It is critical to success that any proposed agreement is perceived to be fair by all Parties. In particular it must reflect the facts that:


  • relatively few countries are responsible for the greater part of historic emissions;


  • there remain vast resource disparities between countries;


  • many of the countries most immediately vulnerable to climate change have contributed to it the least;


  • without assistance, countries tackling high levels of poverty are unlikely to be in a position to take all necessary action against climate change;


  • requiring the least developed countries to cut emissions may have disproportionately negative effects on their economic development.



However all these factors could be reflected with sliding scales of need and commitment reflecting the different circumstances of different Parties. While the distinction between ‘developed’ and ‘developing’ countries remains important in general terms, there are difficulties in using the concepts to delimit specific commitments. Indicative, sliding scales of need and commitment might provide a more proportionate and flexible approach for assessing contributions, helping to ease some of the current negotiating challenges. Such an approach would take the pressure off the precise location of dividing lines. Supposing, for example, countries included in Annex X are obliged to make financial contributions to the Green Climate Fund; that the basis for inclusion is per capita GDP in excess of $20,000; and that the contribution is calculated with reference to a percentage of this excess. The fact that a country has per capita GDP only slightly in excess of $20,000 will not have an ‘all or nothing’ consequence, as its expected contribution would be proportionately modest.

Moreover different scales for different factors would allow for a more targeted and nuanced approach. In relation to emissions, a sliding scale is proposed using per capita shares of a global emissions budget as an indicative baseline (see ‘Element 4’, below). Similar indicative scales to inform the provision of assistance might be developed reflecting:

               (i)    Capacity to contribute financial assistance;
               (ii)   Capacity to contribute technical assistance;
               (iii)  Vulnerability to the effects of climate change;
               (iv)  Need for financial assistance;
               (v)   Need for technical assistance.

The Parties would not need to determine the detail of the sliding scales at Paris: it might be enough to agree the general principles, leaving the development of the scales to a technical body.

 

Proposed text:

 

Para. 217:

            (1) Annex X shall include all countries which, according to the statistics of the [World Bank / IMF?],  have per capita GDP in excess of $20,000.
            (2) Annex Y shall include all countries which, according to …, have per capita GDP between $10,000 and $20,000.
            (3) Annex Z shall include all countries which, according to …, have per capita GDP of less than $10,000.

 

Para. 218:

            Annexes X, Y and Z shall be reviewed and updated annually.


 
See further, elements 4 and 7 below.
 

- Party bandings in the UNFCCC and current NT

UNFCCC divides parties into 3 groups attracting different sets of commitments.

Annex 1 Parties consist of countries that were members of the OECD in 1992 with the addition of countries whose economies were then considered to be ‘in transition’ (eg the Russian Federation and the Baltic States);

Annex 2 Parties consist only of the OECD members of Annex 1 (eg Greece, Spain, Turkey).

All other parties are described as ‘non-Annex 1 Parties.’ These include Qatar, Singapore and Brunei (three of the top five countries in terms of per capita GDP).

Annex 2 Parties are required to provide financial assistance to ‘developing country’ Parties (although this term is not specifically defined) to support their mitigation and adaptation plans.

The negotiating text currently refers to 3 different sets of groupings across the text:

            (i)  ‘developed’, ‘developing’ and ‘least developed’ countries;
            (ii)  Annex 1, Annex 2 and non-Annex 1 Parties;
            (iii)  Annex X and Annex Y Parties.

The last clause of para. 6, for example, reads as follows:

… which will depend on the extent of financial, technology and capacity- building support provided by [developed country Parties [and Parties in a position to do so]][Parties included in annex Y] to [developing country Parties [and the Parties included in Annex I undergoing the process of transition to a market economy]][Parties not included in annex X].

Annexes X and Y refer to new lists of countries to be developed for the new agreement. Unless prepared on the basis of pre-existing criteria, such as per capita GDP, attempting to agree such lists would, inevitably consume large quantities of negotiating time.

NT, para 218, Option 5, proposes an interesting mechanism for updating the UNFCCC groupings:

… the Conference of the Parties to the Convention … may request the Subsidiary Body for Scientific and Technological Advice and the Subsidiary Body for Implementation to review both the per capita greenhouse gas emissions and per capita gross domestic products of Parties and present to it draft decisions on revisions to Annex I and/or Annex II to the Convention;
In reviewing and revising Annex I to the Convention, the total amount of greenhouse gases, expressed in carbon dioxide
equivalent, emitted by a Party to the Convention since 1750 A.D. shall be added up and divided by the current population of that Party. On the basis of the thus obtained per capita greenhouse gas emissions and population size of each Party to the Convention, the average global per capita emissions of greenhouse gases shall be used to evaluate the status of the greenhouse gas emissions of a Party to the Convention. Each Party to the Convention whose per capita greenhouse gas emissions exceed the global average per capita greenhouse gas emissions shall be proposed to be inscribed in Annex I to the Convention, and the remaining Parties shall not be proposed to be inscribed in Annex I to the Convention;
In reviewing and revising Annex II to the Convention, the current per capita gross domestic product of each Party to the Convention shall be compared with the global average per capita gross domestic product. Each Party to the Convention whose per capita gross domestic product is above the global average per capita gross domestic product and whose population size is above half a million shall be proposed to be inscribed in Annex II to the Convention. The remaining Parties shall not be proposed to be inscribed in Annex II to the Convention;
The Conference of the Parties to the Convention serving as the meeting of the Parties to this agreement will, as it sees appropriate, review, revise and endorse a draft decision on any revision to either or both Annex I and Annex II to the Convention and present the draft decision that it has endorsed to the President of the Conference of the Parties to the Convention with a request for the Conference of the Parties to the Convention to review, amend as it sees appropriate and approve the proposed amendment or amendments to Annex I or Annex II to the Convention in accordance with Articles 15 and 16 of the Convention;

On the basis of the decision of the Conference of the Parties, the President of the Conference of the Parties shall inform in writing the Depositary of the Convention, the Depositary of this agreement and each Party to the Convention that is to be inscribed in or removed from either Annex I or Annex II to the Convention. The President of the Conference of the Parties shall also report on the outcome to the Conference of the Parties serving as the meeting of the Parties to this agreement;
A Party which has been informed in writing by the President of the Conference of the Parties that it is to be removed from Annex I or Annex II to the Convention shall be deleted from the said Annex as of the date of its written notification. A Party that has been informed in writing by the President of the Conference of the Parties that it is to be inscribed in Annex I or Annex II to the Convention shall accordingly be inscribed immediately after two years have passed since it received the written notice.


