- Prelims: Current events of international importance, COP, IPCC, G20 etc
- Mains GS Paper II: Bilateral, regional and global grouping and agreements involving India or affecting India’s interests, Important international institutions etc
ARTICLE HIGHLIGHTS
- This year, at COP27 in Egypt, important topics from the emissions reductions to rules to govern carbon markets were discussed.
- The most significant to developing countries including India is climate finance
INSIGHTS ON THE ISSUE
Context
COP : (held annually)
- It stands for the annual ‘Conference of the Parties’ to the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol(1997) or the Paris Agreement.
- Meetings review the progress made by countries in the fight against climate change and in the implementation of decisions taken in earlier COPs.
- The first COP meeting was held in Berlin, Germany, 1995.
Preludes to COP27:
- Widespread droughts in Africa
- Floods in Pakistan
- Wildfires globally
Loss and damage:
- It refers to costs the rich and developed countries, who are majorly responsible for industrial emissions, should pay to poorer nations(made negligible contribution to pollution) but are more vulnerable to extreme climate events –
- For example: the devastating floods in Pakistan
- Polluter Pays” principle: It makes the polluter liable for paying not just for the cost of remedial action, but also for compensating the victims of environmental damage caused by their actions.
- Warsaw International Mechanism (WIM) for Loss and Damages(2013): It was the first formal acknowledgment of the need to compensate developing countries struck by climate disasters.
Developing countries need finance for:
- Low-carbon transformations
- Building resilience to inevitable climate impacts
- Loss and damage (L and D) from climate-induced impacts.
Mains L and D agendas for developing countries:
- Change the existing narrative of L and D to addressing losses that have already occurred
- Responsibility: Start holding developed countries morally responsible and financially liable for the same.
Challenges associated with L and D:
- L and D in ratified UN texts: It mostly entailed prevention and pre-disaster preparation(combining L and D with adaptation)
- This is in the interest of developed countries that do not want any new responsibilities.
- The decision text accompanying the Paris Agreement took liability and compensation for L and D off the table.
Issues with new L and D fund introduced at COP27:
- Following the recommendation of the G77+China: The text frames L and D as post-event “rehabilitation, recovery, and reconstruction”.
- It excludes mention of historic responsibility and principle of Common but Differentiated Responsibilities (CBDR).
- There is no clear indication that the fund will be paid for by developed countries.
- The decision explores a “mosaic” of solutions: which might simply mean a slow shift of the L and D burden onto the private sector.
- If liability and CBDR are removed from L and D: The notion to hold developed nations morally and financially accountable.
- It risks becoming a toothless and more voluntary reward than recompense.
COP27 on climate finance:
- It focussed on increasing finance flows to support positive climate action in developing countries.
- COP27: It encouraged finance through other channels other than public finance.
Background of climate finance:
- Climate finance: In 2009 developed countries had promised developing countries $100 billion in climate finance annually by 2020, which still remains unmet.
- Developed countries now aim to meet by 2023.
- Article 2.1c of the Paris Agreement: seeks to make all finance flows compatible with low-carbon development.
Importance of reforming the global financial system:
- It will reduce the costs of borrowing for climate projects
- Increase finance for adaptation
- Better align their operations with the Paris Agreement.
Multilateral system and carbon markets:
- Reforming the global financial system: For the first time, the COP27 decision text included a call for reforming the global financial system, particularly multilateral development banks (MDBs), to make them more supportive of climate action.
- Carbon markets(prominent vehicles for channeling private finance): some entities sell credits by reducing their emissions below a threshold, while others buy these credits to offset emissions they are unable to reduce.
- Just energy transition partnerships (JETP): emerging as avenues for developed countries to quickly channel finance to developing countries transitioning towards clean energy systems.
Way Forward
- Meeting the current pledge and developing a meaningful new pledge: based on developing countries’ needs, will be important trust-building exercises encouraging greater cooperation towards climate action.
- Lack of transparency and double-counting in carbon markets: It can open the door to greenwashing.
- Plans for using carbon credits to enable private investments raises risks about the sufficiency and predictability of finance; whether it can reach sectors that need more support and whether this is an attempt by developed countries to offload responsibility.
- Developing countries at COP27 wanted to focus on the public finance that developed countries should provide.
- The finance conversation is becoming multi-stranded and spreading to arenas outside formal negotiating channels.
- India: It needs to carefully watch trends, and what they might imply for amounts, sources, predictability, impacts, and equity.
QUESTION FOR PRACTICE
Q. Discuss global warming and mention its effects on the global climate. Explain the control measures to bring down the level of greenhouse gasses which cause global warming, in the light of the Kyoto Protocol, 1997.(UPSC 2022) (200 WORDS, 10 MARKS)
