Finance biggest sticking point as UN climate deal takes shape

Intro

With one dangerous typhoon following hot on the heels of another, and records suggesting this year could be the warmest ever, negotiators met in Germany this week for the last round of talks before a new global climate agreement is due to be signed in Paris this December. After five days of intense discussions, late nights and some drama, those negotiators are going home with a text that is considerably stronger and fairer than it was a week ago. Negotiators managed to inject back in some of the balance and ambition that had been lacking from a trimmed-down draft which risked alienating many. Yet today’s text still contains a range of opposing options which need to be bridged to ensure a strong final agreement can be reached. Climate finance above all remains a sticking point: developing nations want more clarity and detail on the $100 billion promised annually by developed countries, and on boosting it after 2020, than some of their richer counterparts do. Observers say that other elements are also crucial to the agreement, like requiring countries to increase climate ambition every five years, starting before 2020, and setting a long term goal to completely phase out fossil fuels and switch to 100 per cent renewables over the coming decades. A new report shows these features could make the difference that contains global warming under the internationally agreed 2DegC limit, or even the 1.5DegC threshold the most vulnerable nations want. With the official negotiations now over, and the sign-off summit in Paris in December fast approaching, it is up to Ministers and Heads of States to recognise the crucial importance of climate finance and put ambition and fairness at the front and centre of their discussions at upcoming high-level meetings. Doing so will put a meaningful global agreement on climate change, now closer than it has ever been, truly within reach.

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Key Points

  • As the final UN climate talks before the Paris summit close, political momentum is surging. During the week’s talks, negotiators made the draft agreement stronger and fairer, as they took ownership of the text and made progress on a range of issues. All parties accepted the final draft — considerably leaner than the draft produced at the end of the previous talks — as the starting point for the Paris summit. Despite some drama and fireworks throughout the week, there was a clear sense that governments want a deal in December.
  • The pared down text has a menu of options for Ministers and Heads of States to take up at meetings in the next five weeks. Observers are now calling on governments to use the time till Paris to solve the big political issues negotiators in Bonn struggled with: a mechanism to strengthen national climate plans every five years, a long term goal to replace fossil fuels with 100 per cent renewables, and financial support for vulnerable countries dealing with climate impacts. The emergence of unusual country groups from North and South crafting compromise proposals for contested issues bodes well for Paris, and negotiators leaving Bonn promised to continue this work over the coming weeks to lay the foundation for success in Paris.

Background

As negotiators arrived in Bonn this week for the last round of negotiations before governments meet in Paris this December they had an important task ahead: taking the slimmed down agreement prepared by the meeting co-chairs and adding back in the ambition, clarity and specificity that many felt was lacking at the beginning of the week. Building off the weak draft, negotiators spent the five day session producing a stronger, fairer and clearer draft for the universal climate agreement to be signed at the end of the year, and as a result they now have a draft text that they can take ownership of.

On some key issues – including mitigation, adaptation and transparency – there has been some progress in Bonn. As teams engaged in formal negotiating sessions, spin-off groups and informal bridge-building meetings, they were able to take steps such as strengthening the options on the table for a Paris agreement that signals the end of the fossil fuel age and the decarbonisation of the global economy; collaborating and aligning on proposals for climate change adaptation; and reaffirming the importance of transparency in mitigation.

However, on other issues, countries continue to remain divided on the options going forward to ministers. After progress in September, discussions in Bonn stalled as countries failed to find common ground on loss and damage – with developing countries proposing a strong loss and damage mechanism and developed countries sidelining the concept which would support countries affected by impacts they can no longer adapt to. Observers suggested the lack of progress could be due to negotiators reaching the end of their mandates, coming to a point where the issues have to be handed over to Ministers for resolution of bigger political questions.

The most significant divisions remain on the issue of climate finance, with developing nations calling for wording that clearly establishes the responsibility of developed countries to achieve the goal of $100 billion in climate finance by 2020 and lays out a plan for continual scaling up of post-2020 financing. Developed countries have proposed a much less detailed option, which shifts some degree of participation to developing nations and private or non-UNFCCC funds.

New reports and data published during the week highlighted crucial elements of the future agreement. While the IEA analysed the pledges made so far, showing they would slow energy sector emissions growth dramatically, a report by IDDRI and PIK demonstrated that having countries increase their pledged ambition on climate change every five years, and setting a long-term decarbonisation goal, could bring global warming under the 2DegC danger threshold, and closer to the 1.5degC limit the most vulnerable countries are advocating.

