Finance the crunch issue as COP talks enter final stages
EU and US need to offer developing world more to secure an ambitious deal
The negotiations at COP26 are building towards their climax. The next two days, and especially whether the EU and US step up on finance, will determine whether the UK presidency can deliver an encouraging result or a weak one that fails to increase the world’s chances of reducing climate change.
The presidency during the night released seven documents including draft texts for agreements — among them the central COP Decision text. Countries began a stocktaking meeting at noon UK time to give feedback on them.
The UK is expected to make further consultations before issuing a second draft in a few days.
Environmentalists welcomed the inclusion of some stronger language in this COP statement than has appeared before. But on many issues the draft text still amounts to an exhortation to action, rather than actual decided measures.
“It’s quite clear this is not a plan to solve the climate emergency,” said Jennifer Morgan, executive director of Greenpeace International.
The six page agreement “expresses alarm and concern that human activities have caused around 1.1°C of global warming to date” and “stresses the urgency of increased ambition and action in relation to mitigation, adaptation and finance in this critical decade”.
The parties recognise that “the impacts of climate change will be much lower at the temperature increase of 1.5°C compared to 2°C”, resolve to pursue efforts to limit the temperature increase to 1.5°C, and recognise that this requires “meaningful and effective action by all parties in this critical decade”.
Observers welcomed the fact that the text is now focusing clearly on 1.5°C — no one is still arguing for 2°C to be the target.
The text also calls on members to “accelerate the phasing out of coal and subsidies for fossil fuels” — but not fossil fuels themselves.
“The fossil fuel text is very important and a small step forward,” said Morgan. “It’s the first time that you’ve had a phase-out of coal in a UN text and certainly the need to phase out subsidies.”
Alden Meyer, senior associate at E3G, the climate change think tank, said the G20 had agreed in Pittsburgh in 2009 to phase out fossil fuel subsidies, but had still not done so. “The first rule of holes is: when you find yourself in a hole, stop digging,” he said. “We’re still digging the hole deeper by paying people to pollute and to produce and use more carbon.”
That fossil fuels are still being subsidised contrasts starkly with where climate campaigners believe the debate needs to be: eliminating oil and gas use as fast as possible.
The International Energy Agency has recommended that no new fossil fuel production infrastructure be built after the end of 2021.
Even the gains in the draft text on coal and fossil fuels are not secure yet. “I expect this to be a very contested sentence, that Saudi Arabia and other countries will come in and try to remove this paragraph, although it has no dates,” Morgan said.
Ideally, she said, the text would include the dates endorsed by the Intergovernmental Panel on Climate Change that coal should be phased out by 2030 in industrialised countries and in the 2040s everywhere.
“On the whole this does not provide the type of clarity that is needed,” Morgan said. “They need to have a heads of state summit in 2022. They need to come back every year, as the Climate Vulnerable Forum is calling for, to close this gap. It’s not clear the gap is going to be closed here by the end of Glasgow — they have to get to work and tighten this text in order to be able to leave here with a good conscience.”
Although the text on mitigation is at the more ambitious end of the range of options that have been discussed at COP, Meyer said it was “not as strong as the political direction given last week by leaders. The text also needs much more ambition on adaptation, loss and damage and finance.”
He said there were some placeholders in the texts of those sections, to allow for further progress in the ministerial negotiations in the coming days, particularly on adaptation and the post-2025 finance regime.
“We’ve particularly not seen the EU and the US step up to push for the strong accountability hooks that we need, or for the financial support they need to deliver for vulnerable countries to bring balance to the package,” Meyer said.
Developed countries are keen to secure more commitments for transparency on how countries are measuring their carbon emissions, and more ambitious decarbonisation pathways from countries like China and India.
But Eddy Pérez, international climate diplomacy manager at Climate Action Network Canada, contrasted the willingness of many countries to increase their nationally determined contributions in the run-up to COP with the developed countries’ reluctance to increase the finance available.
Meyer said he had seen the bargaining game go on at previous COPs, but “if the EU and the US hold their bargaining chips to the very end game on Thursday morning or Friday night their money is going to be worthless to get what they need and say they want out of Glasgow.”
Analysts are trying to remain optimistic that a deal can be thrashed out. Meyer said every time meaningful progress had been made in the COP process it had involved a coalition being formed between developed and developing countries.
At this COP, there is the makings of a consensus in the High Ambition Coalition, which includes developing countries and the Climate Vulnerable Forum — the EU and US are now in it, Meyer said.
“The US and the EU need to work with their partners in the High Ambition Coalition… and really strengthen their political demands in these last days,” he said. “That’s the only thing that’s going to bring us out of the downward spiral… that we could be in if they don’t do that and for both the US and the EU that means crossing some of their red lines coming in here.”
He said it would mean delivering a large scale-up of adaptation finance as part of the $100bn of annual climate finance rich countries promised to be channelling to poor ones by 2020. The $100bn target now looks likely to be met only in 2022 or 2023.
It would also require “assuring developing countries that there’s going to be lots more money, beyond the $100bn, to address the $850bn gap that the IEA and the World Bank have identified per year is needed to decarbonise the global South,” Meyer said. “If they don’t move on those red lines the HAC is not going to have the political strength it needs and we’re not going to get the outcome we need, so that’s the message we’re putting in to the US and Europe today at the highest levels — that they have to move on this.”