This text is replicated in CCT, P3, para. 102 (‘Amendment to Annexes I and II of the Convention’).

It is one thing for the Parties to make a collective commitment regarding financial assistance; another for individual contributions to materialize.

There is some ‘chicken-and-egg’ in the relationship between financial and technical assistance and reduction commitments by potential beneficiaries. Countries dependent on assistance need to know what is available before making their commitments; donor countries want to know what assistance will deliver.

An indicative, baseline scale for financial contributions, with a review and adjustment mechanism, might instil greater confidence in the collective pledge.

Mexico’s INDC suggests a useful way forward, and might be more widely adopted. Countries requiring assistance might express their reduction commitments in two parts: (i) the unconditional part (ie what they can do without assistance); and (ii) what additional commitments they will make with specified additional assistance. Parties providing assistance should have their contributions centrally recorded and treated as a relevant factor in the assessment of their reduction commitments. With central oversight, such a scheme would support the efficient allocation of resources. It will encourage recipient countries to be both ambitious and realistic in their commitments with a view to securing initial and follow up tranches of assistance; and donor countries to be generous and focussed in what they provide.

Moreover ‘incentivisation’ might operate in both directions if funding were the trigger for enforceable commitments for developing countries.  The donor could be confident that funding would produce results; the beneficiary that commitments would not bite unless funding materialised.
 

Proposed text:

 
Para. 114: Recognising that many Parties will require financial and technical assistance for both mitigation and adaptation efforts the Parties agree as follows:

 

                 1. Parties requiring assistance should express their commitments in terms of unconditional and conditional components.



                 2. Conditional components should clearly define the work to be undertaken together with the required funding.



                 3. Following the ex ante review of commitments, and any consequent adjustments, the governing body shall undertake a review of the total funding requirement necessary to meet the Parties’ long-term goal (acknowledging a minimum target of $100 billion per annum for 2020 rising to $200 billion per year by 2030).



                 4. [The governing body] shall develop an indicative scale for contributions based on a country’s population and per capita GDP[4].



                 5. Where necessary to address any shortfall in relation to the funding requirement, the governing body may PW 3 recommend / PW 1 require contributions from the Parties on the basis of criteria including 4 above.



                 6. Donor countries may be credited for contributions in excess of the indicative scale in the future 
PW 3 indication / PW 1 determination of emission reduction commitments (and vice versa).



                 7. 
PW1 Where funding is provided to support conditional commitments, such commitments will be enforceable pursuant to [section x] of this agreement; Beneficiary countries may also be credited or rated for the efficient delivery of funded conditional commitments in the allocation of future funding;.



                 8. To ensure consistency and efficiency, and to avoid duplication, climate change funding, pursuant to this agreement, should be managed through the Green Climate Fund.



                 9. The Parties shall agree a common transparency framework for funding and technical assistance.

 

In parts of the NT concerning developing country commitments, the dependency on financial support is clearly articulated.

NT para. 21.5, Option 2, b.ii, for example , states:

[Developing country Parties][Parties not included in annex X], which have been provided with means of implementation, to prepare, communicate and implement a diversity of enhanced net mitigation commitments / contributions / actions in accordance with Article 3, paragraph 1, of the Convention …

NT para. 79, Option 3, states that:

[Developing country Parties][Parties not included in annex X], which have been provided with means of implementation, to prepare, communicate and implement a diversity of enhanced net mitigation commitments / contributions / actions in accordance with Article 3, paragraph 1, of the Convention

There are proposals that highlight the need for clarity and predictability of financial support, such as NT para. 84:

[The importance of providing clarity on the level of support, in particular financial support, that will be provided to [developing countries][Parties not included in annex X] to allow for the enhanced implementation of the Convention, in particular with regard to adaptation, to be recognized as a crucial element in creating the necessary conditions for the enhanced participation of developing countries in the global effort to combat climate change and adapt to its adverse effects.]

NT para. 85(b) proposes:

A process for the determination of the level of resources required to keep the level of temperature increase to below 1.5–2 °C shall be conducted.]

There are also proposals for determining country financial contributions, such as NT para. 89, Option 1:

[Scale of resources provided by developed country Parties shall be based on a percentage of their GNP of at least (X per cent) taking into consideration the following][Climate finance provided by developed country Parties shall be based on a quantified target taking into consideration the following][The provision of finance [committed by developed country Parties,] to be based on a floor of USD 100 billion per year] …

And NT para. 119(e):

[Developed country Parties to provide 1 per cent of gross domestic product per year from 2020 and additional funds during the pre-2020 period to the GCF;]]

NT para. 123 recognizes the need for a clear framework for funding:

[Parties agree on a common transparency framework, applicable to all Parties, that shall promote transparency of support by providing information on the delivery, use and impact of support, as well as on the implementation of enabling environments.

The governing body shall elaborate further guidance related to the transparency framework of support while recognizing that it should evolve and improve over time.]


There is an absence, however, of proposals concerning incentivisation, with NT para. 114, Option 2, a partial exception:

[To receive funding from the Green Climate Fund [GCF] for implementation of the agreement, a Party must:

(a) Be a Party to this agreement, and
(b) Have fulfilled its reporting requirements as described in section I].


