Re-Gearing for a New Climate Agreement

by Rishikesh Bhandary

Negotiations for a new, comprehensive agreement on climate change (expected in Paris in 2015) are taking place on a complicated and conflicting backdrop: the reduced appetite for scaling back carbon emissions in major economies, the urgent need to scale up climate mitigation action amidst calls by the Intergovernmental Panel on Climate Change, and the alarming convergence of views by countries to formalize a climate mitigation system wholly inadequate to minimize climate impacts. The risk that we currently face in the climate change negotiations is the institutionalization of a process that is inadequately equipped to inspire and sustain deep mitigation cuts while keeping pace with the evolving demands of climate science.

The failure of the Copenhagen Climate Conference in 2009 to produce a comprehensive agreement prodded many to think whether such a single undertaking approach was wise. This ‘Big Bang’ treaty fixation continues to persist amongst some quarters, even in the context where the primary venue for negotiating on climate change, the UNFCCC, is unwittingly ceding ground to other initiatives.

We must therefore pay attention to two related issues. First, what is the UN climate treaty system uniquely qualified to do? And, second, are there other institutions or forums that are functionally better designed and equipped to handle various elements that are being raised in the negotiating process?

The UN climate framework will continue to play an important role in two respects. First, it will be critical to scaling up ambition and creating the infrastructure around reporting and verification systems. As the emerging contours of the new agreement indicate, there will likely be a push to formalize a process where countries make nationally determined emissions reductions. This is in contrast to a top-down process where a global goal would be negotiated amongst countries. In this ‘bottom-up’ scenario, the critical question that needs to be addressed is whether these emissions reductions match the demands of climate science or not. Hence, the UNFCCC will continue to have the ‘last resort’ role to devise methods that meet the shortfall of needed reductions. Similarly, as a framework convention with near universal membership, the UN Framework Convention on Climate Change is the most well suited to devise monitoring, reporting and verification systems and place in a compliance system that enjoys the most credibility.

Second, countries have already initiated the process of addressing climate impacts by forming institutional frameworks such the Cancun Adaptation Framework and the Warsaw International Mechanism for Loss and Damage (for impacts going beyond adaptation) under the climate convention. These initiatives are at an extremely early stage and now the focus has to be on how to give them adequate teeth. In addition, while most of the climate finance flows take place outside of the direct control of the Convention, the UNFCCC is nonetheless well poised to steer the process by creating regulatory processes to provide incentives (as they did for the Clean Development Mechanism under the Kyoto Protocol), and to harmonize climate finance efforts.

Regardless of what the outcome is in Paris, climate change will slowly move from being a discrete issue needing a negotiated solution and to taking the form of a sustained condition that we need to learn to manage. This means that the nexus between development and climate change needs to be looked at seriously as with the international processes that can contribute to this nexus. Currently, the most pertinent processes are the post-2015 development agenda that is being discussed as a successor to the Millennium Development Goals and the Sustainable Development Goals process that emerged from Rio+20 Summit in 2012. Coordination and coherence across these processes would be much welcome.

Finally, while the risk of climate impacts has received attention in this series (see Laura Kuhl’s piece on restorative development, for example), we also need to address what is increasingly being called climate risk or carbon asset risk.Carbon asset risk arises when we hold the temperature goal (the global goal to limit warming to two degrees Celsius, for instance) against the total proven fossil fuel reserves to yield ‘burnable’ fossil fuel estimates. As carbon assets enter equity valuations of companies, there is some fear that company valuations may be inflated (“the carbon bubble”) if companies have not recognized what regulatory action on climate change will mean to their balance sheets. This is where the UN climate treaty could play a role. As countries set up their internal processes of determining the scale of emissions reductions, the UN climate treaty needs to encourage articulation of long-term mitigation efforts to generate sustained policy signals.

Instead of a total breakdown of climate negotiations in Paris, the real risks surrounding climate change involve: a continuation of a bottom-up process that is incapable of stabilizing the climate system; the inability to recognize and address carbon asset risks created by national policies and legislations, and the consolidation of an international architecture that cannot help the most vulnerable people adapt to climate change and pursue climate resilient development trajectories.

All in all, a calibrated view of what the UN climate treaty needs to deliver is needed. A few preliminary observations include: devising methods to meet the demands of science while inspiring multi-level action on climate change and addressing issues such as adaptation and monitoring systems that the UN system is uniquely capable of handling.

About the Author

Rishi is a doctoral candidate at Fletcher and a junior research fellow at the Center for International Environment and Resource Policy. He also serves as a Contributing Author to the Fifth Assessment Report (mitigation working group) of the Intergovernmental Panel on Climate Change.

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