The world’s nations are meeting in Bonn, Germany, for the 23rd annual “conference of the parties” (COP) under the UN Framework Convention on Climate Change (UNFCCC), which aims to prevent dangerous global warming. This year, Fiji plays president and meeting the Paris climate goals are top of the agenda.
CAREC team participated in several side-events and considered the countries’ experience in addressing climate change issues in different economic sectors, different instruments and mechanisms used for both the mitigation of, and adaptation to climate change.
High-level Opening of Global Climate Action on the Day 1 reaffirmed that governments alone cannot achieve the Paris goals without proactive action from all levels of government, the private sector and civil society. The Marrakech Partnership for Global Climate Action launched at COP22 calls for strengthening such collaboration to immediately lower emissions pre-2020 and enhance resilience against climate impacts, guided by the long-term goals of the Paris Agreement and undertaken amid adoption of the Agenda-2030 and Sustainable Development Goals.
During COP23 negotiations the International Cooperative Climate Initiatives were discussed in the Nordic Pavilion, where the representatives of UN Environment, Green Stream, UNFCCC and NDC Partnership delivered series of presentations.
Conference sessions exposed to public the Climate Initiatives Platform, which is an online portal that provides a space to collect, share and track information on international cooperative climate initiatives driven by non-state actors, including businesses and cities. Currently, the collection consists of 224 initiatives and covers such themes as finance, transport, agriculture and forestry, energy, emissions, adaptation and others.
Another innovative initative is NDC Partnership, which was created in order to help countries in getting the technical knowledge and financial support they need to achieve large-scale climate and sustainable development targets. The NDC Partnership builds in-country capacity and increases knowledge sharing so that climate policies have meaningful and enduring impacts, and drive increasing global ambition over time. NDC Partnership announced that the Regional Hub to Support Climate Action will be organized in Suva, Fiji and will provide expertise for developing regional solutions to mitigate global warming and enhance efforts by Pacific islands to adapt to climate change.
Among the international initiatives discussed was the Non-State Actor Zone for Climate Action (NAZCA), a global platform that aims at to bringing together the companies, cities, subnational regions, investors and civil society organizations to address climate change. Through NAZCA the non-state actors can register their climate action commitments and demonstrate how to face the common evil of global warming through this platform. This platform is developed to catalyze public and private sector action on climate change prior to and after 2020.
Participants were also introduced to German Development Institute (DIE) and Stockholm Environment Institute (SEI) launched a platform on NDC-SDG Connections. This online tool enables users to examine synergies between the climate and development agendas and identify entry points for coherent policies that promote just, sustainable and climate-smart development.
COP23 SIDE EVENT: Water-Food-Ecosystem Resilience
This side event organized by the Republic of Korea was focused on the Water-Food-Ecosystem resilience in the mid-latitude region to achieve the SDGs and Paris Agreement. The event underlined the interdependence between sectors which is needed to overcome trade-offs while addressing climate change issues. The concept of resilience was explained as the capacity for a socio-ecological system to absorb stresses and maintain function in the face of external stresses imposed upon it by climate change and adapt, reorganize, and evolve into more desirable configurations that improve the sustainability of the system, leaving it better prepared for future climate change impacts. Representatives of Korea University stressed the vulnerability of the mid-latitude region. The mid-latitude region, represented by 50% of world population and 36 countries including Central Asian states, is vulnerable to climate change due to water shortage, desertification and sensitive ecosystems.
Multisectorial process to the NDC implementation
Latin America countries, in particular Peru, Chile, Ecuador, shared their experience in the development of their Nationally Determined Contributions (NDCs). The need of setting up a multi-sector and multi-stakeholder working group while addressing climate change was underlined. Minister of the Environment of Peru noted that INDC development in the country was based on the incorporation of 3 approaches: intergenerational, intercultural and gender.
African countries also shared their experience on the development of their NDCs at the side event “Support to NDC implementation in Agriculture”, organized by FAO. They underlined that all NDCs in Africa focus on adaptation measures in agriculture. Prior to the NDC identification, gaps and opportunities in the agriculture sector were presented in the regional analysis of NDC in Africa by FAO.
FAO representative noted that 50% more food is needed by 2050. Meanwhile, the world is facing the problem of obesity in one part and the problem of hunger in another. In the context of climate change agriculture is the main sector facing the consequences of climate change. Agriculture is exposed to 26% of economic impact of climate change, and this share increases up to 80% under drought conditions. Therefore, agriculture needs to be climate-smart. Agrobiodiversity practices need to be scaled up by private funds and agriculture investments.
The panelists of the session on scaling up private sector climate actions in agriculture highlighted the potential benefits of engaging with the private sector as following:
- Access to expertise and network: complementary skills to our own
- Fitness for purpose: creating more appropriate products and services
- Cost-sharing/reduction: avoiding duplication, leveraging joint investments
- New paradigms/models: developing novel approaches for complex challenges
- Upskilling staff: enhancing competencies and skills in our staff
- Accelerating impact: scaling up and out
- Reflected glory: partnering with credible businesses
The speaker of the session dedicated to the private sector in agriculture suggests the following to be accounted for climate action:
- Farmers should be involved into the policy design
- Labeling of agricultural or other products is an opportunity
- Standardization of the agricultural production needs integrated approaches
- Government can encourage business to invest in agriculture by benefits from carbon pricing
Finance was one of the central topics of climate agenda these days. These issues were discussed included blended finance, different financial instruments, good price on fossils and the need of regulatory certainty ensured by national governments.
