Download Unsure and Unswearing Negotiations of Financing

Unsure and Unswearing Negotiations of
Financing
Combating Climate Change (UNFCCC)
Xianliang YI
Ministry of Foreign Affairs, China
Oxford, August 2010
Content
I The status quo: the process of commitment
and unswearing
II Interpretation of relevant parts of CA
III UNFCCC: impossible to create a financial
mechanism with stability and predictability
VI AGF proposals: impractical and unacceptable for
UNFCCC
V IMO/ICAO: sectoral actions denote uncertainties
and decades effort needed for mobilizing resources
VI China's positions and perspectives
I The situation quo
1. Limited resource and huge need and expectation
• resources under framework of UNFCCC:
---the 5th refreshment of GEF:
1.36 b US$ for climate of 4.25 b US$
---Adaptation Fund: 149.6 m $
--- others
• needs:
agreed: 30b US$ (fast start funding-FSF for 2010-2012
100b US$ (long-term finance arrangement-LFA for
each yr from/ beyond 2020
UNDP: 200b US$ for mitigation and 49-171b$ for
adaptation in developing countries in 2030
2. Ambitious promise but difficult action
• Promises made by some Parties (to the
Copenhagen fast start fund)
-US: 10b US$ (Obama, COP15)
-Japan: 15b US$ (Hatoyama Initiative)
-EU: 7.2 b Euro (EU Env. Ministers'decision)
-Australia: 599 m AU$
-Canada: 400m US$
• None one commits to carry the promise out
except EU reiterates its announcement
3. None progress in the negotiation either under FCCC
context or any other forum to support a decision or
conclusion by COP 16 on the financial issue which will
be the decisive element of a successful Cancun
Conference.
• FCCC: -fccc-centered or a mdb-centered
- how many and what kind of funds need
-CBDR, percentage and addition
• AGF: the public resource would be denied
• IMO: Experts Group on market mechanism will report its
study to IMO Council in 2011
• ICAO: Ministerial meeting in this October will discuss
the next step action, but none concrete conclusion on
levy and/or emission trade
II Interpretation of the Copenhagen Accord
1. FSF 30b US$ should come public resources
2. LFA 100b US$ should majorly from public
resources with supplemental by market
mechanisms if they could take place then
Q: how about the scale of 2013—2019?
III UNFCCC
Chapter III Enhanced action on the provision of financial
resources and investment( Chair's Text to facilitate
negotiations, Aug. 2010)
Agreed something but with fundamental and substantial
disagreements
General agreement:
1.Scaled up, new and additional, predictable and adequate
funding shall be provided to developing country Parties, …
2.The main source of funding shall be provided by
developed country Parties. Private-sector financing and other
innovative sources of funding shall supplement the provision
of public financial resources.
Fundamental disagreement:
1. [developed countries commit to a goal of mobilizing
jointly USD 100 b US$ ][developed countries shall make
assessed contributions of 1.5% of the GDP of those countries]
2. [Developed country Parties] [All Parties, except least
developed countries,] shall, beginning in 2013, provide
resources based on an [assessed] [indicative] scale of
contributions to be adopted and periodically updated by COP.
3. New or existing bodies govern the resources
--A new body of the financial mechanism shall be
established under the guidance of and be
accountable to COP in order to perform, inter alia,
the following functions:
--Existing institutions shall be strengthened in order
to perform, inter alia, the following functions:
IV AGF might be practically resultless
•The Advisory Group on Finance convened by the Secretary General
of the United Nations to develop practical proposals to mobilize new
and innovative resources for long-term financing for climate change,
as pledged by developed countries. The report of the Advisory Group
on Finance is due to be presented to the Secretary General of the
United Nations on 29 October 2010.
•The Chair of LCA believes AGF will deliver practical
proposals/suggestions to LCA or COP16
•Actually, there are diversified disagreements in the AGF, mainly
because of the dispute whether the public resource should be the
dominant funding. Furthermore, the wording was changed to "grant"
which was interpreted covering the public resource.
V Sectoral channels maybe the way to make deal
but need time
1 ICAO
2 IMO
Both could set MF and internal funds
3 Industries (steel, cement, etc.) without specialized
intergovernmental organizations (INGs)
VI How Chinese positions
1. China can not punch above its weight
• job is the first priority
• lower emission per capita in history
• coal is the primary energy
• a big embitter with great mitigation potential but more
emission needed
• energy subsidies and taxation should be the first
consideration for financing climate issue
2. Cooperation in energy technology and efficiency should
be the core
3. South-South cooperation should be strengthened
Data of PEW Centre
1）1850-2000 emission：US 30% and China 7% of the
total emission in the world
2）1750--1950，the developed emitted 95% of the total；
1950--2007 ， the developed emitted 77%；
1904--2004 ， 8%；
3) Emission (billion ton of CO2) from 1750:
•world in total: 1122.2
• developed countries: 805.6，78% (if add other GHGs, more
than 80%)of the total；
4) historical emission per capita(ton CO2, 1750-2006):
India 43, China71，UK1125，US1107
Questions for discussion:
1. Need and possibility to decide a minimum
percentage (50%) for public financial
resources in the LFA from developed
countries, based on 100b US$ of 2020
2. Possibility of a yearly increase ratio of LFA
3. How to connect sectoral funding with LFA
4. How to arrange the financing for 2013-19
Thanks