This is the last part of my blog series called SOAS Hopes & COP26 Outcomes, in which I provide readers with my interpretation of the SOAS outlook on COP26 and evaluate them against COP26 outcomes. In part 3, I discussed the fresh agreements on Nationally Determined Contributions (NDCs) and the extent to which globally differentiated responsibilities and response capacities were taken into account. In this final part, I’ll address globally differentiated climate change impacts in light of the agreements and pledges made on climate finance and loss and damages. Apart from this, I’ll discuss the COP26 consideration on Just Transitions and the progress made in terms of Article 6.
There’s a lot of talk of finance in the Glasgow Climate Pact (GCP) draft. Articles III, V and VI each highlight the important role of climate finance. Paragraph 5 “notes with serious concern that the current provision of climate finance for adaptation remains insufficient to respond to worsening climate change impacts in developing countries.” Multilateral development banks, financial institutions and the private sector are called to enhance the mobilisation of finance towards an Adaptation and Least Developed Countries Fund. New pledges at COP26 have resulted in a flow of $356mn towards the Adaptation Fund and $413mn towards the Least Developed Countries Fund. When it comes to the necessary annual funding towards developing countries, Paragraph 26 calls to increase the annual climate finance target beyond $100bn. What remains unclear however, is whether and when initial shortfalls on funding will have to be met.
In terms of climate vulnerabilities, Paragraph 32 emphasizes the provision and mobilization of concessional financial resources – loans to climate vulnerable countries should be offered against non-competitive and more affordable interest rates. Paragraph 29 specifies that climate vulnerability countries should be provided with special drawing rights, supplementary foreign exchange currency reserves, as a form of additional support. In terms of loss and damages, Paragraph 42 highlights strong support for the operationalization of the Santiago Network – a vehicle that connects countries that seek assistance on loss and damage with various providers of technical assistance. Regardless of these accomplishments, the representatives of climate vulnerable countries like Guinea, Tuvalu, Tonga, the Marshall Islands, Fiji and Antigua and Barbuda express heavy discontent with the reality that funding for losses and damages remains strictly voluntary and pledge-based instead of being institutionalised in the shape of a funding facility.
The Just Transition is mentioned three times. Article IV on Mitigation mentions that the low-carbon transition should go hand in hand with “targeted support for the poorest and most vulnerable in line with national circumstances.” Article VII on Implementation elaborates a bit more on the meaning of the Just Transition namely, “the creation of decent work and quality jobs.” In this respect, the major outcome of COP26 has been the launch of the Just Energy Transition Partnership between the United States, Britain, France, Germany and the EU vis-a-vis South Africa. This partnership will provide South Africa with $8.5bn in grants and cheap loans over the next five years. While this partnership and its focus on unemployment prevention are definitely worth applauding, it should be noted that the GCP fails to address inequality and the fact that high income groups emit significantly more carbon than low income groups. For a critical reflection on whether the actual decision-making process at COP26 incorporated the Just Transition concept, I recommend this blog entry by SOAS scholar Giuseppina Siciliano.
So what about Article 6? Has the Paris “rulebook” been updated and are we all ready to play a fair and square game of carbon monopoly? Let’s break it down according to the draft decisions on the recommended updates of Articles 6.2, 6.4 and 6.8:
- Upward adjustments of NDCs must now proceed in a manner that avoids double counting. This means that a single amount of reduced carbon can only be counted towards the climate commitments or certified emission reductions (CERs) of one
- 5% of the “share of proceeds” of emission reductions related to the implementation of specific projects will be funnelled to the previously mentioned Adaptation Fund for climate vulnerable countries.
- 2% of existing CERs will be excluded from trade and NDCs. This is said to benefit the world’s atmosphere rather than a particular country.
- CERs granted between 2013 and 2020 can be used in a country’s first submission of NDCs.
- Non-market approaches will be overseen by the Glasgow Committee which is in charge of the development and implementation of work programme activities, their timeline and expected outcome.
The concrete dismissal of double counting and the introduction of a cancellation rate have definitely pushed market approaches to emission reductions into fairer realms. A deeper push into this realm, however, would not allow the transfer of previously held CERs to count towards the NDCs in an indiscriminate manner – a capacity-based distinction would have been fairer. And when it comes to the funding of non-market approaches, the draft decision only “Invites Parties to make contributions to the Trust Fund for Supplementary Activities for implementing the work programme.” In absence of the possibility to count non-market emission reductions to CERs or NDCs, one would expect a stronger regulatory measure that will guarantee actors to nevertheless fund them.
All things considered, I believe that most of the scholars who presented at the SOAS COP26 Briefing in October are pleased their concerns received a “shout-out” in Glasgow. Unfortunately, each of the points that were raised hasve only been addressed in a half-baked fashion. While the ambition to reduce carbon emissions seems to be at an all-time peak (45% by 2030!), the willingness to accept the difficulty of this task in the face of global economic and power imbalances leaves the poorest and most vulnerable to fend for themselves on rapidly declining shorelines.
Dr Chandni Dwarkasing is a postdoctoral fellow at the SOAS Department of Economics working on climate change policies, low-carbon transitions in developed countries and abstraction and formalization practices in the field of Ecological Economics.