalized” and the commitments are established, they will need to be an integral part of the legally binding agreement to be adopted in Paris at CoP21.  There must be a strong legal obligation to implement and achieve the targets set out in the national commitment documents. This, regardless of where the commitments end up being captured, whether it be an annex, schedule or an online registry, as Parties have suggested.

The fact that there are already many INDCs on the table has given both national governments and non-state actors a reason to be optimistic for the Paris outcome.  But the biggest and most important decision is yet to come: a legal agreement that makes these INDCs binding is the best way to enhance trust and confidence in the multilateral process.

According to the C2ES executive vice-president, Elliot Diringer, “I see far greater convergence on the broad outlines of the deal than we ever saw in the time preceding Copenhagen.” C2ES conducted a year-long consultation with climate negotiators from more than 20 countries.

Laurence Tubiana, France’s chief climate envoy, indicates that “This is a very new thing,” she said. “This is a process where countries progressively do more and more over time. This is a long and deep transformational process that will extend over the next 40 to 50 years and beyond. We need a clear framework of rules to do that.” (http://goo.gl/s08s47).

            

Christiana Figueres, Executive Secretary of the UNFCCC, is confident that CoP21 will deliver on its target to agree on action to limit global warming to 2C. “The stars are aligning towards a Paris agreement that will establish a pathway that keeps us within the limit of 2C. What is unique here is that everyone is realizing that this truly is a very, very urgent moment in the history of addressing climate change. That this is a moment we cannot afford to miss. And because everybody is mobilized in the same direction, we actually have a very good chance of doing something meaningful.” (http://goo.gl/n3apmE).

Climate Finance

One of the linchpins in achieving an ambitious and effective outcome in Paris is climate finance. The provision of climate finance to developing countries will be indispensable to achieve the emissions reduction that is required, and also to build trust in order to conclude a successful agreement in Paris.

According to the IPCC AR5, “For mitigation scenarios that stabilize concentrations (without overshoot) in the range of 430 to 530 ppm CO2-eq by 210019, annual investments in low carbon electricity supply and energy efficiency in key sectors (transport, industry and buildings) are projected in the scenarios to rise by several hundred billion dollars per year before 2030. Within appropriate enabling environments, the private sector, along with the public sector, can play important roles in financing mitigation and adaptation” (goo.gl/b63SI9).

Developing countries are estimated to need $350 billion per year for mitigation, plus an additional $70-$100 billion per year for adaptation to climate change. In addition, if the impacts of climate change continue to mount, increased funding will be needed to deal with “losses and damage” of climate-related disasters, such as hurricanes, flooding, droughts, and the rising sea level.

Developed Countries have already committed to “jointly mobilize” $100 billion per year in climate finance for developing countries, including private funds leveraged by public resources, but there is still a lack of clarity that on whether and how this goal will be reached. 

AILAC and other developing countries have suggested that the Paris Agreement needs to include:

a)       A long-term, qualitative goal on means of implementation: “all investments are to progressively become low-emission and resilient to climate impacts, contributing to the necessary transformation towards sustainable development and the achievement of the goal of maintaining the average global temperature increase below 2 ºC or 1.5 ºC, as well as building economies, societies and ecosystems that are resilient to climate change” (from the negotiating text, http://goo.gl/JeuL68).

b)      A “short-term collective quantified goal shall be determined every five years starting in 2020 on the basis of a floor of USD 100 billion per year, in order to enhance the predictability of the provision of climate finance, indicating specific levels of funding from public sources to be provided”.

c)      “Each developed country Party and other Parties in a position to do so commit to communicate on an annual/biennial basis in the post-2020 period the scaled-up, quantified financial contribution they will provide to support developing countries in the effective implementation of mitigation and adaptation action, in the light of the transformational goal set forth in article above and the global goal set forth in article 5.3 above, which shall be considered and reviewed”.  This could build upon the experience of the Submissions on Strategies and Approaches to scale up climate finance, by including ex-ante information on funds to be provided.

d)     Strengthen the Operating Entities of the Financial Mechanism of the Convention, including the Green Climate Fund (GCF), the Global Environment Facility (GEF) and the Adaptation Fund (AF).

e)      Develop new carbon market mechanisms for trading certified emissions reductions (several of the INDCs include a component linked to a market mechanism).  This could build on the existing mechanism under the Kyoto Protocol; and include a levy for adaptation finance.

In conclusion, progress has been made through the presentation of the INDCs, but it will be necessary to achieve a Paris Agreement that ensures the environmental integrity and ambition of the commitments (up-front information, quantifiable targets, cycles with a common timeframe, accounting rules, ex-ante assessment and ex-post review, etc.).

(*) The views expressed in this article are the author’s and do not reflect the views of the AILAC Group or any of its member countries.

Climate Change – the defining issue of our time

My contribution (limit: 150 words) on the most significant issue in the 21st Century, for an upcoming publication by the Strategic Foresight Group. Here is their previous publication on the topic

http://strategicforesight.com/publication_pdf/67141BQOT.pdf

Climate Change – the defining issue of our time

By Luis Alberto Fierro 

Without a doubt, the defining issue of the 21st Century, and centuries to come, is climate change. The emission of greenhouse gases has already caused an increase of 0.8 C degrees since pre-industrial times, and future forecasts range from 2 to 6 degrees.

Even an increase of 2 degrees, which most climate scientists consider inevitable, will have devastating consequences. Forecasts regarding the rise of the sea level range from 1 to 6 meters; one meter would be devastating, 6 meters would be catastrophic. Hundreds of millions of people would be displaced (especially in China, India and Bangladesh), at least four nations would disappear (Kiribati, Maldives, Marshall Islands, and Tuvalu), tropical cyclones would increase in intensity, and climate-related events would cause trillions of dollars in losses and damage annually.

Given the magnitude of the problem, additional progress needs to be made, within and outside the UNFCCC negotiation process, to effectively address climate mitigation, adaptation and finance