Fight Over $100 Billion Aid Stalls Global Warming Deal

By Stefan Nicola  

A dispute about how to link greenhouse-gas emissions cuts to a promise from the richest nations for $100 billion a year in climate aid emerged as a major stumbling block at UN talks on global warming.
After five days of discussions in Bonn, envoys from some 190 nations deadlocked about the formula countries will use in setting out their commitments on reducing fossil-fuel pollution in time for the deal they plan to sign in Paris in 2015.
That means higher-level officials will have to unpick the issue when they meet in Peru at the end of this year. The exact way in which those pledges are put on
the table is the cornerstone of the pact that the United Nations is promoting as a replacement for the Kyoto Protocol, whose limits on emissions in richer countries lapse in 2020.
At the heart of the issue is a promise that U.S. President Barack Obama along with the European Union and other industrial nations made in 2009 to scale up the value of aid for climate-related projects to $100 billion a year by the end of this decade. Developing nations would get the money in exchange for cutting emissions -- and opening their industries to scrutiny.
“There has to be some collective signal from the developed countries that the direction of climate finance will be upwards and not fall off a cliff,” said Alden Meyer, a policy specialist at the Union of Concerned Scientists who has been following the talks for two decades. “You need more clarity on post-2020 finance if you want to get an agreement in Paris.”

Disastrous Record

The promise made in 2009 was one of the few tangible outcomes from a disastrous meeting in Copenhagen where envoys failed to agree on a way to take forward the fight against global warming. Instead, they took note of a deal Obama and a handful of richer nations made, which included the aid pledge.
Since then, the talks got back on track with a decision to work toward a deal in Paris in 2015. How the aid pledge links into the next agreement has remained one of the key points of friction.
That climate aid totaled about $10 billion a year from 2010 to 2012. While the richer nations say the level of their giving hasn’t dropped off, there’s been no figure since then detailing their collective progress. The $100 billion pledge includes both finance from private companies and taxpayer-funded projects as well as cash from development institutions.

Bonn Agenda

Envoys at the meeting in Bonn were hoping to nail down exactly what would be included in the pledges each country will put forward for final deal in Paris. Those are known in the UN jargon as Intended Nationally Determined Contributions.
Poorer nations want some measure for climate aid included in the so-called INDCs along with details about how each country will reduce its fossil fuel emissions. For richer nations, the cash they pledge is leverage to bring the poorer ones into a deal that will restrict pollution everywhere, unlike the 1997 Kyoto pact that applied only to industrial nations.
The nature of the INDCs is crucial to the Paris deal because it’s at the core of how much emissions will be reduced.
Under Kyoto, industrial nations pledged to cut greenhouse gases by 5.2 percent from 1990 levels by 2012. Each had a target, and the goals were later extended to 2020. The goals set a top-down requirement to cut fossil fuel pollution without specifying how countries would make the cuts.

Kyoto Targets

The 2012 targets under Kyoto were mostly met, though global greenhouse gases kept rising because pollution rocketed in developing nations such as China and India. They had no restrictions under Kyoto.
The deal for Paris envisions all countries rich and poor alike coming forward with their own proposals for how to reduce emissions and a UN body reviewing those before enshrining them under the framework of a global agreement. Delegates in Bonn are debating what needs to be included in the INDCs, as well as the legal form of the eventual deal.
Island nations most at risk of being swamped by rising sea levels and more violent storms forecast with an increase in the global temperature don’t want to budge without aid from the West for adapting to climate change, said Ronald Jumeau, a delegate from Seychelles who is representing 44 island nations.
“We’ve heard signs they’re getting the message” that funding and climate adaptation is key to developing countries in the talks, Jumeau said today in an interview. “Now they have to respond.”

Paris Timeline

Last year, delegates to the talks committed to announcing their pledges in the first quarter of next year. They didn’t set out the exact form those pledges would come in or what detail would be required from each country.
Part of the aid will be channeled through the Green Climate Fund, an institution established by these UN talks. It has received pledges for money from nations including Germany, France, South Korea and Switzerland but not yet from the U.S., Japan and the European Union.
The envoys in Bonn also haven’t made much progress on a draft text for the Paris talks that they hoped to release at their next meeting in Peru. Delegates spent time stating their positions instead of negotiating on wording, according to Kishan Kumarsingh, the envoy from Trinidad who is co-chairing meeting in Bonn.
“Lima is just a few weeks away,” Kumarsingh told delegates yesterday.
Co-chair Artur Runge-Metzger suggested nations meet again in February or March, possibly in Geneva or Bangkok, to refine a text that can be ready for Paris.