Luxembourgh Times

UN climate talks hit a wall over tensions about finance

Weeks of negotiations were overshadowed by cost of meeting demands of Paris agreement

Annual intersessional meetings are a chance for negotiators to outline their positions ahead of the main COP summit at the end of the year

Annual intersessional meetings are a chance for negotiators to outline their positions ahead of the main COP summit at the end of the year © Photo credit: AFP

Source: Bloomberg

By Leslie Hook

Tensions over climate finance threaten to derail this year’s COP26 summit after weeks of preliminary UN deliberations yielded little agreement over how to proceed with core principles of the Paris climate accord.

The downbeat conclusion fuels further disappointment about progress on halting global warming, after the G7 leaders summit in Cornwall failed to produce specific plans for new climate funding.

A major reason for the discord is that rich countries appear to have missed a target of $100bn in annual climate aid by 2020, creating mistrust among the 191 countries that signed the Paris agreement.

The shortfall in funding also sets the scene for a series of difficult discussions in November at the COP26 in Glasgow when it comes to agreeing new goals for climate finance.

“It is unlikely that rich countries hit the target of mobilising $100bn per year by 2020,” said Amar Bhattacharya, co-chair of the UN’s Independent Expert Group on Climate Finance and senior fellow at the Brookings Institution, although official figures are yet to be tallied formally.

At a time when government coffers have already been emptied by the coronavirus pandemic, reaching agreement on climate finance — public and private funding to help developing countries cut emissions and adapt to climate change — is more contentious than ever.

During three weeks of tense negotiations at the UN Climate Change intersessional meetings, which concluded on Thursday, an undercurrent of discontent over climate finance stymied a number of discussions on topics such as carbon markets and transparency.

“The issue of climate finance still remains the most difficult part of all these negotiations,” said Molwyn Joseph, environment minister for Antigua. “I do not believe that particular aspect was dealt with as it should have been.” Rich countries donated around $80bn in 2018, according to UN figures.

The annual intersessional meetings are a chance for negotiators to outline their positions and identify areas of disagreement ahead of the main COP summit at the end of the year. This year, however, participants say scant progress was made.

Several aspects of the “rule book” governing the 2015 Paris climate accord are due to be finalised at the COP26, including how countries report their carbon emissions.

Negotiators will also attempt to craft rules for global carbon markets, for example, carbon offsets between countries. The issue — mandated in Article Six of the Paris accord — has thwarted several previous summits.

UN climate chief Patricia Espinosa admitted there had been a lack of progress. “I cannot say that there was really any breakthrough in the consultations that took place here,” she said on Thursday.

She said that the promised $100billion (€84 billion) is “absolutely crucial” for the success of the negotiations, adding that “everyone mentioned this as one very important point”.

Lord Nicholas Stern, professor of economics at the Grantham Research Institute on Climate Change at the London School of Economics, said developed countries should contribute at least $150billion (€126 billion) in climate finance annually by 2025.

“The success of COP26 depends on whether the [financial] flows increase in quantity and quality by 2025,” he said.

“It would be feasible for COP26 to agree that rich countries could mobilise $150 billion (€126 billion) a year in climate finance from public and private sources for developing countries by 2025, including $60 billion (€50 billion) in bilateral finance and a further $90 billion (€76 billion) through the multilateral development banks.”

UK COP president Alok Sharma has said that reaching the $100bn (€84 billion) climate finance target was a “matter of trust”, the UK failed to rally other countries to make unified financial commitments at the G7 summit in Cornwall last week.

Though many reiterated a commitment to climate finance, only a handful made new pledges. Germany pledged €6 billion a year by 2025, while Canada promised to increase to C$5.3billion (€3.6 billion) annually.

The leaders also provided few details about a new funding framework, called “Build Back Better for the World”, billed as an alternative to China’s Belt and Road Initiative.

The pandemic has added further uncertainty to COP26, which has already been delayed by a year. The UK hosts hope to hold an in-person gathering supported by a range of coronavirus precautions, including providing delegates with vaccines.

However, the UK has also not ruled out the possibility of further postponing the COP until spring 2022 if the meeting becomes unfeasible.