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“The Paris Agreement ‘grand bargain’ is falling apart”

Diplomat from Egypt and seasoned negotiator Wael Aboulmagd tells CarbonCopy the vague climate finance promises by developed countries ahead of COP26 are not good for the global climate effort 

Amid the high-pitch clamour of the demands of most ambitious actions, nearly 200 countries are gathering at Glasgow in November for the 26th Conference of Parties (COP26) under the United Nations Framework Convention on Climate Change (UNFCCC). 

The countries can largely be divided into two groups—developed nations that have caused climate change with their historical emissions and emerging countries (including the small and poor nations), which have very little to do in causing climate change, but they have been the sufferers of climate extremes. The political messaging around COP26’s success is set and demands ambitious actions from all nations. This, however, is likely to hinge on the availability of finance, for mitigation, adaptation and loss and damage induced by climate extremes, particularly in the developing world. With a new estimate from the UN pegging the finance requirement for less than half of the climate action in developing countries at $6 trillion, discussions around finance are fraught with political frictions.

To understand how global climate politics is going to converge and diverge within the COP26 negotiation rooms, CarbonCopy spoke to Wael Aboulmagd, a diplomat from Egypt and a seasoned negotiator, who has represented the interest of the Global South at UNFCCC. The Chair of G77 and China group at COP25, he is also a voice for African states in the Green Climate Fund (GCF) Board. 

At the recent GCF board meeting, the re-accreditation process for one of Africa’s direct access entities, the Development Bank of Southern Africa (DBSA), became a matter of contention between board members of rich nations and those from the Global South. The former added a condition that the bank adopts a 2050 net-zero emission target across its portfolio, and an intermediate 2030 target, within one year of the accreditation being approved. This condition was opposed by emerging countries who thought it was against the equity principle of CBDR-RC. Similar instances have happened in the past at the GCF board meetings. Do you see this becoming a larger behavioural trend of the developed countries? How does this impact poor and emerging nations’ ability to access climate finance?

Yes. The conditions put forward by some board members in this particular case were quite concerning.  We objected in principle as they placed a condition that has no clear basis in the accreditation policy. This is not fair to developing country entities seeking accreditation. And while we understand the ‘spirit’ of encouraging entities dealing with the GCF to show ambition with regard to divesting from fossil fuels, conditioning accreditation on committing to specific time-bound targets is, in our view, a violation of the existing accreditation policy. So, in principle, any and all conditions must be based on the agreed policy or else we will be setting a dangerous precedent. Furthermore, this particular condition places yet another obstacle to accreditations from developing countries, imposes conditions on an entity, which were not imposed on other entities, and harms the prospects for future accreditations since it denies them the needed predictability.

This type of condition also reflects a tendency by some board members to impose their national views irrespective of what the GCF policies prescribe. It’s worth noting that even the Paris Agreement has only referred to net-zero emissions as an aspirational goal and not as a requirement.

On a broader note, imposing last-minute conditions on entities seeking accreditation or on funding proposals raises serious questions about our working methods. This creates an extremely unfair dynamic where an entity, an AE or national government is at a disadvantage and usually find themselves coerced into accepting unwarranted conditions just to get their project or their accreditation approved.   

Recent reports have shown that the developed countries failed to mobilise $100 billion by 2020. On one hand, some party groups are calling on the Glasgow COP to set a new post-2025 climate finance mobilisation goal from the floor of $100 billion. On the other hand, at an in-session workshop under UNFCCC in June 2021, the EU proposed to sunset the discussion on long-term climate finance under the convention. How could this play out at Glasgow?

No doubt that developing countries lack the necessary funds to make their contributions to the global climate effort. That is a reality that underlies the entire climate process. In essence, The Paris Agreement represented a “grand bargain”. Developing countries would agree to make an effort to combat climate change, including through reducing emissions (mitigation), as long as developed countries who caused all of this, would commit to providing means of implementation (finance-technology-capacity building).

Under Paris, we have all made NDCs, many of which were conditional on the availability of finance and/or other means of implementation. Unfortunately, the main outcome on finance has been a rather vague, arbitrary pledge to “mobilise” $100 billion and, as we can all see, developed countries have fallen short of meeting even that. This figure was not based on actual needs and there is hardly any way to measure it or to hold anyone accountable when it is not met. On the other hand, NDCs are concrete contributions subject to a transparency framework and other mechanisms to determine whether a party is falling short. So, the “grand bargain” is falling apart, and this cannot be good for the global effort.

