Author Archives: Benito Muller

The risks of not adopting a Paris Agreement Ambition Cycle at COP 26 in Glasgow

by Benito Müller and Kishan Kumarsingh*

Heraclitus of Ephesus (Ἡράκλειτος, Herakleitos; c. 535 BC – 475 BC

* The authors would like to express their gratitude for fee-back and contributions to Aglaja Espelage, Janine Felson, Geert Fremout, and Axel Michaelowa.

I. Summary

‘Ambition’, or rather the lack of it, currently headlines most discussions on the Paris Agreement. The term refers to how much countries are willing and able to do to combat climate change and its adverse impacts through the pledges in their Nationally Determined Contributions (NDCs).

According to Article 4.9 of the Paris Agreement, all Parties must communicate an NDC every five years starting in 2020. Each successive NDC has to “represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition”.[Art. 4.3]

While the ambition of an NDC is nationally determined, it can be internationally enabled or stifled. The importance of the latter should not be underestimated. The provision of finance, technology, and capacity is an important enabling factor, but countries will also peg their level of ambition on how much other countries (their peers) are willing to do. All countries have to do their fair and equitable share, as agreed in Article 4.3, reflecting “common but differentiated responsibilities and respective capabilities, in the light of different national circumstances”.

The vast majority of the initial NDCs (over 80%) have a time frame up to 2030.[1] For them, paragraph 24 of Decision 1/CP.21 applies, requesting the countries in question: “to communicate or update by 2020 [these initial NDCs] and to do so every five years thereafter”. The problem is that this poses a number of significant risks.

Locking in low ambition

For one, there is the risk of locking in low ambition, for national and international reasons:

  • At the national level, planning for the longer-term (more than 10 years) as required under paragraph 24, introduces greater uncertainty – and therefore Parties are likely to opt for risk-averse conservative (low) ambition.
  • At the international level, there is no timetable for Parties to consider enhancing previously communicated ambition: everyone is waiting for everyone else, and there is no deadline for (informal) consultations to ensure a just and equitable distribution of ambition, with the effect that the initial risk-averse ambition remains unchanged.

Thwarting Global Stocktakes and Replenishments of Climate Funds

Under paragraph 24, there is a risk that every ten years, there is no information whatsoever on what Parties intend to do next. This not only introduces uncertainty for domestic stakeholders and hampers advance planning, but also thwarts:

  • the ex ante component of every second Global Stocktake, and by extension the ability to assess whether the global community is on target to achieve the 2°C/1.5°C trajectory; and
  • the ability to take into account the financial needs of developing countries as expressed in (‘conditional’) NDCs in the course of the replenishments of the multilateral climate funds. This may disadvantage developing countries in financing their NDCs.

Additional political risks

The further away a target, the greater the temptation to postpone action, with the intention of compensating later in the implementation period. This is a high-risk strategy.

Also, while longer-term targets can be updated in the mid-term, updating a previously communicated ambition may not generate the same public and political attention than the setting of a new target.

The Ambition Cycle: a simple and elegant remedy

These currently prevailing risks to equitable ambition under the Paris Agreement can be mitigated through two simple process requests, for Parties:

  • to communicate by 2025 their next NDC, ending in 2035 (‘with a time frame up to 2035’), and
  • in 2025 , to consider enhancing (‘updating’) the ambition of their initial 2030 NDC; and to repeat these two steps ceteris paribus every five years thereafter.

This ‘Ambition Cycle’ [2] will:

  • shorten the horizon of projections necessary to formulate NDCs;
  • provide for a five-year assessment phase;
  • create an ambition enhancement timetable that provides space for Parties to update their previously communicated ambitions in a fair and equitable manner, reflecting everyone’s highest possible ambition as referred to in Article 4.3;
  • enhance confidence in, and facilitate predictability for financing and means of implementation by ensuring that the periodic needs determination reports of the Standing Committee on Finance  and the replenishments of the multilateral climate funds can be informed by, and take into consideration, the needs of developing countries as reflected in their NDCs;
  • by providing an NDC time frame common to all, increase support for formulating NDCs  and planning how market mechanisms can be used to raise ambition and avoid double counting under  Article 6; and
  • avoid the temptation to postpone action.

It would thus remedy the shortcomings of the 10-year time frame without impeding its advantages. At the same time, it is compatible with the ‘5-year’ and the ‘5+5-year’ options tabled by Parties in the common time frame negotiations. The proposed Ambition Cycle can unite all the options on the table in a way that retains all their advantages, while avoiding the significant risks they pose on their own.

Note: This Summary is also published as an ecbi Brief

II. The Prevailing Majority Set-up

As mentioned above, paragraph 24 requests those Parties whose intended nationally determined contribution … contains a time frame up to 2030 to communicate or update by 2020 these contributions and to do so every five years thereafter. The problem is that  it does not actually determine what exactly is to be done every five years after 2020. ‘Plan A’ and ‘Plan B’  below describe what in our opinion are the most plausible implementations of paragraph 24.

Plan A. ‘Update-first’ (2025)

  • [0] : In 2020, the 2030 iNDCs are communicated or individually updated (para. 24)
  • [1] : In 2025 the first (2030) NDCs are individually updated (‘update-first’).
  • [2] : In 2030, the second round of NDCs with time frames up to 2040 are communicated.
  • [3]: In 2035, the 2040 NDCs are individually updated; etc.

Key Issues/Risks

Locking in of low ambition due to a lack of an updating time table

It has been said that the decision requiring Parties to submit their NDCs “at least 9 to 12 months in advance of the relevant session of the [CMA] with a view to facilitating the clarity, transparency and understanding of these contributions”[para. 25] was not only to give the Secretariat time to produce a synthesis report, but also to enable Parties, in light of this synthesis report, to update these NDCs before they communicate them at the ‘relevant’ CMA session.

While that failed to take into account that Parties would find it difficult to carry out an updating in such a limited time frame, not only procedurally but also for fear of being accused to have done the original determination in bad faith, it is correct that the highest possible ambition requires not only national but also international consultation.

The level of the ‘highest possible ambition’ referred to in Art. 4.3 [4] depends not only on national circumstances but also on the wider international picture: If I do not know what my competitors are going to offer, and I am worried that I am going to be accused of (unfairly) losing competitive advantage with my offer, then the natural thing to do is to assume no-one else offers anything and calibrate my offer accordingly low. 

Indeed, fair and equitable distributions of ambition can only be achieved through consultations, formal or informal, where everyone involved knows in advance what the others intend to do, so as to arrive at an outcome with a mutual level of confidence that each country is indeed doing its fair share with its highest level of ambition.

Plan A  does provide the ‘space’ to have these consultations, at least when it comes to the 2025 and 2035 updating: the ambition levels of the NDCs in question (2030 and 2040) will have been known for (at least) 5 years. However, what is missing is a clear signal from the process that the time has come to consider an update. Updating, if it happens, is done on an ‘individual’, that is to say, non-coordinated level. But there is a danger that in the absence of a synchronized updating cycle (time table) no significant updating will take place (as may well prove to be the case in Glasgow),  as no-one wants to stick out their neck first.

Decadal cliff-edges

The main drawback of starting the para 24 cycle in 2025 with just an update of the 2030 NDC, however, is that until the next NDC is communicated (which has to be done in Spring 2030 [5]), it is not clear what exactly the target post 2030 will be, and given the Plan A communication cycle, this sort of ignorance ‘cliff-edge’ will happen at the end of each decade.

a. Domestic considerations

Domestic stakeholders need to have a degree of certainty of what will be asked of them at least for the short term, i.e. the next few years. Being potentially in a position of not knowing for sure what will be demanded (other than that it will be more) 6 months before the demands are meant to kick in, should rightly be unacceptable.

b. Global Stocktake (GST)

Additionally, tracking the progress of achieving the PA at GSTs  through an assessment of NDCs and their progress would involve Parties submitting Information to facilitate Clarity, Transparency and Understanding (ICTU) of NDCs. Such information as agreed (Annex I of decision 4/CMA.1 ) requires inclusion of a “time frame and/or period for implementation, including start and end date, consistent with any further relevant decision adopted by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA).”  Although applicable to second and subsequent NDCs, Parties are strongly encouraged to include the agreed information when updating their NDCs in 2020.

However, there is no ex-ante information available for the GSTs prior to a cliff-edge (i.e. the 2028 and 2035 GST)  This is  likely to result in locked-in ambition particularly as the ICTU also anticipates information on the planning processes involved in arriving at the NDC. It is unlikely that if a Party, in the absence of an agreed common timeframe, undertakes  such planning processes and submits an NDC, that it will revisit the domestic NDC planning process (or it is likely to resist doing so) to revise its NDC merely to comply with a subsequently agreed timeframe. Therefore, to avoid any additional burdens of having to possibly reconfigure institutional and planning processes to facilitate ICTU and NDC formulation in the future, it would be advantageous to agree on an ambition cycle prior to the second NDC, that can be informed by the GSTs.

Additionally, the absence of a synchronised or agreed common timeframe may bring into question the value of the global stocktake if there is no information on which to base ex ante or ex post actions and therefore whether the Paris Agreement trajectory is on track. An agreed common timeframe that can be synchronised with the GST is therefore the most elegant solution to maximising the intended value of the GSTs.

c. Implications for replenishments of the multilateral climate funds

During the four-yearly replenishments, the multilateral climate funds establish their strategic programming for the subsequent four-year funding period. It is key that these priorities take into account the priorities of developing country NDCs, not least because most of them contain components that are ‘conditional’ on foreign funding. However, under Plan A, this will not be possible.

For example, the next replenishments of the Green Climate Fund, the premier multilateral climate change fund, will take place in 2023, 2027, 2031, 2035, etc. This means that half the GCF replenishments (2027, 2035) would happen under cliff-edge conditions, with insufficient if any information on NDCs for the relevant funding period. As a result, financing for NDC implementation is likely to be impacted negatively.

Plan B. ‘Communicate-first’ (2025)

  • [0] : In 2020, the 2030 iNDCs are communicated or individually updated (para. 24).
  • [1] : In 2025, the second round of NDCs with time frame up to 2040 are communicated (‘communicate-first’), and there is the opportunity for an individual update of the first round of (2030) NDCs.
  • [2] : In 2030, the 2040 NDCs are individually updated.
  • [3] : In 2035, the third NDCs with time frame up to 2050 are communicated, and there is the opportunity for an individual update of the 2040 NDCs; etc.

Key issues/risks

Plan B manages to avoid one key disadvantage of Plan A, namely the cliff-edge scenarios: there are at any one time NDCs communicated with a time frame 10 to 15 years in the future. However, in addition to the risk of locking in of low ambition due to a lack of an updating timetable already highlighted in the context of Plan A, Plan B has some additional issues not present in Plan A. 

Locking-in of low ambition due to a lack of confidence in longer-term projections

For one, not many countries, if any, have the wherewithall to make projections with a fifteen-year time horizon with sufficient confidence for them to be as ambitious as possible. Accordingly, they will reasonably be cautious in the original determination of the ambition level of their NDCs with accounting year more than 15 years in the future.

This risk could be mitigated by the fact that there are two possible points for updating — at the beginning of the NDC term [2] and mid-term [2] — but the former still involves a projection horizon of more than 10 years, which may still lead to conservative updates.

The risk of a false sense of non-urgency

Another problem, albeing related to the issues discussed above, is the fact that long time-frames are likely to lead to the misconception that there is sufficient time later to make up for inaction now: “we can overshoot now and compensate later” 

This can have disastrous consequences, particularly in the context referred to above (1.b) when, as in 2035, which is the first time we will have meaningful data after 2020 to update the next NDC ending in 2040. If we have succumbed to a lack of  urgency due to the lack of mid-term data, then there is a significant risk that we will not be able to compensate our early lack of ambitious action in the remaining 5 years.

