Anyone who’s following the “how the hell are we going to pay the costs of an emergency global climate transition in a reasonably fair way” debate should take a few minutes to read a short paper that Bert Metz just wrote under the title Making a Pledge and Review System Work: National Green Growth Plans, Policies, and a Different Approach to Equity.
This paper was written for a recent workshop, organized by the Centre for Policy Research in New Delhi and held there just after the Warsaw climate conference. The workshop had the rather enigmatic title of Building the Hinge: Reinforcing National and Global Climate Governance Mechanisms, and it covered quite a lot of ground. A summary of the proceedings is here. Our focus is primarily on “Theme 4: Equity,” though the summary is very brief and, if you want the meat, it’s best to go back to Metz’s paper.
Metz posits an equity debate that is defined by the “Equity Reference Framework” approach on the one side and “Cost sharing” on the other. As long time supporters of the equity reference approach who are extremely concerned with cost sharing, we consider this to be a false dichotomy. In fact, we believe that the core of the climate equity challenge is, almost by definition, to contrive an approach that, while guided by an shared and constantly improving equity reference framework, nonetheless takes the uneven distribution of “mitigation potential,” and thus cost sharing, into proper account.
Still, it’s useful to review Metz’ framing. So here are the key sections of his paper:
“The third problem is the way the thinking on equity has shaped up. The dominant view amongst developing countries is to look for a set of principles, more recently referred to as an “equity reference framework”, with which countries can determine what a fair contribution to a global effort would be. Apart from the problem of getting universal agreement on such a framework, the implication of this approach is that countries will only look at that part of their mitigation potential they consider to be their fair share. This will prevent to show the full potential available in countries and will thus make it hard to investigate if the untapped potential in countries can be tapped through international support, while it is clear that the full potential is globally needed to get back on a 2°C trajectory.”
Then, the equity reference approach:
“The current effort sharing interpretation has led African developing countries to propose an “Equity Reference Framework” as part of the negotiations towards a new post-2020 climate agreement. It would roughly work as follows for mitigation contributions (see also note by Xolisa Ngwadla):
- Define how much needs to be done on mitigation and adaptation and finance (starting from the 2 degree goal and calculations of finance needed for mitigation and adaptation support
- Develop an agreed “bucket of indicators” for what is equitable and derives from that what is the relative contribution of countries to the effort, while retaining the Annex I, non-Annex I categorisation.
- The “bucket of indicators” then leads to a range of percentages (as determined by the equity indicators put in by countries), that provide guidance to countries on what they could contribute
Country contributions are then compared with the guidance on fair shares and if the contributions do not add up to the global total required, discussions are held with countries to increase their contribution
The ERF would also include adaptation and finance contributions, to be brought under a common metric, in a manner to be determined.
The ERF approach appeals to those that want to see the equity principles embedded in the UNFCCC to be visibly applied and it could help raise countries’ ambition by “ambitious ” countries “pushing up” ambition of others. However, reaching agreement on the reference framework will be difficult to achieve within the UNFCCC; even moving the responsibility to expert bodies outside the UNFCCC would be very controversial. In addition, the retention of the Annex I/ non-Annex I framework that the UNFCCC Durban decisions on a future agreement did away with, will be very controversial. It is also an approach that disconnects the discussion from the development agenda, a “climate only“ approach.”
Then, the cost-sharing alternative:
“As an alternative, a cost sharing interpretation of the “Equitable Access to Sustainable Development” would work as follows:
- If all countries would assess their full mitigation potential (up to a cost level that would be consistent with being on a 2°C trajectory) and how they could capture that potential with policies and measures,
- They could then identify what they consider a fair share of the “net” costs (including development co-benefits) that they could absorb themselves and for what part they would need international financial assistance. That division would then be the country’s interpretation of what is their equitable contribution.
- If the sum of countries’ proposed contributions, plus the financial contributions available to capture an additional part of the potential, does not add up to what is needed under a 2°C trajectory, then discussions are held with developing countries on raising their own contribution and with donor countries and international financial institutions on raising the financial means.
The advantage of such an approach is that the debate of what is equitable could take place on the basis of specific policies and interventions in the country and not in the abstract when discussing equity principles. The other big advantage would be that the full potential for emissions reduction would be visible and bilateral and international financial resources to tap that potential could be more easily mobilised. The approach links the development with the climate agenda and has therefore a better chance that countries see the opportunities for low carbon, climate resilient green growth, allowing them to be more ambitious in their climate actions.”
And the implications for the global regime:
“The identification of the full mitigation potential and the policies that would make it possible to tap that potential could be made a requirement for the proposals that countries are to make in the run up to the 2015 COP, in the form of agreed guidance. Differentiation of the time frame for producing such a full potential assessment would be needed, but G20 countries should be able to produce such an assessment well before the 2015 COP, and some other countries probably as well.
The element of identifying countries’ equitable share of paying for the “net” costs of implementing the respective policies would have to become part of the review process, in which other parties and independent analysts could comment on the proposed division “self-paid” contribution from a country in light of its development benefits and in which discussions on mobilising financial assistance to countries for the remaining part could be held. Unfortunately no agreement exists at the moment in the UNFCCC negotiations on whether to have a review process and if so, how such a review process should be structured. Without a proper review process a new regime that is built on national offers would be seriously weakened.”
All of which is very interesting. As for our claim that the dichotomy here is a false one, that will have to be demonstrated elsewhere.