Comprehensive review of Cancun Climate Agreements and prospects for CoP17, 2011

Going through almost 100 pages of Cancún Climate Agreements and another 100 of analysis from both the media and academia was not a delightful task to do during last month, given that the summit didn’t reach any genuine results. The more you dig, the more disappointed you become. The “set of focused” agreements was celebrated as building blocks for a real comprehensive agreement next year. This is a truly over-optimism. Unless serious negotiation rounds take place throughout 2011, there will be no final effective agreement signed in CoP17, Durban. We will be faced with either a gap period of delayed post-2012 action, or a virtual gap of weak and ineffective action; that is a continuation to Kyoto Protocol (KP) or a similar form of agreement.

Summary of the outcomes:

In short the agreements didn’t resolve any of the fundamental issues. The big and hard decisions were postpone to next year. There was neither actual commitment on raising the emission cuts pledges, nor clear definition of the post-Kyoto agreement. However, the agreements have drawn the headlines of many issues among which is “the controversial” REDD+ Scheme (Reducing Emission from Deforestation and Forests Degradation), and the Green Climate Fund. More mechanisms and modalities were introduced for: Technological Transfer, CDM (Clean Development Mechanisms), MRV (Measurement, Reporting, and Verifications), ICA (International Communication and Analysis), prioritising the Adaptation over Mitigation, focusing on Building Capacities for the Developing and Least Developed countries, and introducing a review process for validating the scientific targets. These are mainly built on Copenhagen Accord. The low-expectations before the summit had made of adopting these agreements an achievement. Most importantly, the distinction between the developing and developed countries is more blurry now. Certainly, these are important foundations for a comprehensive agreement, yet we are in time lag for the increasing climate damages. The mitigation and adaptation costs are sharply increasing.

The Negotiations:

The successful negotiations’ management by the Mexican presidency had played an important role. There was a more positive and transparent atmosphere between the delegates, which had led to a more open climate diplomacy. This has served to maintain the UNFCCC as a platform for negotiations. Moreover, the collaborative, rather than the rival, perception of a major organizations’ involvement such as MEF and G20 has created more forums for discussion. Ireland put forward new initiative to include UNEP and the WRI (World Resources Institute) as major players in the negotiations, and set some dates for formal meetings during 2011. The MEF presented a study shows that the World Trade can play an important role in shifting the markets toward low-carbon productions through supporting the environmental goods and increasing the pressure on the carbon-intensive ones. Yet, no action was taken in this direction.

The most controversial position this time was taken by Japan. It has announced its intentions to not sign any 2^nd commitment period under Kyoto Protocol (KP2). This was followed publicly by Russia, Australia, Canada, New Zealand, and Turkey, and privately by other developed countries. However, this didn’t mean total abandonment to any international treaty. It was a refusal of taking emission cuts burdens solely while the major emitter, namely the US and China, are not. Also, the changing economic dynamics over the last two decades resulted in having countries like Mexico under the non-Annex I countries while at a later point they became part of the MEF. Kyoto Protocol (KP) has proved in theory and practice to be an inefficient and ineffective policy to deal with climate change. Recent studies show that under the current pledges and mechanisms will fall short of the IPCC targets. Japanese stance was a wake-up call of how the negotiations scene will look like this year, CoP17. On the other hand, the developing countries are pushing for KP2 as they would face less economic disruptions. Ironically, the international community has raised its voice against the Japanese position, and remained silent about the continuous American ignorance to join any form of effective binding treaty. Finally, the Japanese position has resulted in agreeing on a scenario of KP2 that has no legal obligations for Parties to ratify it in CoP17.

Unlike the previous summit, China announced its willingness to introduce a voluntary target of emission cuts and include this target in a legally binding agreement. This offer was based on the conditions of having financial and technological support, in addition to commitment by all the nations, and specially the US. The Chinese position has eased the tone with the US in particular, and within the whole summit in general. This will put more pressure on the US that the future of post-Kyoto agreement is now within the American Congressmen hands. The Americans are still faced with the two options of either no regulations or weak regulations, under both they still fall short of their 17% target. The only chance for having tougher American commitment is a shift in the climate agenda toward national interest need rather than economic disruptive want. In the light of this argument, former US officials predicted the increase propensity toward adopting low-carbon energies in order to detach the army from its dependence on fossil fuels.

