21 Dec 2018 19:39 IST

WTF! Where’s The Finance to implement the Paris accord?

Absent clear definitions, any loan can be creatively interpreted as climate finance

WTF! How would you react if you were in a respectable global conference, expected to be marked by gravitas and hi-funda discussions, and you found some people going about wearing a badge that says, in bold letters, “WTF?”?

I guess you’d be shocked, just as I was. You’d want to go up to that person and ask, “WTF do you mean?”. But he’d point his index finger to the short writing below the three offensive letters, which says ‘Where’s the Finance?’ On that crucial, three-word question, hangs the fate of our planet.

But first, let’s rewind a bit, for the sake of background.

In December 2015, over 195 countries of the world met in the French capital of Paris, to hammer out an agreement for joint action against climate change. Those who have been reading these columns would know about climate change and global warming. Basically, these phenomena are caused by the accumulation of greenhouse gases up in the atmosphere as a sort of a blanket, preventing the heat generated by the earth from radiating out into space. As a consequence, the planet is warming. Scientists have determined that unless the rise in global temperature is limited to 2 degrees Celsius over the average temperatures as obtained in the pre-industrial levels (generally taken to mean the 18thand 19th centuries), the consequences will be unmanageable.

Agreement on global warming

More recently, the Inter-governmental Panel on Climate Change (IPCC), a scientific body set up by the United Nations Framework Convention on Climate Change, came up with a report in which it said that global warming ought to be contained within 1.5 degrees Celsius, which is technically feasible, and the fallout of not doing so.

So, in Paris, they all agreed that global warming should be limited to 2 degrees Celsius. The famous Paris Agreement, however, isn’t quite your regular agreement at all — in the sense that it does not read like things you shall do and what I shall do and the penalties of you or I not doing them. Instead, it is a list of intentions. For example, it says that the developed countries should pay developing countries enough moneys for the latter to put up climate-resistant projects and that all countries would undertake a periodic review of the result of all climate actions. In short, the Agreement only outlines ‘what’, but does not say ‘how’.

So, it was left to all parties to write the rules on ‘how’ to operationalise the Paris Agreement. After three years of negotiations on the wording of the rules, representatives from all the countries met in the Polish city of Katowice between December 2 and 15, to evolve the Paris Rulebook. It was this conference that the activists wearing the provocative WTF badges were attending.

They, of course, had a very valid point. To get to that point, we have to rewind a bit more, to check out the Paris Agreement in a little more detail.

Funding from developing countries

The soul of the 16-page document lies in the middle 4-5 ‘articles’ or chapters. Article 9, which says that the developed countries should provide finance to developing countries for climate action in the latter. They should tell the developing nations how much they will give in the coming two years and also declare how much they have so far provided. Article 10 speaks about technology development and transfer, Article 11 is on building capacity to take climate actions, Article 13 elaborates on transparency in reporting each country’s actions and Article 14 on the method of periodic (once in five years) review of what has been achieved thus far.

In writing the rules that would give life to these intentions, all countries shall keep in mind the principle of equity, (or fairness — you can’t expect a Malawi to do what the United States can), and the golden principle of ‘common but differentiated responsibilities’, (or CBDR, which means that while everybody has a responsibility to climate action, some (developed countries) have to shoulder more burden than some (developing countries) others.)

At Katowice, they did arrive at a rulebook – a detailed, 133-page document. It is not to everyone’s liking, but it is probably the best that could be gavelled under the circumstances, which is pretty much how international agreements are forged.

Glaring gap on definitions

However, there is a glaring gap in the rulebook. It does not specify how much money the developed countries shall pay the developing countries. Worse, it allows the developed countries to only ‘mobilise’ funds — which means they can count commercial loans, repayable with interest, as climate funds ‘provided’ by them. Worse still, there are no rules for accounting of backflows of moneys when the loans are repaid. And worst of all, there is no clear definition of climate finance, which means any loan can be creatively interpreted as climate finance.

For example, if the World Bank gives a loan to the Delhi-Mumbai Freight Corridor project, it can be called climate funding mobilised by the rich countries, because the freight line will take trucks off the roads. While it is true that the railway line would cause less burning of fossil fuels, the point is, the project, and the loan to it, would have happened anyway, even if there hadn’t been a Paris Rulebook.

The hard facts

Imagine the consequences of this. Let us break the whole scenarios into points:

· Climate change is a global emergency and is closing upon us fast;

· The countries and people who are least responsible for the mess are likely to be the most affected;

· Urgent action is needed to be taken for (a) slowing down and stopping climate change by measures such as, for example, building more solar farms and scrapping coal plants — called ‘mitigation’; (b) taking steps to cope with climate events when they happen, such as, for example, building storm water drains, deepening lakes and linking rivers — called ‘adaptation’; and (c) reaching help to those hit by a climate event — called ‘loss and damage’.

· For the urgent action under the three heads, a lot of money is needed, and those who are likely to be affected by global warming are those with shallow pockets. Thus, unless they are given money, they are going to be battered;

· Oh, and it’s not as though rich countries are spared the effects of global warming. The US, for instance, is severely impacted by hurricanes, such as Harvey, which brought Houston to its knees, and the frequent devastating forest fires in California;

· Thus, climate change is a global phenomenon, affecting everybody, and as a corollary, action taken anywhere in the world will help everybody too;

· Without a lot of additional funds, nothing is going to happen, which means we are all collectively sinking.

· Blame it all on the narrow-mindedness of developed countries, which got rich in the first place by creating this climate mess and are now unwilling to pay up.

The Conference of Parties to the UN Framework Convention on Climate Change (COP24) failed to write rules robust enough to get the rich pay up.

Many expressed their anguish over this by wearing the badge that said WTF – where’s the finance?

Recommended for you