Reflections on the Durban outcome

Reactions to the outcome of the climate talks in Durban have ranged from elated to deflated, passing by most points in between. The best summaries include those by Jonathan Grant for PwC, Jennifer Morgan and others for the World Resources Institute, and Yvo de Boer and colleagues for KPMG .

We learn from Jonathan Grant that there were 36 separate decision texts in Durban, in addition to the Durban Platform for Enhanced Action, the key document which charted the way forward. These covered the continuation of the Kyoto Protocol, the setting up of the new Green Climate Fund, and a raft of specifics on adaptation, MRV (Monitoring, Reporting and Verification), technology and forestry. The detailed texts - but not, as far as I can see, a summary - can be found on the website of the UNFCCC.

What follows is not an attempt to provide a synthesis, but to make one or two points from the perspective of someone working both on climate compatible development, through CDKN, and on European development cooperation.

Just to clear the decks first, neither the external environment nor the politics were propitious before Durban. The threat of a global recession and the euro crisis had a greater claim on leaders’ attention, for example at the G20. Partly driven by slow growth, carbon prices in the European Emissions Trading Scheme had fallen to record lows. From a political perspective, writing after the Chatham House climate change conference in October, I summarised the prospects as follows:

Expectations are low, despite Christiana Figueres talking up the success of the prep conference in Panama. The political moment is not right, and the focus is on sustaining the credibility of the process until the next breakthrough moment, which will probably not be before 2015. Some (incl Figueres) argued that civil society pressure should be stepped up urgently to accelerate progress. Others disagreed, arguing that powder should be kept dry until the circumstances are more propitious.

In that context, Durban is likely to deliver three main things: (i) a way forward on the Green Fund, with the arrangements (not the money) ‘almost there’; (ii) a Technology Mechanism, with agreement on the policy side and some progress on implementation; and (iii) bringing order on adaptation. That is a pretty modest package, though not so modest that there probably won’t be a row with NGOs about the scope and management of the Green Fund: they (well, anyway, those who spoke) are worried it will be too much focused on mitigation (esp energy), not enough on adaptation.

Christiana Figueres said that the post-Cancun package is much more difficult, with major questions about long-term finance and about post-Kyoto commitments. On post-Kyoto, the most likely outcome is not a single framework, but what Christiana described as a three-cornered hat: (a) agreement in principle to a second commitment period, but (b) dependent on the countries which have announced they are quitting (Russia, Canada and Japan, plus the US, which was never in) being gathered together into a separate ‘container’, along with the pledges they have already made, and (c) a ‘declaration’ or ‘letter of intent’ to move towards a comprehensive agreement.

From this starting point, the Durban Platform looks like a better outcome than Christiana Figueres had hoped for. It is only a page and a half long, and is appended here for ease of reference. As many have noted, the key features are:

• Agreement to launch a process towards a new legal framework;
• Involving all countries, and not just Annex 1 countries;
• With a timeline, to begin in 2012, reach agreement by 2015, and implement by 2020;
• And a commitment to scale up ambition in the light of the next report of the IPCC, due in 2014.

The text goes along with a decision to extend the Kyoto Protocol into a second commitment period, from 1 January 1, 2013, ending at the end of 2017 or 2020.

Of course, this can be read as the glass half empty or half full. Half empty because nobody much except for the EUEuropean Union will sign up to the Kyoto extension, all the work remains to be done on a successor agreement, and anyway, what exactly is meant by an agreement ‘with legal force’? Plus there seems to have been very little discussion of country emissions targets in Durban, in or out of ‘containers’. Half full because the process has been kept alive and made more inclusive. I am inclined to agree with Robert Stavins, who says that ‘in the real world of international negotiations on this exceptionally difficult global commons problem, this is what success looks like’.

The most interesting aspect for me is the role of the EUEuropean Union in brokering this deal, first by developing the idea of a ‘road-map’ to a post-Kyoto framework, and second by stitching together an alliance across the traditional dividing lines of Annex 1, Annex 2 and non-Annex 1 countries, as well as large and small emitters. I can’t say that I have studied the internal EUEuropean Union processes in any detail, nor been able to disentangle the role of European institutions versus Member States, but at first sight Connie Hedegaard, the EUEuropean Union Climate Commissioner, deserves a great deal of credit. There are a couple of implications.

First, Durban may well provide a case study of why it is sensible for Member States to work together through the EU, and of how to do it. At a time of political crisis in Europe, there are valuable lessons about the benefits of developing an EU-wide vision and set of targets, as well as specific instruments like the European Emissions Trading Scheme, however flawed (but NB worth celebrating and defending, especially given the current row with the Chinese, Americans and others about bringing airline emissions into the Scheme). Are there implications for development ministers working on climate change, but also more widely?

