Climate Change
Thursday, 07 February 2013 09:10

Delivering on the promise

By Steve Nicholls, National Business Initiative (NBI) programme manager for climate change and water

COP18 was a delivery COP – a COP intent on implementing decisions made in Durban (and before). Many referred to it as a transitional COP and the World Resource Institute (WRI) referred to it as a “finalising the rules” COP. Consequently, the progress made was not dramatic, but modest gains, that were important in keeping the negotiations on track, were made.

The decisions ratified in Durban that needed implementation were: The closure of the ad hoc working group on cooperative action (AWG-LCA) and the consequent unification of negotiation tracks under one process – the Durban Platform, a second commitment period to the Kyoto Protocol, and activation of climate finance – specifically the Green Climate Fund (GCF). The package of agreements negotiated at COP19 – the “Doha Climate Gateway” – introduced wording on “damage and loss” for the first time and continued to raise the prominence of adaptation.

The alignment of a complex, multi-track (that emerged at Bali) negotiating process into a single track, the Durban Platform on Enhanced Action (DPA), is a positive outcome. Many countries lack the resources to manage several streams which sometimes conflicted with each other. Hopefully a single-track process receiving more attention from parties and from the United Nations Framework Convention on Climate Change (UNFCCC) secretariat will make more rapid progress.

A second commitment period to the Kyoto Protocol is a key issue. It reinforces the significance of setting and reporting against emission targets within a multilaterally agreed rule-based system. While South Africa as a developing country does not have a target and while this directly impacts few South African organisations, it sends a strong signal that markets are a key part of plans going forward and the critical mass enables the continuation of developing standards, reporting frameworks and accounting rules that will ultimately support the goal of an essential global price on carbon. Leaving infrastructure intact helps us work towards this goal, something that business also wants and called for through the Prince of Wales’ Corporate Leaders Group on Climate Change, by enabling regional cooperation on market mechanisms. Finally the second commitment period lends credibility to the development and consideration of other market mechanisms. Arguably any discussion of market mechanisms is positive for business.

Finance remains a huge challenge. The funding mechanisms are established and well governed. However, the commitment of industrialised nations to the population of the funds is uncertain. The Doha Gateway merely encourages countries to commit and few pledges were made (the UK, the Netherlands and Germany), nowhere near the target of US$100-billion a year by 2020. Committing funding is a significant challenge for most countries as they struggle with the financial and economic crisis that has been lingering since 2008. The impact of this is a greater level of competition for available funding – something that disadvantages middle-income countries like South Africa.

This will increase the need for us to build a strong case for access to finance that is effectively government-to-government lending. Subsequently, monitoring and evaluation systems at national level, requiring business participation, will continue as a priority for many governments. Furthermore, the government is likely to seek, under the banner of nationally appropriate mitigation actions (NAMA), further detail on existing mitigation initiatives to form a base for nationwide replication as well as a basis for funding justification.

It is still early days, but an interesting introduction to the UNFCCC text is on loss and damage, where support and compensation is provided to countries who have suffered loss and damage from climate change. Countries have been asked to assess risk, collect data and build capacity related to loss and damage issues. The key to the loss and damage is, in the context of little money on the table elsewhere, how it will be funded. Developed nations are also weary of acknowledging, through this mechanism, historic responsibility and future liability for yet unknown and difficult-to-quantify climate impacts.

A number of important decisions raised the profile of adaptation, not least the emphasis provided by the loss and damage text. There is subtext that a substantial portion of public funds must go to adaptation (particularly through the GCF). Developing countries are required to develop national adaptation plans (NAPs) which are more strategic and less project-focused than the former national adaptation programmes of action. COP also approved a three-year work plan for the Adaptation Committee, whose function is to create coherence among the various adaptation-related negotiation streams and connect with adaptation parties outside the convention.

A number of challenges remain. In the words of one pundit: “There is insufficient ambition and no money on the table.” While the agreement represents the reinforcing of critical multilateral processes there is insufficient acknowledgement of the reductions of emissions required by science. The current set of targets, pledges and coverage of binding agreements is simply insufficient. The issue of a lack of trust between parties and the war in defining equity, and specifically the principle of common but differentiated responsibilities, is a major challenge. Finally the lack of funding, and the unlikely increase in funding given the current global economic health, is not encouraging.

There are two very interesting years ahead. A worthy development to watch is an announcement by the UN secretary-general, Ban Ki-moon, that he will organise high-level talks during 2014. This is seen as an effort to bring heads of state back into the conversation and raise the importance of climate change on national agendas. The role of Obama and the new Chinese leadership will be of key importance in scaling up ambition. With the scientific pressure applied by the release of the 5th assessment report in 2013 and the political pressure applied by the UN secretary-general in 2014, we may see a change of pace.