16 December 2015 08:05:50 IST

Why the Paris Agreement is not so hot

With the developed nations having committed a mere pittance, India will be under pressure on the coal front

Prime Minister Modi was perhaps premature in hailing the Paris Agreement as a victory for climate justice. The reality suggests the opposite. The reality is that the developed countries have won. Developing countries, notably India, stand to lose from the Agreement.

They have been demanding that the distinction between rich and poor, which was enshrined in the United Nations Framework Convention on Climate Change [later adopted as Annex-1 (developed) and Annex-2 (developing) in the Kyoto Protocol], be maintained. While the Agreement does mention ‘common but differentiated responsibility’ in many places, it is not specific on fixing the responsibility on the developed countries.

On the other hand, in return for the CBDR mentions, the developed countries have got into the Agreement something that the developing countries have long tried to avoid — the words, “in the light of national circumstances” which is the equivalent of saying “if the situation in my country permits”.

While this was painted as an effort by poor countries to wriggle out of climate action commitments, it works equally well as an excuse for rich nations to do the same.

Chips played out

The developing world had a few bargaining chips: they had opposed issues such as periodic review of emission reductions (global stocktake), and verification and reporting. They were also opposed to the use of the phrase “in the light of national circumstances”. The hope was that the developing countries could cash these bargaining chips for some tangible benefit such as commitments on finance and transfer of technology.

Now, these chips have been played, and the developing countries have got back nothing.

The biggest injustice has been on the count of finance, though it had been clear for some time that the rich nations would somehow escape firm commitments (see ‘The Great Escape’, BusinessLine , October 28, 2015). There are various estimates with respect to the need to finance global efforts to limit temperature rise to 2 degrees C over pre-industrial levels — they all run into trillions of dollars, and that is only ‘mitigation finance’. The bill for ‘adaptation’ (defence against the already inevitable climatic effects) and ‘loss and damage’ (rehabilitation after a catastrophe) will run into more trillions.

Against this, the Agreement says that the “developed countries should continue to take the lead in mobilizing climate finance from a wide variety of sources, instruments….” There is no commitment to any number in the Agreement. But the Decision document (which, unlike the Agreement, is not legally binding) speaks of setting a “new collective quantified goal from a floor of $100 billion”.

The operative word here is “collective”, which means all. The developed countries, whom the United Nations Framework Convention on Climate Change recognises as mainly responsible for the greenhouse gas accumulation in the atmosphere, are off the hook.

Besides, $100 billion is a pittance. Besides, there is no clear definition of climate finance. In the absence of such a definition just about anything can be pushed under ‘climate funds’. We see that happening already. The OECD, the rich countries’ club, brought out a report that said $62 billion of climate finance had been mobilised in 2014 — it included loans, guarantees and even promises. The Indian government countered this with its own estimate of $2.2 billion.

The World Bank describes its loans to road projects as ‘green funding’ because new roads improve fuel economy and thereby help emission reductions. There are many such instances of ‘green washing’, which a clear definition of climate finance in the Agreement could have avoided.

What’s more, the Decision document explicitly absolves the developed countries from ‘liability and compensation’ in no uncertain terms. It says: “the Agreement does not involve or provide a basis for any liability or compensation”.

Impact on India

India will be severely impacted by the Agreement. Given the low finance available, and given that the first claimants of whatever is available are the very poor countries, India cannot hope for any assistance after floods and droughts.

There is nothing given under ‘technology transfer’. If there are breakthroughs in, say, renewable energy technology, such as high efficiency solar cells, Indian companies will have to pay the market price. Further, India will be under tremendous pressure to roll back coal-based power projects. Coal is India’s energy mainstay and the only way to burn coal and not maul the atmosphere is by using the expensive ‘carbon capturing and storage’ technologies. India will be under pressure to use CCS projects, but there will not be any financial support for them.