Adapting the Adaptation Fund under the Paris Agreement

Screen Shot 2018-11-29 at 9.01.36 PMThe future of the Adaptation Fund (AF) is among the dicey climate finance issues to watch as Parties seek to complete negotiations on the Paris Agreement Rulebook over the upcoming 2 weeks. While it is small, with total cumulative receipts of only $737 million, the AF is highly regarded and widely celebrated for the “relevance, efficiency and effectiveness of its work” and its “contribut[ion] to transformational change.”

The AF was created under the Kyoto Protocol, and thus subject to the CMP, not the COP. The requisite decision to have it serve the Paris Agreement came in 2017 at CMP13.

Screen Shot 2018-11-28 at 6.31.12 PMOn the eve of the Katowice climate change conference, concerns remain about whether, in its new life, the AF will retain the unique and innovative features that have made it so vitally important to developing countries. In particular, developing countries want to preserve:

  • Direct access (not having to access funds through multilateral institutions)
  • Grants-based funding
  • Full cost accounting of country-driven projects/programmes, and
  • A developing country majority on the AF board.

Negotiators have been grappling with two divisive issues that will impact these characteristics: 1) the AF board composition, and 2) how the Fund will be resourced.

The 16-member AF board currently includes 2 representatives from the 5 UN regional groups, 1 each from the small island developing states (SIDS) and Least Developed Countries (LDCs), and 2 each from the UNFCCC’s Annex I Parties and non-Annex-I Parties.Screen Shot 2018-11-28 at 6.47.17 PM

A proposal to eliminate the differentiation between Annex I and non-Annex I Parties and expand donor country representation on the board emerged during APA 1-6 in Bangkok in September. Developing country Parties want the make-up to remain unchanged and are pushing back hard. They fear undue donor country influence not only on funding decisions, but also on multiple other important aspects of governance and operations.

As for resources, a percentage of proceeds from the marketable emission reduction credits of the Kyoto Protocol’s Clean Development Mechanism (CDM) initially funded the AF. With CDM proceeds drying up in recent years, the Fund has had to seek voluntary contributions – not a sustainable mode. Currently, the Fund has only ½ of the resources needed to meet the amount requested in the most recent round.

Screen Shot 2018-11-29 at 8.07.46 PMWhile, across the board, Parties support establishing new innovative mechanisms to serve as revenue sources, most developing countries also want to continue the original model and link AF resourcing to the Article 6 international crediting mechanism(s) that will emerge from negotiations. Developed country Parties, don’t want to give up any value of the credits they secure from funding mitigation projects in other countries, and some have wondered why the Adaptation Fund should be continued at all, given that the Green Climate Fund provides adaptation financing. That perspective has little traction, and we are likely to see some rich engagement about resourcing.

Two just-released publications will certainly impact any climate finance negotiations: 1) the 2018 Biennial Assessment (BA) and Overview of Climate Finance Flows * (from the Standing Committee on Finance), and 2) the 2018 Emissions Gap Report of the UN Environment Program (Executive Summary is here).

According to the BA, climate finance flows to non-Annex I Parties reached a newScreen Shot 2018-11-29 at 8.39.43 PM high of $74.5 billion in 2016, still far short of the $100 billion per year by 2020 developed countries committed to provide and mobilize. Characteristically, too, adaptation funding remained less than 40% of that for mitigation in public climate finance flows for 2015-2016, with adaptation funding a rarity in private finance.

TScreen Shot 2018-11-29 at 8.28.30 PMhe emissions gap is the difference between the GHG emission levels needed to keep global temperature rise below 2°C or 1.5°C in 2100 (compared to pre-industrial levels) and the global GHG emission level the NDCs are expected to achieve if fully implemented by 2020.

Two of the many key messages from the Emissions Gap Report giving the climate community pause are that:

  • The “gap has increased significantly in comparison with previous estimates” and
  • “Global greenhouse gas emissions show no signs of peaking.”

Given the prospects ahead, poorer countries are expected to be unwavering on a strong funding foothold for the Adaptation Fund and a path to grow it.

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Photo credits: 1) https://www.adaptation-fund.org/; 2) Leolintang/iStock by Getty Images; 3) http://www.famu.edu/index.cfm?PreMed&ADVISORYBOARD; 4) https://www.customtermpapers.org/free-term-papers/term-paper-emissions-trading/; 5) https://indicaonline.com/blog/ways-marijuana-dispensaries-save-money/; 6) https://www.unenvironment.org/resources/emissions-gap-report-2018. Featured image: https://grist.org/climate-change/2011-08-25-neoliberalism-and-climate-change-adaptation/

(*The 2018 BA is a complex compilation that covers climate finance flows in 2015 and 2016, examines trends from 2011-2014, explores gains in measurement, reporting and verification of these flows, and considers the implications for global goals and efforts.)

 


Show Us The Money!

 

Tension in the global climate finance community is mounting as the Katowice climate change conference approaches. The September effort to advance the Paris Agreement Work Program (PAWP) exposed deep historic divides on climate finance (reported here, here and here). And though the Green Climate Fund Board thankfully “righted its ship” a bit in October (see our close look here), the relief did not ease the larger systemic angst.

At its core, climate finance is a highly political issue. For the most part, rich societies are suffering far less from climate change impacts than poorer ones, and have far more resources with which to respond to those impacts. Poor countries need substantial help from the developed world to do the same. Screen Shot 2018-11-01 at 5.38.49 PMYet, many developed countries are not inclined to make the enormous financial investments required to address global climate change for outcomes that won’t be realized until the distant future and that will mostly benefit other countries. We get a glimpse of this reality in Climate Scoreboard’s just released Global Report #8, on which we reported yesterday.