III. The Glasgow Ambition Cycle

These currently prevailing risks to ambition under the Paris Agreement can be mitigated by adopting  a couple of simple process requests, collectively making up the ‘Glasgow Ambition Cycle’, namely that Parties:

(i) to communicate by 2025 their next NDC, ending in 2035 (‘with a time frame up to 2035’), and
(ii) in 2025 , to consider enhancing (‘updating’) the ambition of their initial 2030 NDC; and to repeat these two steps ceteris paribus every five years thereafter.

* The dotted blue line segments indicate that the NDCs in question could be communicated up to 5 years before the relevant CMA. For example, the 2035 NDC could be communicated any time between 2021 and 2025. However, communicating after 2028 has the advantage of being able to take into account the 2028 GST.
  • [0] : In 2020, the 2030 iNDCs are communicated or individually updated (para. 24).
  • [1] : By 2025, a second round of NDCs with time frame up to 2035 is communicated, and there is a request to update 2030 NDCs simultaneously in 2025 .
  • [2] : By 2030, a third round of NDCs with time frame up to 2040 is communicated, and there is a request to update 2035 NDCs simultaneously in 2030.
  • [3] : By 2035, a fourth round of NDCs with time frame up to 2045 is communicated, and there is a request to update 2040 NDCs simultaneously in 2035; etc.

Combining the advantages of Plan A and Plan B while avoiding their shortcomings

In this way, the proposed Ambition Cycle combines the advantages of Plan A and Plan B while avoiding their shortcomings, and provides a number of additional workable elements to the Paris Ambition Mechanism:

  • It ensures that after 2030, all Parties have NDCs that end simultaneously, namely in 2035, 2040, 2045, and so forth, which does help in aggregating and synthesizing outcomes.
  • It ensures that from 2025, all Parties will always have two NDCs communicated, providing sort-term certainty for the next five years, and a longer-term vision (for the subsequent five years).
  • It does not require long-term (see ‘Key Issues/Risks Plan A) projections for the determination of NDC (while not precluding them either), and any final updating of an NDC involves only short-term (5 year projections).
  • It provides the enabling framework through a synchronized ambition updating time table for Parties to revisit together the ambition of NDCs communicated five years earlier in light of changing circumstances to be able to enhance their ambition in an equitable and fair manner.

Other key advantages

Compatibility and inclusiveness

Although our detailed discussion has been focussed on the situation addressed in paragraph 24, often referred to as the ‘10-year Option’ and how the proposed Ambition Cycle can be used to resolve the main problems inherent in that Option, it is important to highlight that the proposed Glasgow Ambition Cycle is perfectly compatible with the situation addressed in paragraph 23, that is to say with the ‘5-year’ and ‘5+5-year’ Options.

Creating space for equity

Some may be worried that by introducing synchronised updating of NDC ambition, particularly following GSTs that are highly likely to reveal significant global ambition gaps, will lead to countries being pressured into taking on disproportionate ambition increases. It is indeed crucial, that the envisaged periodic updates be seen to be fair, if they are to happen at all, and a key advantage of the Ambition Cycle is that it provides the space for this to happen. Take the situation illustrated in Figure 4.

[1] The 2035 NDCs are communicated by 2025
[2] In 2028, there is the Global Stocktake, informing the NDCs communicated in 2030 (Art. 4.9)
[3] In 2030, Parties are scheduled to update their 2035 NDC, if possible.

In order to facilitate a fair distribution of (updated) ambitions, Parties need prior information on what they are all proposing to do, as well as time to consider the fairness of these proposals

Under the Ambition Cycle, everyone will know in 2026 what Parties have communicated they will contribute by 2035. This leaves 5 years for them to arrive at a fair sharing of 2035 updates in 2030, in light of the information provided by the 2028 GST and the potential change in national circumstances since 2025. Without this ‘equity space’ there is a very little chance of an equitable ambition sharing in the 2030 communications.

Facilitating the predictability of financial needs

Figure 5 illustrates how the Ambition Cycle incorporates the replenishments cycles of the Global Environment Facility (GEF) and the Green Climate Fund (GCF), with the year of the replenishment and the relevant 4-year funding periods, as well as the end year of the relevant NDCs, either initially communicated or updated, following the Ambition Cycle. The figure shows that information on financial needs provided in the NDCs covers all replenishment periods and is never more than 5 years old.  Under the Ambition Cycle, financing needs for countries with conditional NDCs can therefore properly be taken into account in the strategic programming of the GCF/GEF.

At COP 24 in Katowice, the Standing Committee on Finance was requested “to prepare every four years a report on the determination of the needs of developing country Parties related to implementing the Convention and the Paris Agreement, for consideration by [COP 26] (November 2020)”.[Decision 4/CP.24, paragraph 13] While it is not quite clear how the postponement of COP 26 to November 2021 will affect the start of these reports, their periodicity is essentially that of the GCF funding periods as depicted in Figure 5, which means that the above argument applies ceteris paribus to these reports.

Article 6

It will not be surprising that the issue discussed here has a bearing on the Article 6 negotiations. In that context, we would like to highlight that the Ambition Cycle addresses the following two Art. 6 issues:

  • Parties report every two years on progress towards implementing their NDCs as well as on how their emission balances were adjusted for ITMOs transferred/used. However, only after the end of an NDC timeframe is it possible to assess whether the NDC was achieved, including with respect to Art. 6 engagement. From an Art. 6 perspective, it is important that NDC timeframes are the same for buyers and sellers in order to be able to avoid uncertainty as to whether double counting is actually avoided.
  • It is important for host-countries to understand with reasonable certainty where they stands with respect to (i) generating Art. 6 credits and transferring out ITMOs, in particular to avoid transferring the ‘low-hanging fruit’ mitigation outcomes, as well as (ii) financial needs for conditional activities. Regular, five-yearly updates of NDCs can provide the required information.

[1] Source: Climate Watch. 2018. World Resources Institute. Only ten countries have a time frame up to 2025: Ecuador, Micronesia, Gabon, Palau, Saint Vincent and the Grenadines, Samoa, Timor-Leste, Tuvalu, United States of America, and Uruguay.

[2] See also ‘Complete the Ambition Mechanism’.

[3] By ‘individual updating’ we mean updating in the absence of a common synchronised updating time table.

[4] Art. 4.3. Each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.

[5] 25. Decides that Parties shall submit to the secretariat their nationally determined contributions referred to in Article 4 of the Agreement at least 9 to 12 months in advance of the relevant session of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement with a view to facilitating the clarity, transparency and understanding of these contributions, including through a synthesis report prepared by the secretariat;[Decision 1/CP.21].


International Bulk Purchasing for Technology Transfer

UJALA marketing poster, by courtesy of EESL

Understanding Art. 6.8 ‘non-market collaboration’

Anyone following the UN climate negotiations in recent years will be aware of the problem that is Article 6, one of the two remaining issues of operationalization of the Paris Agreement (PA) that have so far eluded a solution.[i] The Article deals with ‘voluntary cooperation’ between Parties of the PA in implementing their targets (‘Nationally Determined Contributions’ NDCs). While Art. 6.2 considers the international transfer of mitigation outcomes, and Art. 6.4 establishes a mechanism whereby emission reductions generated in a ‘host’ Party can be transferred for use by another Party to fulfil its NDC, Art. 6.8 introduces the general idea of ‘non-market’ collaborative approaches to assist Parties in implementing their NDCs. All of these require a considerable amount of clarification to be operationalized, a process which it is hoped will conclude in COP.26, whenever that will be.

Conceptually, Art. 6.8 was from the outset a bit of a cuckoo’s egg: it was originally not part of the negotiations that led to Art. 6 and was added mainly due to the insistence of a few Parties hostile to markets on anti-capitalist grounds.

Moreover, it was from the beginning by far the least well understood, and indeed talked about, of the collaborative approaches introduced in Art. 6.

For example, in the context of the events held annually under the auspices of the ecbi Fellowship Programme, the topic of non-market approaches made its first appearance only in 2018. As documented in the 2018 Oxford Seminar Report it was given a separate slot for discussion, kicked off with a presentation by a AOSIS lead negotiator. Both the presenter and the European respondent admitted that ‘non-market approaches’ are not understood well. Indeed, during the Fellows Colloquium that preceded the Seminar, no one was able to give a concrete example of such approaches. All that was clear is that they were not meant to involve the sale of emission reductions (‘mitigation outcomes’).

At the time, I had just come across the Indian UJALA programme which, as mentioned in the Report, was “designed to lower the price of LED lighting and make it desirable for consumers”. Having published a blog post on the need to harness social marketing techniques,[ii] which has since been taken up here in Oxford by the ‘COOL4climate’ initiative, I stressed that aspect of the programme. However, over the next twelve months, I realized that bulk purchasing, as practised under UJALA (see below) could be a type of non-market collaboration as envisaged under Art. 6.8.[iii]

UJALA – Affordable LEDs for All

Unat Jyoti[iv] by Affordable LEDs for All (UJALA) is a government LED lightbulb distribution scheme driving the transition to low-carbon LED lighting in India. Since its launch in 2015, UJALA has emerged as the world’s largest unsubsidized LED bulb programme for households. To date, the National UJALA Dashboard lists the fact that more than 360 million LED bulbs have been purchased by Indian households, with estimated savings of more than 47 TWh. These savings are equivalent to the annual electricity consumption of Portugal, and represent 38 Mt CO2 annually, making it a striking story of developing country technology transition.

http://ujala.gov.in/, accessed 13 May 2020

In January 2014, Energy Efficiency Services Ltd. (EESL), the UJALA operator, floated the first open tender for the procurement of 750,000 LED bulbs for the Indian State of Puducherry. The procurement was done through reverse auctioning where, in its simplest form, vendors offer to sell the quantity sought at a certain unit price, and the buyer purchases from the vendor bidding the lowest price, which is known as the price ‘discovered’ by the auction. The price thus discovered in the initial bulk procurement was INR 310 (USD 4.08) per bulb, just over half of the open market price of INR 595.

The expansion of the UJALA scheme across India meant that the procurement quantity was increased over time (see Figure 1) with the prices discovered decreasing continually, to INR 39.9 in August 2019, (87% lower than in January 2014). It is noteworthy that the market price also declined by 82% to INR110 over that period, mirroring in part a decline in the average global retail price of about 70%.[v]

Data courtesy of EESL.

The data reflected in Figure 1 imply a total procurement cost incurred by EESL between January 2014 and August 2019 of just under USD 260 million (see Table 1). This is not an insignificant amount to invest, which is probably why EESL arranged loans and guarantees from a number of multilateral donors, including most recently, an agreement with the World Bank for 2019-22 (USD 220m loan, USD 80m guarantee).

* USD 1 = INR 76 ; ** remainder @ USD 0.53.

Given the figure for the number of bulbs distributed to date (see above), clearly all the bulbs procured by August 19 have been sold. Unfortunately, the Figure 1 data cannot be used to estimate the total EESL sales revenue without some additional assumptions, in particular regarding how many bulbs were sold at which of the listed EESL sales prices. Table 1 reflects scenarios in which a certain percentage of the bulbs acquired at an auction is sold on the spot at the sales price listed on that date, and the rest at the lowest (August 19) price of USD 0.53. It shows a considerable range of outcomes from 46% profit if all had been sold on the spot, to a 30% loss if all had been sold at the August 19 price, with a break-even point of 40% spot sales. Given that the prices did not fluctuate significantly after December 16, it can safely be assumed that the sale of the bulbs procured after that date yielded a healthy surplus of an estimated USD 65m (78%).

