Updates with Article 6 info
Countries at the UN Cop 27 climate conference have adopted a final deal in the early hours of Sunday, agreeing on the creation of a loss and damage fund for vulnerable countries but making no additional progress on efforts to limit global emissions.
The creation of a loss and damage fund has been the most contentious issue debated at Cop 27, but parties finally agreed and "responded to the voices of the vulnerable", said Pakistan climate change minister Sherry Rehman, who spoke on behalf of the Group of 77 (G77) plus China. The inter-governmental organisation of developing nations comprising 134 members pushed hard for a loss and damage fund to be put on the Cop agenda this year.
Countries have decided "to establish new funding arrangements for assisting developing countries that are particularly vulnerable" to the impacts of climate change, including a fund and the mobilisation of new and additional resources, "recognising the need for support from a wide variety of sources, including innovative sources". The EU during the negotiations floated the idea of contributions from oil and gas companies, as well as levies on air tickets and shipping containers, to go towards a loss and damage fund. The creation of the fund is to be established by a transitional committee over the next year.
Countries have hailed the decision on loss and damage, although it is described as imperfect and much work remains to be done. But the lack of progress towards cutting greenhouse gas (GHG) emissions responsible for global warming left many "disheartened", Maldives environment minister Aminath Shauna said. Antigua and Barbuda advisor for climate change Lia Nicholson said — on behalf of the Alliance of Small Island States — that the loss of damage fund was just "a life boat in a brewing hurricane", and Rehman regretted that the parties did not reach "substantive guidance" with regards to updated nationally determined contributions (NDCs) — or countries' pledges to cut emissions.
EU negotiators sought to make the creation of the loss and damage fund conditional to new updated emission reduction targets under the mitigation work programme. EU executive vice-president and lead climate negotiator Frans Timmermans today welcomed the creation of the fund but said that the overall deal reached did "not bring enough added efforts from major emitters to increase and accelerate their emissions cuts". He warned today that a lot of speed was lost since Cop 26 last year.
The Sharm el-Sheikh text reiterates the need to reduce GHG by 43pc by 2030 relative to 2019 levels, unchanged from pledges made in Glasgow last year.
"It does not address the yawning gap between climate science and our climate policies," Timmermans added. The EU and nations part of the high level ambition coalition (HLAC) — including countries such as the Marshall Islands and the UK — wanted to see stronger NDCs aligned with the 1.5°C limit goal, mentions of efforts for global emissions to peak by 2025 and a pledge to phase down fossil fuels. The 2015 Paris Agreement aims to limit global warming to well below 2°C above pre-industrial levels, and ideally to 1.5°C.
Timmermans said that "too many parties are not ready to make progress today" to fight climate change, pointing at "too many attempts" to go back on what was agreed in Glasgow last year and saying that some nations were "afraid of the transition ahead".
Weak on fossil fuels
The energy and mitigation sections of the climate agreement emphasises the urgent need for a rapid reduction in GHG emissions across "all applicable sectors", including through an increase in low-emission and renewable energy, while striving for a "phase down" of unabated coal power and a "phase-out" of inefficient fossil fuel subsidies. This is unchanged from last year's Glasgow Pact and failed to increase ambition on fossil fuels. Mitigation refers to efforts to reduce GHG.
Timmermans said today that more than 80 countries supported the goal of a fossil fuel phase out in the text, but that no solution could be found.
Saudi Arabia was amongst several countries trying to water down the use of fossil fuel language in the final text, with a member of the delegation repeating today on behalf of the 22 countries in the Arab League that "the convention needs to address emissions and not the origin of the emissions".
"It is crucial that commitment [on NDCs] is delivered by all of us, including the major emitters in this room who did not come forward this year," UK lead negotiator and Cop 26 president Alok Sharma said, while pointing at the last minute weakening of the energy section of the text.
Making markets
The final outcome also included new guidance for finalising details for the use of emissions trading under Article 6 of the Paris Climate Agreement, which was one of the less contentious arenas of the talks. Much of that work will take place over the next year for more decisions at next year's Cop, which is due to take place in the UAE from 30 November to 12 December 2023.
"The texts provide key elements to implement high-integrity carbon markets that can help deliver net zero ambitions for all countries," International Emissions Trading Association (Ieta) president Dirk Forrister said. "We are glad that work at the UN level will continue into 2023, including on infrastructure and integrity measures.
The talks centred on Article 6.4, which establishes a centralised body, essentially a successor to the Kyoto Protocol's clean development mechanism (CDM). But it cannot function until its governing guidelines are in place, and limited time remains to do this before the informal deadline for the start-up of the mechanism at the end of 2023.
Negotiators also discussed Article 6.2, which sets out guidelines for the trading of internationally transferred mitigation outcomes (ITMOs) between two countries. ITMOs are UN carbon credits that can be counted towards NDCs.
Progress on 6.4 was limited somewhat by the fact that the advisory body set up for Article 6.4 only met for the first time this summer.
"The pace of development of the Article 6.4 mechanism must accelerate to make a difference in the fight against climate change in this decade," Forrister said.
Article 6.2 is already operational, and a number of countries have signed bilateral agreements to co-operate under the mechanism, including in Sharm el-Sheik, where Switzerland and Morocco signed a joint agreement to reduce emissions, which will allow Switzerland to buy ITMOs against its NDC.