Since the adoption of the UNFCCC, developed countries have committed to and provided some, but not nearly enough, climate finance to help developing countries meet the costs of mitigating and adapting to climate change. Their collective target of $100 billion/year by 2020, established in the 2009 Copenhagen Accords and reiterated in the Paris Agreement decisiScreen Shot 2018-11-01 at 6.17.35 PMon (1/CP.21), falls hundreds of billions short of predicted needs for mitigation and adaptation in developing countries. (Numbers are hard to come by, but the World Economic Forum projected a few years ago that $700 billion/year in climate investment will be required by 2020, while UNEP has estimated annual adaptation costs alone could reach $500 billion by 2050.) Additionally, many are questioning the likelihood that even the $100 billion/year by 2020 will be realized (see here, here and here).

All of this adds up to a lot at stake for climate finance in Katowice in December, where Parties have promised to bring the Paris Agreement implementation guidelines across the finish line.

One of the most contentious climate finance issues we have been tracking is whether Article 9.5 will be fully operationalized. It stipulates that developed country Parties, and others as they can, “shall” communicate, in both quantitative and qualitative terms, financial resources they intend to provide to developing country Parties (ex ante support). However, decision 1/CP.21 calls only for identifying the information Parties will report, and not the modalities to be used in accounting of those resources.

Some feel this was an oversight in the rush to adopt the Paris Agreement back in December 2015, since it is unusual for a COP to decide what Parties are to report without also deciding how the information will be reported and used. For instance, for Article 9.7, decision 1/CP.21 sets in motion identifying both the what and how Parties will report on financial resources they have provided and mobilized through public intervention (ex post support).

Screen Shot 2018-11-01 at 8.01.22 PMDeveloped country Parties contend that Article 9.5 is sufficiently clear and that no action is required. They want to use the existing general guidelines from 3/CP.19 for the biennial submissions they were requested to make on “scaling up climate finance from 2014-2020.” Notably, only 7 Parties and the EU made such submissions.

Developing country Parties assert that predictability and transparency are at the heart of Article 9.5 and that it must be fully operationalized by also specifying accounting modalities. In particular, Parties should decide how the information will be compiled, made publicly available, transmitted to the global stocktake, and be subject to technical review, none of which is addressed by the earlier general guidance on reporting ex ante support.

Currently, the battle for and against establishing modalities for Article 9.5 is being played out under agenda item 8a of the Ad Hoc Working Group on the Paris Agreement (APA).Screen Shot 2018-11-01 at 6.48.57 PM

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Stay tuned for more posts on climate finance issues for COP 24/CMA 1-3. And, may all Parties show up rich in political will.

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Closing the UNFCCC Gender GAP?

Screen Shot 2017-05-30 at 1.47.14 PMThe Gender Action Plan, with its apt acronym – GAP – was on the agenda earlier this month at the UNFCCC intersessional meetings in Bonn, Germany. And, rightly so. Women’s equal and meaningful participation in the development and implementation of effective climate policy is an agreed goal of the Parties to the Convention. Since COP7 in 2001, when Parties endorsed an increase in women’s participation, this goal has been increasingly articulated and characterized through a total of 75 decisions and mandates within decisions across the UNFCCC programs. (The secretariat’s compilation of these, organized by 9 thematic areas, is an excellent reference.)

Screen Shot 2017-05-24 at 4.24.07 PMYet, despite all these, Parties have faltered (see secretariat’s annual reports, 2013-2016). As we reported at COP22, in Marrakech (Nov-Dec 2016), Parties again acknowledged women’s under-representation throughout the Convention process and the inadequate progress toward gender-responsive climate policy. This recognition generated the Gender and climate change decision (21/CP.22), which directed the SBI to enhance the Lima work programme on gender (LWPG) and develop a Gender Action Plan (GAP). The GAP’s function is to “support the implementation of gender-related decisions and mandates.”

At SB46, an in-session workshop provided the primary substance for the GAP. Some of it came from twenty submissions with proposed GAP elements and advice on the workshop’s structure received from Parties (9), intergovernmental organizations (IGOs) (8), and NGOs (3). Additional and rich input came from two pre-workshop events: 1) a 2-day informal consultation in March among 45 representatives of Parties, NGOs, and IGOs held at The Hague, Netherlands, and 2) a May 9 Listening and Learning Climate Justice Dialogue among negotiators and grassroots women focused on bringing forth key messages/principles.

Screen Shot 2017-05-30 at 1.42.46 PMAn open update session on the LWPG ahead of the GAP workshop also introduced the proposed framework that had emerged from the Hague consultation. This comprehensive framework, containing 5 clusters with associated priority/key results areas, and activities for each, was subsequently moved forward as the starting point for the Day 2 breakouts.

The first half-day covered the GAP mandate, the secretariat’s compilation of decisions and mandates, an overview of the submissions, outputs from the 2 pre-workshop events, and lessons learned from other action plans. This was followed by a facilitated dialogue addressing the Plan’s overall objectives and what success would look like in 2019 (when the LWPG is reviewed). Day 2’s breakouts explored and refined the 5 proposed clusters, priority/key results areas, and draft activities. (On-demand webcasts are available here: 5/10 and 5/11)

SBI47 will consider the outputs of these breakouts in establishing the GAP, when it returns to Bonn in November. To what extent the SBI makes modifications is a big question. One ambitious key result under the Gender balance, participation and women’s leadership cluster calls for reaching 50% representation of women in all Party delegations and constituted bodies under the UNFCCC by 2019.

As pressure grows for more than baby steps, so does the hope for an effective new tool to actually make women’s equal and meaningful participation in the development and implementation of effective climate policy a reality.


Wheels of climate change policy roll on in Bonn

trump+climate+environmentWhile angst about the pending Trump decision on the Paris Agreement (PA) remained a subtext of the annual intersessional climate meetings that wrapped up last week in Bonn, Germany, the technical work trundled on.