It is worth mentioning that annual sales of LED bulbs grew by more than 130 times to over 650 million bulbs between 2014 and 2018. Initially LED bulbs were mostly displacing CFL bulbs (Figure 2[vi]), but since 2018 their sales have overtaken those of incandescent bulbs in absolute terms. The question of how the UJALA bulk procurement, the global and domestic market prices, and the growth in annual sales are related is not is not trivial, but is beyond the scope of this post. What is clear is that there has been a technology transition in the Indian domestic lighting sector.[vii]

Bulk Purchasing as Art. 6.8 TT collaboration

Technology transfer, particularly as envisaged under the Paris Agreement, is, as The Four Aces song goes, “a many splendored thing!” The term ‘technology’ itself is, according to the ecbi Pocket Guide to Technology, used to encompass what is referred to as ‘hardware’ (physical tools), ‘software’ (knowledge and skills required to use the technology), and ‘orgware’ (institutions, policies, rules, and legislation). According to the ecbi Guide: “Countries rely on different modes of technology transfer, depending on their stage of industrial development. UNCTAD identifies three stages of industrial development in the context of technology transfer:

  • Initiation, when technologies are acquired from other countries through the acquisition of machinery and equipment and reverse engineering. The situation in least developed countries (LDCs) in particular, with many other developing countries, corresponds with this phase.
  • Internalisation, when local firms can learn through imitation under a flexible Intellectual Property Rights (IPRs) regime. (IPRs refer to the legal protection of inventions or creations used in commerce through patents, copyright, and trademarks, which enable people or companies to earn financial benefit from what they invent or create).
  • Generation, when local firms carry out their own R&D and generate IPRs.” [page 4]

It thus stands to reason that bulk procurement, as international non-market collaboration, would be specially suited to the technology transfer needs of LDCs, particularly if combined with the sort of financial support (loans and guarantees) given to the UJALA programme by multilateral funds and donor agencies. But why bring in Art. 6.8?

I have been told by a friend of mine that one of the reasons why non-market approaches to international collaboration have been somewhat marginalized is that: “industrialized countries wanting to engage in markets do not like it and see it as an attempt to set up yet another climate finance mechanism, to which they would have to contribute.” This attitude could explain the prevailing lack of concrete examples. I hope that the idea mooted here demonstrates, for one, that it is possible to engage in economically motivated international collaborations that do not involve emission trading or simple monetary transfers.

Having said this, such collaborations do not rely on Art. 6.8, but the work programme that was established in Paris with the objective to consider “how to facilitate the implementation and coordination of non-market approaches” could be used to identify how such bulk procurements could be most effectively applied in the process of transferring technologies to countries like LDCs that are in the technology transfer ‘initiation stage’.

Acknowledgments

The author is grateful to Mr Saurabh Kumar and Mr Ashish Malviya from EESL for the permission to use the UJALA marketing poster and for the data graphically represented in Figure 2, and to Axel Michaelowa and Radhika Khosla for the feed-back provided.


[i] The other being, of course, Common Time Frames, as dealt with in an earlier post: A “Glasgow Ambition Cycle”?.

[ii]We need Geo-engineering . . . of Consumer Aspirations!

[iii] “On Article 6.8, Müller said … smaller and poorer countries could use it to ‘bulk purchase’ energy efficient technology through a joint call for tender, like India had bulk purchased 700 million energy efficient LED bulbs to drive down their price under the Ujala programme.”[2019 Oxford Seminar]

[iv] ‘Progressive light’.

[v] See, for example, ‘Global LED Lighting Products Price Trend’, LEDinside.org, 16 August 2018.

[vi] Data Source: Kamat, Khosla, and Narayanamurtia (2020).

[vii] In total, 1.5 billion bulbs were sold in that period, just over a fifth of which through the UJALA programme.



Article 6.8 of the Paris Agreement

A Glasgow Ambition Cycle

Johnson Banks, with COP 26 logo.

On 1 April, the UNFCCC Bureau decided to postpone 2020 sessions in light of the corona pandemic. While this may have been inevitable, it must not be used as an excuse to also postpone enhancing the ambition of the global response to climate change under the Paris Agreement. We cannot afford to postpone ratcheting up the ambition of targets (‘Nationally Determined Contributions’ or ‘NDCs’) originally announced five years ago!*

Indeed we need to complete the ‘Paris Ambition Mechanism’ by adding the final component to the current 5-yearly communication and stocktake cycles: an ambition (replenishment) cycle! **

Introducing the missing Ambition Cycle

This aim of this post is to summarise a proposal for this missing cycle, based on work which has been going on since 2014 (see ‘Publications’ below for more info on the origins and evolution of the idea). Following the language used in paragraphs 23 and 24 of the implementing Decision (1/CP.21) of the Paris Agreement (see ‘COP 21 Text’ below) to operationalise the communication cycle, the proposed Ambition Cycle can be introduced with a very simple procedural decision to:

  1. request Parties to communicate by 2025 a nationally determined contribution with a time frame up to 2035, and to do so every five years thereafter, in line with Art. 4.9 [five-yearly communications];
  2. also request Parties to consider in 2025 updating their nationally determined contributions with a time frame up to 2030, in line with Art. 2.2 [Equity], Art. 4.3 [Progression], and Art. 4.9 [informed by the outcomes of the2023 global stocktake] of the Paris Agreement, and to do so every five years thereafter.

Exegesis

A. Choice of Language

Form an exegetical point of view, the first and most important point to be made is that the proposed decision language was chosen not just because of the Paris precedent (paras 23 and 24, see COP 21 Text below) but because it allows avoiding having to go into metaphysical arguments as to the nature of ‘time frames’ which have unfortunately and unnecessarily taken up a lot of time in the past negotiations on the topic.

A lot of time has been spent in the past couple of years to discuss the merits of different durations of a common time frame and whether it should be interpreted as, say, a ‘target period’, or a ‘period of implementation.’ Indeed, it sometimes feels as if there are now different sects (a ‘5-year’ sect, a ’10-year’ sect, and a ‘5+5-year’ ecumenical lot), who seem to be getting more and more entrenched in their creeds. Fortunately, there is no need to enter into such metaphysical debates in order to adopt a common time frame. All that is necessary is the realisation that the target period and period of implementation of an NDC have a common end-point X, referred in the Paris language as the NDC “containing a time frame up to X”. Given this it is possible to define a common time frame without any reference to durations, in the manner proposed above.

B. The Paragraphs

Para. 1 launches the 5+5 cycle. Note that the request is to communicate by 2025 (not in 2025), which leaves open the possibility for Parties to communicate the 2035 15 years before the end of the time frame, as some seem to favour.

Para. 2 introduces the ambition replenishment cycle, that is the simultaneous regular (5-yearly) assessment by Parties of the ambition of NDCs that were originally announced (‘contributed’) 5 years earlier. A lot can happen in 5-years, which is why Parties will not lose face if they decide that, in light of such changed national circumstances, they can do better than what 5 years prior was their highest possible ambition (Art. 4.3). However, this will not happen without a common timetable as to when such assessment are to happen: no-one will increase their ambition ‘spontaneously’ on their own, not least for fear of being accused of imposing an unfair burden on domestic stakeholders.

In practice the two paragraphs mean that Parties:  

  • in 2020: (§23) communicate a (new) 2030 NDC (i.e. with a time frame up to 2030), or (§24) consider updating the existing 2030 NDC;
  • by 2025: communicate a 2035 NDC, in 2025: consider updating 2030 NDC;
  • by 2030: communicate a 2040 NDC, in 2030: consider updating 2035 NDC;
  • by 2035: communicate a 2045 NDC, in 2035: consider updating 2040 NDC;
  • etc. etc.
Source: COP26, UK House of Commons Library Briefing Paper, April 2020.

* See also Francesco Bassetti, “Coronavirus Postpones Climate Summits, But Climate Action Cannot be Delayed“.

** The only way to avoid the situation castigated in a recent Climate Home News blog post (Is the Paris Agreement failing its first test?) becoming the default is by adopting such an ambition updating cycle.


COP 21 Text

Relevant Articles and Paragraphs from the Paris Agreement and Decision 1/CP.21, respectively.

  • Para. 23. Requests those Parties whose intended nationally determined contribution pursuant to decision 1/CP.20 contains a time frame up to 2025 to communicate by 2020 a new nationally determined contribution and to do so every five years thereafter pursuant to Article 4, paragraph 9, of the Agreement;
  • Para. 24. Also requests those Parties whose intended nationally determined contribution pursuant to decision 1/CP.20 contains a time frame up to 2030 to communicate or update by 2020 these contributions and to do so every five years thereafter pursuant to Article 4, paragraph 9, of the Agreement;
  • Art. 2.2. This Agreement will be implemented to reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.
  • Art. 4.3. Each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.
  • Art. 4.9. Each Party shall communicate a nationally determined contribution every five years in accordance with decision 1/CP21 and any relevant decisions of the Conference of the Parties serving as the meeting of the Parties to this Agreement and be informed by the outcomes of the global stocktake referred to in Article 14.

Selected Publications

Reverse chronological order.

Here’s looking at EU again! The European Climate Law

European Commission President Ursula von der Leyen and Greta Thunberg (Virginia Mayo/AP)

On 4 March 2020, the European Commission presented “a proposal to enshrine in legislation the EU’s political commitment to be climate neutral by 2050, to protect the planet and our people. The European Climate Law sets the 2050 target and the direction of travel for all EU policy, and gives predictability for public authorities, businesses and citizens.”[1]

While criticized by climate activists like Greta, who sat next to Commission President von der Leyen, for not being ambitious enough, both with respect to the near term (enhancing the ambition of the 2030 target) and the 2050 net-zero target (too late), the law proposes a process of how to reach the net-zero target that is worth highlighting. According to the press release:

  • [a] The Commission proposes the setting of a 2030-2050 EU-wide trajectory for greenhouse gas emission reductions, to measure progress and give predictability to public authorities, businesses and citizens.
  • [b] By September 2023, and every five years thereafter, the Commission will assess the consistency of EU and national measures with the climate-neutrality objective and the 2030-2050 trajectory.
  • [c.1] The Commission will be empowered to issue recommendations to Member States whose actions are inconsistent with the climate-neutrality objective, and Member States will be obliged to take due account of these recommendations or to explain their reasoning if they fail to do so.
  • [c.2] The Commission can also review the adequacy of the trajectory and the Union wide measures

This illustrates very nicely how a long-term strategy (net-zero in 2050) can be linked to periodic ambition adequacy reviews to ensure not only that the long-term goal is achieved, but (pace Greta) to allow for a rule governed review of the long term target [c.2]

It is also clear that the 5-yearly assessments are meant to coincide with the Global Stocktake cycle of the Paris Agreement, and it seems reasonable to assume that the trajectory [b] is going to be aligned with the EU’s post-2030 NDCs (Nationally Determined Contributions, i.e. targets). What is not so clear is what exactly is going to be assessed in these 5-yearly reviews. And while it seems again reasonable to assume that the 2023 assessment is going to be about achieving the initial (2030) NDC, nothing is said about objects of the subsequent assessments in 2028, 2032 etc.

It stands to reason that the trajectory [a] is going to be given as a sequence of EU-wide targets, most likely as multi-year emission budgets of equal duration, which essentially means 5- or 10-year budgets. Figure 1 illustrates the two options.[2]

Figure 1. Options for the Assessment Trajectory

Plan A

The initial EU has a ten-year target period from 2021 to 2030. Under Plan A, this would be maintained in subsequent NDCs, with the effect that there would be two more NDCs until 2050: the second one with a target period from 2031 to 2040, and the third one from 2041 to 2050. Given the 5-yearly rhythm of the assessments, this means that each of them would be assessed twice, once with an implementation period of 12 years, and once with an implementation period of 7 years.