CCT P2, para. 29(i), does however propose the development of criteria for access to the GCF:

i.   Regarding issues related to access:

i.   [There is a need for: the [simplification,] improvement [,prioritization,] [and rationalization] of access[, including direct access, especially] for the LDCs and SIDS; and/or the harmonization of approval and accreditation processes between various channels and institutions leveraging potential non-climate-specific financing mechanisms and institutions; and/or the operation of all funds under the Convention to be transparent, competitive and based on rules, with operating criteria underpinning rules that are compatible with the requirements of private investors, in order to effectively stimulate co-investment; and/or information on how all disbursements include provisions for ‘climate proofing’ measures; and/or arrangements between thematic bodies of the Convention and the GCF to be strengthened;]] {[Proposals for decisions related to anchoring institutions under the agreement] iii, vii. 3. SCT}



CCT, P2 proposes a collective financing goal at para. 31:
 

SHORT-TERM COLLECTIVE GOAL (TIMING) [Decides that the short-term collective quantified goal [of USD 200 billion per year by 2030 committed to by developed country Parties][5] [shall][should] be determined [every five years starting in 2020 on the basis of a floor of USD 100 billion per year;] {para 89 g. SCT}.

 
It also proposes regular reviews of financing at para. 30:

 
TIMING OF FINANCE RELATED REVIEWS [Decides that, with regard to finance-related reviews as set out in Article/paragraph 46 of Part III:

a.  [The review of [climate finance][the financial support provided under the agreement] shall be subject to a triennial review;] {para 87 SCT}

b.  [The scale of the provision of finance shall be reviewed every [five][four] years;]] {para 89 c. SCT}.


 
CCT P2 proposes, at para 81, the development of criteria for the pre-2020 period for determining which countries are in a position to provide financial support:

CRITERIA, MODALITIES AND OPTIONS FOR FINANCE SPECIFIC MATTERS [Decides/requests … [(chapeau with mandate, including any specifications of body and timing, for any further work)] to:

[Develop objective criteria to define which Parties are in a position to provide support;] {para 80 SCT}.


 
It does not, however, propose criteria to assist with the determination of the scale of that support.

CCT P3, para. 47, proposes 2 different approaches to individual country contributions, the first of which provides a scheme for assessing commitments, the second of which does not:

 

QUANTIFIED/INDIVIDUAL COMMITMENTS

 [Option 1: [The provision of finance [committed by developed country Parties,] to be based on a floor of USD 100 billion per year [, and shall take into account the different assessment of climate-related finance needs prepared by the secretariat and reports by other international organizations]][The scale of resources provided by developed country Parties shall be based on a percentage of their GNP of at least (X per cent) taking into consideration the following][Climate finance provided by developed country Parties shall be based on a quantified target taking into consideration the following]: {chapeau of para 89 and a. SCT}

a.  Based on an ex ante process to [commit][identify] quantified support [relative to][commensurate with] the required effort [reflected in the adaptation and mitigation goals] and in line with the needs of [developing countries][Parties not included in annex X]; {para 89 b. SCT}

b.  [Based on clear burden-sharing arrangements among [developed country Parties][Annex II Parties][Parties included in annex Y] …{para 89 d. SCT}

c.  Based on a [clear] road map with individual annual commitments for public funding [from developed country Parties] in the post-2020 period [or][and trajectory and] pathways with annual expected levels of climate finance [towards][for] achieving short-term quantified goals; {para 89 f. SCT}

d.  [Based on an agreed percentage formula for the calculation of the contributions of [[Annex I Parties] [Parties included in annex X] and differentiated [developing country][Parties not included in annex X]] [Parties in a position to do so considering evolving capabilities] [all countries in a position to do so] on the basis of GDP or other indicators];] {para 89 h. SCT}

e.  [Including aggregate and enhanced [specific] [individual] [commitments] [contributions] by [developed country Parties][[Annex II Parties][Parties included in annex Y], complemented by other Parties in a position to do so] [Parties in a position to do so, considering evolving capabilities] [all countries in a position to do so];] {para 89 e. SCT}

f.   [A short-term collective quantified goal [of USD 200 billion per year by 2030 should be committed to by developed country Parties], [which][that] defines [how] the expected, scaled-up climate finance level for the post-2020 period [shall][should] be determined in order to enhance the predictability of the provision of climate finance, indicating specific levels of funding from public sources to be provided[; this goal shall be regularly reviewed, and updated.]] {para 89 g. SCT}

Option 2: Agreement not to specify [individual][quantified] commitments, quantified targets or specific indicators for the post-2020 period.] {para 89 opt 2 SCT}

Conclusion | Back to top
Element 7: Principles for financial and technical assistance incentivizing donor generosity and beneficiary efficiency (and generating a minimum annual payment of $100billion into the Green Climate Fund from 2020, rising to $200billion p/a by 2030) | Back to top

Annual progression indicators would bring consistency and transparency to reviews of progress in terms of the Convention’s ultimate objective. They would provide the basis for an agreed ‘early warning system’ indicating whether the Parties, collectively, are:

(i) on track towards the long-term objective;
(ii) off track, demanding an increase in mitigation measures; or
(iii) so far off-track that the long-term goal needs to be reassessed (with knock-on consequences for adaptation measures).

Such transparency would be particularly valuable in conjunction with a ‘soft’ agreement.

The Parties would not need to agree the annual indicators themselves. Once the principle has been agreed, the task of deriving annual indicators from the emissions reductions pathway might be delegated to an appropriate technical body.

Proposed text:

Para. 25: All Parties to agree to the establishment of annual progression indicators towards the long-term goal and to review progress at each meeting of the Parties, facilitating timely adjustments to mitigation efforts as required.


[for ‘hybrid/soft’ PW 2] Para. 26:

 

Option A: 
The Parties shall agree on a system of early warning signals as the basis for invoking para. 202 [i.e. the switch to a strong-form agreement].

 
Option B: 
The Parties shall annually consider the necessity of invoking para. 202, on the basis of performance against the annual indicators and the recommendations of [? technical body].
 

Option C: 
The Parties agree to invoke para. 202, in the event of overshoot of annual indicators in excess of [x%].

 
NT Para. 28 proposes that:

The Conference of the Parties shall review the adequacy of the sum of individual commitments by Parties, the relation of the aggregate effort for keeping temperature increases to below 2 / 1.5 °C, and the equity of relative efforts.

