There is a risk of the Paris Agreement being thrown in reverse gear by rich nations
During last month’s 25th session of the Conference of the Parties (COP 25) to the UNFCCC—held in Madrid from December 2-13—the UN Secretary-General Antonio Guterres emphasised upon the moral and historical obligation of major polluters to enhance their NDCs much more than what was promised in the Paris Agreement. He also said that we have sleepwalked past the point of no return. The 25-odd Prime Ministers/Presidents present spoke of their long-term commitments, yet it remains clear that the political will is wanting. Further, the largest-ever scientific community attending COP 25 warned that the impact of climate crisis is far more significant than previously estimated.
There were three key issues on the agenda: (1) Carbon markets dealt with in Article 6 of the Paris Agreement, (2) loss and damage under Article 8 and setting up of a fund to help poor countries reeling from climate crisis, and (3) enhancing NDCs by all countries to curb emissions. The first two issues are pending from COP 24, held in Katowice (Poland), to be finalised in the Paris rulebook.
Article 6 relates to matters like rules, modalities and procedures for the new global carbon markets after 2020 when the Kyoto Protocol expires. Carbon credits would lose economic value if they are not transitioned over to the new market mechanism. After years of effort, governments could not agree on rules that would allow trade in carbon credits. Carbon markets trade in emission reduction credits, which means that a country that has overachieved its target can sell carbon credits to others. More than half the countries have included carbon credits in their NDCs as one of the means to achieve emission reduction goals. It is important to ensure environmental integrity of these credits.
Article 8 deals with devising a system for compensating loss and damage to vulnerable nations and reviewing the Warsaw International Mechanism for Loss and Damage established at COP 19 in 2013. We need a standard approach to quantify loss and damage to implement the Paris Agreement and also a financing window for financial action on loss and damage under the Green Climate Fund. However, of the $100 billion per year committed by developed countries by 2020 in the Paris Agreement, only $5.6 billion appears to be coming till this year.
Having said that, let me mention about a few interesting reports that were circulated on the sidelines of COP 25. One such report is by a UN-backed group called the Principles for Responsible Investment (PRI), which represents investors with $86 trillion of assets under management. It said that tighter government climate policies/regulations could wipe up to $2.3 trillion by 2025 off the value of companies in industries ranging from fossil fuel production to agriculture and carmakers. Coal could lose as much as 44% in value, while the world’s top oil and gas companies risk losing 31% of their market share. The report stated that automakers invested in electric vehicles and electric utility firms using low-carbon power could more than double their value. I think such reports are short-sighted and do not take into account the financial and social benefits resulting from saving the planet from disastrous impacts of climate change.
As a concern to combat climate change, another report was circulated in which the governments have listed various sectors and actions that would help meet the Paris Agreement goals. Here, tourism is prominently mentioned because it accounts for about 10% of global domestic product at about $9 trillion, while it also contributes 9% of global GHG emissions. Although tourism gives a boost to an economy by providing employment to millions of people, in addition to providing social benefits such as entertainment and opportunity for mixing with relatives/friends, it must focus on reducing its carbon footprint in all modes of transport; air, road, railway and water as transport are responsible for contributing about 75% of the sector’s GHG emissions.
The UNEP International Resource Panel also launched it report at COP 25, which noted that for reducing carbon emissions drastically, simply moving away from using coal and gas for energy will not be enough. It is more so for developing countries such as India. Improving material use and resource efficiency have the potential to reduce emissions. In its report titled ‘Resource Efficiency and Climate Change’, the panel made an assessment of two sectors—residential housing and passenger cars—and found that building segment is the biggest consumer of energy accounting for one-third of emissions.
Against this backdrop, let me now discuss the outcome or, more appropriately, indecisions of COP 25 on the three points: First, carbon market trades was an outstanding issue from Katowice (COP 24), but the negotiators in Madrid again failed to make rules as no agreement was reached on the contentious issue of carrying over of carbon credits from the Clean Development Mechanism (CDM) under the Kyoto Protocol, and also the measures to avoid double-counting. It would only be fair and logical that credits are carried over to any new trading framework, but the EU and other rich countries believe otherwise.
Second, no concrete decision on compensating countries for their loss and damage due to climate impacts by providing financial and technological assistance could be taken. It is because the US and other developed countries do not want to incur any liability. Rich nations, in fact, have not delivered on their pre-2020 commitments, and India, China and Brazil wanted to take stock of pre-2020 commitments in this regard.
Third, there was hardly any progress on meeting the Paris Agreement’s goal of keeping the average global temperature rise well below the 2-degree Celsius target by 2100. So far, the world is on course for a 3-4 degree rise, as NDCs of developed nations are not compatible with 1.5-2 degree rise, while only NDCs of India and other poor and small island nations are.
To sum up, the longest ever climate talks, in Madrid, have hit a wall on all important key issues as they have been pushed to the next round of talks in Glasgow, for COP 26 in 2020. There was a complete disconnect between what the science requires and what climate negotiators are delivering in terms of any meaningful action. In fact, there is a risk of the Paris Agreement being thrown in reverse gear by rich nations. To say the least, the planet is on fire, and our window of escape is getting narrower, with the global political masters delaying action.
The author is a former ISS, and UN consultant on environment and poverty alleviation