At a Glance
Slow progress at the 58th Meeting of Subsidiary Bodies to the UN Climate Convention (SB58) does not bode-well for an ambitious COP28 outcome.
A successful conclusion of the Dubai climate conference (COP28) will address:
- Wording on phasing out fossil fuels
- Enhanced mitigation ambition and adaptation efforts, drawing the right lessons from both the first Global Stocktake under the Paris Agreement and from the IPCC Sixth Assessment report
- Operationalising the Loss and Damage fund agreed at COP27 as well as developing the framework for the Global Goal on Adaptation.
Re-establishing trust over the next six months between developed and developing countries, particularly around the mobilisation of the trillions of dollars needed for a climate compatible transition will be a pre-condition.
The multilateral climate change governance is complex and rigid.
The ultimate aim of the United Nations Framework Convention on Climate Change (UNFCCC) is to “prevent “dangerous” human interference with the climate system”. The convention entered into force in 1994 with 198 countries (parties) ratifying it.
The Conference of the Parties (COP) is the supreme decision-making body of the convention – with all parties to the convention represented, it takes decisions related to the effective implementation of the convention.
Meeting at the 21st Conference of the Parties (COP-21) – the landmark Paris Agreement was adopted – entering into force in 2016. It is a legally binding international treaty on climate change, whose overarching goal is to “limit the increase in the global average temperature to well below 2°C above pre-industrial level and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.” Since 2020, countries have been submitting their national climate action plans, known as nationally determined contributions (NDCs). The Paris Agreement considers “ratcheting” up climate ambition reflected in updated – more ambitious - NDCs every five years.
All States that are Parties to the Paris Agreement are also represented at the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA). The CMA oversees the implementation of the Paris Agreement.
Two permanent subsidiary bodies (SB) assist the key COP/CMA governing bodies: the Subsidiary Body for Scientific and Technological Advice (SBSTA) and the Subsidiary Body for Implementation (SBI). Other ad-hoc subsidiary bodies are established as required.
COP and CMA meet simultaneously once a year, while the SB meets twice. The intersessional SB meeting takes place in Bonn – halfway between two COP / CMA meetings.
Progress achieved in Bonn was meant to shape Dubai…
The COP28/CMA5 meetings in Dubai (30 November – 12 December 2023) will see the conclusion of the first “Global Stocktake (GST) under the Paris Agreement”. Every GST is a two-year process that takes place in five year cycles to see where and how collective process is made towards the achievement of the goal of the Paris Agreement. Reaching an ambitious and actionable conclusion of the GST would be a key pillar of a successful COP28 outcome.
Mobilising the trillions of dollars in public and private finance to operationalize the Loss and Damage fund agreed upon at COP-27 in Sharm el-Sheikh, to meet the Global Goal on Adaptation (GGA) as well as more generally to fund the green transition will be prioritized. Further political guidance is expected from the Paris Summit for a New Global Financing Pact in late June 2023.
The world community will be requested to step up mitigation effort to respond to the Intergovernmental Panel on Climate Change (IPCC) – Sixth Assessment Report (AR6) which constitutes the most comprehensive and robust assessment of climate change to date. The report particularly highlights that temperatures have already risen above 1.1 C since pre-industrial times and calls for emissions reductions of 43% by 2030 to maintain a Paris Agreement compliant trajectory.
…but SB58 was plagued by divisions.
The 58th meeting of the SB (SB-58) (5-15 June 2023) in Bonn was characterized by painfully slow progress. While SB meetings are of a more technical nature than COPs/CMAs – political tensions nonetheless emerged. It took an unbelievable 9 days out of 10 for the planned sessions to agree on agendas for the SBs, highlighting deep divisions – particularly between developed and developing countries, reflecting a lack of trust of the latter into the former’s willingness to deliver the financial flows thought to be required. The response – or lack thereof – to the IPCC AR6 was particularly disappointing as was the inability to agree on putting the “mitigation ambition and implementation work programme” (MWP) on the agenda. Progress on other key elements of the Paris Agreement also failed to materialize, including on developing a framework for achieving the Global Goal on Adaptation (GGA) and on the GST (see below).
Some items under discussion are of relevance to business.