It has been reported by UNfairplay organization that there was low representation for the poor countries in the summit due to financial and communication issues. These countries delegates lack high skills and expertise in international law and negotiations, while they are the most affected and vulnerable to the climatic damages. Therefore, they must be supported to attend the summit and express their views. The position of rejecting the agreements is taken by only Bolivia this time. They refusal to sign the agreements is based on the lack of ambitious emission cuts and financial support. Despite that, the agreements were adopted by the conference and included a note of the Bolivian objection. However, Bolivia won’t stop at the objection stance; it will file a complaint at the International Court of Justice.

CoP17 Results:

The negotiations this time were full of ups and downs, yet they are certainly much better and more positive than the previous ones. The set of focused agreements are:

1.       Reducing Emissions from Deforestation and Forest Degradation Scheme (REDD+): the introduced forestry scheme in Copenhagen was formally adopted by the Parties. However, and as the official agreement recognizes, it still lacks a lot of details. Neither MRV mechanisms nor clear definitions of the indigenous people’s rights were introduced. What is more, there are high discrepancies between the definitions of degraded forestry’s and property rights across the nations and across the different levels of a government in one single nation. This makes a global unified policy inapplicable and more vulnerable to manipulation. Ignoring the corrupted cases in the current REDD applications, such as Indonesia and Malaysia, would create a threat to the world natural forest and undermine the international efforts to curb the emissions.

The introduction of REDD+ market mechanisms to raise the needed funds will carry the risk of privatising the natural resources. An effective scheme should rule out the possibility of financing through the volatile carbon markets. Study by Friends of the Earth shows that banks, energy suppliers, airlines, palm plantation corporations are the big benefiters from this scheme. Most of the proposed investments aim mainly to maximize returns. Scientific studies show that the proposed projects must target key areas that involve biodiversity features in order to maximise the benefits. REDD+ doesn’t address the real reasons behind deforestation, which are the environmentally inadequate trade and economic policies. The UNFCCC should come with clear definition of the projects that maximise the environmental benefits, protect the indigenous people’s rights, and incentivise investments.

2.       Climate Change Finance: was adopted on the same basis as introduced in Copenhagen Accord; Fast-start finance and Green Climate Fund. The agreement has recognized the “AGF on Climate Finance” recommendations. Under this fund there were many sub-funds created such as: Least Developed Countries Fund, and Adaptation Fund. However, the fundamental issues are not resolved yet. Observing the current practices from the fast-start fund, so far most of the donors are providing their funds as loans, debt reliefs, or part of the Official Development Aid (ODA). It is clear enough that this fund should be on the top of the ODA. However, according to the Development Assistance Committee – dac – the climate fund is “dac-able” and therefore it could be bundled with the ODA.

The agreement has failed to determine the ratio of the allocated funds between mitigation and adaptation. Also, there was no particular definition of the fund sources. This is a vital issue. The climate fund should be channelled through special sources and under different policies that make it distinct from the ODA. Moreover, periodical assessments should be conducted to determine whether these funds match the needs or not, and a set of MRV mechanisms is needed to be introduced as well.

Another issue is the governance of the climate funds. For example: the Adaptation Fund will be governed by the Global Environmental Facility as Interim Secretariat, and World Bank as Interim Trustee. There are big question marks around the credibility of having the World Bank (the biggest funder for the fossil-fuels projects) as a Trustee!!

3.       Measurement, Reporting, and Verification standards (MRV): the issue that created the biggest scandal in Copenhagen was resolved this time with thanks to the progressive proposal by India and the UNFCCC, in addition to the positive attitude by China and USA with respect to MRV.  The Indian delegate has introduced International Consultation and Analysis (ICA) measures. Under ICA, nations will declare their targets and produce periodical reports on how they met them. Unlike Copenhagen proposals, there will be no international monitoring and inspection, neither penalty’s. However, the internationally supported actions are subject to MRV/ICA standards in accordance with general guidelines to be developed. While the national supported actions are subject to domestic MRV in accordance with general guidelines advised by the UNFCCC. These standards should be finalised before CoP17.