More than 3,300 (negotiators, observers [including a VLS delegation], plus secretariat and other agency staff) participated in:

  • the 46th sessions of the Subsidiary Body for Scientific and Technological Advice (SBSTA) and Subsidiary Body for Implementation (SBI),
  • the 3rd part of the first session of the Ad Hoc Working Group on the Paris Agreement (APA1.3),
  • several COP-mandated companion events (e.g., indigenous peoples, climate finance reporting, capacity building), and
  • more than 90 side events.

The Earth Negotiations Bulletin gave its usual comprehensive (if dry) lowdown of the meetings. By many reports (here, here, here, and here), the negotiations moved rather smoothly. In particular, positions on APA agenda items got clarified, even though negotiating texts are still out of reach. The APA must deliver a Paris rulebook by December 2018.

Aside from the Trump question, the media coverage (e.g., here, and here) spotlighted the contentious tussle over conflict of interest (read: corporate/fossil fuel industry influence on climate policy). But that shadow side of the SBI’s imperative to “further enhance the effective engagement of non-Party stakeholders,” was not the only thing we watched.

A few of our observations:

  • APA round tables got a thumbs up for the airing and clarifying of views and could speed introduction of “contextual proposals” for PA rulebook pieces. Five will be held ahead of COP23, though observers will be excluded.

  • Parties are determined to understand, manage and capitalize on the linkages between Paris Agreement articles, and between the APA work and PA work of the subsidiary bodies. This is important and rich ground for cohesiveness.
  • More frequent interventions are coming from the new “coalition” of 3
    3K1A3741

    Marcia Levaggi, Argentina, speaking on behalf of Argentina, Brazil and Uruguay (Photo by IISD/ENB | Kiara Worth)

    contiguous South American countries – Brazil, Argentina and Uruguay. They constitute 3 of the 4 members of Mercosur, the Southern Common Market, which is on track to a free trade agreement with the European Free Trade Association. We’ve known them as part of multiple different negotiating groups: G77+China (all 3); Coalition of Rainforest Nations (Argentina, Uruguay); BASIC (Brazil); Like-minded Developing Countries (Argentina); and BRICS (Brazil, Russia, India, China, South Africa). We’ll be keeping an eye on this development.

  • The Long Term Climate Finance workshops (LTF) may catalyze concrete COP consideration of strategies to address the confusing
    3K1A6693

    Breakout during LTF event. (Photo by IISD/ENB | Kiara Worth)

    multi-lateral climate finance architecture and developing countries’ challenges in accessing finance. (See the World Resources Institute new pub out on this issue.)

  • The SBSTA’s agriculture agenda item hopped on a rollercoaster, disrupting the 4-year stalemate between developed and developing countries over adaptation vs mitigation. The excitement generated by delegates’ Week 1 mantras (“very substantive dialogue,” “feels like a family”) landed with a thud in the end. No mature elements moved forward to the SBI; nor was an agriculture work programme recommended. We do see slightly positive prospects looking ahead, given the Co-Facilitators’ non-paper. Stay tuned for our deeper dive on this.
  • The Gender Action Plan workshop wasn’t covered by anyone, but you’ll get the in-depth story with our next post.

Next up? Thank you, Carbon Brief, for the chart of steps toward COP23.Screen Shot 2017-05-25 at 1.11.43 PM

 


Adaptation and Climate Resilience – Help Wanted

climate_change_adaptationA recent National Academy of Sciences (NAS) half-day seminar – Climate Change Adaptation Investments and Measuring Effectiveness – considered a pressing suite of interrelated issues. As Timmons Roberts of Brown University (one of the moderators) stated, “[t]his seminar is not an academic exercise.” Developing countries urgently need climate change adaptation help and they want and need to know if the commitments from developed countries are being met.

Their concerns go back to a key premise for the Paris Agreement (PA) – developing countries agreeing to compromise their own fossil fuel industrialization (a faster, less expensive path toward poverty reduction than leaping over it into renewables) in exchange for the promise of greater support for both mitigation and adaptation. This weighed heavily last month in Marrakech, especially with release of the controversial Climate Finance “Roadmap” by a subset of OECD countries just before the climate conference. In addition to objections to the Roadmap’s methodology (we touched on this here), the much greater support documented so far for mitigation over adaptation flew directly in the face of the balance between the two that had served as another “ground rule” for achieving PA consensus.Tracking-Climate-Finance-400x264

With that backdrop, this NAS seminar featured academic, investment, agency, and civil society perspectives from around the world that explored:

  • How adaptation action is counted, financed and evaluated, including in the context of climate resilient development;
  • The challenges of adaptation investment decision-making within competing and sometimes overlapping contexts (e.g., the relationships of strict criteria to vulnerability reduction to resilience building, and of adaptation finance to climate finance to development finance); and
  • How the effectiveness of adaptation activities and resilience building can and should be measured.ccrc_wordcloud

The discussion helped illuminate an evolution of terminology, concepts and experience at the intersection of adaptation science, practice and policy. The response to climate change is no longer just about mitigation and adaptation. The PA’s purpose (laid out in Article 2) clearly broadens that response to include climate resilience, while also omitting “adaptation” from the language on finance flows (i.e., making them “consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”).

This evolution is confounding decision-making around support and evaluation, which is in turn impacting the accounting of adaptation finance and the capacity of on-the-ground communities to adequatefieldly deal with climate change.