The diverging positions on key issues such as climate finance and loss and damage mean ministers and heads of state will have an important role in reaching an alignment on those issues at high level meetings over the next few weeks, such as the “Pre-COP” in France on 8-10 November, the G20 meeting in Turkey on 15 November, and the Commonwealth Heads of Government Meeting in Malta on 28 November. Observers are calling on them to keep ambition and fairness in the front and centre of their discussions. Above all, providing financial support to help poorer countries take climate action and prepare for and protect their people from climate impacts is key to reaching an agreement that can support and speed up the ongoing transition from fossil fuels to 100 per cent renewable energy.

As politicians build bridges in order to uphold their pledge to reach a meaningful climate agreement, their electors will turn out en masse to show their support for the clean energy transition. Mobilisations, concerts, action days and more are planned for the next few weeks, peaking with major marches in Paris and other cities around the world on 28-29 November, on the eve of the summit, and more actions and demonstration throughout the COP and on the last day, 12 December.

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The UNFCCC and the Road Through Paris

Key Quotes

  • “Negotiators have given themselves the tools to build a stronger deal in Paris, but governments must now put them to good use. Rich country negotiators need to go back to their Prime Ministers and Presidents and explain that new commitments of climate funding, especially to help poor communities cope with climate change, will be needed to broker the strongest deal. Oxfam will continue to press for a climate deal for the world’s poorest people. Exclusion of civil society from the process that has characterized the meeting in Bonn must not be a precedent for Paris.” – Oxfam’s senior policy adviser Romain Benicchio
  • “It’s clear that all countries want a new climate deal, but the big question is how we will achieve this. The new draft Paris agreement we got today is manageable, but there hasn’t been enough progress in many key issues, like finance. Countries need to work together to bridge gaps and scale-up ambition to limit warming to below 1.5°C.” – Kit Vaughan, Director of CARE International’s Climate Change, Poverty and Environment Network
  • “Negotiators made some significant strides here in Bonn but a much more vigorous pace is needed to secure a strong climate agreement in just a few weeks. We’ve been running a marathon for years to reach to this point. Now we need an all-out sprint to get over the finish line in Paris. This week negotiators took full ownership over crafting the draft agreement which demonstrates their strong commitment to a successful outcome in Paris. This determination needs to continue at all levels to connect the dots between the negotiations and the ministerial gatherings ahead of COP21.” – Jennifer Morgan, Global Director of the Climate Program at the World Resources Institute
  • “Everyone wants to play their cards late. But not everyone can have the ace of spades. This process is too important to be a high risk poker game. They need to put down their cards, and play together as a team.” – Martin Kaiser, Greenpeace
  • “On the positive side, some critical elements like the long-term goal of phase out fossil fuels are back and getting growing support among countries. We want to see words which signal the end of the fossil fuel era, and a new era based on 100% renewable energy. But this is a start. More and more countries also support a mechanism for ramping up climate pledges every five years. This process needs to start before 2020 to avoid locking in weak ambition. It’s also good that loss and damage has remained in the text. This is a must-have for the poorest, who are losing their homes now in countries like the Philippines or Mexico. On the other hand, the text is far too long. With only five weeks to go before Paris, we have 55 pages. And it’s not specific enough on some of the key issues. It’s clear why this has happened: the oil-producing countries are trying to block negotiations and hi-jack this process for their own ends.” – Martin Kaiser, head of international climate politics, Greenpeace
  • “Let us not underestimate what is at stake here. Impacts are already hitting home, affecting the world’s most vulnerable people and ecosystems first and foremost. That is why a Paris agreement must feature solutions to address the loss and damage caused by mounting climate impacts, affecting people and places from Manila to California. We know that finance is left to the last moments of negotiations and used as a bargaining chip. But governments need to know that this last moment is now. They now only have just six weeks to figure that out. We need to be clear about the scale, the predictability and additionality of the financial support needed to help countries cut emissions and adapt to the devastating impacts of climate change.” – Tasneem Essop, WWF
  • “The French presidency will need to play a critical role. Until the very last minute of the very last night of the Paris COP, they will be the gate-keepers of ambition and fairness. A success in Paris is not only about signing a universal deal, but about signing an ambitious universal deal. And while some countries may have chosen to keep us out of the room here in Bonn, they won’t be able to avoid us in Paris. We will be massively taking to the streets on November 28th and 29th—not just in Paris, but in cities all over the world. With our calls for climate action, we will make our voices heard throughout the talks. At the close of the COP, we will take to the streets of Paris again, reminding the leaders that we will not stop demanding progress and holding them accountable.” – Alix Mazounie, RAC France