Plan B

This plan introduces four 5-year target periods post-2030. Each assessment follows exactly the same pattern, established under the assessment of the initial 2030 NDC:

  • 2021-23: Assessment of EU and national measures with regards to achieving the 2030 NDC and recommendations in September 2023, with a 7-year implementation period till 2030.
  • 2021-24: Review of the adequacy of the [c.2]-trajectory, with communication of an updated 2030 NDC in 2025, if appropriate.

Which?

Given that steps 1, 3, and 5 of both Plans are identical, there cannot be any institutional/legal reasons why Plan B could not work if Plan A does. However, there is one significant political difference between the two.

There is a good reason for the Commission to propose a trajectory towards net-zero in 2050, and not just a single emission budget for 2030 to 2050. Having intermediate milestone targets prevents the natural temptation to procrastinate action (‘don’t worry we have time, we can make up for current inaction later in the period’). Plan B is clearly superior in combatting procrastination than Plan A, and since we cannot afford to procrastinate, it is superior tout court!

In short, to keep with the spirit of the proposed trajectory [a], the EU must adopt 5-year target periods for its post-2030 NDCs and follow Plan B in the assessments [b] and reviews [c.2] proposed in it new climate law.

Internationally, this would also have the advantage of aligning with an idea of how to synchronise ambition enhancements under the Paris Agreement that is gaining traction. For more on this, see The Dynamic Contribution Cycle: Enhancing Ambition on the Basis of Equity, and also the sisters of this post:


[1] EC Press Release, 4 March 2020.

[2] While there is theoretically time to carry out a 2048 assessment the 2050 (net-zero) target, we can sensibly discard such an assessment as not particularly useful, given that it would only leave two years to implement any [C.1] recommendations.


Leipzig in September: Birth of a new G2?

In March 2017, Amb. Bo Kjellen (Sweden) and I wrote a Strategy Note (“Once more unto the breach, dear friends, once more”), focussing in particular on what would enable China to continue taking a global lead after the demise of the 2014 Xi-Obama ‘G2’ that is widely credited as having paved  the way for the success at Paris.

Our analysis was based on what we considered a fundamental maxim (‘red-line’) of Chinese climate change policy: as concerns issues related to the principle of common but differentiated responsibilities (such as expressed in Art. 3.1 of the UNFCCC: “developed country Parties should take the lead in combating climate change and the adverse effects thereof.”), China considers itself firmly to be a developing country, and will not allow itself to be pushed into situations that could be interpreted otherwise.

This is why we advocated that the EU should take up the role of developed country partner in a new G2 with China, and the hope is that the EU-China climate summit meeting in Leipzig in September could have a similar catalytic effect as the 2014 Beijing meeting between Presidents Xi and Obama. One concrete outcome could be an agreement with respect to enhancing ambition.

The EU has already announced that it will enhance its 2030 ambition in Glasgow. Given China’s CDBR sensitivities, it seems unlikely to me that they will follow suit at the same time. But it seems conceivable that they could agree to consider enhancing in 2025. Indeed, it would seem to be reasonable that this could be done in the context of a general invitation to Parties to do so, such as issued in the proposed ”Glasgow Ambition Cycle” language (see below, Para. 2). Given the highly significant nature of the year 2035 for China, it was pointed out to me by a Chinese colleague that the request (Para. 1) to communicate a 2035 NDC by 2025 should also be, in principle, acceptable to China.

In light of recent developments (see FT Headline below) the EU also seems to be moving towards a position compatible with the DCC, which means that Leipzig could be the locus where China and the EU are demonstrating joint-leadership and decide to complete the Ambition Mechanism of the Paris Agreement by adopting the DCC as their ambition position for Glasgow.

Mehreen Khan in Brussels FEBRUARY 29 2020

The Glasgow Ambition Cycle

Para. 1. Requests Parties to communicate by 2025 a nationally determined contribution with a ten-year time frame up to 2035, and to do so every five years thereafter.

Para. 2. Invites Parties to consider in 2025 (2030) updating their nationally determined contributions with a time frame up to 2030 (2035), in line with Art. 2.2 and Art. 4.3 of the Paris Agreement, and to do so every five years thereafter.

Art. 2.2. This Agreement will be implemented to reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.

Art. 4.3. Each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.

COP 25: What is missing is global political leadership!

David Robinson, who attended COP 25 in Madrid and numerous prior COPs representing Oxford Climate Policy, has written the following eyewitness blog on what happened.[1] 

David Robinson, Senior Research Fellow, OCP

The widespread view of COP 25 as a failure reflects civil societies’ growing concern with climate change as well as unrealistic expectations about what a COP could achieve. Most insiders to the negotiating process did not expect much and were not surprised by the outcome. And in some respects, there was progress. However important individual COPs may seem, making serious breakthroughs on fighting climate change depends on what happens between those events, in particular on “top down” global political leadership as well as “bottom up” initiatives from individual governments, the private sector, research institutions and civil society.

Why were insiders not surprised? Essentially because real breakthroughs do not happen at a COP if they have not been agreed beforehand by the main players. There is always room for some detailed negotiation and arm-twisting. But major breakthroughs require global leadership and agreement well before the summit takes place. The agreement between President Obama and Chairman Xi prior to the Paris COP, for example, was central to obtaining virtually unanimous support for the Paris Agreement (PA). There was no such leadership or agreement prior to COP25 on the big issues, for instance on ratcheting up mitigation commitments under NDCs (see also Benito Müller’s Madrid blog post), or on delivering the annual $100 billion financial support for developing countries, as promised at the COP in Copenhagen. Indeed, these were not even among the original UNFCCC objectives for COP25, which was billed as a preparation for COP26. On the main official objective of COP25, namely, to agree Article 6 (international carbon trading) of the PA, there was no prior agreement and – unsurprisingly – little expectation of a deal.

So, in what way can COP 25 be characterized as successful?

  • First, the fact that Madrid was able to organize the conference in 5 weeks, after Chile decided it could not proceed due to political unrest, was itself evidence of international commitment and cooperation to address climate change; cancellation or postponement would have been a serious blow.
  • Second, there was some progress in official negotiations. The parties stressed the urgency of enhanced ambition to close the significant gap between the aggregate effect of existing NDCs and what science tells us will be required to keep temperature increases within the limits set by the Paris Agreement. Other hard-won decisions were to include oceans in future negotiations on climate change and to include “loss and damages” in negotiations over finance. Ironically, failure to agree on Article 6 could also be considered a success to the extent that it reflects an unwillingness of most countries to accept a “bad” agreement that would have allowed double-counting of emission reductions and a carry-over of a large volume of stranded emission reduction assets, condemning the new regime to failure. This list of successes is woefully short of what civil society expects, but does constitute progress in a world where key players – the US and Brazil in particular – are led by men determined to undermine the global fight against climate change.
  • Third, the COP witnessed and even inspired action outside the negotiations. The EU announced its commitment to carbon neutrality in 2050. The unofficial “We are still in” US pavilion demonstrated a powerful US commitment to the PA from the Congress, as well as from states, cities, civil society and companies. Large private financial institutions announced new lending policies that shift investment priorities to low carbon activities. Finance Ministers were present for the first time at a COP, a recognition that climate change is now at the centre of policy making throughout the world.

Without a doubt, the most powerful messages came from the young, whose future is endangered by climate change. The march led by Greta Thunberg attracted an estimated 500,000 participants and served to underline the divide between official negotiations and civil society.

What can we expect at COP26 in Glasgow? Negotiators will pick up the pieces left by COP25: finalizing Article 6 and other details of the Paris “rule book”; carrying out a reality check on the Paris ambition schedule; and nailing down how to deliver the annual $100 billion finance goal after 2020. With the UK and the EU having passed legislation to achieve net zero emissions by 2050, I also expect Glasgow to focus on negative emissions, both new technologies for capturing and using CO2, as well as protecting and promoting natural land and ocean CO2 “sinks”. 

However, a truly successful outcome in Glasgow – especially with regard to achieving much greater ambition – will depend on global leadership and agreements reached prior to COP 26. While the Trump Administration is out of the picture, the greatest challenge and opportunity is for other global powers – starting with the EU and China – to forge a strategic collaborative agreement to lead on the implementation of the PA and to convince the rest of the world to follow. For that to happen will require a very broad agreement – possibly in the form of a treaty – on climate change, investment, trade and cooperation.

Many challenges remain, but the wheels are beginning to turn already and will continue to do so, whether or not Trump remains in power.



[1] This note was first published in EEnergy Informer, The International Energy Newsletter in its January 2020 edition.

Enhance Climate Ambition in 2020: Here’s looking at EU, kid!

Rick Blaine (Humphrey Bogart) and Ilsa Lund (Ingrid Bergman) in Casablanca

An American looking at a European, a Swede to boot, for increased climate ambition may seem a bit rich, but actually the owner of Rick’s Café Americain in Casablanca gave his nationality as “drunkard” which, according to  Capitaine Renault, head of the local police,”makes him a citizen of the world”. And there is no doubt: the citizens of the world will be looking to the EU to lead the way on enhancing the ambition of the initial Paris Agreement pledges — the initial ‘Nationally Determined Contributions’ (NDCs) — at the UN Climate Conference (COP26) in Glasgow next December.

‘Updating’ and the reputational risk of ‘high-ambition-washing’

The ambition fight, a defining feature of last year’s UN Climate Change Conference (COP25) in Madrid, was about whether in 2020 countries should enhance the ambition of their initial NDCs. More precisely, it was about whether two paragraphs (§23 and §24, see Appendix 1) in the Paris Outcome mandate the Parties to the Paris Agreement morally, if not legally, to enhance the ambition of their initial NDCs by 2020.

Tensions grew as the Conference reached its final days. Even though the Chilean Presidency had made ‘ambition’ a central pillar of COP25, any references to countries being called upon to ‘enhance’ or ‘update’ their initial NDCs by COP26 were removed from the negotiating text. All that was left was a very general and rather toothless acknowledgement of “the growing urgency of enhancing ambition and responding to the threat of climate change.”[§ 4 Appendix 2]

Reacting to this, the High Ambition Coalition led by the Marshall Islands, with the backing of the European Commission, made it clear that the final COP25 decision text must include a clear call for enhanced ambition in 2020. . “We need more ambition than what is currently on offer at #COP25,” tweeted Frans Timmermans, Executive Vice President for the European Green Deal of the European Commission on 14 December 2019. “We cannot tell the world that we are lowering our ambitions in the fight against climate change.”

In the end, slightly more ambitious wording was added (§§ 5-7, Appendix 2), pointing to the emissions gap between what country pledges currently add up to and what is needed to keep global temperature rise well below 2°C, and urging Parties to consider this gap when implementing §23 and §24 of the Paris Outcome (Appendix 1) .

The EU did play a very progressive role in Madrid. They announced a long-term strategy of net-zero emissions by 2050, with an implementing European Green Deal, mandating the European Commission to present by Summer 2020 “an impact assessed plan to increase the EU’s greenhouse gas emission reductions target for 2030 to at least 50% and towards 55% compared with 1990 levels in a responsible way.”[COM(2019) 640 final]

As regards the COP25 ambition debate, another significant announcement was made in the Conclusions of the European Council meeting of 12 December 2019, during the end-game at COP25, inviting the European Commission “after a thorough impact assessment, to put forward its proposal for an update of the EU’s nationally determined contribution (NDC) for 2030 in good time before COP26.”