These are a few of the key takeaways drawn from the robust presentations and discussion:

  • The ultimate goal is that of reducing vulnerability, and the strategy is to build dynamic climate resilience (not just resilience to a certain set of conditions). Thus, resilience, as a goal, should be embedded into adaptation interventions/projects of every kind, with regular reviews tied to the results of resilience building activities.
  • A shared system of resiliency principles is needed to guide financial support and implementation, as opposed to a unified definition of adaptation (as crafted by a cadre of multi-lateral development banks) or a host of different definitions (currently being utilized by a broad set of agencies).
  • There is no convergence across the wide-ranging landscape of indicators of success and their associated metrics; but tapping other fields (e.g., evaluation) and establishing linkages between developers and implementers can significantly address this issue.
  • Lessons to date point to adopting flexible adaptation pathways and success indicators that: a) account for all system resources (economic and non-), and b) rely on iterative, stakeholder-sensitive decisions over time (built-in learning, decision-making under uncertainty).

Let’s hope these and other lessons rapidly translate into credible, applicable guidance capable of assuring finance support accountability and long-term effectiveness of on-the-ground interventions. Developing countries need both.


A Numbers “Crunch” – Trump & The UNFCCC

Number-crunchingLike most every other institution around the globe, for a while now, the UNFCCC has been called on to do more with less. This is clearly reflected in the Executive Secretary’s recent budget presentations that report contributions to UNFCCC trust funds have declined significantly for at least the last 5 years. In fact, 2016 contributions are just 43% of the 2012 level. And all the while, the COP has added new tasks, including, most recently, the raft of work associated with the 2015 Paris Agreement.reduce-boost-graph SmallbizTrends

At a COP22 informal session on November 11, Espinosa shared that the Secretariat, with its mandated zero-growth budget, will be unable to fully deliver on its current mandates. So, all countries are being called on to meet their full commitments and to increase their voluntary contributions.

It just so happens that the U.S. is a big piece of this budget picture, contributing (as of October 21) more than 20% of the total $30.3 mill* in 2016 receipts for the 3 non-Kyoto Protocol related funds. These include the Trust Fund for the Core Budget (with country-specific contribution levels based on UN-determined proportions) and two voluntary funds: Trust Fund for Supplementary Activities and Trust Fund for Participation in the UNFCCC Process (the latter to help developing country Parties attend COPs and other meetings).

Screen Shot 2016-11-17 at 11.50.06 PMAnd, of course, there is the ongoing U.S. climate funding via appropriations from Congress, development finance, and export credit, which totaled $2.6 billion in 2015. That was before $500 million was transmitted to the Green Climate Fund earlier this year in partial fulfillment of the $3 billion U.S. promise (that constitutes 30% of that fund’s total pledges). All of it adds up to a very big number in the climate finance world.

Then, on November 8, from stage right: enter President-elect Trump.

While the potential impact on the climate regime is about more than money (check out our Monday story), the finance implications are indeed great. Considering Mr. Trump’s campaign pledges, the Republican Party’s platform position, and the Transition Team’s recent statements, when it comes to climate funding, those calculators only subtract.

Many negotiators and high-level ministers attending COP22 from around the world have been cautioning against hasty speculation on U.S. policy post-January 20, 2017. Behind the scenes, however, and certainly within the Secretariat, the number crunching has doubtless turned to nail biting.

 

* Based on 11/17/16 EUR-USD exchange rate

(Image credits: Calculator = seocopywriting.com; Diverging costs/revenue= smallbiztrends.com; Scissors & currency= neatoday.org)


LDCs – Concern, yet hope, entering Week 2 of COP22

Courtesy www.afd/frAt the end of the first week, many were expressing concern that Marrakech’s purported COP of Action wasn’t measuring up for the world’s most vulnerable countries. Yesterday morning, Least Developed Countries (LDC) Chair, Tosi Mpanu Mpanu, identified troubles on key issues of ambition, adaptation / loss & damage, and climate finance. In particular, he noted that:Screen Shot 2016-11-15 at 3.37.17 PM

  • The Paris Agreement rulebook development is being stymied and strong action on pre2020 commitments is not materializing.
  • Adaptation needs of the most vulnerable, exploding as a result of inadequate mitigation by developed countries for decades, are not being addressed in a balanced manner, with even the adaptation registry being complicated. And, foot dragging on other seemingly simple decisions, such as the review of the Warsaw International Mechanism for Loss and Damage (WIM), is eroding trust and confidence that the global community will concretely respond to the very real and devastating losses and damages increasingly suffered by poor countries on the front lines of climate change impacts.
  • Developed countries have been blocking the Paris-mandated inclusion of the Adaptation Fund in the Paris Agreement rulebook, and the developed country recent “roadmap” to reach the promised $100 billion/year by 2020 lacks credibility – – unfortunate circumstances in the face of developing countries’ low-carbon climate resilient development needs now estimated to collectively exceed $4 trillion.

Work did continue yesterday, while heads of state and ministers arrived for the high-level segment. By the end of the day, among some positive developments were two improved draft decisions on the WIM (here and here). (More on these to come.) Additionally, the Green Climate Fund expedited grants for Liberia’s and Nepal’s National Adaptation Plans. Climate finance remains a hot topic on this week’s COP22 agenda, in particular, the upcoming High-Level Ministerial Dialogue on Climate Finance; so, Screen Shot 2016-11-15 at 3.09.30 PMhope remains for new and encouraging news on that front. (Check back with us on this, too!)

 

Photo credits: Action Time courtesy www.afd/fr; Informal negotiations courtesy iisd enb


Financial instruments ignite SCF Forum on L&D risk

Screen Shot 2016-09-14 at 12.19.31 PM Some sparks flew and some eyes got opened at the 2016 Forum of the UNFCCC Standing Committee on Finance (SCF), held in Manila last week. The Forum’s exploration of financial instruments for addressing the risks of loss and damage was at the request of the Executive Committee of the Warsaw International Mechanism (WIM) on Loss and Damage (L&D) in service of Action Area 7 of its 2-year workplan. (For some past posts on the WIM, including on this significant SCF-WIM linking, see here.)