4.       Clean Development Mechanisms (CDM): the agreement mentions that the standardized baselines and monitoring methodologies “can” be developed. Proposed improvements are in the areas of reducing transaction costs, enhance transparency and predictability, CDM governance and accountability, eligibility criteria, registration procedures, and increase the CDM projects’ access to the underrepresented regions and projects’ types. The Carbon Capture and Storage (CCS) have been recognized as eligible projects’ activities under the CDM. This was despite of many Parties’ concerns about the associated risks with the CCS projects. The agreement identified but didn’t clearly address in details the issues that need to be reformed. Moreover, the restrictions on the types of the CDM projects maintain the carbon prices artificially high. On the top of all that, the controversial future of KP creates uncertainty in the CDM investments.

5.       Technological Transfer and Development: the agreement has established the “Technological Executive Committee” that is responsible to prepare the draft of “Technology Mechanisms” by CoP17. These mechanisms should include clear definition of the governance, financing, and property rights issues. The private sectors have to be incentivised through set of public policies in order to invest in the developing countries. Also, the mechanisms should build a stronger link between the technological transfers and the financial ones, and introduce MRV standards.

6.       Capacity Building: is the weak link between the financial and technological mechanisms to support the developing countries in their mitigation and adaptation. Parties decided that the Subsidiary Body of Implementation needs to prepare a draft decision on the outcome of “The 2^nd Comprehensive Review of the Implementation of the Framework for Capacity-Building for the Developing Countries” by CoP17. However, there was no mention of improving these standards.

7.       Phasing out the fossil fuels subsidies & introducing levy on aviation and shipping: on these two matters there were no inputs from the conference what so ever. On the contrary, the EU has announced recently that it will extend its subsidies from 2014 to 2018, and the World Bank will keep subsidising these projects. It has been identified by G20 and other organizations that these two markets contribute to major chunk of the emissions, and policing them will single the markets to switch to the low-carbon technologies.

8.       Land Use, Land Use Change, and Forestry (LULUCF): the conference recognized the possibility of introducing cap on the LULUCF emissions. Modalities and mechanisms for further commitments related to LULUF emissions are to be identified in KP2. However, it suffers the same setbacks as the REDD+. There must be MRV, technological, and financial mechanisms introduced.

9.       Adaptation: the agreement has introduced new measures to enhance the adaption governance. It has established “Cancun Adaptation Framework” in order to manage the adaptation actions, support the NAPAs governance, enhance the relevant policies and mechanisms on all levels, and create measures for climate induced migration and displacement. In addition to that, it established “Adaptation Committee” that is responsible for governing this Framework. “Adaptation Work Programme” was created to consider addressing the loss and damages associated with climate change. Finally, “Adaptation Regional Centres” were commissioned to enhance networking and collective cooperation. Throughout 2011, Parties are required to provide inputs for a final structure to be agreed in CoP17.

10.   Mitigation:  the agreement has established a “Process for International Assessment” on the mitigation actions. In addition to calling both the developed and developing countries to submit reports concerning their emissions inventories and mitigation actions (MRV related issue).

11.   Markets solutions: the agreement called for promoting the establishment of market-based mitigation actions in the developing countries with the support of the developed ones. These will be built using the existing mechanisms included in KP. Also, it has encouraged “considering” the establishment of non-market mechanisms. The World Bank pledged multi-million dollars to support the introduction of Carbon Markets in the developing countries. However, carbon markets under KP are open to fraud, vulnerable to high volatility, associated with unrepresentative carbon prices, and contain a lot of offset loopholes. These are proven through evidences from the European Emission Trading Scheme. Cap and Trade and CDM have proved in theory and practice their ineffectiveness as market instruments to deal with climate change as global crisis. Various economists introduced the Carbon Tax as the most effective market instrument that produces real reductions and meets the 2°C target.

12.   Scientific Review Process: the agreements “identified” the need to scale up the current pledges to reach the 2°C target, and “recognized” the need to reconsider the 1.5°C target. For this purpose, a scientific review process will be conducted between 2013 and 2015. It is scientifically proven that the 2°C target is a global average and it will result in sever damages in some regions such as Africa that will face an increase of up to 5°C.