So the initial EU NDC is to be updated by 2020, in good time before COP26. This must be welcomed, provided that ‘updating’ is understood as ‘enhancing ambition’. The reason I am highlighting this is that I have been told by a usually reliable source that some in the EU are thinking of interpreting the term as merely updating some information rather than ambition, a scenario that is unfortunately consistent with the changes that were made to the draft conclusions before they were adopted. The draft conclusions (Appendix 3) emphasised that the EU will follow §24 in 2020 “in a manner that represents a progression of ambition beyond the current one and that reflects the EU’s highest possible ambition, taking into account the collective further efforts needed and actions undertaken by all Parties in line with the long term goals of the Paris Agreement“. In the final version, however, this was replaced by the statement that in 2020 the EU will update its NDC “taking into account the need to increase clarity, transparency and understanding of its NDC“.

I sincerely hope this will not happen, and I find it difficult to believe it will, not least given the Green Deal mandate (see above). However, if it did, it would be at a considerable reputational cost for the EU. As a climate leader, such a purely informational update of the initial NDC could rightly be branded as ‘high-ambition-washing’. What is clearly expected in the 2020 update, as acknowledged by Timmermans, is the increase of the initial (2030) ambition!

With the #EUGreenDeal adopted and #COP25 behind us, now we look forward to raising global ambitions at #COP26 in 2020.”[@TimmermansEU, 13:48h, · 15 Dec. 2019]

A Common Time Frame and the EU: ditherer or high-ambition champion?

The ambition battle in Madrid was about whether, five years after they were initially announced, countries should reconsider their NDCs in light of changed circumstances with respect to whether they still reflect the highest possible ambition. As it happens, this question also lies at the heart of another issue that was not resolved in Madrid, namely the need to complete the ‘Paris Ambition Mechanism’ by introducing a ‘Common Time Frame’ (CTF).

This debate has been going on for over five years, and the only outcome thus far has been a decision at COP24 (Katowice 2018) that “Parties shall apply common time frames to their nationally determined contributions to be implemented from 2031 onward.” At COP25, the issue was again kicked down the road without even a decision on a date for a decision. The main difference was the reaction by civil society. Fired up by what was happening (or not) on ambition they took a very dim view of the lack of progress on the CTF issue, as witnessed in the ECO article of 6 December (reproduced below).

Dynamic Ambition Replenishments

To explain the connection between a CTF and global ambition, let me use the proposal for a Dynamic Ambition Replenishment (DAR) Cycle (a.k.a. Dynamic Contribution Cycle) which is seen by many as a potential ‘landing ground’ in this debate. It can be introduced, following the template of §23 and §24 of the Paris Outcome [Appendix 1] with two very simple decisions, namely to:

  • Request Parties to communicate by 2025 a nationally determined contribution with a ten-year time frame up to 2035, and to do so every five years thereafter.
  • Invite Parties to consider in 2030 updating their nationally determined contributions with a time frame up to 2035, in line with Art. 2.2 and Art. 4.3 of the Paris Agreement [Appendix 1], and to do so every five years thereafter.

The first is simply a (‘5-year+5-year’) ‘dynamic’ compromise between §23 (5-year) and §24 (10-year) which ensures that by 2025, there will always be two consecutive 5-year NDCs communicated. The second is the ambition replenishment component, rectifying the lack of clarity in §23 and §24 that led to the ambition battle in Madrid. It establishes a 5-yearly cycle for simultaneous enhancements of ambitions initially communicated 5 years before.

As graphically represented above, the DAR Cycle involves four activities:
A. The ‘ratcheting up’ (‘updating’) the ambition of the NDC initially communicated (at least) 5 years before.
B. The communication (‘indication’) of an NDC with a (+5) time frame ending five years after the updated NDC.
C. & D. The assessment of the +5 NDC by the public and governments.

This type of process is important for ambition because it creates an ‘enabling space’ of 5 years where everyone knows and can evaluate Parties longer-term (10-year) ambition in light of Global Stocktakes and changing circumstances, together with a regular synchronised timetable for Parties to get together and  discuss potential ambition enhancements. While at present Parties can spontaneously enhance the ambition of their NDCs, it will be abundantly clear to anyone acquainted with replenishments of funds that they are more efficient and effective than such spontaneous ‘voluntary donations’.

The Way Forward

As the ECO article notes, the EU has, for some time, been treating the CTF discussion as premature, with a decision only needed in 2023, in time for the communication of a second NDC in 2025. However, this will tie the EU into a 10-year time frame, as it has been suggested that the EU needs 15 years between the communication and the the end of an NDC. Delaying the communication of the second NDC to 2025 will then mean a time frame up to 2040 (i.e. 2025 + 15).

This said, things do seem to be moving. In the discussion on the issue during the Environment Council meeting of 4 October (see transcript, Appendix 3), the majority of the 12 intervention were in favour of a 5-year time frame. No one mentioned 10 years, and only three though it was still premature to take a decision. Moreover, the Council Conclusions also recalled “the importance of striving towards common timeframes for all Parties’ NDCs, in line with the Paris Agreement.”

In fact, the EU could still join the Dynamic Ambition Replenishment Cycle, at it requests communicating a 2035 NDC by 2025and not in 2025. So the EU could follow the request (with a 15-year announcement lag) by communicating a second NDC with a time frame up to 2035 at COP26 in December 2020.

This would put the EU on the 5+5 track, and if the promised updating of the 2030 NDC “in good time before COP26” is not just cosmetic, but a genuine ambition enhancement “after a thorough impact assessment” then it should be relatively straightforward to use the same process to come up with a 2035 NDC at the same time.

Therefore, to live up to the reputation of being a high-ambition champion, the EU should by Glasgow not only communicate an enhanced 2030 NDC, but also a 2035 NDC (or at least decide that its second NDC is to have a time frame up to 2035). This would allow them to sign on to the Ambition Replenishment Cycle, thus ensuring that the Paris Agreement processes supports, rather than impedes, a regular enhancement of global ambition.


Appendix 1. The Paris Outcome

Paris Agreement
Art. 2.2. This Agreement will be implemented to reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.
Art. 4.3. Each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.

Decision 1/CP.21; III. Decisions to give effect to the Agreement; Mitigation
§ 22. Also invites Parties to communicate their first nationally determined contribution no later than when the Party submits its respective instrument of ratification, acceptance, approval or accession of the Paris Agreement; if a Party has communicated an intended nationally determined contribution prior to joining the Agreement, that Party shall be considered to have satisfied this provision unless that Party decides otherwise;
§ 23. Requests those Parties whose intended nationally determined contribution pursuant to decision 1/CP.20 contains a time frame up to 2025 to communicate by 2020 a new nationally determined contribution and to do so every five years thereafter pursuant to Article 4, paragraph 9, of the Agreement;
§ 24. Also requests those Parties whose intended nationally determined contribution pursuant to decision 1/CP.20 contains a time frame up to 2030 to communicate or update by 2020 these contributions and to do so every five years thereafter pursuant to Article 4, paragraph 9, of the Agreement;


Appendix 2. Chile Madrid Time for Action

Decision 1/CMA.2.
§ 4. Acknowledges the growing urgency of enhancing ambition and responding to the threat of climate change;
§ 5. Re-emphasizes with serious concern the urgent need to address the significant gap between the aggregate effect of Parties’ mitigation efforts in terms of global annual emissions of greenhouse gases by 2020 and aggregate emission pathways consistent with holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 °C above pre-industrial levels;
§ 6. Recalls that each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition, reflecting its common but differentiated responsibilities and respective capabilities, in the light of different national circumstances;
§ 7. Also recalls the request to Parties contained in decision 1/CP.21, paragraphs 23–24, and urges Parties to consider the gap referred to in paragraph 5 above with a view to reflecting their highest possible ambition when responding to this request;
§ 8. Reminds Parties that have not yet communicated their nationally determined contributions pursuant to Article 4, paragraph 2, and decision 1/CP.21, paragraph 22, to do so;
§ 9. Reiterates its strong encouragement to Parties to provide the information necessary for clarity, transparency and understanding of nationally determined contributions, described in the annex to decision 4/CMA.1;
§ 10. Recalls the request in paragraph 25 of decision 1/CP.21 to the secretariat to prepare a synthesis report, and requests the secretariat to make this report available to the Conference of the Parties at its twenty-sixth session (November 2020);


Appendix 3. EU Environment Council, 4 October 2019

EU Preparations for the United Nations Framework Convention on Climate Change (UNFCCC) meetings

Draft Council conclusions: 27 September 2019
[HIGHLIGHTS that the EU will [update] [or communicate] [review] [and enhance] its nationally determined contribution (NDC) in 2020, as agreed in Paris, in a manner that represents a progression of ambition beyond the current one and that reflects the EU’s highest possible ambition, taking into account the collective further efforts needed and actions undertaken by all Parties in line with the long term goals of the Paris Agreement [and IPCC 1.5 ⁰ C report], and to increase clarity, transparency and understanding of its NDC.]

Council conclusions: 4 October 2019
HIGHLIGHTS that in 2020, the EU will update its nationally determined contribution (NDC) as agreed in Paris, taking into account the need to increase clarity, transparency and understanding of its NDC, as agreed in Katowice. STRESSES the need to step up the global efforts to tackle climate change in light of the latest available science, especially the IPCC Special Report on the impacts of global of 1.5°C above pre-industrial levels.

Transcript of interventions referring to Common Time Frames

(in chronological order, with references to webcast times [hh:mm:ss]. MS missing in the list did not refer to CTFs in their interventions)

Spain [00:07:15] “We think the text is a balanced one, but we do think it can be bolstered in two ways. The first one is that it needs to be more consistent with the Paris Agreement and the five-year cycle. Like other MS we think we need these conclusions to send out a signal of support for the five-year framework for the contributions to the PA”
Sweden [00:12:15] “The 5-yearly ambition cycle is one of the cornerstones of the Paris agreement and we will need to ensure that it becomes as effective as possible in raising the global level of ambition to meet the long-term targets of the agreement. We should therefore show openness to support having five year timeframes. It’s important to note that a five year CTF from 2030 and onwards is entirely without prejudice to the timeframe of the EU internal targets of the post-2030 framework”
France [00:17:42] “Lastly, FR thinks it is time for the EU to take a decision on the timeframe. We need to take a joint decision to ensure that we can participate constructively in the discussions which will take place at COP25. FR is in favour of a schedule which is in line with the Paris Agreement objectives – we need to make sure we are consistent and clear, so a five-year time for all NDCs.”
Portugal [00:38:55]“The leadership role of the EU for climate action needs to be reflected in our NDC in keeping with the 5-year cycle for the PA.” [00:40:29]“We support the common time frames but we’re against transferring units to the Kyoto Protocol.”
Belgium [00:52:44] “We have stressed the need to establish a CTF for all NDCs, but this far we have been pretty vague in our position, and that is why we haven’t been able to especially constructive in the negotiations” [00:51:53] “Now, FR and SE’s comments we can support them as well regarding the CTF, the CTF of 5 years for all NDCs as of 2030, we think that is best in line with optimally performing […] of the Paris Agreement”
UK [01:00:30] “Further, the UK supports the inclusion of text that seeks agreement of a five year CTF for NDCs.”
Malta [01:05:07] “On issues related to CTF for the NDCs, Malta is of the view that it is not yet time for such discussion to take place and would clearly prejudge future discussions”
Germany [01:09:17]“… That is an important point for the next COP – as is the time frame. We think that it’s worth working towards a CTF, but as others have said, we need to have some flexibility here. We shouldn’t stick too fast to this, because this is still an open point”
Luxembourg [01:15:37]“Thirdly, the EU needs to support a CTF for all parties and then with the review cycle from the PA, which I think would give us a dynamic for reviewing the NDCs which would be more effective and more transparent”
Bulgaria [01:20:06] “As for the proposal to include text about a common five-year TF for implementing the NDCs, we’d like to stress that the current EU legislation effective for the period 2020-2030 is fully in line with the PA. At the same time, we believe it is extremely premature to discuss other timeframes post 2031. Therefore, we strongly oppose the introduction of a 5-year TF to execute the nationally determined programme.”
Estonia [01:22:40]“In today’s discussions, there has been references to the CTF – I think it’s too early to reach any decision on this point”
EC (closing remarks) [01:30:26]”The Commission does not see any reason to include additional text on the Common Time Frames, as this issue is not up for decision in Santiago.” [01:30:54]”Any language implying five-yearly greenhouse gas target setting for the European Union remains a decision outside the scope and mandate of the Environment Ministers.”