The Forum drew nearly 150 representatives of governments, financial institutions, civil society and the private sector. The webcast (which covered much of the meeting) along with informative tweeting (#scfmanila) from a number of participating institutions and individuals offered remote observers some interesting insight. But first a little context/framing:


Addressing L&D – Basically, addressing L&D involves: 1) avoiding it, and 2) meeting it when it is unavoidable. L&D can be avoided primarily through mitigation and adaptation. In addition, reducing the risks of L&D (e.g., through early warning systems and disaster GITEWSconcept14001preparedness plans) can help prevent it. Unavoidable L&D can be minimized through certain types of risk management (sharing, savings/credit, insurance instruments, catastrophe bonds). Because L&D still occurs, even if it is minimized, responses to it rely on disaster response and management and climate services.

WIM workplan Action Area 7 – A close reading of Action Area 7 reveals one goal, one objective (how the goal is to be accomplished) and one strategy/action (how the objective is to be met):

  • Goal = facilitate finance in L&D situations;
  • Objective = “encourage comprehensive risk management;” and
  • Strategy = “diffus[e] information related to financial instruments and tools that address the risks of [climate-induced] loss and damage…”

Action Area 7, through encouraging risk management, tends to both avoiding L&D and minimizing unavoidable L&D. As for the SCF Forum, it fit within Action Area 7’s strategy of diffusing information, by covering risk pooling and transfer, catastrophe risk insurance and bonds, contingency finance, social protection schemes, and other instruments.

Cat bond transaction structure (rms.com, 2012)

Cat bond transaction structure (rms.com, 2012)

Throughout the event, however, it was clear that some participants were focused on the goal, while others (predominantly the insurance experts) were focused on the objective and/or strategy. The resulting friction illustrated the philosophical and political tensions that continue to fester in the climate regime in the absence of financial support to directly address loss and damage. The workplan, after all, is devoted essentially to compiling, diffusing and leveraging information. (We wrote about the Paris Agreement/Decision role in this evolving issue in our COP21 Documentation Project.)

The Forum did enhance understanding both of the gaps and opportunities with existing financial instruments, as well as the barriers that must be addressed to reach the most vulnerable with any versions of current and emerging risk instruments. (See the Forum page for presentations and the WIM Financial Instruments page for a well-organized host of relevant resources.)

Among the conclusions was that both cross-sectoral collaborations and integration of approaches are vital to deal with the risks of L&D. Importantly, two significant areas of concern remained unaddressed:

  1. The absence of actionable approaches for addressing slow-onset processes nclimate2016-i1from the insurance industry and related market players. Not surprising, given that there are generally no dramatic moments of humanitarian focus and no money to be made.
  2. The absence of financial instruments and tools to address non-economic losses. Without a means to monetize, the financial sector has yet to be effectively engaged toward this cost.

We will be tuning into the WIM Executive Committee’s 4th meeting later this month to learn its response to the Forum and more.


Getting serious about 1.5°C

ap_611245925978_wide-0d885fdde8a9b22d1501efec383f5eb03654796c-s900-c85As we reported earlier, the historic Paris Agreement of December 2015 established a long-term temperature goal to keep global temperature increase “well below 2°C” and to undertake efforts to limit that increase to 1.5°C, “recognizing that this would significantly reduce the risks and impacts of climate change.”

The COP21 decision adopting the Agreement included an invitation to the Intergovernmental Panel of Climate Change (IPCC) “to provide a special report in 2018 on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways.”Screen Shot 2016-08-26 at 4.44.05 PM

The impacts on lives, livelihoods, and ecosystems is likely be quite different between a 2°C and a 1.5°C increase. And, while scientists have been characterizing the former for some time, too few studies have focused on a 1.5°C hotter world. So, this report will be very critical for policymakers.

The IPCC accepted the COP’s invitation in April and established an 11-member Steering Committee for the Special Report from among its top officials. A scoping meeting of more than 80 experts nominated from around the world was held in Geneva last week (August 15-18) to draft a Scoping Paper “describing the objectives and an annotated outline of the Special Report as well as the process and timeline for its preparation.” Carbon Brief, in reporting occgraph1n the meeting, characterized part of the message from Dr. Hoesung Lee, IPCC Chair, to the gathered experts this way: “[T]he report will need to spell out what’s to be gained by limiting warming to 1.5°C, as well as the practical steps needed to get there within sustainability and poverty eradication goals.”

Outcomes of the 1.5°C Special Report scoping meeting will be presented to the IPCC’s 44th Session in October, and once the report structure is approved, “a call for authors” for each chapter will go out.

It has become clear for many, though, that limiting the global temperature increase to 1.5°C is pretty much impossible at this point. In fact, based on IPCC carbon budget data (originally crunched in 2015) and assuming current levels of CO2 emissions, Carbon Brief concludes that there is a 66% chance we’ll reach that 1.5°C increase in just 5 years.carboncountdown

This IPCC report certainly won’t come too soon!


Global Goal on Adaptation: work has begun

The next in our series of posts on SB44/APA1adaptation mosaic

Work on the Paris Agreement’s (PA) global goal on adaptation was launched by the Subsidiary Bodies (SBs) and Ad Hoc Working Group on the Paris Agreement (APA) in Bonn in May. We reported earlier on the global goal here and here.

The APA, SBTA and SBI agendas contained three items directly addressing elements of the PA’s Article 7 (Adaptation) and Article 9 (Finance) in support of this important qualitative goal:

  1. Further guidance in relation to the adaptation communication referred to in Art. 7.10 and 7.11 (APA)
  2. Development of modalities and procedures for the operation and use of a public registry referred to in Art. 7.12 (SBI)
  3. Modalities for the accounting of financial resources provided and mobilized through public interventions in accordance with Art. 9.7 (SBSTA)

Consideration of these occurred in contact groups and informal consultations, supplemented by bi-lateral meetings.Screen Shot 2016-06-28 at 2.34.09 PM

There was also work on capacity building, technology development and transfer, and transparency of action and support under the PA, all of which relate to adaptation planning, financing, implementation, and reporting. Beyond that, the SBs addressed existing Convention components and programmes that will ultimately serve the global goal on adaptation, including national adaptation plans and the Nairobi work programme on impacts, vulnerability and adaptation to climate change. Capping it off during week 2 was the Technical Expert Meeting on “enhancing the implementation of adaptation action.”

