MARTIN KHOR ON CANCUN - PART II

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6 january 2011

Complex Implications of the Cancun Climate Conference [II]

Martin Khor, Economic and Political Weekly, Vol XLV No.52 December 25, 2010


A ‘Great Escape’

Even as it facilitates the “great escape” of developed countries from their commitments, the Cancun text introduced new disciplines for developing countries. Indeed what is really new is the vastly expanded mitigation obligations placed on deve­loping countries. As the two developed country pillars of the Bali mitigation architecture have been almost fatally weakened, the attempt is made to shift the burden of propping up the edifice to the third pillar, the developing countries’ mitigation efforts. The developing countries are now obliged, through the Cancun text, to put forward their plans and targets for climate mitigation, which are to be compiled in a document and later in several registries to be regularly updated. It is a first step in a plan by developed countries (they have been quite open about it) to get developing countries to put their mitigation targets eventually as commitments in national schedules. An analogy has been made with the tariff schedules or services schedules in the WTO. Some developing countries have submitted information to the UNFCCC on the announcements made of their national targets; these are now to be registered, with the prospect of their becoming more formal and binding than originally expected when the information was provided and other developing c­oun­tries will now be pressed to also submit similar information.

National Reporting

The Cancun text also obliges developing countries to report on their national emissions, mitigation actions and their effects, in national communications reports once every four years and to also submit biennial update reports on the same topics. In other words, the reporting will be once in two years. These reports (to include information on mitigation actions, details of emissions, analysis of impacts, methodo­logies and assumptions, progress on implementation and information on domestic MRV) are to be subjected to scrutiny by other countries and by international experts. The Cancun text in fact gives a lot of space to the details of these MRV and ICA procedures.

These are all new obligations, and a great deal of time was spent in Cancun by the developed countries (especially the US) to get the developing countries to agree to the details of MRV and ICA. While international MRV of global financed mitigation actions of developing countries was agreed to by all in Bali, it was understood that there would not be an international scrutiny of actions that are domestically funded. The Copenhagen Accord changed this understanding, adding on the obligation of ICA for domestically-­financed mitigation actions. Many developing countries still have not associated with the Copenhagen Accord and they thus had not agreed to an ICA system. The Cancun decision however now obliges all developing countries to be part of an ICA regime. Many developing-country officials were increasingly worried in Cancun about how they are going to implement these new obligations, as a lot of people, skills and money will be needed to prepare the reports, while the mitigation actions themselves may involve major changes in their production and economic systems.

In fact, the developing countries made a lot of concessions and sacrifices in Cancun, while the developed countries managed to have their obligations reduced or downgraded.

Cancun may be remembered in future as the place where the UNFCCC’s climate regime was changed significantly, with developed countries being treated more and more leniently, reaching a level like that of developing countries, while the developing countries are asked to increase their obligations to be more and more like developed countries. This is reflected in the fact that the Cancun AWG-LCA text contains 20 operational paragraphs on developing countries’ mitigation actions (most of them containing new obligations), compared to only 12 paragraphs on mitigation by developed countries. The ground is being prepared for a new system, that would blur the differences that now exist in the mitigation commitments of developed countries versus the mitigation actions of developing countries, which would then replace the Kyoto Protocol and change the meaning of the UNFCCC itself. Cancun will be seen as a milestone in f­acilitating this regime change.

In the section on “shared vision”, the Cancun text recognises the need to limit temperature rise to 2 degrees C and that parties should take action to meet this goal consistent with science and on the basis of equity. Although the crucial principle of equity is recognised here, the proposal that India and many other countries had made (and that had been placed as an option in earlier drafts) that the goal should be “preceeded by a paradigm for equitable access to global atmospheric space” has been eliminated. This precise formulation had opened the door for examining historical and cumulative emissions, the occupation of carbon space, the issue of carbon debt, the method for debt resolution, and the implications for d­istributing the burden of future global emission cuts.

Also in this section, the parties agree to achieve the peaking of global and national emissions as soon as possible, with the time frame to be worked out within a year. Since many developed countries have a­lready reached an emissions peak and are now reducing emissions, what is new is the national peaking by developing countries. The agreement to achieve their national peaking as soon as possible when many of them are still at very low levels of emissions (and of economic levels) raises many questions as to whether and when they can achieve such a target. Many d­eveloping countries had rejected the obligation of “national peaking” when this had been placed as options in many previous drafts and their acceptance of the Cancun decision should be recognised as a major concession by them. The implications of this new obligation are not yet clear and will unfold in the near future.

On the demands of developing countries for concrete implementation by developed countries of their commitments to transfer finance and technology, the Cancun decision falls far short of concrete action or even concrete commitments. The measures agreed to are only to establish new institutional arrangements. The actual implementation is not addressed.

Green Climate Fund

The Cancun conference agreed on esta­blishing a new Green Climate Fund to function under the UNFCCC to finance m­itigation and adaptation actions in d­eveloping countries.