Clarity regarding the long-term goal provides the basis for an emissions reduction pathway and for evaluating progress.

Recognising the diplomatic sensitivities, 1.5 degrees and 2 degrees ought not to be used as if they were interchangeable: the different goals entail differences in terms of risk and outcome, particularly for vulnerable and low-lying states, and therefore imply different adaptation measures.

The Parties can reconcile the two targets by aiming to limit warming to 1.5 degrees, while committing to keeping it below 2.

The Structured Expert Dialogue (SED), established at COP18 to review the adequacy of the long-term goal, concluded in May 2015 that ‘in some regions and vulnerable ecosystems, high risks are projected even for warming above 1.5 degrees Celsius. We are therefore of the view that Parties would profit from restating the long-term goal as a ‘defence line’ or ‘buffer zone’, instead of a ‘guardrail’ up to which all would be safe.’

 
Proposed text:
 

Para. 5: All Parties shall take action and cooperate to further implement the Convention in order to reach its ultimate objective … in accordance with their … common but differentiated responsibilities … by achieving an emission pathway consistent with limiting the global average temperature to below

 
Option a: 
1.5 degrees Celsius

Option b: 
1.5 degrees Celsius and likely to limit it to below 2 degrees Celsius

Option c:  
1.5 or 2 degrees Celsius

 above pre-industrial levels, which entails …


 
See NT para. 5, opt. 1: ‘… by achieving an emission pathway consistent with limiting the global average temperature to below 2 degrees C or 1.5 degrees C above pre-industrial levels.

 

See CCT p1, para.3: ‘[[All] Parties [shall][should][other] [enhance mitigation ambition] … and cooperate [to ensure that the aggregate level of mitigation [commitments][contributions][actions] increases over time] [with a view] to [achieving long-term emission reductions, in the context of Article 2 of the Convention][stabilize greenhouse gas (GHG) concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system], [consistent with][including] holding the increase in global average temperature below 2 °C or 1.5 °C above pre-industrial levels …’

 
- to include specific reference to ocean acidification


In addition to global warming, CO2 emissions cause ocean acidification, threatening the base of the ocean food-chain and so further jeopardizing food security and economic well-being. Given the common cause, containing ocean acidification should be brought clearly within scope as a distinct objective of the agreement.
 

Proposed text:
 

Para. 6: The Parties acknowledge ocean acidification as a phenomenon distinct from global warming, also attributable to anthropogenic emissions of CO2. The Parties agree that limiting ocean acidification should be an additional objective of this agreement requiring the establishment of a separate long-term goal …

 
This objective is not contained in the current NT [what is the methodology for introducing new proposals at this stage?].

Element 3: an agreed emissions reduction pathway | Back to top

The 2014 UN Climate Summit in New York delivered the following ‘action statement’:

Global momentum is building for putting a price on carbon emissions as a necessary and effective measure to tackle the climate change challenge. Approximately 40 countries and more than 20 cities, states and provinces use carbon pricing mechanisms or are preparing to implement them. A growing number of business leaders are standing up in support of a price on carbon as an effective way to incentivize low-carbon growth and lower greenhouse gas emissions that are driving climate change.[6]

The World Bank has described carbon pricing as ‘inevitable’ for effective mitigation:

The latest report from the United Nations Intergovernmental Panel on Climate Change makes clear the importance of putting a price on carbon to help limit the increase in global mean temperature to two degrees Celsius above pre-industrial levels …

The momentum is growing. Pricing carbon is inevitable if we are to produce a package of effective and cost-efficient policies to support scaled up mitigation.[7]


The IMF recently calculated that fossil fuels benefit from subsidies of $5.3 tn a year, or $10m a minute, half of which derives from the polluters not paying the costs of health damage from air pollution[8].

The emerging international consensus on the imperative to price the social costs of GHGs should constitute an essential element of the agreement.

Further, carbon pricing offers a potential mechanism for Parties to generate funding for the Green Climate Fund.

Proposed text:

Para. 113:

Option A:

The Parties agree to establish a technical committee to identify an appropriate mechanism for making sure the price of carbon reflects its social cost, and for raising revenue towards investment in clean energy.
In the absence of a consensus to the contrary the Parties agree to be bound by the recommendations of the technical committee.

Option B:

The Parties agree to establish a carbon pricing panel, consisting of [X number of] members, each of whose nomination is agreed by [Y number of Parties]. The carbon pricing panel shall identify appropriate mechanisms for making sure the price of carbon reflects its social cost, and for raising revenue towards investment in clean energy.
In the absence of a consensus to the contrary, the Parties agree to be bound by the recommendations of the carbon pricing panel.


NT contains a number of relevant provisions in Part F (‘Finance’):

Para. 81,1 Option 2:

Parties [are encouraged to mobilize climate finance from a variety of sources …

Encourage policy signals by governments / catalyze policy actions by governments and adjustment or improvement of policies (81.1.b)

Targets the drivers of climate change (81.1.k)



Para. 102:

[Parties to reduce international support for high-carbon investments, including international fossil fuel subsidies.]

Para. 105, Option 1, d:

The provision of a price signal for emission reductions, including through payments for verified emission reductions.

Para. 106.2:

The use of levies for adaptation funding from any market-based mechanisms

Para. 106.5, Option (a)b:

Encourage the International Civil Aviation Organization and the International Maritime Organization to develop a levy scheme to provide financial support for the Adaptation Fund.

And most specifically, para 113 bis:

(a)All Parties to commit to cooperate in leveraging private finance and/or to mobilize / utilize public funds and means to facilitate and encourage private investment in accordance with their capabilities, recognizing that private-sector financing is complementary to, but not a substitute for, public-sector financing where public finance is needed …
(b)A tax on oil exports from [developing][Parties not included in annex X] to [developed countries][Parties included in annex X][Parties in a position to do so, considering evolving capabilities][all countries in a position to do so] to be established;
(c) An international renewable energy and energy efficiency bond facility to be established;
(d) The phasing down of high-carbon investments and fossil fuel subsidies.]