While this was a robust intersessional for action related to the global goal on adaptation, it was not all smooth sailing. (See our upcoming coverage on items #2 and #3 above.) For instance, further guidance on adaptation communications (item #1 above) was added to the APA agenda during week 1 following objections from G-77/China that the original provisional agenda did not follow the PA and its implementing decision. Additionally, spirited discussions on this item in open-ended informal consultations honed in on what adaptation communicatiohom1ns are intended to achieve, and the nature and scope of the guidance for those that should be developed. Developing countries asserted the need for flexibility in communications (highlighting differentiation), while most countries supported at least some common minimal communications parameters in order to achieve the critical linkages with the transparency and stocktaking components of the PA. It was a good first step, even with historic geo-political lines still visible.

The conclusion adopted on this agenda item calls for Parties to submit their views on adaptation communications by September 30, in order for the APA Co-Chairs to prepare for further work at the resumed first meeting during COP22 in Marrakesh in November. We will be watching those submittals and the next meeting, given that adaptation communications bear significantly on the success of the Paris Agreement.


Counting On Big Bucks for Adaptation – More News from SB44

Time to Adapt - ClockFinancing Adaptation was a big topic in Bonn at SB44 last month (see our SB44/APA1 overview here), and rightly so, with the newly released UN Environment Program (UNEP) 2016 Adaptation Finance Gap Report. The report states that current international public finance flows for adaptation are only one-third to one-half the amount needed right now. Additionally, the roughly $22.5 billion in 2014 adaptation finance flows to developing countries will need to be 6-13 times that in 2030, or $135-$292 billion, and 12-22 times that by 2050. That’s $270 billion to nearly half a trillion per year.

In Bonn, we witnessed the launch by the Subsidiary Body for Scientific and Technical Advice (SBSTA) of its process to develop an accounting framework for climate finance under the Paris Agreement (per Decision 1/CP.21), a long-sought goal of developing countries. Other UNFCCC institutions and the secretariat held adaptation finance workshops and updates related to various COP directives. And, side events extended the dialogue, providing attendees insight into the principles of and country experiences with fossil fuel subsidy reform and fuel levies to fund adaptation activities, as well as the critical and growing role of private finance for adaptation programs and projects.newsletter_article_photo_1

Among the UNFCCC events was the second of two (one each in 2015 and 2016) in-session half-day workshops on pre-2020 long-term finance, held in accordance with 5/CP.20. Executive Secretary, Christiana Figueres, opened the workshop – one of her last activities before stepping down from her celebrated 6-year post on July 6. There were presentations, panel discussions, and breakouts covering topics ranging from enhancing the understanding of adaptation finance and the role it plays in meeting developing country needs, to scaling up and enhancing the transparency of that finance. (Presentation slides and audio can be found here.)

Three of the key needs identified in the workshop represented adaptation financing themes that reverberated throughout the Bonn meetings:

  • Scaling up of availability of funds – The UNEP Adaptation Finance Gap starkly underscored this need and buttressed arguments for fossil fuel subsidy reform and fuel levy policies to support adaptation finance.
  • A clear definition on adaptation finance to move tracking forward – Though not the most contentious negotiation point in the SBSTA’s agenda item 12 on developing modalities for climate finance accounting (referred to above), the informal consultations were marked by developing countries’ objection to using an un-vetted definition of climate finance (sourced from the 2014 Biennial Assessment and Overview of Climate Finance Flows Report of the Standing Committee on Finance (SCF)). We may see this issue come up again in Parties’ and observer organizations’ submittals of their views on the development of modalities (due by August 29) and in the in-session workshop now planned for SBSTA 45 (Nov. 2016). (Watch for our fuller coverage coming soon on the Bonn negotiations regarding “modalities for the accounting of financial resources provided and mobilized through public interventions” under Article 9.7 of the Paris Agreement.)
  • Private sector engagement – This major thread, building on the focus leading up to and at COP21 (see here and here), grew steadily across SB44/APA1, and we expect it’s continued weaving into approaches to address climate change across the board – in mitigation, adaptation and loss and damage. Many are hanging their hopes for sufficient adaptation finance on this sector.

Climate-change-adaptation.2jpgIt remains unclear, as yet, how the fast growing requirement for adaptation finance will be met, especially given how far behind current needs the flows already are. We are looking forward to the SCF’s 2016 Biennial Assessment and Overview of Climate Finance Flows, along with a number of adaptation finance events leading up to COP22 to help shed some light on the range and reach of the pathways. Many working on this critical issue are well aware that the price of inadequate adaptation is the tragedy of loss and damage.


Loss and damage at SB44 – Whither the WIM?

101803802-495496305.530x298While, as we posted last week, loss and damage (L&D) was not on the agendas of the Subsidiary Bodies or the APA at the UNFCCC intersessional meetings held in Bonn, May 16-26, some attention was paid to this important issue.

Four side events covered varying aspects of L&D policy and action, both inside and outside the UNFCCC. These included climate migration, climate litigation, non-economic losses (we posted on this last week), and existing disaster risk management tools. (Links to event presentations can be found at the SB44/APA1 side event site.)