No decision was taken on how much money the fund will get. However, the text repeats the Copenhagen Accord language that the developed countries commit to a goal of mobilising $100 billion per year by 2020. While developing countries have insisted that most of the financing should be in the form of grants or payments and not loans, and should be sourced from the public sector rather than from the private sector or markets, the Cancun text only mentions a wide variety of sources of funding, which it listed as “public and private, bilateral and multilateral, including alternative sources”. Moreover the commitment is only to a “goal of mobilising”, and not to actual payment of the funds mentioned, and moreover this weak goal is also conditioned by it being in the “context of meaningful mitigation actions and on transparency”. This implies that the funds will be raised only if developing countries take on “meaningful” actions and implement “transparency” mechanisms (MRV and ICA) to the satisfaction of the developed countries. The $100 billion amount is far below what many studies (including by UN-DESA and the World Bank) estimate is needed by developing countries for their climate a­ctions, and also far below the G-77 and China’s proposal that developed countries contribute 1.5% of their GNP (which currently adds up to $600 billion).

A transitional committee was also set up to design various aspects of the fund. One important issue is its governance. The Cancun decision is that a 24-member board will govern the Fund, with equal representation between developed and developing countries. This is the proposal of developed countries, whereas the G-77 and China had advocated an “equitable representation”, which would have meant a majority of board members would be from developing countries. In the Cancun decision, developing countries, with four-fifths of the world’s population would only have half the seats on the board, which is yet another example of developed countries’ proposals holding sway.

It was also agreed in Cancun that the initial trustee of the fund will be the World Bank. This has been a key demand of the US and which many developing countries had been opposing, as they have had negative experiences with the Bank. The developing countries wanted competitive bidding for choosing the trustee, rather than appointing the Bank upfront.

On adaptation, the CoP decided to establish an Adaptation Committee to promote enhanced adaptation action, with views on its composition, modalities and procedures to be agreed on in the coming year. In relatively weak language, it also “recognises the need” to strengthen cooperation to understand and reduce loss and damage associated with climate change, including extreme weather events. The developing countries were advocating a stronger decision, to establish an international mechanism to deal with loss and damage. The text however mentions a work programme of workshops and meetings to address this issue.

Technology Mechanism

A technology mechanism was also set up under the UNFCCC, comprising a technology executive committee of 20 members, and a technology centre and networks. The executive committee as originally envisaged by developing countries was to have decision-making powers. The functions as elaborated in the Cancun text are more in the nature of “recommending actions” and “recommending guidance”. The Cancun text avoided any mention of intellectual property rights (IPRs), a­lthough the developing countries have argued that IPRs have an important influence over their access to climate-related techno­logies, and have made it a priority issue in the technology transfer n­egotiations. Even on the day before the conference closed, a draft text prepared in ministerial-led consultations had three options in a section on IPRs, one option was to leave out any mention of IPRs whatsoever; the second was to accept the strong position of many developing countries on reviewing the IPR regime and on the use of TRIPS flexibilities; and the third was to continue the dialogue on IPRs in the next year, or to hold workshops to be organised by other international organisations. It was expected that at least the third option would be accepted. However, the extreme US poisition, of no mention whatsoever, triumphed. The Cancun text gave up any recognition of the developing countries’ position on IPRs, without even accepting a very dilute compromise to keep talking about the issue.

On introducing market mechanisms as an issue to be discussed in the AWG-LCA, developing countries have been suspicious that this is a move to enable the shifting of market mechanisms now being used or discussed in the Kyoto Protocol to the convention track under the AWG-LCA, so that if the protocol is discontinued, the market elements (such as the use of carbon offsets through the Clean Development Mechanism and other market instruments that are sought to be introduced) can be i­nstalled in a new protocol or agreement. They thus want the issue to remain in the Kyoto Protocol group, and not be transferred to the AWG-LCA, or at least to postpone a decision on whether to discuss it in the AWG-LCA until the issue of continuing the Kyoto Protocol is settled. This option was included in earlier drafts. However, the option not to have market approaches in the AWG-LCA text has been eliminated in favour of the developed countries’ option to launch market-based mechanisms, with details given in the text.

The link between climate change and trade measures is another important issue for developing countries. The earlier negotiating texts contained the proposals by a large number of developing countries in strong language forbidding the use of unilateral trade measures such as border tax measures imposed on imports on the grounds of needing to take climate change actions. However, the Cancun decision has totally disregarded these proposals and instead chosen text on this issue that merely reiterates language of the existing Article 3.5 of the Convention, that measures to combat climate change should not constitute a means of arbitrary or unjustifiable discrimination or a disgused restriction on trade. This is seriously inadequate as it does not add anything new to the Convention to fight against climate-linked protectionism.

Conclusions

When the dust settles after the Cancun conference, a careful analysis will find that the adoption of an outcome may have given the multilateral climate system a shot in the arm and positive feelings among most participants because there was something for them to take home, but that it also failed to save the planet from climate change and helped pass the burden of climate mitigation onto developing countries. Instead of being strengthened, the international climate regime was weakened by the now serious threat to close the legally binding and top-down Kyoto Protocol system and to replace it with a voluntary pledge system.

Many delegates and observers, however, were looking positively to the future work. From this low base level of ambition in climate terms, there is much work to be done in 2011 to raise the level of ambition in both environmental and development terms, and to reorientate the international system of cooperation to address the climate crisis. The Cancun decisions may have made the climb more difficult.

Martin Khor (mkhor@igc.org) is at the South Centre, which is headquartered in Geneva.


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