The United Nations Climate Conferences, or “COPs,” come and go, year after year. The Twenty-sixth Conference of the Parties to the United Nations Framework Convention on Climate Change has just ended in Glasgow.
COP has been difficult, particularly due to COVID-19, although it has had three successful outcomes.
step up ambition
First, updated five-year national climate pledges – “NDCs,” or NDCs in terms – have been announced by many countries, including more ambitious long-term goals by all G-20 countries.
This is important because it underscores the workings of the five-year “undertaking and review” structure of the Paris Agreement.
The International Energy Agency (IEA) has suggested that if the pledges are implemented collectively, the pledges would limit the average global temperature increase to 1.8°C, which is consistent with the target of “well below 2°C” referred to in the Paris Agreement.
The more ambitious 1.5°C target has been confirmed as the preferred long-term target, even if most observers see it as too challenging.
It was also agreed to “reconsider and strengthen the 2030 goals” in the Nationally Determined Contributions by the end of 2022 and to accelerate efforts towards the relentless phase-out of coal energy and ineffective fossil fuel subsidies.
The discussion must now move from making pledges to fulfilling pledges made, bending emissions paths toward zero within a timetable that would avoid the worst effects of climate disruption.
What makes it even more challenging is that the process is based on volunteerism and peer pressure, with no binding penalties for non-compliance.
Not only are the pledges self-limiting, they can be repudiated without consequence, as the United States made clear when it withdrew from the Paris Agreement. Fortunately, the United States has since rejoined, but the process remains fragile.
coalitions of willing
A second successful outcome was that to initiate enhanced policies, groups of countries and companies announced several specific climate actions: reducing methane emissions, ending deforestation, greening private finance, and accelerating coal phase-out, among others.
Although these voluntary commitments vary greatly in scope, participation, and financial provisions, they hold true promise.
Some can serve as an example for the future, such as the example on greening the energy sector in South Africa, with reference to specific investments in renewables and concrete steps for financing.
Robust methodologies are now needed to ensure that these pledges are adhered to, as it is much easier to make promises and make decisions than to keep them.
Specific climate action coalitions are welcome, as they complement the Paris Agreement and can help advance the policies that countries now need to develop and implement.
Completing the Paris Agreement Rule Book
The third addition is that the Paris Agreement rulebook is now complete, as negotiations on transparency and international carbon markets (“Cooperative Approaches” to Article 6) have been completed.
A new mechanism has been set up to be supervised by a newly created “supervisory body”. It is critical for this body to learn from the experience of the Clean Development Mechanism Executive Board established under the Kyoto Protocol, where lax standards and political interference have led to an over-supply of credits of little financial value, sometimes environmental. There is now an opportunity to do better.
Climate finance will increase from developed to developing countries, even if there is hope for more generous specific commitments.
However, the key question is not just how much money will be transferred, but how much public and private capital will be mobilized towards the massive amount of low-carbon investment necessary, for mitigation and adaptation, around the world.
“Middle way” with border adjustments
Nobel laureate Professor W. Nordhaus has criticized the Paris Agreement as being unfit for purpose due to the lack of binding sanctions.
Instead, Nordhaus proposes the idea of ”carbon clubs”. Like-minded countries that want to be ambitious in climate action can agree to exchange goods between each other without charging additional climate duties, but imports into club countries must pay a fee.
This can be justified on the grounds that production costs must be equal between production within the club and imports from abroad.
There will be, in one fell swoop, an incentive to join the club, and as a result of not doing so.
For the European Union, which wholeheartedly supports the Paris Agreement and multilateralism in general, Nordhaus’ approach is demanding.
However, there is a middle way which is how the EU carbon limit adjustment mechanism is designed.
Imports into the EU of energy-intensive products will be subject to duties in line with what European producers of similar goods have to pay as a result of climate regulation.
Exemptions and discounts apply to goods from countries whose climate policies comply with those of the European Union, while those without similar policies will be subject to duties.
Such a mechanism would enable the EU to be ambitious, as is expected of industrial economies under the Paris Agreement.
The modalities and terms of the mechanism for adjusting carbon limits should be elaborated in more detail and ensured that they are consistent with the rules of the World Trade Organization.
But the logic is compelling. While it is true that such modifications were not expressly foreseen in the Paris Agreement, Europe’s greater ambition would contribute to the greater good.
Frans Timmermans, Executive Vice President of the European Commission, was busy at the COP explaining the rationale for the mechanism for adjusting the carbon limits, and succeeded in curbing the hostility that was expected from some of Europe’s trading partners on the issue.
Indeed, this tool is necessary to prevent production from “leaking” away from Europe and moving to jurisdictions with much lower climate ambition, thus undermining the ultimate goals of the Paris Agreement.
As climate ambition rises and regulatory costs increase, which is inevitable for early adopters, the risk of carbon leakage increases. Clearly, simply shifting energy-intensive production is not the answer.
Of course, the necessary allocations could be given to the least developed countries and the revenue collected could be distributed to assist the global effort.
The EU proposal for a mechanism to adjust carbon limits does not rule out the possibility that several countries could together create a club.
If the European Union, the United States and China, for example, succeed in creating the carbon club, it could open a promising path to higher climate ambition without fear of carbon leakage, and create a powerful incentive for other countries to join.
“Implementation” of COP27?
While states are sovereign over the policies and procedures they establish, perhaps future COPs could usefully consider implementation.
No country has a monopoly on good political ideas and experiences, and every country is different. By sharing good practices, and comparing what works and what doesn’t, effective measures that reduce emissions pathways can be implemented.
At COP 27 in Egypt, countries will be asked to demonstrate that their policies for the next decade are in line with their long-term goals.
Why not shift this COP from the traditional “COP” to a “policy comparison”, focusing on implementation rather than objectives?
Jos Delbeke is the former Director-General of Climate Action in the European Union, Chairman of the European Investment Bank’s Climate Action Board, and Professor at the European University Institute’s School of Transnational Governance. Peter Weiss is a Senior Research Associate at the EUI School of Transnational Governance.