CCT P3 proposes at para 52(a):

[Parties [are encouraged] to [take steps to] [reduce][eliminate] [international support][public incentives] [for][phase down] high-carbon investments[, [including][and] international fossil fuel subsidies];] {paras 102, 103 and 113 bis d. SCT}


Element 1: Supplementing the distinction between developed and developing countries with indicative, sliding scales of commitment. | Back to top
Element 2: Clarifying the long-term goal | Back to top
Element 10 (PW 2 only): incorporation of 'ratcheting-up' measures. | Back to top
Element 6: Review and adjustment of national reduction commitments | Back to top
Why mitigation and carbon pricing measures are key to effective adaptation | Back to top

Analysis and resources to support the UNFCCC's ultimate objective

A ‘strong’ agreement is, by definition, one that provides for commitments to be enforced; a ‘soft’ agreement one, which does not. It is the prospect of enforcement, as much as enforcement itself, which tends to lead to compliance. In the context of the agreement, any provisions on enforcement should go hand in hand with mechanisms for revising national commitments.

A combination of nationally determined commitments with strong enforcement would be a disincentive to ambition: if you know you will suffer adverse consequences for failing to meet your targets, you are likely to set those targets low. In other words traditional enforcement measures should only be introduced in conjunction with mechanisms for adjusting Party commitments.

A virtuous circle might be created through providing for the enforceability of developing country commitments only in the event of receipt of adequate funding. Donors would be more willing to provide funding knowing that it would deliver enforceable commitments; beneficiaries would only assume binding responsibilities in the event that suitable funding materialized.

A soft agreement might still include measures to encourage Parties to uphold their commitments. Significant diplomatic and public pressure might arise from a regime casting a spotlight on Parties’ performance. Compliance with reduction commitments might also be used as a criterion for adjusting indicative financial contributions (and vice versa).

Proposed text:

PW 1, Para. 193: The governing body shall, at its first session, approve appropriate and effective procedures and mechanisms to facilitate the implementation and enforcement of the provisions of this agreement, including through the development of an indicative list of consequences, taking into account the cause, type, degree and frequency of non-compliance, building on experience under the Convention and its instruments …

Para. 194: The list of consequences may include, in the case of developed countries, risk of exposure to legal liability for loss and damage attributable to climate change in accordance with a scheme to be developed by …. The conditional commitments of developing countries shall only be enforceable in the event that the requisite funding is provided within the relevant time-frame.

Para. 195: The Parties shall appoint an enforcement panel consisting of [X number of] members, each of whose nomination is agreed by [Y number of] Parties.

Para. 196: All Parties agree to be bound by the rulings of the enforcement panel.


PW 3, Para. 193: The governing body shall, at its first session, approve appropriate and effective procedures and mechanisms to facilitate compliance with the provisions of this agreement, including through the establishment of a Compliance Committee to review and report on the performance of Parties in relation to their commitments.

 
NT, section K deals with ‘Facilitating implementation and compliance’.

Option I would establish a regime broadly applicable to all parties. Sub-options include para. 193, Option 2:

The governing body shall, at its first session, approve appropriate and effective procedures and mechanisms to facilitate the implementation and enforcement of the provisions of this agreement, including through the development of an indicative list of consequences, taking into account the cause, type, degree and frequency of non-compliance, building on experience under the Convention and its instruments …

Option II, III and V would establish a split regime in which only the commitments of developed (or Annex 1 and 2) countries would be strictly enforced.

Options IV and VI dispense with an enforcement regime entirely.

CCT P1 proposes three options for enforcement, at para. 42:

I[The governing body shall[, at its first session,] approve and adopt appropriate and effective procedures and mechanisms to [promote compliance]

II Implementation shall be strengthened through enhanced transparency

III [No specific provisions required.] {Opt VI SCT}


CCT P3, para 97, proposes two main options for compliance: either a compliance committee or a Climate Justice Tribunal. In both cases different remits are proposed for developed and developing countries.

Element 9: Commitment to carbon pricing | Back to top

In the event the COP21 agreement commences on the basis of voluntary commitments, and it subsequently emerges that these are insufficient to deliver on the Convention’s objectives, an internal mechanism for introducing additional measures would be more economic that renegotiating the agreement as a whole.

Given the highest of stakes, it seems prudent to incorporate a ‘Plan B’.

Proposed text:

Option 1 (Pathway 2A), Para. 202:  From 2025 this agreement shall be amended as follows:

In para. 114(5) the word ‘require’ will replace ‘recommend’;

In para. 114(6) the word ‘determination’ will replace ‘indication’;

Para 178 shall be revised to read ….[ie PW 1 text]

And Para 193 shall be replaced with the following … [ie PW1 text].

Option 2 (Pathway 2B), Para. 202: This paragraph shall take effect only pursuant to a decision under paragraph 26 above:

In para. 114(5) the word ‘require’ will replace ‘recommend’;

In para. 114(6) the word ‘determination’ will replace ‘indication’;

Para 178 shall be revised to read ….[ie PW 1 text]

And Para 193 shall be replaced with the following … [ie PW1 text].

[1]  Paul Murtaugh and Michael Schlax

[2]  See http://www.gci.org.uk/index.html
 
[3]  See http://www.gci.org.uk/Documents/C&C_Janos_Pasztor_UNFCCC.pdf

[4]  The proposed scheme is as follows: 1) use per capita GDP of $20,000 as a baseline; 2) take 0.5% of per capita GDP in excess of that figure and multiply it by a county’s population. France, for example, has per capita GDP of $42,700, ie $22,700 in excess of the baseline. 0.5% of this figure is $113.7. Multiply that by France’s population of 66 million and the indicative figure for France’s financial contribution would be $7.5 billion.

[5]  Note: For provisions on the short-term collective quantified goal see Article/paragraph 47 option 1 f. of Part III.