In addition, the Presidencies of COP21 and COP22 held a meeting for observer delegations to provide input on Article 8.4Screen Shot 2016-06-10 at 5.11.27 PM of the Paris Agreement and action areas of the 2-year workplan of the Warsaw International Mechanism (WIM) Executive Committee (Excom). (As we reported earlier, the workplan is scheduled to be completed for review at COP22.) Among those presenting were: the Organisation for Economic Co-operation and Development (OECD), Climate Action Network (CAN) International, the Munich Climate Insurance Initiative, a range of NGO constituency groups, the Food and Agriculture Organization (FAO), and the International Indigenous Peoples’ Forum.

Dr. Saleemul Huq, Director of the International Centre for Climate Change and Development (ICCCAD) in Bangladesh, and one of the (Least Developed Countries) LDCs’ top advisors,Screen Shot 2016-06-10 at 5.13.02 PM suggested that the purpose of this event was “to gauge the level of interest amongst parties and observers.” Given the throng of attendees and the passion with which many statements were delivered, it is clear that interest and engagement levels are high.

And, there is good reason – this is a highly political subject. According to presenters at the side events, developing countries are increasingly experiencing much worse L&D and sooner than expected from drought, heat waves, major storms, sea level rise, and salt-water intrusion. Climate-induced migration is gaining wider acknowledgement and attention. At the same time, L&D has essentially achieved recognition as a separate pillar of the climate regime through Article 8 of the Paris Agreement. Yet, the Paris decision included a clause preventing Article 8 from serving as “a basis for any liability or compensation;” on top of which, no specific reference to financing to address L&D is present in either the Agreement or the decision.

Concern is great, and the primary message is that the WIM should ramp up its engagement with the robust sphere of non-state actors and resources to both address current actual losses and damage and establish equitable, aggressive policies and strategies to avoid future L&D. Hotbeds of engagement exist for all of its current workplan action areas. (The 2-year workplan can be found here.) Dr. Huq considers migration and finance as “the two most critical,” and recommends fast-tracking those.

Screen Shot 2016-06-10 at 4.50.21 PMThe urgency is mounting ahead of COP22. Among the questions we’ll be following, as the Excom holds its final 2016 meeting in September, is whether the 20-person body will seek an extension or try to meet the review deadline. Among its tasks is to “[d]evelop a five-year rolling workplan for consideration at COP22 building on the results of this two-year workplan…”

Will the Excom fail to deliver? Will a delay lose the political momentum of COP22? Neither those suffering now, nor those at current risk can afford that.


Loss and Damage in Bonn (sort of)

Screen Shot 2016-06-02 at 7.23.56 AMThe 44th meeting of the UNFCCC Subsidiary Bodies (SBs) and the first meeting of the Ad Hoc Working Group on the Paris Agreement (APA), held in Bonn, Germany, May 16-26, were full of action. Our delegation report-back started earlier this week, here and here. Key work areas receiving consideration included, for example: preparation for the implementation of the Paris Agreement; adaptation planning and action (and the Adaptation Fund); capacity building in developing countries; gender and climate policy; and market and non-market mechanisms to incentivize mitigation action.

Yet, Loss and damage (L&D), what many consider the third pillar of the climate regime, 131206_loss_and_damagegot little attention in Bonn. A few observers noted they expected more than two posters and one side event on the work of the Warsaw International Mechanism on Loss and Damage (WIM), given the upcoming COP22 review of progress on the WIM Executive Committee (Excom) 2-year (2015-2016) workplan, and L&D now being the subject of a separate article in the Paris Agreement. Some also expressed confusion about a special event for observer delegation input on “issues related to the Warsaw International Mechanism in the lead up to and beyond COP22,” convened by the COP21 and COP22 Presidencies on May 24 (we’ll speak to this in an upcoming post).

The reason for the limited attention is that the WIM, created at COP19 to address L&D, functions under and reports to the COP independently, rather than being part of the work of the SBSTA and SBI. Additionally, though Article 8 of the Paris Agreement is devoted to the WIM, the Paris decision gave no additional instructions to the Excom for 2016 that might have tied it to the SB44. The Excom is heavily engaged in its 2-year workplan (2015-2016) through 3 meetings in 2016 (January, April, September). You can follow the work, including calls for submissions via the Excom meetings site.

The WIM L&D side event, Shining the light on non-economic losses: challenges, risks and lessons learned for addressing them, was well-crafted and well-attended. (The robust presentation can be accessed from the Side Event list, by scrolling down to the May 18 event and clicking on the “Presentations” link.) Screen Shot 2016-06-02 at 7.20.03 AMNon-economic losses, the focus of Action Area 4 of the 2-year workplan, are losses for which a monetary value cannot be readily assigned, for which there is no market price. As defined by the UNFCCC technical paper, these are losses of “life, health, displacement and human mobility, territory, cultural heritage, indigenous/local knowledge, biodiversity and ecosystem services.” These can be, of course, the greatest and worst losses of all. The side event’s key objectives were to:

  • Raise awareness and understanding of the nature and extent of non-economic losses;
  • Put a spotlight on some of the challenges and risks that non-economic losses pose to developing countries;
  • Highlight some of the lessons learned associated with addressing non-economic losses, including how to integrate measures to reduce the risk of non-economic losses in comprehensive approaches to address loss and damage.

An upcoming post on L&D from Bonn will cover the special event for observer input on the WIM, and a couple of exciting unofficial side events addressing the limits to adaptation and progress on climate litigation. Also stay tuned for more info on the WIM Excom.


Solar Energy Growth Really Heating Up

News about the increase in solar energy potential and development Montgomery Cty Divisionhas been robust across all the climate news aggregators for some time. And, targeted outlets like the U.S-based Solar Energy Industries Association News (weekly) and the Australian-based Solar Daily abound with exciting stories. Screen Shot 2016-05-05 at 8.11.42 PMThe overwhelming consensus is that this technology has really caught fire, as costs have dropped and attention to the growing dangers of climate change has expanded.