1. GLOBAL STOCKTAKE
The GST is to assess progress made in different areas towards the achievement of the Paris Agreement objectives. It will look at opportunities for enhanced support as well as follow up steps with regards to NDCs, NAPs as well as the longer-term Low Emissions Development Strategies (LEDS). Despite concerns over the slow progress of the GST it is expected that it will report on “collective progress towards achieving the purpose and long-term goals of the Paris Agreement., in the light of equity and the best available science, and informing parties in updating and enhancing, in a nationally determined manner, action and support”. Five sub-sections are likely to be considered:
- finance flows and means of implementation and support – the exact wording for this key section is still “bracketed” – as disagreement on financial flows persist
- efforts related to loss and damage.
- efforts related to response measures.
The sections mentioned above are considered as part of an “indicative draft structure of the decision on the GST” and will be further discussed. Parties and non-party stakeholders (i.e. including business) are invited to submit views by 15 September 2023 on elements to be considered. A synthesis report capturing the outcomes of the three technical dialogues of the GST is to be produced (no date indicated).
2. CO-OPERATIVE APPROACHES UNDER ARTICLE 6 OF THE PARIS AGREEMENT
Emissions reductions that have been authorized for transfer by the selling country’s government may be sold to another country, but only one country may count the emission reduction towards its NDC. The agreement on Article 6 established an accounting mechanism known as corresponding adjustment to ensure that double counting does not occur.
- Co-operative approaches under Article 6.2 of the Paris Agreement create the basis for trading in GHG emission reductions (or “mitigation outcomes”) across countries. It foresees Internationally Transferred Mitigation Obligations (ITMOs). ITMOs require guidelines on how authorizations are to be handled and transparency is ensured. A single international registry could be a permanent solution. In the meantime national and international registries would have to be linked and inconsistencies overcome. Triggers for corresponding adjustments between two parties need to be clarified.
- Co-operative approaches under Article 6.4 of the Paris Agreement are expected to be fairly similar to the Clean Development Mechanism of the Kyoto Protocol. They establish a mechanism for trading GHG emission reductions among countries under the supervision of COP. This particularly matters to business as a company in one country can reduce emissions in that country and have those reductions credited so that it can sell them to another company in another country. That second company may use them to comply with its own emission reduction obligations or to help it meet net zero. Authorization, however, remains a national prerogative – it is to be given by host countries as early as possible to give the right market signals. The fungibility of units under articles 6.2 and 6.4 is being explored.
- Non-market approaches under Article 6.8 of the Paris Agreement recognize non-market approaches to promote mitigation and adaptation. They introduce cooperation through finance, technology transfer, and capacity building, where no trading of emission reductions is involved.
3. EMISSIONS FROM FUEL USED FOR INTERNATIONAL AVIATION AND MARITIME TRANSPORT
- Informal consultations started on submissions from the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO)
- No agreement was reached.
Six months remain to address major roadblocks
COP26 in Glasgow will remain known for the parties’ commitment to phasing down (as opposed to phasing out) the use of coal, COP27 in Sharm el-Sheikh failed in delivering a similar commitment on oil. Addressing [the end of] fossil fuel production will remain one of the most contentious issues at COP28, with a number of parties losing patience with continued wavering around this issue. While at SB58 in Bonn the incoming COP28 Presidency for the first time declared that the “phase-down of fossil fuels [was] inevitable” – many parties will seek a clear timeline and a clear reference to eventual phase-out.
Progress on the operationalization of the Loss and Damage Fund, as well as funding for the Global Adaptation Goal – are likely to constitute non-negotiable pre-conditions for many developing countries. Drawing the right conclusions from both the IPCC-AR-6 and the GST in terms of stepped-up ambitions to pursue a Paris Agreement compatible 1.5C trajectory – while simultaneously dedicating the resources needed to adapt now will determine whether COP28 will make history or whether it will reflect on the global community’s inability to address one of the most important challenges humanity is facing. Re-building trust among parties is therefore essential over the remaining six months.
A fundamental question: “can it go on like this?”
Many delegates expressed frustration at the slow and overloaded process. The ballooning number of additional workstreams, mandated events, and workshops are not conducive for delegates to focus on the bigger picture. This would include how the GST ought to lead to more ambitious NDCs through stepped-up mitigation action, as well as defining a new collective quantified goal (NCQG) on climate finance to mobilize the trillions of dollars needed [as opposed to the USD100bn per year target defined at COP-15 in Copenhagen – and never met] to fund just transition pathways, adaptation efforts and experienced loss and damage.