COP27 and the ambiguity about responsibility
#GS-03 Climate Change
- 27th Conference of Parties of United Nations Framework Convention on Climate Change (UNFCCC) is held at Sharm-El-Sheikh, Egypt.
To know more about COP 27 click here.
Loss and damage (L&D):
- COP27 adopted the basic demand of a fund to acknowledge assistance needed for particularly vulnerable developing countries.
- However, there is no agreement yet on how finance should be provided and where it should come from.
Concerns about L and D fund:
- Even though following the recommendation of the G77+China, the text finally frames L and D as post-event “rehabilitation, recovery, and reconstruction”.
- But it excludes mention of historic responsibility and the principle of Common but Differentiated Responsibilities (CBDR).
- What is more, there is no clear indication that the fund will be paid for by developed countries.
- The decision explores a “mosaic” of solutions, encouraging a miscellany of actors to contribute, which might simply mean a slow shift of the L and D burden onto the private sector, and perhaps even to richer developing countries such as China.
- The ambiguity about responsibility is in fact carefully phrased to dilute the notion that there are distinct victims and perpetrators in the case of L and D.
- Once liability and CBDR are removed from L and D — in essence, an adversarial notion to hold developed nations morally and financially accountable — it risks becoming toothless: more voluntary reward than recompense.
- With the new L and D fund, the line between victim and perpetrator has been blurred.
Financing for Climate Change:
- In 2009, developed countries had promised developing countries $100 billion in climate finance annually by 2020, which still remains unmet.
- Much deliberation around finance has focused on assessing progress towards this goal, which developed countries now aim to meet by 2023.
- With this track record, developing countries have been keen to maintain focus on developed country obligations.
- Consequently, there was no discussion on Article 2.1c of the Paris Agreement, which seeks to make all finance flows compatible with low-carbon development.
- Carbon markets are also increasingly featuring in just energy transition partnerships (JETP), which are emerging as avenues for developed countries to quickly channel finance to developing countries transitioning towards clean energy systems.
New decisions in COP 27:
- For the first time, the COP27 decision text included a call for reforming the global financial system, particularly multilateral development banks (MDBs), to make them more supportive of climate action.
- Carbon markets emerged as more prominent vehicles for channelling private finance.
- In carbon markets, some entities sell credits by reducing their emissions below a threshold, while others buy these credits to offset emissions they are unable to reduce.
- Under Article 6 of the Paris Agreement, two types of markets will allow countries and companies to trade in emissions reductions.
- While developing countries at COP27 wanted to focus on the public finance that developed countries should provide, the finance conversation is becoming multi-stranded and spreading to arenas outside formal negotiating channels.