[6]  http://www.un.org/climatechange/summit/wp-content/uploads/sites/2/2014/09/FINANCING-CARBON-PRICING-Caring-for-Climate-Carbon-Pricing.pdf

[7]  http://www.worldbank.org/content/dam/Worldbank/document/Carbon-Pricing-Statement-060314.pdf

[8]  http://www.imf.org/external/pubs/ft/wp/2015/wp15105.pdfType your paragraph here.

There are three reasons for focussing on the essential proposals for aligning emission reductions to the long-term goal:

Logically, in the context of a comprehensive international regime, they are key to all other measures, including funding and adaptation. An agreed emissions pathway provides the basis for assessing the adequacy of aggregate INDCs; and hence understanding of requirements for financial assistance. The adaptation measures necessary for 4 degree warming are different from those required for 2 degrees; and the decisions with respect to mitigation today, determine the climate change risks for the second half of the century.
A clear approach to mitigation and carbon pricing would incentivise and generate funding for mitigation, adaptation and other measures.
An ambitious, legally binding and enforceable agreement on emissions, in combination with measures on carbon pricing, is key to sending a clear and strong signal to the markets, steering essential capital towards investment in clean energy..

There is, of course, no guarantee that the voluntary commitments of the Parties would combine to put the world on track to the LTG. The probability that they would not appears to be higher. A ‘strong’ agreement, in which Parties are heavily committed to the LTG, confronts this prospect and includes a mechanism for making adjustments as necessary.

Proposed text:

Para. 175: After their communication, commitments / actions will be subject to an ex ante consideration process in order to:

Assess the adequacy of the aggregated contributions compared with science;

Facilitate the analysis of national mitigation potential and address deficits in the light of the ambition required.

Para. 176: Each Party to go through a consultative period for four to six months after the submission of its intended nationally determined contribution.

Para. 177: 

Option A: The Parties agree to establish a technical body to undertake analytical work, examine the adequacy and fairness of commitments and contributions and prepare recommendations.

Option B: In the event that the Parties are unable to agree on the revision of INDCs in order align aggregate commitments to the long-term goal, the Parties agree to submit their proposals to an arbitration panel consisting of [X number of] members, each of whose nomination is agreed by [Y number of] Parties.


[PW 1] Para. 178:

Option A: In the absence of a contrary consensus the Parties shall agree to be bound by the recommendations of the technical body.

Option B: The Parties shall agree to be bound by all findings of the arbitration panel.


[PW 3] Para. 178:

Option A: The Parties shall review and revise their INDCs in light of the recommendations of the technical body

Option B: The Parties shall review and revise their INDCs in light of the recommendations of the arbitration panel.


Para. 179:

The Parties shall publish annual reports on progress towards the long-term goal, in simple, accessible language, enhancing accountability in terms of the ultimate objective of the Convention.

 
NT, Part J [[Time frames and process related to commitments / contributions / Other matters related to implementation and ambition] includes, at para. 175, options regarding an overall assessment of the adequacy of reduction commitments.

Option 1 states simply:

No ex ante consideration process / no arrangements for further facilitating transparency and clarity [/no consultative process / period].

Option 2 contains a number of sub-options, including the following:

After their communication, commitments / contributions / actions will be subject to an ex ante consideration process / further facilitation of transparency and clarity / a consultative period/process in order to:

Assess the adequacy and[equity][fairness][of the][aggregated contributions][overall effects] compared with science, [as part of the principle-based reference framework] [Option (a)b].

Facilitate understanding of the comparability of effort of the commitments / contributions / actions; and of the global aggregate commitment [Option(a)e];

Address / understand / determine / discuss deficits in the light of the ambition required / facilitate the analysis of national mitigation potential and address deficits in the light of the ambition required [Option (a)f].


NT para. 175.3, option (d) proposes:

Each Party to go through a consultative period for four to six months after the submission of its intended nationally determined contribution.

NT provides at para. 175.4, option (c):

Parties will undertake top-down adjustments on the basis of a global carbon budget.

NT para. 175.4 is supplemented with corresponding procedural proposals, in particular para 175.5, which states:

The governing body shall develop and adopt modalities and procedures for the ex ante consideration
process / further facilitation of transparency and clarity / consultative period/process by its [X] session:




A technical body / panel / task force to be established that undertakes analytical work, examines the adequacy and fairness of commitments / contributions and prepares recommendations; and/or on mitigation and means of implementation [para. 175.5.d.];

Option 3 is along similar lines but would only provide recommendations to parties (see para. 175.3):

The aggregate consideration process shall be conducted consistent with science and on the basis of equity, with a view to providing recommendations and informing Parties in adjusting their nationally determined contributions towards enhancing ambition …

Option 4 would establish a two-tier regime exempting developing countries from any hard pressure in relation to their commitments (see para 175.1.c and para 176.2):

On the basis of the ex ante assessment, each developed country Party shall revisit, revise and increase its commitment on mitigation and provision of finance, technology and capacity-building support, including by putting forward further targets, policies and measures.

176 .2 Developing country Parties are invited to participate in a facilitative process before or after their communication of the enhanced actions:

b. The facilitative process for developing country Parties should be:

i. On a voluntary basis;

ii. Supportive, non-prescriptive, non-intrusive, non-punitive and respectful of national sovereignty of developing country Parties;

iii. Conducted in accordance with Article 4, paragraph 7, of the Convention.


The ex ante consideration process is set out in CCT P3 at para. 95: Option 1, is for no ex ante process; Option 2 provides, inter alia:

PURPOSE: After their communication, [commitments][contributions][actions] will be subject to [an ex ante consideration process][ further facilitation of transparency and clarity] a consultative [period][process]] in order to: {Opt I para 176 opt 3 GNT / Opt I para 175 opt 2 SCT}

a.  Facilitate understanding of the level of ambition and [equity] [fairness] of the [commitments][contributions]  … {Opt I para 176 opt 3 opt (a) a. GNT}

b.  Assess the adequacy and [equity] [fairness] [of the] [aggregated contributions] [overall effects] compared with science, ….{Opt I para 176 opt 3 opt (a) b. GNT}


Para 95.4 provides for three options for the outcome from the process:

Parties should consider the outcome of the process;
Parties should revise their INDCs on a voluntary basis; and
Top down adjustments on the basis of a carbon budget..

