Posts by: Farrukh Zaman

Pakistan has always played a proactive role on finance issues at COPs. Recently, while talking to my negotiators, I learnt that the delegation had proposed the UN Secretary General Ban-ki Moon to take the lead in designing the structure of a “Global Climate Change Solidarity Bond” worth $20 billion as a guarantee by the developed countries. The Bond is aimed at raising climate finance to help developing countries in their adaptation efforts.

Since countries have so far been unable to raise adequate funds to support developing countries either through public finance or innovative sources such as imposing levies on bunkers and aviation, the Bond can provide a “middle ground” for countries to address on-going finance issues.

Pakistan proposes Global Climate Change Solidarity Fund to raise climate finance.

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Perhaps the most important issue that is not taking as much media attention as are the other issues related to the Kyoto Protocol or finance at COP18 is “Loss and Damage” (L&D). It is one of the issues that is being hotly contested by both the developed and developing countries, with each pushing their own agendas forward. A decision on loss and damage is still pending at COP18 and is most likely to go through the high-level segment where ministers will take a final move on the issue.

Post-flood situation in Jacobabad, Sindh, Pakistan

So what is loss and damage?

Past actions by nations have been inadequate in responding to climate change impacts such as extreme weather events (floods, storms) and slow onset conditions (sea-level rise, desertification). When emissions reduction efforts (mitigation) fail and responses to climate impacts (adaptation) reach its limits, the subsequent effects result in permanent loss and damage. In this case, the loss and damage mechanisms come into play and rehabilitate and/or compensate affected communities for permanent loss and damage incurred that cannot be reversed.

International Framework on Loss and Damage

Currently, efforts are being put together to develop an international mechanism on compensation and rehabilitation. The developing countries and Alliance of Small Island Developing States (AOSIS) are calling for an international insurance facility to protect them against the damage of climate impacts. This requires money from the developed countries, who as historic emitters, need to mobilize additional funding than just the $100 billion they are currently being asked for. Of course, this is getting a lot of friction from the developed nations who see the concept of loss and damage having legal and moral consequences.

Last year in Durban, parties agreed to a work program on loss and damage, through which five expert meetings were held focusing on three thematic areas: assessing the risk of loss and damage, approaches and the role of the Convention (UNFCCC). As a next step, an international mechanism was to be agreed upon in Doha. However, developed nations oppose the idea and instead want to continue the work program (organizing five more workshops) for another year. They seem adamant in going on with the idea of compensation due to loss and damage. Developing countries also want a separate track to be established on loss and damage, but there is no convergence on it so far.

I sat with Ali Tauqeer Sheikh, Asia’s Director for Climate and Development Knowledge Network (CDKN), to talk more about the issue. Here’s what he has to say about loss and damage:

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Loss and damage has emerged to be an important issue at COP18. Here is a brief look at what it is all about.

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Finance is a hot issue here in Doha. In case you are wondering why, we need money and we need it fast to enable countries to adapt to climate impacts. There is unequivocal scientific evidence confirming that global warming is happening and most poor and vulnerable countries need finance to deal with its impacts. As this need is increasing each day, countries here at Doha are seemingly unclear about what decisions related to finance will emerge out of COP18. The differences between the developed and developing countries have become more apparent here in Doha and a “trust deficit” has been created, which is slowing down things.

Finance Agenda for COP18

In order to build the trust back, and to ensure a successful outcome in Doha, parties must agree on certain things related to finance:

1. Parties need to make sure and agree that climate finance in 2013 will go up and not down the levels of Fast Start Finance (a finance mobilization period between 2009-2012), and continue to rise to USD $100 bn by 2020.

2. New and additional public resources should be committed, amounting to USD $60 bn.

3. 50% of public finance should be allocated for adaptation purposes.

4. There should be full transparency on common criteria and baselines for monitoring, reporting and verification (MRV) of finance.