Second, it is interesting to speculate whether and how EUEuropean Union momentum will be sustained. Is it sensible to think, for example, that the global public good would be served if EUEuropean Union Member States concentrated more of their climate change energy through Brussels institutions rather than bilaterally – giving Connie Hedegaard more bargaining power in the negotiations over a new treaty? From a development angle, there might be implications for the funding of the EU’s Global Climate Change Alliance, so far very poorly funded, and for the allocation of bilateral funds, like the UK’s International Climate Fund.

I’ll leave others to comment on the 36 decision texts, except that the agreement on the Green Climate Fund deserves a mention – not least because control over climate finance, and the uses to which climate finance is put, have been highly contested and political. Last year’s IDSInstitute for Development Studies, Sussex Bulletin on the political economy of climate change remains an essential read on the tensions in this respect between the World Bank and the UN, between Ministries of Finance and Ministries of the Environment, and between developed and developing countries. Reading the agreement, a number of points stand out:

• Most important, the agreement to establish the Fund, albeit so far with no actual money;
• The Fund should be an operating entity of the Convention;
• A Board made up of equal numbers of representatives of developed and developing countries, with two co-chairs, one from each group;
• Developing country members appointed to represent both regional and ‘special-interest’ constituencies (e.g. small island states and LDCs);
• A portfolio of grants and loans;
• ‘Balanced’ as between mitigation and adaptation;
• With developing countries able to access funds directly or through international organisations such as UN agencies and multilateral development banks;
• With a private sector facility;
• And with the World Bank to act as a trustee, at least initially.

It seems that Switzerland and Korea are vying to host the GCF, though Germany is also making early contributions, and it would not be surprising if they wished to add the Fund to the portfolio of organisations - including the UNFCCC, where the Secretariat will initially be based - that they have attracted to Bonn.

The acid test of the GCFGross Capital Formation will be whether it is successful in attracting a significant share of the $US 100bn in climate funding promised by 2020 – though that number itself looks in doubt, with so little discussion in Durban of follow-up to fast start funding, which is supposed to end in 2012.

In the best case, the Fund will hoover up most or all of the money currently scattered across other funds and programmes, such as those listed by Climate Funds Update or the Climate Finance Tracker. This would include the substantial funding available through the Climate Investment Funds, currently managed by the World Bank. Whether that happens will probably depend on whether donors feel that funding is being channelled through Ministries of Finance and in support of national climate compatible development plans, rather than, as has up to now been the case with UNFCCC-controlled windows, to Ministries of the Environment, and for largely environmental projects.

That links to the other big issue, the scope of funding. The GCFGross Capital Formation documentation talks explicitly of funding mitigation and adaptation, which is probably regarded as a victory by those who feared that adaptation would be neglected. However, we have argued consistently in CDKN that a mitigation/adaptation framework is incomplete and misleading, given the scale of change in the global economy that will result from climate change or the measures taken to deal with it. This is not the place to repeat the many examples to illustrate the point, whether solar cells for export in China, development of lithium in Bolivia, or wind power as an industrial policy in South Africa. See my previous contributions on green growth, for example here and here. The main message is that there is much more to climate compatible development than simply domestically-focused mitigation and adaptation. This is a lesson being demonstrated in many national and regional plans supported by CDKN, for example in Eastern and Southern Africa and in Central and South America.

The risk is that the GCFGross Capital Formation will be constrained by governance through the UNFCC, and hobbled by UNFCCC terminology and priorities. It is to be hoped that the new Executive Director and Secretariat will be encouraged to take a broad view of climate compatible development. If they do, then an exciting possibility opens up, one I have long argued for in the context of work on UN reform – viz a significant source of loan and grant funding managed through the UN, rather than the World Bank and the other MDBs. It could have been interesting to have UNDPUnited Nations Development Programme as the trustee of the new Fund – indeed, a case could have been made for making the GCFGross Capital Formation an organ of UNDP. Was this considered, I wonder?

The High Level Forum on Aid Effectiveness, which met in Busan the week before Durban, has mandated a review of multilateral development finance channels. It will be interesting to see how it treats the GCFGross Capital Formation and other climate funds.

Finally, none of this will lead to a single country adopting a new target in the short run, nor to a single wind turbine or solar panel being installed. Durban probably provides encouragement to those who today are setting targets and building turbines, and to those opposing coal-fired power stations or the development of tar sands. However, the world does need a global carbon price and more generous finance, and quickly, if warming is to be kept anywhere close to 2 degrees. It is a pity, maybe worse than just a pity, that we have to wait until 2020 for the fundamentals to be put in place. In the meantime, the running will continue to be made by progressive governments, local authorities and businesses, pushing the boundaries and hoping the regulatory regimes will soon catch up. On that, see my other contribution on the Durban Durbar.