Element 5: Annual reviews of aggregate emissions against defined progression indicators | Back to top

Such agreement is the prerequisite to coordinated, collective action. Without it there is no reference point for determining either national contributions or for evaluating collective progress towards the LTG.


The Global Commons Institute has plotted the trajectory of collective INDCs (see above) to reveal as follows:

  • INDCs, even if honoured, will have consumed by 2030 about 100 GtC in excess of the total carbon budget for 1.5 degrees;
  • INDCs, even if honoured, will have consumed by 2030 the entirety of the carbon budget consistent with a  > 66% chance of limiting warming to 2 degrees Celsius;
  • A path from INDCs in 2030 to decarbonisation by 2100 leaves us on track for 3.5 or 4 degrees warming;
  • The consequence of the decision to delay deep cuts until 2030 is the absolute necessity of decarbonising in full by 2050.


Unless INDCs are revised downwards, in other words, pathways to the long-term goal are vanishing fast.

In face of the danger, do the Parties bury heads in sand and hope? Or do they identify and commit to the best available escape route? This is the real test of COP21.

A pathway might be defined in terms of both 'router' and 'destination'.

Router (or adjustable pathway)

AR5 specifies a carbon budget for a greater than 66% chance of limiting warming to 2 degrees celsius: 790 Gigatonnes of Carbon (GtC), of which 515 had already been 'spent' by 2011, leaving just 275 GtC. Since more is being spent now, there is less to spend later: aiming to reduce emissions by 70% by 2050 is no longer consistent with the temperature goals.
Fixed sign-posts, in other words, quickly become dangerously misleading, guiding us in the wrong direction. The router element of the pathway needs to reflect the fact that our orientation changes with every turn we. The only way to do that effectively is to set it in terms of the carbon budget. The text might take the following form:

The Parties acknowledge that the carbon budget consistent with the long term goal is [790] Gt Carbon - x [where x is the carbon emitted between 2011 and the present]. The Parties commit to remaining within this budget, and INDCs will be reviewed and revised on that basis.
If the Parties accept that 790 GtC will inevitably be exceeded, the budget might be increased to say 820 or 900 GtC (offering respectively >50% and >33% chances of limiting warming to 2 degrees Celsius).

Destination (decarbonisation date)

An alternative (or additional) option to a pathway framed in terms of the carbon budget, focusses on the destination - or decarbonisation date. Clearly the comments above apply: the date for decarbonisation consistent with the temperature goal depends on what happens in the interim.
However politically Paris needs to set a decarbonisation date. The router framed in terms of the carbon budget it too technical and arcane to communicate a strong message of progress and commitment. 
Given the 'overshoot' of INDCS, a decarbonisation date of 2100 would serve only to mislead, implying we have more time than we've got.
The Parties can rescue Paris with an honest assessment of where we are. They must confront and acknowledge the consequence of INDCs that choose to 'spend now': complete decarbonisation by 2050. 
Even if not legally binding, such a commitment would send a powerful and necessary signal to the markets. Climbing such a steep path might be another matter; but for Paris to be regarded as a success it must clearly signpost the scale of the challenge.


Proposed text:
 
Para. 5(1): The Parties agree that the pathway to decarbonisation should be defined with reference to a carbon budget, i.e. [790/820/900] GtC - X, where X is the carbon emitted between 2011 and the relevant date.


5(2) Recognising that INDCs to 2030 will result in the depletion of the carbon budget, the Parties commit to total decarbonisation by 2050.

See NT, para. 5, Option 1, 5(1), Option (d)

Ensuring significant and rapid global greenhouse gas emission reductions of at least 70-95% below 2010 levels by 2050 and negative emissions of CO2 and other long-lived greenhouse gases before 2080.


 See NT, para 17.2, Option 1, sub-option a), eg a) viii:

 Ensuring significant and rapid global greenhouse gas emission reductions of at least 70–95 per cent below 2010 levels by 2050 and zero emissions of CO2 and other long-lived greenhouse gases in the period 2060–2080.

 In CCT, the relevant provisions are contained in part three under the useful heading: ‘Operationalising the long-term goal’. Three different options are proposed:

 [[In the context of the long-term objective referred to in Article 3 of the draft agreement,] Parties’ [differentiated] efforts [shall][should][other] take the form of:

Option 1: PEAKING [A peaking of global [and national] GHG emissions as soon as possible [recognizing that, in accordance with emissions peaking for [developed countries][Parties included in annex X] in 2015, those [countries][Parties] shall aim to reduce net emissions to zero by 2050][with full decarbonization by 2050 for developed countries and a sustainable development pathway for [developing countries][Parties not included in annex X]] …

{para 17.2 opt 1, opt(a) iv. and v., opt 1 a. opt (b), and para 17.2 opt 2 GNT}

Option 2: ZERO EMISSIONS: A long-term zero emission sustainable development pathway consistent with [the findings of the best and latest available science][and the findings of the IPCC,] [and] [a global reduction in GHG emissions [to [net] zero][[of at least][ 40–70][50][70–95] per cent below the [1990][2010] level] by 2050 [and a continued decline in emissions thereafter] [and reaching [[near] zero][negative] emissions of CO2 eq. [or below][ and other long-lived GHGs by the end of the century] [by [the period 2060–2080][2100]][ a stabilization of the concentration of GHGs in the atmosphere at or below 350 ppm of CO2 eq] …{para 17.2 opt 1 a. i. – iii. and vi. – viii. and 17.2 opt 1 c. GNT}

Option 3: EMISSION BUDGET: A global emission budget [informed by national estimates] to be divided among all Parties in accordance with the principles and provisions of the Convention so as to limit global warming in this century to below 1.5 °C in accordance with the IPCC assessment. The distribution of the global emission budget should be undertaken in accordance with historical responsibilities, ecological footprint, capabilities and state of development.] {para 17.2 opt 1 b. GNT}


Although CCT presents ‘peaking’, ‘zero emissions’ and ‘emission budget’ as different options, the concepts are mutually supportive and might be used effectively in combination.
 