Innovative Sources for Multilateral Climate Finance

A

A COP 24 Seminar co-hosted by the PCCB and ecbi


Introduction

From its inception, in 2005, the ecbi has been based on the understanding that enhancing the capacity of the multilateral climate change regime to produce ambitious outcomes requires significant building and enhancement of trust between negotiators. Over the past five years, the ecbi Director has consistently argued that the well-being of the Financial Mechanism of the UNFCCC/Paris Agreement is key in generating such trust.[i] This is why the PCCB (Paris Committee on Capacity Building) and ecbi joined forces to organize a joint Seminar at COP 24 in Katowice to showcase ideas aimed at generating innovative additional contributions to the funds of the Financial Mechanism to enhance their longer-term viability.

This Seminar took place, with the financial support of the World Bank, on 8 December in the PCCB COP 24 Capacity-building Hub. The event was opened by Marzena Chodor, PCCB Co-chair, and Tomasz Chruszczow, Polish Special Envoy for Climate Change and UNFCCC Climate Champion. Following a number of showcase presentations, there was a panel discussion with representatives from civil society, sub-national governments, and multilateral financial institutions and funds (all of the contributions are to be made available as on-demand webcasts on the PCCB website). Daniele Violetti, UNFCCC Director, Finance, Technology & Capacity building, gave the closing address of the Seminar.

Kelley Kizzier, Sean Kidney, Julie-Anne Richards, Benito Müller, Eric Theroux (Deputy Assistant Minister, Fight against Climate Change, Quebec), Liane Schalatek (Associate Director, Heinrich Böll Foundation North America), Mirza Shawkat Ali (Adaptation Fund Board member, Bangladesh), Yunus Arikan (Head of Global Policy and Advocacy, Global Services, ICLEI), Mark Sadler (Practice Manager, Climate Funds Management, World Bank).
 

Presentations

For the purposes of the Seminar, ‘multilateral climate finance’ was interpreted in terms of the Financial Mechanism of the Paris Agreement – that is the Green Climate Fund, the Adaptation Fund, and the Least Developed Countries and Special Climate Change funds, operated by the Global Environment Facility. ‘Innovative’, in turn, was used to refer to sources other than the traditional budgetary government contributions, be they on an ad hoc (‘voluntary’) or a multi-year replenishment basis. Sources were divided into ‘top-down’ or ‘bottom-up’, depending on government involvement (individually or collectively, and at whatever level, i.e. multilateral, national, sub-national):

  • The International Air Passenger Adaptation Levy (IAPAL): top-down (multilateral);
  • The Climate Damages Tax: top-down (multilateral);
  • The International Maritime Fuel Carbon Tax: top-down (multilateral);
  • The Western Climate Fund: top-down/bottom-up (sub-national);
  • The Corporate Air Passenger Solidarity Programme: bottom-up.

The presentations can be downloaded from the ecbi website.

The International Air Passenger Adaptation Levy (IAPAL)

The first top-down innovative source established for multilateral climate finance was the share of proceeds of the Clean Development Mechanism which was intended to be the main source of income for the Adaptation Fund. In 2006, a Working Paper by Benito Müller and Cameron Hepburn[ii] put forward the idea of a solidarity levy on international air passengers for the benefit the Adaptation Fund. Two years later this was taken up by the UNFCCC Group of Least Developed Countries and submitted as a proposal at COP 14 (Poznan, Poland) to establish an International Air Passenger Adaptation Levy (IAPAL) for consideration under the Bali Action Plan.

The Proposal

Achala Abeysinghe, Senior Strategic Adviser to the LDC Group and Head of the ecbi Training and Support Programme, presented the LDC Group IAPAL proposal. Following the very successful example of the French ‘Leading Group’ solidarity levy to combat HIV/AIDS, the Group proposed an adaptation solidarity levy on international air passengers to provide more adequate funding for adaptation activities in the poorest and most vulnerable countries and communities.

The levy, collected by airlines at the point of ticket sale, was earmarked for the Kyoto Protocol Adaptation Fund. It was to be universal in the sense of covering all international air travel. Being international and dependent only on the evolution of air travel demand, the funds raised would truly be new and additional, as well as significantly more predictable than traditional funding mechanisms.

The proposed levy would have no significant impact on passenger numbers – its value representing less than a tenth of the expected annual growth rate – and hence minimal to no negative impact on tourism-dependent economies. In contrast, it would have significant positive impacts on the development of the poorest and most vulnerable countries and communities, by avoiding climate change impacts through the deployment of timely and adequate adaptation measures funded using the revenue raised by the levy.

  • Responsibility for implementation. Airlines would collect the levy from their passengers at the point of sale and transfer it to a dedicated account of the Adaptation Fund. The airlines are compensated for reasonable administrative costs incurred in the course of collection.
  • Revenue. In line with the French levy, the LDC Group proposal involved a small passenger charge for international flights (USD6 per economy and USD62 per business/first class trip); it was estimated that this charge would raise between USD8 billion and USD10 billion annually in the first five years of operation, and considerably more in the longer term. By its very nature, this revenue is not only new and additional to the traditional flows of bilateral funding for adaptation, but also predictable due the stability of the airline sector.
  • Justice considerations. According to the LDC proposal, the proposed levy conforms to the idea of Common but Differentiated Responsibilities and Respective Capabilities (CBDR/RC) with respect to: (i) the personal responsibilities of passengers due to the international emissions produced and (ii) their capability revealed by the ability to fly internationally.[iii]

To reflect CBDR/RC at the national level, the revenue raised in developing countries could be retained by them for their own adaptation activities, with only the revenue from developed countries going to the Adaptation Fund.

The Climate Damages Tax (CDT)

Julie-Anne Richards (Adviser, Climate Damages Tax Coalition) gave a preview of a report on The Climate Damages Tax (CDT), which she co-authored and launched at COP 24 two days after the Seminar. The chief purpose of the proposed CDT is to raise resources to pay for what has become known in the multilateral climate change regime as ‘Loss & Damage’ (L&D). The first time the UNFCCC negotiation texts referred to “unavoidable loss and damage from the adverse impact of climate change” was in 2008 (see “Loss and damage due to climate change An overview of the UNFCCC negotiations”). But it was in 2013, at COP 19, that the issue was fully acknowledged through the establishment of the Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts (WIM) “to address loss and damage associated with impacts of climate change, including extreme events and slow onset events, in developing countries that are particularly vulnerable to the adverse effects of climate change”. Even though the WIM was given the mandate to enhance L&D finance, there have hitherto been practically no resources been allocated for that purpose. This was one of the main reasons for launching the Climate Damages Tax campaign in April 2018.

The Proposal

The Climate Damages Tax (CDT) is a charge on the extraction of each tonne of coal, barrel of oil, or cubic litre of gas, calculated at a consistent global rate based on how much climate pollution (CO2e) is embedded within the fossil fuel.

  • Responsibility for implementation. The CDT proposal is to set up a solidarity facility for loss and damage, managed by the GCF. Working with existing systems of payment, fossil fuel companies will pay an extra amount on the volume they extract to the solidarity facility. International law and precedents embodying the Polluter Pays principle (such as the International Oil Pollution Compensation Fund) serve as a working example of similar facilities.
  • Revenue. The proposal recommends that the CDT is introduced in 2021 at a low initial rate of USD5 per tonne of CO2e, increasing by USD5 per tonne each year until 2030 to USD50 a tonne, with the expectation that it is increased at the rate of USD10 per tonne annually after that to reach USD250 a tonne by 2050. The increasing rate of tax will keep CDT revenue for loss and damage at roughly USD300 billion a year over this period.
  • Justice considerations. The CDT would raise funds for an international loss and damage solidarity facility, and also raise revenue to support a just transition from fossil fuels to renewable energy. This would help low-income communities and workers shift to carbon-free jobs, energy, and transport, via a share of the CDT remitted back to the country where the oil, coal, or gas was extracted. The share remitted to the country of extraction varies between 50 per cent for rich countries, and 100 per cent for low-income countries, with a sliding scale between the two ensuring that rich countries take the responsibility for funding loss and damage.

The International Maritime Fuel Carbon Tax

Kelley Kizzier (Independent Consultant) presented an IMF Working Paper she co-authored on “Carbon Taxation for International Maritime Fuels”.

The purpose of the paper is to promote dialogue about the possibility of a carbon tax as a key element of a GHG mitigation strategy for international maritime transport, in the context of the April 2018 International Maritime Organization (IMO) pledge to cut emissions by 50 per cent by 2050, relative to the 2008 level. The paper discusses the case for the tax over alternative mitigation instruments, together with options for practical design issues; it also presents estimates of the impacts of carbon taxation and other instruments.

The Proposal

  • Responsibility for implementation. Maritime carbon taxes could be collected domestically (through extending administrative capacity for domestic fuel taxes), but the more immediately relevant option (given delegation of GHG mitigation strategy to the IMO) would be an international collection from ship operators (based on required reporting of their fuel consumption). This could be achieved through the establishment of an IMO-administered fund, following the precedent of the International Oil Pollution Compensation (IOPC) Funds, established and overseen by the IMO. Operators could pay the tax on either an annual or individual route basis, with denial of port access, or ship arrest, for non-compliant operators being the potential enforcement mechanisms. Under current practice, IMO members are mandated to enforce the IMO convention — the tax could be paid to the fund, but any non-payment would be enforced by states.
  • Revenue. A tax rising to USD75 per tonne of CO2 in 2030 (USD240 per tonne of bunker fuel), and to USD150 per tonne in 2040, is estimated to raise revenues of about USD75 billion in 2030 and USD150 billion in 2040, while increasing shipping costs by 0.075 per cent of global GDP in 2030.
  • Justice considerations. Compensation mechanisms to reconcile the principle of CBDR/RC and the global application of the maritime carbon tax (preferred due to the high mobility of the tax base and the undesirability of introducing trade distortions), could be achieved by remitting the carbon tax revenues to the GCF.

The Western Climate Fund

Benito Müller

In December 2015 at COP21 in Paris, Quebec’s Premier Couillard announced that CAD6 million of the revenue from Quebec’s auctions of emission allowances under the Western Climate Initiative (WCI) – the joint cap and trade scheme of Quebec and California – were to be contributed to the Least Developed Countries Fund (LDCF) of the UNFCCC/Paris Agreement. At the announcement, former US Vice President Al Gore expressed “deep gratitude, admiration and congratulations” for Quebec’s initiative, which illustrates how the wealthy regions of the world can reach out in partnership to the least developed countries, enabling them to participate fully in solving the global climate crisis.