5. Generate revenues from innovative sources of finance such as Financial Transaction Tax (FTT) and global carbon pricing schemes on international transport with no net incidence on developing countries.

6. Capitalization of the Green Climate Fund (putting actual money in the fund).schemes with no net incidence on developing countries.

7. Increased political will by developed countries to fulfil their financial commitments.

State of Play

As one of the top priorities of COP18, finance is spread across different negotiating tracks. Discussion on finance is simultaneously happening under the Subsidiary Body on Implementation (SBI), Long-term Cooperative Action (LCA), and COP. A lot of countries have suggested to establish a separate negotiating track to merge all the issues related to finance. The COP presidency has also decided to make a contact group on long-term finance (LTF), which aims to address issues related to mobilizing and scaling up of finance up to and beyond 2020. Most developing countries also called for a political process or a ministerial roundtable to discuss long term finance. So far, the discussion is centring around the reports on the Green Climate Fund (GCF), the Standing Committee on Finance, LTF work program, and arrangement between COP and GCF.

US was pragmatic in the discussions and said it was willing to work on LTF and committed to provide finance after 2012 (oh USA! we love the way you lie). Barbados, speaking on behalf of AOSIS, called for a multilateral and inclusive process. Mexico reminded the countries that they were far way from the objective and need to continue the work program on long term finance. Philippines appeared proactive in the finance discussions and highlighted the fact that the workshops on LTF happened earlier in the year focused more on ’providers‘, but not on ‘receivers‘. It also said that work under GCF was happening on ad hoc basis. Pakistan told the parties that decision on finance could not happen without three crucial elements: institutional mechanism, increased political will, and bringing the right actors in the discussions.

All of these views point out to one thing that things will get pretty serious on finance in coming days. It is certainly going to be a make or break issue in Doha and will be contested by all parties. Any misstep on this issue will collapse the talks. In that case, according to one negotiator, “history will judge the Qatari leadership at the 18th Conference of the Parties on very harsh terms”.

 

Show Me The Money!

On November 30, 2012 By

Finance will either make or break the Doha talks. So far, things are not going as smoothly as these should. Will we see some money on the table or leave Doha empty handed?

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Hannibal: And what did you see, Clarice? What did you see?
Clarice: Lambs. The lambs were screaming.
Hannibal: They were slaughtering the spring lambs?
Clarice: And they were screaming.
Hannibal: And you ran away?
Clarice: No. First I tried to free them. I… I opened the gate to their pen, but they wouldn’t run. They just stood there, confused. They wouldn’t run.

(The Silence of the Lambs, 1991)

The silence was eerie. It hinted about a storm that was about to be unleashed. As the ADP (ad-hoc working group on Durban Platform) roundtable started at COP18, parties seemed to be out of words. When the co-chairs opened the roundtable discussions on one of the two work streams of the new ADP negotiating track, there was a long pause in the room. Even the most vocal of negotiators remained quite and waited for someone else to speak. Several minutes later, upon co-chair’s insistence, Singapore broke the silence and marked the beginning of the negotiations under the ADP track.

What is ADP?

In post-Durban climate negotiations scenario, ADP is everything. Last year, during COP17 in Durban, parties agreed to start a new negotiation track called Durban Platform for Enhanced Action, which was given the mandate to launch a process to develop a protocol, another legal instrument or (wait for it) an agreed outcome with legal force under the Convention and applicable to all parties by 2015. The decision taken at ADP will determine the future course and actions of the global climate regime. But so far, parties are unclear about what will emerge out of the ADP, except that both the developed and developing countries will take on similar obligations as part of the new agreement.

Courtesy: IISD

What happened in the First Roundtable?