Remaining Challenges:

“When you are in a hole, stop digging”

Despite the celebrated progress in Cancun, the actions agreed upon are not in the same pace on which the climate is changing. The cost of inaction (or delayed action) is much higher than the cost of action. Undoubtly the UNFCCC is a legitimate platform for the climate negotiations. It does foster actions on climate change. One can’t argue that climate change can be face with national and regional actions. The crisis is global and in order to effectively and efficiently reduce its impacts, the actions should be global.

However, there are three challenges facing this international platform: the number and diversity of the countries, the common consensus rule, and the decision making process under which all countries have the same voting weight. Alternatives?? Well, there is no option but to have all the nations act together collectively. However, national and regional level actions will help creating better grounds for the international negotiations. For instance: the EU regional plans had made it easier for them to have positive stance and be less pressured by the other nations’ actions. Having these layers of governments taking actions simultaneously while the agreement is being negotiated will make breaking down the agreement even smoother, and will curb some of the emissions. The current sub-international initiatives are fostering creative sectoral and inter-governmental climate coalitions. Moreover, they will benefit from the fast-movers advantage in the future global economic system.

As indicated earlier, the policy instrument is a vital issue in determining the distributional costs and benefits of the climate action. A Regulative Review Process must be introduced to examine the different set of policies introduced by the economics academia. The assessment should be built on the basis of environmental effectiveness, economic efficiency, and then political feasibility. The current market instruments are facilitating the privatisation of the global natural resources. The public rights must be protected, and the cost of action should be taken by those who caused the crisis not by the public.

Undoubtedly the lack of leadership, the geopolitical conflicts, and the business interests are forcing factors against quick progression in the agreement. However, there is a more important factor: the public or, in other words, the consumers. Recent general elections’ questionnaires show that most voters are not prioritising the climate change as a factor for casting their vote. Therefore, if the electorates (consumers) didn’t signal the governments (businesses) that impact on climate has became a major element in their decision making process then no serious actions will be taken. On the other hand, having the current economic crisis in place is a very strong reason for them [public] to drop one more issue from their agendas. The fact that combating climate change is going to disrupt their lifestyles and incur extra expenses is holding them back from such action. This calls for the need of social movements that lead and increase the public awareness about the dramatic future costs in case no action was taken now. The more financial disruption we face now, the less total costs will be confronted upon us. Moreover, regulations are needed in order to make sure that the highest stake of costs to be faced by the corporation’s and not passed to consumers. The arguments should shift from “what the economy can do to tackle the climate challenge?” to “how can the actions on climate change boost the economic growth in a more sustainable way?”.

 

Prospects for 2011 and CoP17, Durban:

 

Throughout 2011 each and every single UNFCCC meeting should be treated as important as CoP17. South Africa has called for a minimum of two ministerial meetings before the actual summit takes place. If progress this year followed the same pace of those in previous years, then CoP17 will not be concluded with a single step forward (below is the agreed time table of input submissions by all Parties). Along with these, governments who are willing to seal a legally binding agreement in CoP17 should pass parallel regulations in their chambers before November 2011. Pledges and mechanisms are needed to be nationally agreed upon beforehand. New initiatives of climate policies are need to be considered on the national level.

More importantly, all the major conferences by G20, MEF, OECD, and other organizations should address the climate agenda. The grounds for international governance should be drawn in these forums. The international NGOs have to excessively lobby the governments. They have to publish papers addressing the public and markets about the urgency and importance of taking action in CoP17. The public should priorities their votes based on environmental aspects, and shift their consumption behaviour to foster low-carbon growth.

Unfortunately, the dynamics of such collective bottom-up and top-down movements are not materialized yet. That said, it is unlikely that CoP17 will reach any constructive momentum. On the contrary, we are approaching and running through destructive momentums. The demand on oil is increase simultaneously with the increasing prices. The floods in Australia, Pakistan, Sri Lanka, and Brazil have affected the food prices worlds wide.  The changing weather patterns are hitting all the agricultural activities. The irreversible impacts on the ecosystem are increasing, such as the regional decline in fresh water supply, and plants and animal extinctions.

Determination and responsibility are the keys for these radical movements to take place in 2011. Sense of urgency in reforming our economic systems and lifestyles must become the norms in this decade. Failing to meet our commitments toward the future generations and the environment will result in a brutal world.

 

 

Milestones for 2011 and beyond:

 

Link to UNFCCC formal scheduled meetings.