Bridges Special Update #1 | As Paris Agreement Goes Live, Focus Shifts to Implementation

6 November 2016

The UN Framework Convention on Climate Change (UNFCCC) annual conference will kick off on Monday in Marrakech, Morocco, with delegates from nearly 200 nations working primarily to advance the implementation of its Paris Agreement (PA). The landmark accord entered into force on Friday 4 November 2016.

 At press time, 97 signatories had ratified the accord, representing 69 percent of global emissions. Under its structure, all countries have outlined individual climate action plans, known as “nationally determined contributions” (NDCs), to be implemented from 2020 and expected to be scaled up over time. The PA also has overarching arrangements that deal with topics such as accounting, finance, and stocktaking. However, many key details must be addressed.

“This is a moment to celebrate. It is also a moment to look ahead with sober assessment and renewed will over the task ahead,” said Patricia Espinosa, UNFCCC Executive Secretary, and Salaheddine Mezouar, Morocco’s Minister of Foreign Affairs and Cooperation and president of this year’s climate gathering.

This year’s Twenty-second Conference of the Parties to the UNFCCC (COP22) follows several recent advances on international cooperation to tackle climate change, including on dealing with  aviation and shipping emissions and cutting climate-warming hydrofluorocarbon (HFC) emissions. These issues are complementary to the Paris accord and are dealt with under separate UN fora. Within the WTO, a set of members is also aiming to complete a tariff-cutting deal for environmental goods this year, including some products related to climate change mitigation and/or adaptation.

As the PA enters into force, officials and analysts say that successful implementation is crucial, while warning that even the current commitments under the accord are insufficient to ward off the devastating consequences of a warming planet. The UN Environment Programme (UNEP) said last week that 2030 emissions will be 12-14 gigatonnes above what is needed to limit global warming to two degrees Celsius above pre-industrial levels – even with the Paris NDCs.

Furthermore, the UN agency cautioned, continuing on such a path would mean that the world might see a 2.9 to 3.4 degree Celsius rise by 2100. Along with causing increasingly harsh weather conditions, this could ultimately lead to millions more people living in extreme poverty or otherwise facing a drastically reduced quality of life.   

In a more positive sign, the International Energy Agency (IEA) recently revised upward its five-year renewable growth forecasts, following strong investments last year in wind and solar. However, the global economy still relies on fossil fuels for nearly 80 percent of its energy needs currently, signalling the scale of the task ahead and the need for coordination across policy areas.

Structuring negotiations

The COP22 talks will take place in several configurations. Parties have assigned some items to an Ad Hoc Working Group on the Paris Agreement (APA), and others to the existing Subsidiary Body for Scientific and Technological Advice (SBSTA) and the Subsidiary Body for Implementation (SBI). These will run in parallel for the first week.

During the second week, heads of government and ministers will join for a high-level segment and the first Conference of the Parties serving as the meeting of the parties to the Agreement (CMA 1). The CMA would serve as the Paris Agreement’s central body, with only those that have ratified able to participate in decision-making. Given that not all UNFCCC parties have ratified yet, the COP22/CMA 1 President will continue consultations on how to ensure that rule-making around the deal remains inclusive.

Some commentators expect that COP22 will outline a plan for taking key decisions on Paris implementation by 2018, which is when parties are due to hold a facilitative dialogue aimed at tracking collective progress in meeting the new deal’s goals.

Climate finance, capacity-building packages

Climate finance is expected to be a hot-button issue in Marrakech, as negotiators work to address questions such as how to define this type of support, along with how it should be counted. Developed countries have previously committed to mobilising US$100 billion annually in climate aid by 2020, which would help developing countries meet their climate ambitions. The Paris Agreement reconfirmed this objective through 2025, and there is language mandating the development of a new goal prior to that date. Two years ago in Lima, UNFCCC parties also confirmed the commitment to review climate finance biennially within a high-level ministerial dialogue, with Marrakech to be the second such meeting of this kind.

At a pre-COP gathering last month, Australia and the UK delivered on behalf of developed countries a roadmap for meeting this objective. The document suggests that public support will increase from US$41 billion in 2015 to US$67 billion in 2020 and assumes part of these would be leveraged to reach the full collective pledge.

Countries agreed in May to hold a workshop at COP22 on how to count climate finance, aiming to inform future work. The PA stipulates that developed countries should provide transparent, consistent information on public support to help inform a transparency framework, while developing countries should outline their needs. Discussions around adaptation finance may also feature at COP22 given a prior commitment to boost such funding and continued drastic low levels of funds going to this type of support.

The high-level ministerial meeting on climate finance mentioned above, which is open to all COP22 parties and observers, is expected to confirm the 2020 targets. The event will also address how to establish more concrete ways for obtaining and using public and private funds to meet these goals in practice, in light of recent analysis on the state of climate financial flows.