On one of the side events the representatives from UNEP Finance Initiative (UNEP FI) shared the framework on their climate action, describing the objectives, measurement used and actions taken. UNEP FI highlighted the main activities of the Task Force on Climate Related Financial Disclosures (TCFD) which provides an opportunity to bring climate-related financial reporting to a mainstream audience. UNEP FI currently piloting TCFD in 17 world’s leading banks. The member banks will work together with UNEP FI to develop tools and indicators to strengthen their assessment and disclosure of climate-related risks and opportunities. They will provide an access to reliable information on financial institutions’ exposure to climate-related risks and opportunities and will facilitate the sustainable and stable financial system. UNEP FI also presented the existing financial groups as Energy Efficiency Financial Institutions Group (EEFIG), De-risking Energy Efficiency Platform (DEEP) and etc. The UNEP FI representatives claim that there is need to upscale investments levels. Six major drivers of FI action were identified as risk management, technological development, regulatory requirements, energy price hedge, frequently short payback for low hanging fruits, and deep refurbishments pay off in “green value” segments.
Climate Bonds Initiative, WWF Landscape Finance Lab, Kommuninvest and С40 Cities presented their vision of innovative financing models for the transition to a climate-resilient future at the side event hosted by WWF Pavilion. The importance of innovative ways to invest into smart infrastructure development, ensuring right and transparent investment into eligible and clean projects and using such financial instruments as green loans, green bonds, funds, subsidies, guarantees and green insurance was noted.
The International Renewable Energy Agency (IRENA) organized the session dedicated to energy issues, where several international partnerships and networks presented their activities on energy efficiency.
The Private Financing Advisory Network (PFAN) is one of the actors in climate finance space addressing key barriers for small and medium sized enterprises in developing countries and emerging economies. The Network is a multilateral, public-private partnership which was initiated by the Climate Technology Initiative (CTI) in cooperation with the UN Framework Convention on Climate Change’s Expert Group on Technology Transfer. It screens promising clean energy projects and supports in development of a business plan, investment pitch, and provides guidance before projects are presented to investors at Clean Energy Financing Forums hosted across Asia, including Central Asia, Latin America and Africa.
Energy and Environment Partnership Program (EEP) provides funding to renewable energy and energy efficiency projects. It considers solar PV, biogas, biofuels-liquid, solid biomass, wind power, hydropower and wave and clean technologies. The partnership develops some knowledge products on innovative business models, technical and policy briefs.
IDB Invest is a financial organization, working on financing sustainable enterprises and projects to achieve financial results that maximize social and environmental development for the region.
The Chinese pavilion hosted the side event on the Sustainable Carbon Markets. The panelists have noted the importance of the existing Partnership for Market Readiness (PMR). The PMR is a platform, where countries work together to share their experience, knowledge for the future of cost-effective GHG mitigation. It helps the countries to prepare and implement climate change mitigation policies—including carbon pricing instruments such as emissions trading and carbon taxes. The PMR has a Technical Work Program and through it promotes good practice and facilitates efforts to establish common standards and approaches for GHG mitigation. The resources PRM generates also address technical elements related to specific instrument design; monitoring, reporting and verification (MRV) methods; baselines and benchmarks; stakeholder engagement, and others. The speaker from South Korea mentioned that the linkage of the ETS is a complicated process and require long time. In order to have a productive ETS links, the systems need to be flexible. Meanwhile, the representative from Japan claims that companies in many cases cannot invest into the new technologies because of the high prices. Japan is discussing ETS implementation for 15 years, and probably still will not establish it in the nearest three years. China makes efforts in development of the nationwide ETS. In this case the Chinese ETS will be the largest in the world. Nevertheless, the national ETS will cover eight sectors in its first phase, with a potential expansion post-2020 to more sectors and/or installations. The government has launched the Green Finance Program, which supports the ETS, and under this program the national bank with support of government provides the loans at a lower percent for allowances.
European Union ETS post 2020:
Along with that, it is important to highlight that EU is developing new robust and fair rules for its ETS. The system of allocation will be revised, and is expected more than 50% of allowances to be allocated for free to companies over the period 2021-2030, including a considerable number of new and growing installations. Meanwhile, the benchmarks will be updated in order to reflect technological advances. Furthermore, several support mechanisms will be established to help the industry and the power sectors meet the innovation and investment challenges of the transition to a low-carbon economy. The mechanism will include two new funds:
- Innovation Fund (+50 million allowances) – to support the innovative technologies in industry, including renewables, carbon capture and storage, energy intensive industry;
- Modernization Fund (+310 million allowances)– facilitating investments in modernizing the power sector and wider energy systems and boosting energy efficiency in 10 lower-income Member States
A number of governments are incorporating carbon pricing policies into their mitigation strategies using the instruments as emissions trading and carbon taxes in order to achieve their commitments on emissions reduction. The Paris Agreement implementation phase will definitely require the emissions cut, while more countries might launch nationwide or even linked ETSs.
LOW-CARBON AND GREEN ECONOMY
Low-carbon and green economy was discussed on two side-events “Transfer to the green economy – how Russia and Vnesheconombank are approaching the issue” (Russian Federation Pavilion) and “Initiating a just transition to a low-carbon climate resilient future” (Germany and OECD side-event). German Minister Barbara Hendricks noted that developing a resilient climate change infrastructure, ensuring socially-sound transformation, decarbonizing energy sector are essential to align with Paris Agreement goals.