The Proposal

Benito Müller, ecbi Director, introduced a proposal to build on this example by establishing a Western Climate Fund (WCF) to receive contributions for the multilateral funds of the Paris Agreement from states and provinces in or around the WCI. The trans-national character of this ‘catchment area’ is important, as it would guarantee that the Fund is not perceived as competing with national support, but as being genuinely complementary to it. In order to assure predictability, the Fund’s primary income is intended to come through innovative sources, in particular from shares of proceeds of carbon price instruments, such as emission trading schemes or carbon taxation, namely:

  1. an earmarked share of cap and trade auction revenue (as in the case of Germany’s Climate and Energy Fund[iv]);
  2. an earmarked share of emission allowances to be monetized by an intermediary (as in the case of the share of CDM proceeds monetized by the Adaptation Fund, or the “Allowance Allocation to Electrical Distribution Utilities on Behalf of Ratepayers” under the California Cap and Trade Programme);
  3. an earmarked share of a carbon tax.

By participating in this initiative, sub-nationals can contribute to the support needed by the globally poorest and most vulnerable to enable them to combat global climate change while reducing poverty. This is not just a moral imperative. Without such support, this fight cannot be won.

  • Responsibility for implementation. This depends on the sub-national circumstances, and the source modality. Shares of government revenue would most likely be collected by the relevant government, while the monetization of shares of emission allowances might best be outsourced to a not-for-profit entity.
  • Revenue. 2 per cent share of (expected) 2018 auction revenue: Quebec USD10 million; California USD125 million.
  • Justice considerations. In sub-national contexts, ‘climate justice’ is often focused exclusively on domestic issues. The fact that, in the context of climate change, it is in the interest of everyone to acknowledge that justice knows no jurisdictional boundaries, will have to be explained to the domestic constituencies.

The Corporate Air Passenger Solidarity Programme

The Proposal

The ecbi Director also presented the Corporate Air Passenger Solidarity (CAPS) Programme, launched in 2017 as part of the “Oxford Crowdfunding for Adaptation Initiative”. The aim of the Programme is to encourage corporate entities to contribute 1 per cent of their annual air travel expenses to the Adaptation Fund of the Paris Agreement, in social solidarity with the plight of the globally poorest communities which are most vulnerable to the adverse impacts of climate change. With the financial support of the Luxemburg government, the Programme aims to establish a web-based platform for a ‘CAPS Partnership’ to be used in a campaign to market the idea of contributing ‘Corporate Passenger Solidarity Donations’ to the Adaptation Fund.

Müller argued that, in the context of socially responsible (corporate) air travel, the narrative on ‘climate neutrality’ needs to be augmented. It can no longer only be a matter of carbon neutrality, that is of purchasing voluntary carbon offset credits to mitigate ones flight emissions – particularly given that, as of 2020, the industry will have its own emissions reductions program. ‘Climate neutrality’, he maintained, must also address the need to support the most vulnerable in dealing with the adverse impact of climate change. In short, Müller suggested, the narrative in question has to be re-defined as:

Climate Neutrality = Carbon Neutrality (mitigation) + Impact Solidarity (adaptation),

with CAPS contribution to the Adaptation Fund as an effective and efficient solution to providing the latter.

  • Responsibility for implementation. The CAPS Programme, with the support of the Adaptation Fund.
  • Revenue. A contribution of 1 per cent of corporate air travel expenses – which corresponds roughly to the cost of offsetting – by 1 per cent of corporate travellers would amount to over USD100 million per year, and match the Adaptation Fund’s current annual income.
  • Justice considerations. Voluntary contributions.

Conclusions

There is an abundance of possible innovative sources for multilateral climate finance, each with different characteristics regarding potential scale, predictability, and political feasibility.

Unsurprisingly, multilateral top-down sources – namely global taxes, levies, or ‘shares of proceeds’ – have a much larger revenue potential than sub-national or bottom-up sources. As earmarked revenue streams, they would also generally be more predictable than traditional budgetary contributions.[v] The ‘only’ drawback, as witnessed by the fate of the LDC Group IAPAL proposal, is that in the past they did not command sufficient political buy-in to materialize.[vi]

Sub-national sources, such as the ones presented at the PCCB/ecbi Seminar, have a much smaller revenue potential – which is why they should probably be directed at the smaller funds of the Financial Mechanism, to enable them to serve as multilateral ‘retail outlets’, with the GCF as the ‘wholesale’ fund (see “On the Virtues of Strategic Divisions of Labour”). Their advantage is that they depend less on political will because fewer, if any (as in the case of the CAPS programme), governments are involved.

The one thing that all of these innovative options have in common is that, in providing support to the Financial Mechanism of the Paris Agreement, they help build trust among the Parties of the Paris Agreement. Trust – albeit intangible – is the key ingredient in enhancing the Agreement’s overall ambition.


[i] See, for example, B. Müller, ‘The Time is Ripe! Support from US sub-nationals for the Least Developed Countries Fund of the Paris Agreement’, Oxford Climate Policy, June 2017.

[ii] ‘IATAL — an outline proposal for an International Air Travel Adaptation Levy’, Benito Müller and Cameron Hepburn, Oxford Institute for Energy Studies Paper EV36, October 2006.

[iii] Indeed, given the international character of the activities in question and of the resulting emissions, the only equitable way to deal with the non-national responsibilities for these activities is at the personal level, which – given the price levels of international flights – also respects the idea of respective personal capabilities.

[iv] ‘Two Unconventional Options to Enhance Multilateral Climate Finance Shares of Proceeds and Crowdfunding’, Benito Müller et al., ecbi.

[v] For more on this, see “To Earmark or Not to Earmark?” or “Finance for the Paris Climate Compact

[vi] The one exception is, of course, the ‘share of proceeds’ of the CDM, and subsequently of the Art. 6.4 mechanism of the Paris Agreement. It is still extraordinary that this concept was adopted, and it stands to reason that this only happened because it was not called a ‘tax’ or ‘levy’ but was presented as a charge to cover the administrative costs of the scheme.

Climate leadership in a historical perspective and lessons for the implementation of the Paris Agreement: reflections by a former negotiator.

Contact Group on Adverse Effects at COP 6 (The Hague) Co-Chairs Mohammed Reza Salamat (Iran) and Bo Kjellen (Sweden) seated with Yusef Nassef (Secretariat). 15 November 2000. Photo © IISD 2000

by Ambassador Bo Kjellen

In the climate negotiations, the issue of leadership has been of central importance from the very beginning. It has mainly been raised in terms of national (or EU) efforts to influence other countries (or groups of countries) with the aim of moving the negotiations forward and creating conditions for a satisfactory outcome.  Of course, in all negotiations Parties try to defend their own interests; but negotiations on sustainable development have a special character: in many ways, and particularly in the long term, all parties are in the same boat.

As far as the EU is concerned, there is no doubt that the Union’s long-time commitment to support the Climate Convention has given it a leading position, particularly after the US 2001 decision not to ratify the Kyoto Protocol. In fact, the EU stance on climate change has been an important part of its display of “soft power” in international affairs. However, the present tensions within the EU and the Brexit negotiations limit the authority of the Union and reduce its capacity to act as a leader.

This is particularly unfortunate in view of the need for leadership on the Paris Agreement Work Programme.  I recall that in March 2017 Benito Müller and myself published a Strategy Note dealing with the need for EU leadership through strategic collaboration with China and with other countries like India or Argentina. We also suggested two additions to the EU “tool kit” in the form of joint targets and option of coordination through a special envoy.

EU has tried to strengthen cooperation with China and Canada, and a couple of meetings have been held with these countries over the last years. Furthermore G 77 countries have met in various settings, the most recent one being the Johannesburg Declaration of the BRICS which underlines their countries’ commitment to implement the 2030 Agenda for Sustainable Development and the Paris Agreement. The Talanoa Dialogue is another element in the preparation for Katowice, and there will of course be other preparatory meetings. But the crucial question of decisive leadership like the one of France in preparing the Paris COP 2015, and the China/US strong cooperation at the time, all that remains very uncertain. I do hope that the ecbi Oxford meetings will promote positive ideas on the work to be undertaken over the next few months.

In addition, and based on my own experience, I believe that we need to underline that climate leadership is not only linked to positions of nations. Over the years, negotiations on sustainable development have benefited from the leadership of another character, namely the important actions of Secretariats and Chairpersons, beginning with the strong leadership in Rio 1992 of Maurice Strong as Secretary-General   and Tommy Koh as Chairman of the UNCED Conference; and that of Jean Ripert as Chairman of the Negotiating Committee on Climate change, and the strong support of Michael Zammit Cutajar as Executive Secretary.

Looking back at the twenty-eight years I have been involved in the climate negotiations, beginning in 1990 as Chief Negotiator of Sweden in the decade up to 2001, then as an adviser to the Swedish delegation for a number of years, and finally as a retired but active observer of events. I feel there is a structural pattern which links science with politics, nations with individuals, failure with success; and ultimately a common feeling of responsibility for the real long term – 2100 and beyond.

The links between science and politics were established at the very beginning with the First Assessment Report of IPCC appearing four months ahead of the beginning of the negotiations of the Convention in early 1991. The presentation of the report by IPCC Chairman Bert Bolin of Sweden had a deep impact on the negotiators, and Bolin’s regular appearances over his ten years as IPCC Chairman made him one of the leaders in the process. Nevertheless, the negotiation of UNFCCC was several times on the brink of collapse, most seriously a few weeks before the Rio Conference: pessimism was deep, as we were facing a draft full of brackets; but Chairman Ripert  was finally given a mandate to present a completely new text without brackets: he did so and also led the negotiation to a successful conclusion.

This was the first of a series of cycles of pessimism, followed by progress and success through strong leadership. The first came at COP 1 in Berlin in 1995: I chaired the negotiations for the Berlin Mandate, designed to set the stage for the Kyoto Protocol. At the level of officials, we managed reasonably well, but some crucial and decisive issues were beyond our reach and pessimism was growing. But in a final night of negotiations at ministerial level the Chair, a then rather unknown young German Minister of Environment showed her skills and turned the Conference into success. Her name was Angela Merkel. And two years later the resourceful Chair, Raoul Estrada of Argentina through strong leadership managed to reach agreement on the Kyoto Protocol.

However, the struggle for entry into force of the Protocol opened a new cycle of pessimism when the US in 2001 decided not to ratify the protocol, only a couple of months after a disastrous COP in the Hague, when Dutch Chairman, Environment Minister Jan Pronk, failed to get agreement on anything. However, the incoming EU Presidencies of Sweden and Belgium managed to solve the immediate crisis, and Pronk successfully chaired a resumed COP in Geneva in the summer of 2001, confirmed in the regular COP in Marrakech in late 2001.

The Kyoto Protocol was now “ratifiable”, but the rules for entry into force were compromised by the US exit. A new cycle of pessimism opened, but in 2004, Russia finally decided to ratify, and the Protocol entered into force in February 2005. However, the delay in entry into force would have repercussions that played a role in the next cycle of pessimism connected with the Copenhagen COP in 2009.

Expectations were high that autumn for a decision on a Second Commitment period for the Kyoto   Protocol, especially since a summit at the very highest level would be held in connection with the COP with all the top leaders of the world invited. But the detailed preparations failed and pessimism grew as the Copenhagen COP unfolded. The bad organization of the summit at the end of the Conference seemed to confirm the failure, and the political document agreed – known as the Copenhagen Accord – was not well received. However, as we all know, Mexican and South African engagement and leadership in preparing the COPs in Cancún (2010) and Durban (2011) together with a growing understanding of the potential of the Copenhagen Accord changed the atmosphere and paved the way for the adoption of the Paris Agreement in 2015. A new cycle of optimism was then established by an efficient French Chairmanship with Foreign Minister Laurent Fabius and Ambassador Laurence Tubiana in the lead. The rapid ratification process and the early entry into force of the Agreement were then welcomed by all.

