At COP21 Climate Finance could be a “Deal-Breaker”

The governments of more than 190 nations and at least 80 world leaders, including Barack Obama and Xi Jinping, such is the magnitude of the personalities expected to attend the most important chapter ever of the Conference of the Parties on climate. An huge organizational and security effort was already underway in host city Paris before the November 13 terror bloodbath. Despite the mourning and the new extreme security level "COP will take place," said French Pres. François Hollande.

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Under a sky that was recently often so engulfed by smog to hide part of the Eiffel Tour, the conference took on new importance. The first large and truly international event after the terrorist attacks, it will see the presence of world leaders that represent the whole spectrum of the political stances towards the Caliphate, which thrives on oil, a critical element of the conference.

It is too early to tell whether the 12 days of fraught negotiations will prove enough to clinch an agreement on how to keep global warming from increasing more than 2°C above pre-industrial levels – the threshold that scientists calculate will allow to avoid the catastrophic effects of climate change and then its irreversibility. We are far from this target, because the proposed submitted translate in a cap at an average of 3.5°C (6.3.°F).

Some nations are paying a high toll to the impact of climate change already at the current level of under 1°C. Those include the US and China as well a number of the most vulnerable small developing countries. The biggest polluters, the again the US and China, but also your Europe and India, have very different views on how to tackle emissions without having the economy pay a too high a price.

Highly divergent national or regional interests are significant stumbling blocks on the road to a global deal, let alone to it being just a protocol or a binding treaty.

The US, which withdrew from the Kyoto Treaty, the world's only binding climate treaty, under the George W Bush presidency sanctioning its failure, is committing neither this time to "legally binding reductions targets," as the US secretary of state John Kerry told the Financial Times. The Obama administration, while keen to thrash out a deal in Paris, (this is Obama's last large conference) is worried that a Republican Congress will limit US pledges to its self-interest.

The EU warned Washington that a global climate deal must be legally binding, better so if it included a review process that allowed using the threat of withholding climate aid as a stick against developing countries that renege on their promises.

This brings up the other key question and highly contentious issue of climate finance, which could make or break a global agreement. Developing countries want the rich world to provide them with financial aid to adapt their economies and infrastructure to face the likely damage from climate change, brought about in the first place by the richer countries' industrialization. They also need to invest in clean technologies to cut their greenhouse gas emissions.

In Copenhagen, at the very last minute, rich countries pledged to provide financial flows of at least $100bn a year by 2020to bring developing countries on board. But according to the October OECD's count, only $87 billion had been secured.

Furthermore, NGOs have questioned, EurActiv reports, that only 16% of the funds in that count are in the form of real grants to the poorest countries, while the difference would be covered by adding "worthless junk".

The rich countries' history of not living up to aid promises is adding to poorer countries' fears of existing aid flows being "greenwashed". Some basic development objectives, like access to safe drinking water, healthcare or disaster relief, could be easily relabeled. "There is no clear delineation between adaptation assistance and development aid," Samuel Fankhauser of the Grantham Research Institute on Climate Change and the Environment at LSE wrote.

Counting loans with interest as aid is another book-cooking practice that would not convince developing countries to sign up at the COP21. France announced that it will spend an extra €2 billion per year bringing France's total contribution to €5 billion, but it is also the only European country that will thus a 35% of $1 billion paid back.

Here is where the Intended Nationally Determined Contributions – or INDCs, the pledges that countries have made towards emissions reductions – intertwine with climate finance.

Take India, for instance. It pledged to increase carbon and other greenhouse gas emissions more slowly than growth (7.5% a year), but its emissions are forecasted to reach a stunning 9bn megatonnes by the end of the next decade. This would suffice to make it hard for the world to meet the 2C target, because India's share of emissions alone would make up about one-fifth of the total annual emissions that scientists calculate the world can emit by 2030 without jeopardizing a 50% chance of avoiding the dangerous 2C threshold.

India’s pledge to reduce its emissions intensity is moreover conditional on $2.5 trillion funding from developed countries. Were this aid not available, it could just blame failure on the lack of funding.

Climate finance could turn up to be the ace up the sleeve for developing countries. The Finance Ministers of the newly-found V20 group (the 20 countries put at high risk and already suffering because of the failure to address climate change, voiced, for instance, support for an international financial transaction tax among other kinds of international climate change financing. To make their case they can also bring up the $1.9 trillion in subsidies that "oil the wheels of the fossil fuel sector globally every year," as an OXFAM report reads.

While 2015 is on track to become the warmest year on record, the hope is still that it will deliver, as the V20 statement put it, “an agreement entirely consistent with the non-negotiable survival of our kind.”


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