Global adoption is expected to get a substantial lift from the International Solar Alliance (ISA). We brought you news of this initiative, launched in Paris at COP21 (December 2015) by India and France. Screen Shot 2016-05-05 at 8.07.02 PMIt now has a steering committee, an interim secretariat, and roughly 120 country members, focused primarily in the region between the Tropics of Cancer and Capricorn. (See ISA’s Working Paper here.) Its ambitious goal of facilitating U.S. $1 trillion for solar development by 2030 became a pledge at ISA’s April meeting, held as a side event during the signing of the Paris Agreement. Joining co-hosts Piyush Goyal, India’s Minister of Power, Coal & Renewable Energy, and Ségolène Royal, France’s Minister of the Environment/CO21 President, were ministers and representatives of 25 countries. They also agreed to collaborate in scaling up currently small-scale solar technologies, pursue R&D, and build technology capacity, all with the aim to lower the cost of finance and facilitate investment.

The cost of solar power is already declining rapidly. Earlier this week, The National (a publication of Abu Dhabi Media) reported a new record-low price of U.S. 2.99 cents/Kwh in a bid by a consortium of developers to install an 800 MW set of solar projects in Dubai, United Arab Emirates. This represents a 50% drop in just one year in the lowest price for solar, to a figure that is now below the cost of new coal-fired power in Dubai.

Here in the U.S., the #MillionSolarStrong campaign is sharing the news that more than 1 million domestic systems have been installed, Screen Shot 2016-05-05 at 8.13.15 PMwith the 2 million mark estimated to be crossed by 2018. A sure sign that this technology has been mainstreamed, the campaign’s solar declaration has more than 80 significant organization and corporate signatories; and even Obama tweeted the hashtag.

Speaking of ‘catching on fire,’ Solar City just released interesting data and illustrative animations on solar’s “contagion” in the U.S. Researchers analyzed this trend in homeowner adoption a couple of years ago, and attributed it to “neighbor effects,” neighborhood-solar-panels-456x295in which people living near new installations get a chance to readily talk to those new adopters about their decision, and can begin to see solar as more of a possibility for themselves. Incentives, including referral discounts and leasing as an alternative to buying, seem to be contributing, as well.

Overall, solar’s role as a mainstay of our global low-carbon energy future is quite a sizzling prospect.


Climate – Free Trade Policy Mismatch

bl09_free_trade_jp_2367461fThe Transatlantic Trade and Investment Partnership (TTIP) was high on the U.S.-EU agenda last week (here and here), reigniting nagging questions about the continued disconnect between international trade policies and climate change policies that has been problematic for decades. The Organization for Economic Co-operation and Development (OECD) has acknowledged that the misalignment allows international trade policies that hinder the transition to low-carbon economies.

Two factors contribute to this climate vs trade regime conundrum. Firstly, national boundaries specifically apply for global warming emissions, but are quite porous for international trade agreements. The UNFCCC and the new Paris Agreement provide for countries to determine their own efforts to reduce emissions. (The Kyoto Protocol’s specific emissions caps for Annex I Parties were part of the reason that system failed.) International free trade instruments, on the other hand, hold that purchasers should be able to buy from whomever they want and sellers should be able to sell to whomever they want, with little hindrance in crossing those national boundaries.

As a result, countries with large economies and growing imports (e.g., the U.S.) have driven increased global warming without acknowledgement or constraint, and outsized multinational corporate influence over trade deals has been unfettered, to the climate’s detriment. tppp-cc-cc-565x318Also part of the problem is the World Trade Organization (WTO), which does little to address fossil fuel subsidies that continue to incentivize extraction.

Secondly, trade deals have strong accountability provisions and consequences, whereas, the UNFCCC and its Kyoto Protocol do not. Even the Paris Agreement, in its final form, will have to rely on “naming and shaming” to counteract Party foot dragging on current and future mitigation goals.

On the other hand, countries can and do sue other countries through WTO dispute settlements under trade deals. For instance, the U.S. sued India over its domestic solar energy industry protections designed to accelerate its economic and energy sustainability.

Additionally, an arbitration process known as Investor-State Dispute Settlements (ISDS) common in investment agreements (another form of international “trade”) allows corporations to seek damages from governments for domestic policies that limit their activities. Trans-Canada sued the U.S. over Obama’s rejection of the Keystone XL pipeline. Plus, anti-fracking bans and other measures to limit extraction of fossil fuels are subject to such claims. tpp_shutterstock_590Multinational corporations have used the ISDS process and the threat of it with great success. (Elisabeth Jeffries explores this and more in a January 2016 feature in Nature Climate Change [subscription required].)

Granted, environmental protections within free trade and investment agreements have expanded over the years. The Trans Pacific Partnership (TPP), recently agreed to by 12 Pacific region countries, including the U.S., for the first time “embed[s] conservation commitments” into the main text of the agreement, ensuring they are subject to the agreement’s dispute resolution process. (The Senate has yet to ratify the TPP.) For the TTIP, the EU has proposed an alternative to the ISDS – an Investment Court System (ICS), curtainling grounds for corporate compensation, that some believe could introduce a more transparent and balanced arbitration process to trade agreements.

Environmentalists and climate change policy advocates are not swayed. ISDS trade deal shares 1.5In particular, the TPP is expected to undermine sovereignty and incentivize U.S. hydraulic fracking for natural gas exports. The TTIP is criticized for its failure to ensure environmental factors can moderate economic ones in the ICS, and for its broad definitions favoring investors over governments. Overall, according to prominent economist and scholar, Joseph Stiglitz, both instruments are expected to “undercut” the Paris Agreement, and “cement in place a system that treats the environment as distinct from – and subordinate to – international trade and investment.”

Aligning the global climate and international trade regimes is, apparently, unfinished business.