  • “At the end of the last round of talks we had an 80-page text,” he said. “We now leave Bonn with a manageable document, which contains some robust content that will form the basis of the world’s global climate deal. At the same point before the Copenhagen climate summit in 2009 there were 180 pages so we’re in a far better position this time around. The reason we have got this far in negotiating a global climate agreement, including poor countries as well as big emitters, is because rich countries promised to deliver a balanced outcome that incorporated climate finance. That is what helped win the cooperation of the developing world. But now that we’re on the brink of sealing the deal, rich countries are trying to wriggle out of their commitments. Rich countries cannot erase history: neither their past emissions nor their promises on finance, which have been instrumental in getting us to this point.” – Christian Aid’s Senior Climate Advisor, Mohamed Adow
  • “Putting a meaningful price on carbon is one of the most effective policy measures to drive the transformation of global energy systems. To date 39 countries and 23 cities, states and regions are putting a price on carbon through taxes or cap and trade systems and many more plan to do so in the next few years.  At the same time more than 1,000 companies are implementing an internal price on carbon in anticipation of regulation to come, many planning for prices above $40. We are delighted to see carbon pricing becoming a global norm.  The widespread adoption of carbon pricing will reduce competitiveness concerns and rising carbon prices  will drive further investment in a clean energy future. The decarbonisation of the economy is inevitable , irreversable and irresistible.” – Nigel Topping, CEO of We Mean Business
  • “We welcome the inclusion of carbon pricing in the UNFCCC negotiating text released today in Bonn. Ambitious climate policy, including carbon pricing, will enable business to innovate and invest in a low-carbon, prosperous future.” – Steve Howard, IKEA Group’s Chief Sustainability Officer  
  • “If you are serious about fighting climate change, putting a price on carbon is the most cost-effective way  Carbon pricing provides the right signals to the investor community and will help us start reallocating money from the bad to the good.” – Mats Andersson, CEO of Fjärde AP-fonden/Fourth Swedish National Pension Fund
  • “On finance, rich countries know they’ve failed to meet their climate finance obligations. They refuse to admit it or make a good-faith attempt to fix it, instead proffering loans and double-counting development aid as climate finance. In short, developed nations talk big on a long term solution but are still dreaming of a destination without knowing how they will make the journey.” – ActionAid’s Climate Policy Manager, Harjeet Singh
  •  “From floods and droughts to hurricanes, typhoons and heat waves, the impacts of climate change are increasingly evident worldwide. To limit these impacts, we need a strong, science-based agreement in Paris that sets the world on a path to fully phase out fossil fuel emissions by mid-century and builds a global economy based on clean, renewable energy sources. Additionally, the agreement must not only substantially increase climate finance for both mitigation and adaptation activities in developing countries, but also help vulnerable communities deal with the climate impacts they will continue to experience in the years ahead. There was substantial progress on some issues in Bonn this week, such as transparency and national emission reduction progress reporting. On other issues, including how to create a mechanism that will ratchet up national commitments over time to achieve the reductions needed to keep global temperature increases well below two degrees Celsius, there is greater clarity regarding the options on the table. For some of the toughest issues, such as ramping up climate finance for adaptation and mitigation in developing countries, as well as helping vulnerable countries cope with increasingly severe climate change impacts, little or no progress was made.” – Alden Meyer, director of strategy and policy for the Union of Concerned Scientists (UCS)
  • “As of October 19, the 123 INDCs, covering 150 countries, submitted to the UNFCCC represent 86% of global GHG emissions in 2012. Such wide coverage, with countries from all continents, levels of development and historic positions in the climate negotiations is in itself a major step forward for climate action and a signal of commitment to the Paris negotiations. The criteria for judging INDCs is their capacity to unleash the deep decarbonisation of the energy sector by 2050. This report’s analysis shows that this transformation is emerging but not fast or deep enough. Future policies and targets must be defined to be coherent with deep decarbonisation by 2050, informed by concrete pathways to get there.” – Teresa Ribera, project leader and Director of the Institute for Sustainable Development and International Relations (IDDRI)
  • “What will really benefit the world’s vulnerable communities is a global agreement which includes a ratchet mechanism to increase ambition and ensure we don’t lock in a long period of inaction. It is probably the most important issue to be included in the Paris deal. Without a ratchet mechanism the Paris deal will be like building a beautiful car with no engine. We know that currently the pledges making up the Paris agreement won’t prevent global warming of 2 degrees. Avoiding 2 degrees is our destination and we need the ratchet mechanism to drive us there.” – Christian Aid’s Senior Climate Advisor, Mohamed Adow
  • “It’s a matter of life or death… and we are dead serious. As a matter of urgency we need finance both now and far into the future. Paris will succeed on whether this is part of the core agreement in Paris.” –  Ambassador Joyce Mxakato-Diseko, chair of G77

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