The discussion in the first roundtable session on ADP was centred around some key questions related to applying the principles of the Convention (see: CBDR) to the new agreement; how national circumstances will play a role; and what incentives can be included to ensure the full and ambitious participation of all parties. Singapore started the discussion by clarifying if the NGOs were allowed in the room. He stressed that parties should make commitments and take actions keeping in mind their national circumstances. Along with his Pakistani counterpart, Singapore asked the developed countries to demonstrate leadership and define that leadership in tangible and quantifiable manner. Australia and EU (the lover’s feud in Doha) called for “dynamic” interpretation of the Convention principles that can be applied to all countries, which basically meant that they wanted to change the definition of common but differentiated responsibilities or perhaps even revoke it completely. Other countries like New Zealand and Marshall Islands suggested different approaches to move forward. India stuck with its equity argument and said that actions should be based on national circumstances and development priorities.

What will happen next?

In addition to discussion on the first workstream, parties will now start discussing issues in the second workstream, which deals mainly with the means of implementation of actions and initiatives that can be part of the workplan. While it is a good sign that parties have started discussing issues in the ADP, what remains to be seen is how successful will they be in resolving their differences and coming to consensus. Will we have a workplan by the end of the session? Will parties move beyond ‘equity’? Will the principles of CBDR remain intact? The success of Doha climate talks depends on the answers to these questions.

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While the first ADP roundtable session started with an awkward silence, parties managed to speak out their concerns to move forward. Here’s a recap of what happened in the first session of the ADP Roundtable in COP18, Doha.

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China’s bizarre, yet somewhat funny, “desperate housewife” gag from Bangkok months ago made reappearance in LCA session today during the ongoing UN climate negotiations in Doha (COP18). China, speaking on behalf of BASIC countries, reminded the delegates that even a desperate housewife cannot make a rice dish without first having rice or any other core ingredient. In clearer terms, it stressed that a successful conclusion of the LCA track in Doha must address all elements of the Bali Action Plan (BAP).

Last year in Durban during COP17, parties agreed to close the LCA track in Doha (formed in 2007 to negotiate the BAP). Certainly, this will going to be a difficult thing to do here since parties seem divergent on how to conclude LCA, or whether to conclude it at all. The developing countries want LCA to finish its outstanding work related to adaptation, mitigation, finance and technology before closing it down, or properly transfer these issues to other bodies according to the principles of the Convention. The developed countries, on the other hand, seem adamant in closing the LCA track. This will allow them to start the negotiations from scratch in the new ADP track where both the developed and developing countries will take on similar obligations. The firewall separately the two blocks will be eliminated or minimized forever.

The first session of LCA at COP18 opened today with the parties picking up the fight from where they left last time. Despite agreeing to the chair’s text in Bangkok, parties did not show their willingness to stick to their promise (stating the obvious here, I know). The Umbrella Group of countries rejected the chair’s text, but stressed the closure of LCA. The EU reiterated the Umbrella Group’s position and brought about a disappointing turn in the negotiations, from the start. Even the developing countries seemed less constructive. Philippines, while reminding the plenary that she was “the only housewife” among the negotiators, did not agree fully to the chair’s text, but wanted to add more issues to it for discussion.

The only positive proposal came from the Small Island Developing States (SIDS), proposing a second term for Fast Start Finance (FSF), whose first term is expiring by the end of the year. Since the full operationalization of financial mechanisms such as the Green Climate Fund will take some time (hopefully by 2020), it is important that there is money on the table between now and 2020 to enable developing countries to adapt to climate change impacts.

The LCA chair, Aysar Tayeb, adjourned the LCA session by stating that “not everyone liked rice”, so his text reflected a range of dishes to suit the tastes and preferences of all parties. I think someone should remind Mr. Tayeb that when you have too much food on the table, it is likely that it will get wasted. While he gets that point, it is suffice to say that the start of LCA negotiations in Doha has certainly made the desperate housewives of COP really desperate to fight and disagree with each other. Who will come to their rescue? Only time will tell.

The start of LCA negotiations in Doha has certainly made the desperate housewives of COP really desperate to fight and disagree with each other. Here’s what happened in today’s session…

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