COP23: The wrap-up and the way forward

Two weeks of climate change talks at COP23 finished last week and, despite a number of difficult moments with a few issues being kicked down the road, progress on the implementation of the Paris Agreement remains steady, but unspectacular.  With 12 months to go before the rules for the implementation of the agreement must be finalised, this is the state of play on the key issues.

Maintaining the Paris momentum

All parties are keenly aware of the need to maintain momentum in the negotiations for the rule book and associated matters for the implementation of the Paris Agreement.  A COP23 decision text, the "Fiji Momentum for Implementation", published at the end of the conference seeks to maintain that momentum by stressing the urgency of the completion of the work program under the Paris Agreement. It also foreshadows the need for an additional meeting of the UNFCCC’s subsidiary specialist advisory bodies to work through the detail of the rulebook, if necessary, so it can be finalised at COP24 in Poland in December 2018. 

As if to confirm that (at least the majority of) the world is serious in addressing the threat of climate change and that the Paris Agreement is the vehicle to do so, the COP released a report card listing a series of concrete climate actions that were announced at COP23.

Critical to achieving the overall goal of the Paris Agreement is the need to increase ambition both under Nationally Determined Contributions (NDCs) and pre-2020 reduction commitments.  In this regard the decision text formally recognises the commencement of the Talanoa dialogue from January 2018 with a view to encouraging a constructive, facilitative and solutions-orientated discussion of each parties’ emissions reduction commitments during 2018 to get the parties closer to achieving the below 2 degree limit.  The dialogue will be assisted by a special report of the IPCC on global warming of 1.5 degrees (the higher level goal under the Paris Agreement), as well as inputs which are invited from any interested stakeholder including non-government bodies. This process reflects an appreciation that:

• there is little utility in ratifying the Paris Agreement and negotiating the rules for its implementation unless the parties' commitments the actually avert the potential for dangerous climate change; and
• expertise and knowledge in solutions to increase emission reductions are not the exclusive preserve of government bodies.

This process will in turn inform the preparation and review of current NDCs in advance of the commencement of the Paris Agreement in 2020.

Pre-2020 action

An element of increasing ambition is the push to get parties to the Kyoto Protocol to ratify the Doha amendment.  That amendment provides for a second commitment period for Annex 1 countries from 2013-2020, so that there is no gap between the expiration of the Kyoto Protocol and the commencement of the Paris Agreement.  Australia ratified the Doha amendment in 2015 in Paris and since then a number of other Annex 1 countries have followed suit, including most recently Belgium, Finland, Germany, Slovakia, Spain, and Sweden. Ninety countries in total have ratified the Doha amendment but a further 54 are required to ratify the amendment before it can commence.

Independent of Doha, and consistent with the COP decision at Paris which adopted the agreement, is a request in the decision text that each party provide an update by 1 May 2018 on how it plans to enhance emissions abatement action prior to 2020.  This will be supported by a stocktake of pre-2020 action in 2018 similar to that in respect of NDCs submitted under the Paris agreement for post 2020 action.

Article 6 of the Paris Agreement

Article 6 of the Paris Agreement has the potential to provide scalable and internationally transferable emissions abatement through both market and non-market mechanisms, which could provide real opportunities to leverage private finance to aid in achieving the abatement task.

As noted last week, after down to the wire negotiations in the informal contact group established under SBSTA, the contact group agreed to recommend to SBSTA the adoption of the co-facilitators’ conclusions on progressing the drafting of the rules for the Article 6 mechanisms.  As a consequence, a framework has been agreed, and drafting of the detail around those rules can commence immediately.  Without underestimating the work required to finalise and agree those rules by COP24, this gives the greatest potential for the rules relating to these mechanisms to be agreed upon, and therefore play a substantive role under the Paris Agreement.

Finance

Finance is everywhere and in every issue at the COP there is a finance element. Finance is and will continue to be a major factor in the success or otherwise of the implementation of the Paris Agreement.

The COP and the LDCs are holding on tightly to the commitment for parties to contribute US$100bn annually by 2020 towards financing climate action, mostly in less developed countries.  Current commitments are well short of that target and there is a distinct risk, now that the US has determined to withdraw from the Paris Agreement, that the target will not be achieved by 2020, let alone annually, such that finance may yet put pressure on the fabric that is the Paris Agreement.

In an attempt to defuse the potential for finance to undermine the universality of the Paris Agreement, COP23 decided that there will be two assessments of climate finance, with high-level ministerial dialogues to be held in 2018 and 2020 aimed at ensuring that the US$100bn will in fact be mobilised by 2020 and each year thereafter.

Comparing oranges with oranges

One of the challenges of the bottom-up process that led to the Paris Agreement, with each party submitting an NDC tailored to that party's particular circumstance, is that the parties have in many cases adopted different approaches to measuring and reporting proposed emission reductions. This variation creates a challenge in assessing each party's NDC in a consistent manner.  To deal with this problem, a decision was made at COP21 in Paris to have the Ad-hoc Working Group to the Paris Agreement (APA)  develop guidance on features of NDCs and how parties communicate those NDCs in a manner which facilitates transparency and understanding.

While the technical challenge of developing comprehensive rules that enable NDCs to be assessed consistently remains, progress was made at Bonn with the preparation of a 180 page preliminary document by an informal contact group under the APA which was accepted as being a basis for future negotiation.  The success of the implementation of the Paris Agreement will very much depend on finalising the rules and guidance around NDCs to enable for a proper accounting of emissions reductions.

Sidestepping Trump

The announcement of the US Administration of its intention to withdraw from the Paris Agreement and the absence of any high level Administration officials from Bonn, while noticeable, did not impede the progress of negotiations.  Indeed, to an outside observer, its absence made the international community more united in pressing ahead. In a speech at the high level segment, the French President, Emmanuel Macron, committed France to ensuring that any funding withdrawn by the Trump Administration towards the scientific work of the IPCC would be replaced - “they will not want for one Euro”, the President declared to thunderous applause from the international dignitaries.

The presence at COP23 of the Californian Governor, Jerry Brown, appointed as a special envoy by the President of COP23, as well as his predecessor, Arnold Schwarzenegger, also created a high-profile US presence to lend support to the “We Are Still In” alliance of US states, cities, corporations and other groups which took an active role at the conference.  

As the US withdrawal from the agreement needs to go through a formal process and will not occur until 2019 at the earliest, a US negotiating delegation still participated in the informal and formal meetings at COP23 constructively.  As with all climate change negotiations, a long-term view is essential.

On the road to COP24 in Katowice

Although viewed as a transitional COP, that is one taking place before a deadline for agreement, the outcome of Bonn has been important in getting the technical groundwork laid for the rule book for the Paris Agreement.  In this regard, it has done more than just keep the negotiations on track.  COP23 has also played an important role in ensuring that pre-2020 ambition is not forgotten, by emphasising the role pre-2020 emission reductions can play in ensuring the success for achieving post-2020 commitments under the Paris Agreement.

With a detailed work program now in place for 2018 to finalise the rules for implementation by COP24, domestically attention now turns to how Australia proposes to achieve its Paris emissions reduction target of 26-28% by 2030.  The recently announced National Energy Guarantee (NEG) will obviously need to play a critical role through its emissions guarantee component, but more detailed work needs to be done to give substance to that policy.  The agreement of the States to the NEG is also a necessary precondition to its implementation. 

Apart from the NEG, the Government's report on the review of climate change policies expected before the end of the year will need to give a clear indication of the policy suite that will be implemented and how it is proposed to achieve Australia's target.  This will be critical to providing the enduring certainty necessary for business to understand how it is expected to contribute to the abatement task.  

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