- include provision to revise the emission reduction pathway

 The scientific assessment regarding the LTG and corresponding emissions reduction pathway may change in light of new evidence and research. The agreement should provide some flexibility for revision.

Proposed text:

 
Para 7: The collective reductions commitment, as set out in paragraph 5 above, may be revised only:

             (i) on the basis of a revised IPCC assessment regarding the pathway to the long-term goal; or
             (ii) in the event that all Parties agree to revise the long-term goal (in which case the appropriate pathway will be fixed on the basis of an IPCC assessment).


 There is no equivalent text in either NT or CCT, beyond the general provision on amendment (i.e. NT para. 216).

Key

‘NT’: negotiating text, June 11

‘CCT p1/2/3’: co-chair’s tool July 24, parts 1 (draft agreement), 2 (draft decision) or 3 (allocation to be determined).

Proposed text for core pathway (maroon)


Provisions distinct to Pathway 1, (red)

Provisions distinct to Pathway 2 (blue)

Provisions distinct to Pathway 3 (green)


quotation (small, bold text)    
                      

     

  


Element 4: An agreed carbon budget, per capita shares of which would provide an indicative baseline for the assessment of INDCs (the principle of ‘contraction and convergence’) | Back to top
Element 8: Upholding commitments | Back to top

An emissions budget, expressed in terms of CO2 –eq emissions, is more easily converted into national allocations than a pathway expressed in terms of global emission reductions. According to AR5, the total remaining budget, as of 2011 was 1000 GtCO2. This should be updated and might be better expressed in terms of CO2 – eq.

There is a straightforward formula for splitting the emissions budget between countries: divide it by global population to give a notional per capita emissions budget; then multiply the per capita figure by national population. As well as simplicity this approach offers fairness. For the further developed, high consumption countries, working with the global per capita average share will demand particularly severe cuts; for the less developed, low consumption countries, the share will be relatively generous. Some US researchers[1] help make the point: they estimate that the ‘carbon legacy’ of the average female in the US is 18,500 tonnes of CO2, compared to just 136 tonnes for a woman in Bangladesh.

Of course there may be good reasons for departing from the formula in particular cases; but it would provide a useful tool for determining and interrogating INDCs. It might also be used to create a fixed number of potentially tradable shares, working to ensure adherence to an aggregate emissions limit.

This approach has previously been proposed under the banner of ‘contraction and convegence[2]’. As long ago as 2003, the UNFCCC Secretariat asserted that ‘stabilisation inevitably requires contraction and convergence’[3].


Proposed text:

 
Para.8: All parties shall agree a global emissions budget, based on the conclusions of IPCC AR 5, to be divided among all Parties in accordance with the principles and provisions of the Convention and using, as an indicative baseline starting point, equal per capita shares (i.e. the principle of ‘contraction and convergence’). In proposing their INDCs Parties should justify any departure from the indicative allocation.

 NT Para 7, Option 4, proposes a global emission budget to ‘divided among the Parties’:

A global emission budget to be divided among all Parties in accordance with the principles and provisions of the Convention, in order to limit global warming this century to below 1.5 °C consistent with the Intergovernmental Panel on Climate Change (IPCC) assessment. The distribution of the global emission budget should be undertaken in accordance with historical responsibilities, ecological footprint, capabilities and state of development.

See also NT, para 17, Option 1, Option b)b) and CCT, P3, para 6, option 3:

Option 3: EMISSION BUDGET: A global emission budget [informed by national estimates] to be divided among all Parties in accordance with the principles and provisions of the Convention so as to limit global warming in this century to below 1.5 °C in accordance with the IPCC assessment. The distribution of the global emission budget should be undertaken in accordance with historical responsibilities, ecological footprint, capabilities and state of development.] {para 17.2 opt 1 b. GNT}

The Parties to UNFCCC have been meeting for more than 20 years. With just 5 months till COP21 they are yet to agree the foundational principles for an agreement.

With so much at stake there is a risk the scale of the challenge becomes overwhelming; a risk that can be managed with structure and focus. The emphasis should be on laying the foundations for future cooperation. If nothing else is accomplished in Paris, an agreement, which effectively aligns aggregate emission reductions to the long-term goal; which generates reliable and substantial funding to support developing Parties in planning and implementing appropriate mitigation and adaptation plans; and, which imposes some form of carbon pricing, could be regarded as a success. It would provide the platform for future resolution of other inter-dependent matters.

It should be relatively easy to agree the long term-goal (aiming for 1.5 degrees, with 2 degrees as the limit). The IPCC has outlined a ‘carbon budget’ consistent with that goal. The real challenge is to agree how the burden of emissions should be shared between Parties given the vast differences in resources and circumstances.

The historic UNFCCC approach of separating the Parties into fixed bands overlooks the graduation between parties across a range of variables. It causes unfairness and antagonism. Fixed bands should be supplemented with indicative sliding scales of need and commitment, promoting equity and flexibility.

If opposition to such a change is most likely to come from developing country Parties, then the quid pro quo should come in the form of reliable and substantial financial commitments from developed countries. Conditional commitments would only be binding if the requisite funding materialised in good time, incentivising donor generosity and beneficiary efficiency.

From the point of view of donor countries, carbon pricing may prove a key mechanism for generating the necessary funding.

At this stage the prospects of the Parties entering into a ‘strong’ agreement, containing effective mechanisms, including a sanctions regime, for aligning emission reduction and financial commitments to the long-term goal, appear remote. That being the case they should be realistic about the prospects of a ‘soft’ agreement, and address the question, ‘What happens if it doesn’t work?’ To avoid finding themselves in a situation demanding the negotiation of a whole new instrument, the Paris agreement should contain provision for a ratcheting up of measures  (not just commitments) should the initial approach prove inadequate to meet the Convention’s ultimate objective.

Once such steps are taken the task of agreeing mechanisms to align INDCs with long-terms goal becomes manageable and the prospects for a successful outcome, which applies the break to runaway climate change and ocean acidification, turn brighter.