Several sources expect negotiators to work on getting a Paris Committee on Capacity-Building (PCCB) up and running, along with choosing a focus area for the committee’s work next year. The PCCB aims to support developing countries in their climate action efforts.

Cooperative climate action

A much-anticipated item for COP22 discussions is that of “cooperative approaches,” specifically involving voluntary collaboration in implementing parties’ NDCs, as described in Article 6 of the Paris Agreement. Experts argue that this collaboration can help assuage concerns over lower competitiveness and carbon leakage associated with countries’ varying mitigation measures. In theory, addressing such fears can incentivise more ambitious climate measures, leading to deeper emissions cuts overall.

The SBSTA agenda foresees negotiations on three areas covered by Article 6. Seasoned climate watchers suggest that this may result in a technical work programme to inform and guide future progress.

The first area concerns cooperative approaches involving “internationally transferred mitigation outcomes (ITMOs).” Article 6.2 specifies that these should “promote sustainable development and ensure environmental integrity and transparency, including in governance, and shall apply robust  accounting, to ensure, inter alia, the avoidance of double counting, consistent with guidance adopted by the [CMA].” Recent discussions signalled a need to clarify those terms, along with where the CMA must provide guidance.

In practice, the ITMO provision could accommodate arrangements such as linking of carbon markets or forming carbon market clubs. The EU and Switzerland, as well as California and Québec, have already made such links. This development may intensify with new carbon pricing schemes in the pipeline, which would together lead to 25 percent of emissions being covered by such tools. 

The second area involves establishing a voluntary mechanism for promoting mitigation and sustainable development. Under Article 6.4, a body shall supervise its activities; incentivise and facilitate public and private participation; support cutting emissions in one party that another can use for compliance; and help mitigate global emissions overall. Parties will need to clarify these “activities,” how the mechanism will work, and what “overall mitigation” implies.

Article 6.8 then sets up a framework for non-market approaches. The definition and scope will need clarifying, with a work programme pending. Several parties and observers have made submissions on Article 6, given the complexity and stakes involved.

Other trade-related items

Parties will continue discussions through an improved forum on the impact of “response measures,” having previously agreed to a specific work programme for the 2016-2018 period. The term “response measures” refers to social or economic impacts on third parties from climate activities in other nations. While the topic is not exclusively related to trade, climate change policies and measures can involve trade policy or otherwise affect trade flows.

The subject has often proved divisive due to a historical emphasis that it was linked to the interests of oil producing countries and could raise compensation obligations. The discussions have since evolved as political responses and economic realities changed, now focusing on adjustment needs of a transition to an increasingly de-carbonised economy, including for economic diversification and enabling quality jobs. Response measures is increasingly seen as a key issue in facilitating the sustainable transition to low-carbon growth in a highly-connected global economy.

Delegates will also need to work on the eventual shape of the forum under the Paris Agreement, although some commentators do not expect major breakthroughs at this stage. Six submissions have been made on the subject, including from Russia, the Group of 77 and China negotiating group, the US and Saudi Arabia jointly, the African Group, the Alliance of Small Island States, and the EU. The proposals range from adding new topics, research mandates or processes, to continuing the existing focus, or further defining the agenda.

These talks will build on the outcomes of an October workshop on economic diversification; measures to support the “just transition” of workers who may be adversely affected by the move to a low-carbon economy; and the creation of decent jobs. Discussions will also be informed by a UNFCCC secretariat technical paper . The Moroccan Presidency will hold a high-level event on 15 November.

The deployment of cutting edge technologies will be critical for climate mitigation and adaptation, although countries have long debated the appropriate formulation of relevant trade tools and of intellectual property rights (IPRs). Various submissions have been made on elaborating a Technology Framework under the Paris Agreement, which should provide overarching guidance to an existing Technology Mechanism. Talks will take place under SBSTA and build on an initial exchange of views in May, along with a related information note by the UNFCCC secretariat which maps climate technology development and transfer activities and initiatives. On the docket under the COP is how to better link the technology mechanism with the UN climate regime’s financial systems.

Transitional COP

In synthesis, the UNFCCC gathering is slated to fine-tune the operation of various PA components; prepare the 2018 review of the NDCs in detail; and examine advances being made for securing the US$100 billion needed yearly in climate finance from 2020 – along with what additional work is needed. Negotiators will also review the state of pledges from non-state and sub-national entities.

Understanding how countries plan to act individually or collectively on climate under the PA will be critical for the immediate evolution of international trade and investment policy and frameworks. In an increasingly globalised economy, trade and investment are expected to be essential in enabling climate action while ensuring sustainable development for all.

ICTSD reporting; “5 climate finance topics to watch at COP22 in Marrakech,” GREENBIZ, 26 October 2016.

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