We hope that some of the recent positive pronouncements regarding a renewed commitment by developed countries to increase climate finance and to ease access to it will be translated into real, concrete commitments at COP26. This could take the shape of a new finance goal, or something else. The entire Paris regime is extremely fragile. If a sense of unfairness prevails, and if the burdens of making contributions have to be borne by national treasuries, many developing countries will have no choice but to lessen their ambition on climate action. 

What is the major impasse on the Article 6 discussion? The transition of carbon credits—known as certified emission reductions (CERs)—remains one of the most contentious issues in the possible CDM (under the Kyoto Protocol) transition as a result of contrasting views among countries. What are your views on this? What could be the possible approaches to resolve this issue?

At COP24 in Katowice, we all celebrated the completion of the Paris Agreement work programme, that is, everything except Article 6. We were unable to agree on it at COP25 in Madrid either. So now is the time to find an agreement. The transition of credits from the existing CDM (Kyoto) to the new regime is not an easy matter to resolve. Many countries have a lot at stake and are seeking the best possible outcome from their participation in the old regime. Meanwhile, we need to ensure that we do not damage the new regime as we transition. A lot of effort has been made over the years to find the delicate balance between these two considerations. It is safe to assume that the incoming chairmanship (the UK) has conducted extensive consultations, which we hope will allow for the launch of this important new mechanism. 

There is another matter related to Article 6, which pertains to adaptation. This is very important to all developing countries. In recent months, we have seen a near universal acknowledgment of the importance of adaptation and the need to fund it adequately. Yet, and, despite the positive rhetoric, many developed countries oppose any shares of the proceeds from the market mechanism under Article 6 going to the adaptation fund. If they maintain this position in Glasgow, we hope to hear what they intend to do to ensure that adaptation is properly funded. The UNEP Adaptation Gap reports demonstrate the massive challenges developing countries must contend with when it comes to adaptation. Add to that, the lack of progress on loss and damage and you see that the entire process is gradually being reduced to focus on the mitigation side of things.    

Do you think this immense pressure on countries announcing net-zero targets is in line with the CBDR-RC principle?

Pressure is not helpful, particularly in a regime based on a very weak legal basis such as the Paris Agreement. The success of such a regime requires conviction, commitment, trust and most importantly, buy-in by all. Pressure could even backfire. Many countries may find it difficult to meet over-reaching, pressure-induced NDCs. Net-zero targets were not explicitly demanded by the Paris Agreement for a reason. Furthermore, removing the global effort to combat climate change from the negotiating rooms where consensus is built, to the political realm of statements and pledges may seem attractive, but in reality the principles of equity and CBDR, as well as the underlying unavoidable reality of historical and even current responsibility for climate damage must be respected. 

What are your views on the announcement of ambitious actions becoming the barometer of success for COP26, while increased ambition on the means to implement these actions, i.e. climate finance and technology transfer, are being pushed down on the agenda.

Indeed, the threshold seems to be set that a successful COP in Glasgow is one where major announcements on ambitious emission reductions are made. This will perhaps satisfy the general public and many in the activist community. But the reality of international diplomacy is quite different. A successful COP is one which has a balanced outcome and where every party feels that their national interests were respected and hence lead to commitments actually being fulfilled. 

We should always remember that the climate process is about action and ambition in all its aspects. Mitigation and adaptation alike, and where means of implementation are provided and where access to such means is ensured. An outcome that falls short on any of these delicately balanced aspects may seem encouraging on the very short term, but will ultimately be detrimental to the global effort on the medium and long term. 

What can be realistically expected from the COP26 in terms of outcomes?

Realistically speaking, there seems to be some promise with regards to finalising Article 6. This is not guaranteed, but there seems to be some momentum in the talks and a general realisation that this final part of the Paris Agreement must come to a conclusion.

On climate finance, there is renewed commitment from developed countries on the political level to do more. We certainly welcome this. But we need to see this political commitment translated to concrete action and facilitated access to climate finance. We will most likely hear promising commitments from leaders of developed countries at the opening of the COP. The real test will be whether or not these political statements are reflected in the negotiating rooms discussing the various aspects of climate finance, and in other fora also discussing the issue.

The same applies to adaptation. We are hearing an encouraging commitment on the issue of adaptation, which is of priority to most developing countries. We hope to see this translated into positions in the negotiating rooms as well. 

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