The optimism is still there but worries exist in the preparation of the entry into force of the new regime in 2020, in particular the Paris Agreement Work Programme. The next few months will be crucial, and therefore the discussions in Oxford this month are so important. As noted in the beginning of this paper the overall global prospects are not favourable, and the APA meeting in May left many questions open. The resumed meeting of subsidiary bodies in Bangkok September 3-8 and the continued Talanoa Dialogue will show whether the Paris enthusiasm is still there to enable constructive results in Katowice in December. No doubt the IPCC report on the 1,5 degree target will also have an impact in this connection.

My conclusion is that the implementation of the Paris Agreement may still be part of a positive cycle. However, the relative weakness of leadership on the side of the traditional big actors has to be compensated by strong support from business, finance and climate NGO’s. No doubt this year’s extreme weather conditions and all the disasters linked to them have had an impact on public opinion globally. But how much will this influence the negotiations? The Bangkok meeting is also an opportunity for the skillful and hard-working APA Co-chairs Jo Tyndall and Sarah Baasha to provide strong and constructive leadership and open the way for success at the moment of truth in Katowice in December. If this would happen it could open the way for a positive preparatory process for the Paris Agreement by 2020.

Let me return to a more long-term aspect of leadership, as the crucial implementation of the PA will develop in the period up to 2030 and beyond. It is a question of great political significance as the pattern of leadership and commitment will be facing and operating the new concept of NDC:s, which will bring national and international policymaking closer to each other. The management of a system of internationally binding procedural rules with commitments for action which are not binding internationally will require new thinking, new practices, and new flexibility. Perhaps the experience of OECD, which has been operating a system of this kind, could be helpful.

GCF Board: In need of a cultural revolution!

Introduction

Anyone following climate finance who was not at the recent 20th meeting of the Green Climate Fund (B.20) can be forgiven for being taken aback to read: “Board meeting turns ‘toxic’ as UN climate fund runs low“ and “UN climate fund chief resigns for personal reasons while board meeting collapses“. What happened?

Ostensibly, the seed for the collapse was sown in the run-up to the meeting when some members felt that, contrary to their interpretation of due process, they were not sufficiently consulted by their constituency Co-Chair when the draft agenda for the meeting was put together. This, in conjunction with the fact that the constituency in question was unable to nominate a candidate from their ranks when their Co-Chair was unable to attend the meeting, led to an awkward late opening of the meeting followed by an unedifying agenda fight lasting until the end of day 2 (of a 4-day meeting!).

However, that is not all there is to it. This blog looks more closely at the issues that lie behind the collapse of B.20 and suggest a few things that might help to improve the Board culture, not least because I believe the time is now finally ripe to do something about it. Why? Given the dramatic failure of B.20, maybe there is a willingness by the Board to look into how a repeat performance can be avoided. So, in short, the purpose of this blog is to support the cultural revolution that is required for the GCF to do its job properly, not to say to survive.

The GCF, as it has evolved, has a couple of general governance problems that need to be addressed. To explain, consider the standard best practice corporate governance model, which distinguishes between three governance tiers: the executive, led by a CEO, the board of (non-executive) directors, and the company membership/shareholders. Each of these tiers has different functions. According to the G20/OECD Principles of Corporate Governance, the first responsibility of board members is that they “should be informed and act ethically and in good faith, with due diligence and care, in the best interest of the company and the shareholders.”

The first problem I have in mind is systemic, that is it is shared by many, if not most multilateral funds with a GCF-type governance structure: not only are all board members (representatives of) ‘shareholders’, but (of) shareholders with widely different, indeed in some cases, mutually incompatible interests. The only way in which Board members can serve the best interest of the ‘company’ is if they put the company interest first and their shareholder interest second. If this is not done, then everyone loses, as was painfully obvious at B.20 and was clearly not in the interest of the organization.

The second problem is more specific to the GCF governance culture as it has emerged over the years, namely the Board having developed a culture of ‘micro-management’, taking on tasks that in a mature organisation should be left to the executives.

What to do? In light of the antagonistic, or as one member called it “toxic nature of the last Board meeting, it is not self-evident what could realistically be done to effect the required change in Board culture away from bi-polar negotiations to collective primary responsibility for the wellbeing of the Fund. So, the following suggestions are at best ‘baby-steps’, hopefully in the right direction.

Remedy One. Adopt the “2 Co-Chairs – 1 Board” (2-1) Model

In the course of the rather drawn-out opening of the meeting, Ayman Shasly (member of the Board from Saudi Arabia) made an intervention that sums up very nicely one of the key remedies I have in mind, namely that the two Co-Chairs are chairing the whole Board and not just a ‘constituency’. It would be good, in Shasly’s words, “if the two Co-Chairs were to treat us all as one constituency and not two constituencies [and] communicate equally, symmetrically, in unified communications to all Board members and alternate Board members.  [The two Co-Chairs should use] one mailing list, to really demonstrate to the international community that this Board is one Board and is not divided over two constituencies. … I truly believe this is a good practice that we should establish under your leadership.”

To be fair, a similar sentiment was already included in the “Co-Chairs’ joint vision for 2018”, sent to GCF Board members and alternates in April 2018, which was “to strengthen the role of the Secretariat, to build bridges among Constituencies to strengthen the Board’s ability to operate as ONE BOARD [sic.] and to increase knowledge sharing between the secretariat and the Board.”

Shasly was rightly highlighting the fact that, according to the Rules of Procedure, the Co-Chairs are elected by the whole Board as Co-Chairs of the whole Board and not of some sub-set or other. Indeed, according to these Rules, the Co-Chairs, “in carrying out their function as Co-Chair, … shall be guided by the best interests of the Fund.”  The only ‘constituencies’ for the Co-Chairs should be the Board as a whole and the Fund. To serve in this capacity, the Co-Chairs should be supported by a single joint team of advisers and they should not involve themselves in ‘constituency’ matters. Thus, should some members of the Board feel the need to coordinate among themselves, then they should do that by themselves, without involving the Co-Chairs and their support team.

In the same vein, the Board should look very carefully at what they can and cannot expect from the Co-Chairs, particularly in between meetings. Take the expectation that Board members should be consulted in the process of drafting meeting agendas. According to the Rules of Procedure, “the Secretariat will, with the approval of the Co-Chairs, prepare and distribute the provisional agenda for each meeting.” There is no mention about a Board member consultation.

The problem is that there has been a tendency among some of the previous Co-Chairs to involve themselves and the Board in micro-managing the Secretariat, which derived from a distrust by some Board members in the ability of the Secretariat to provide what they wanted without their direct supervision. However, it is clear that this sort of micro-management is not sustainable in the long run, which may also have been the reason why in their 2018 joint vision, the Co-Chairs stated that “we will increasingly rely on quality assurance systems inside the Secretariat, limiting Co-Chairs role in the preparation of Board meetings. In principle guidance will be provided as regards to modalities and structures for the yearly Board meetings including the daily organization of work as well as on documents and draft decisions with the Secretariat making the ultimate decision to release documents unless there are particular reasons to deviate from that principle.”

Micro-management by the Board may have been necessary while the Fund was being set-up. But the Fund is now grown up, and its executives need to be allowed to do the job they are, according to best practice, meant to. If the Board feels they are not doing their job properly, then the solution is for the Board to make sure they do, and not to take on the work themselves.

Remedy Two. Reduce ‘Airtime Inequ(al)ity’

The division between a ‘developing country-’ and a ‘developed country constituency’ derives from the multilateral climate change negotiations, but that does not mean that the adversarial culture is inevitable. After all, the Board of the UN Adaptation Fund (AF) is similarly structured, and it has managed to build a genuinely collegiate culture. So, what is the difference?

The AF Board has, from the outset, had the 2-1 model of chairing in the form of a single Chair and a Vice Chair (rotating between developed and developing country members), and it has over time given up the practice of constituency meetings.[1] It has also, and I believe not unrelated to this, avoided to emulate the practice of UNFCCC plenary sessions, where each constituency has a spokesperson who is expected to make the intervention on behalf of the constituency, with other constituency members only meant to intervene in order to support the Chair’s statement.  Unfortunately, the airtime patterns at B.20 reveal the sort of “airtime oligarchy” that one could expect in UN plenary sessions with a few members being given three to six times the average air time, and others well below average, if any at all. Fig. 1 represents the share of total webcast airtime of individual members at B.20[2] and Fig. 2 represents the percentage deviations relative to the average webcast speaking time[3].[4]

This is not appropriate for a Board of equal members and, as witnessed in the reception of the B.20 deliberations outside the Board room, can lead to the perception of deliberate time wasting, with the effect that there was no time left to deal with actual project proposals and accreditations. It is not easy to see how this could be remedied short of introducing some measure to ‘incentivize’ the oligarchs to give up some of their disproportionate airtime usage (maybe through an effective guillotine on the time to be used in individual interventions[5]).

Remedy Three. Introduce Activities & Accreditation Days at Board meetings

There is a very simply tool  for avoiding the unacceptable situation of procedural wrangling eating into the time for deliberating activity (project/programme) proposals and accreditation requests. All it takes is to set aside a specific time period, say a day (or two) in the meeting for that purpose, in the way in which there are days set aside for constituency and committee meetings. As it happens, something similar was also envisaged in the Co-Chairs 2018 joint vision, as an “Advisory Day” to provide “an opportunity for advisors to discuss policy items and funding proposals with the Secretariat prior to the actual Board meeting with the purpose to increase knowledge on technical aspects of policies, as well as to identify and informally address possible concerns in order to streamline the decision making at the Board. A specific time slot will be dedicated for interactions with CSOs, private sector representatives and accredited entities.”

Although this would have been a step in the right direction – ultimately wasn’t to be because of push-back from some Board members – it wouldn’t have been exactly what I have in mind here. The days for discussing activity proposals and accreditation requests proposed here are not for advisers alone. They are meant to be for the discussion of these matters by Board members. Advisory Days as envisioned by the current Co-Chairs might still be useful as a preparatory exercise, but the Activities & Accreditation Days proposed here are intended to be the main locus of Board deliberations on these important issues. Having such days set aside outside the order of the agenda[6] would ensure not only that the Board can actually perform one of its key duties: the scrutiny of proposals put before it for adoption. It would also enable the proponents of activities and the accreditation candidates to attend just these days, and not have to follow the remaining Board deliberations, which some of them may regard as not really worth their time. Having sat with the observers during B.20, it was absolutely clear that the Board cannot allow a similar fiasco to happen again without terminal reputational damage to the Fund.

[1] Except for the selection of candidates for Board Chairs and Vice-Chairs.

[2] In order not to unhelpfully point fingers at this point in time, I have decided not to identify either individuals or constituencies.

[3] Note that the sum of the bars is a measure of (airtime) inequality.

[4] I would like to thank Emmanuel Taiwo who was at B.20 with me and kindly offered to go through the web casts and list the durations of interventions.

[5] This still does not mean that airtime could not be hogged through repeated requests for the floor, but it might help to trim the airwaves from unnecessary rambling.

[6] I am fully aware that taking the deliberations on project and accreditation proposals outside of the sequencing of the meeting agenda might not be palatable to those who would like to use negotiation-style issue linkages to get ‘the other side’ to adopt what they want. Although I do not think that such ‘issue-linkages’ are in the interest of the Fund, the concerns of those who would want to continue to use them could be accommodated by including the actual formal decisions (not the deliberations) as part of the sequencing of the meeting agenda.