As negotiations to design the Paris Rulebook developed during COP23, finding an agreement on the sensitive topic of climate finance proved to be a major obstacle in bringing the guidelines for Paris forward. Specifically Article 9.5 of the Paris Agreement brought discussions to a full stop during the second week of COP23. But what is this article about exactly? And why couldn’t countries come to an agreement on the matter? A breakdown by Climate Tracker:
The Basics of 9.5
Article 9.5 of the Paris Agreement (PA) states that developed countries should communicate how much and how they are contributing to climate finance for mitigation and adaptation.The article dictates a biennial reporting on these finances, and also encourages other countries that are financially capable (e.g. China) to contribute to these finances.
Communicating on climate finance has been central to the UN climate negotiations for years, and plays a pivotal role in bringing forward the mitigation and adaptation efforts of underdeveloped countries. So why has it been such a contentious issue during COP23?
Let’s talk Climate Finance – a history of Article 9.5
Already at COP18, in Qatar, developed countries were asked to submit information, alongside their strategies and approaches, to explain how they intended to respect their commitment of scaling up finance, as to reach a proposed US$100 billion/year goal by 2020.
At COP19, in Warsaw, countries agreed to communicate on the funds they would provide for the period from 2014 to 2020, which was supposed to be the 2nd implementation period of the Kyoto Protocol, brought to life by the Doha Amendment (unfortunately this 2nd Kyoto period was never implemented, since not enough countries ratified the Doha Amendment). The quantity and quality of funds needed to be communicated every two years and before the implementation of these funds.
At COP21, in Paris, the milestone of the Paris Agreement rallied all countries of the United Nations together behind the goal of reducing greenhouse gas emissions to keep the world from warming above 1.5 degrees. Many underdeveloped countries pushed for the inclusion of climate financing mechanisms into the Paris Agreement, and finance was included under Article 9 of the PA, with the first paragraph stating:
“Art. 9.1: Developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation..”
The 5th paragraph of this article stated these finances (provided by developed countries) needed to be communicated on a biennial basis using clear quantitative and qualitative measures. it also invites financially capable (non-developed countries) to do the same. A solid basis for conveying climate finance was born.
In COP22, in Marrakesh, the thought process of actually implementing this communication process was started but didn’t lead to much more than some suggestions.
In May 2017, during the intersessionals of SBI 46 and SBSTA46, a specific workshop was held to identify what specific information should be included in article 9.5.
What happened during COP23:
At the COP23, during November 2017 in Bonn, the negotiating body of underdeveloped countries, the G77, raised the flag that although the first steps had been taken in figuring out article 9.5, it was still unclear how and when climate finance information should be communicated (referred to in the discussions as the modalities), and how it relates to other reporting and communication under the Paris Agreement.
The G77 wanted to discuss this issue under the Paris Agreement discussions (APA) during COP23 but many developed countries blocked this fearing this would force them to have stronger communication commitments. Although article 9.5 is supposed to only give indicative, non-binding information on finance, once it is being discussed in the APA negotiating body it would also become part of negotiations around transparency (Article 7 of the PA) as well as compliance (Article 15 of the PA), which might make it a much more binding process.
Some developed countries and negotiating groups (e.g. Australia, the EU) even stated that discussing 9.5 in the APA would be against the Paris Agreement itself since they felt not the process itself but their individual contributions were being questioned during these negotiations.
The EU, among other negotiating groups, pointed out several times that the approval of their domestic budgets is a slow process that they can not predict two years in advance, which makes it difficult to report projected levels of finance in future years.
Although predicting how much financial aid a country is able to give two years in advance can indeed be a technical difficulty, the real problem that emerged during the COP23 negotiations is the political resistance against making any form of politically binding pledges every two years.
Not placing the issue of climate finance in the center of the APA, but rather keeping it on the sidelines in the technical negotiating bodies SBI and SBSTA, protects developed countries from being scrutinized when not delivering the finance that was promised. It also prevents the discussions around transparency and compliance from becoming an essential part of the transparency framework and compliance mechanisms of the Paris Agreement.
Now what? Discussing finance after COP23
After 2 weeks of tough negotiations, some mediocre progress was made during the late hours of the final day of COP23: it was decided to keep discussing the issue under the APA under “additional matters” (article 8b). The technical negotiating body SBI will still keep identifying the information to be provided when communicating finance, taking into account the informal note that has been prepared. The next intersessional in May 2018 (during SB48) will thus be the scene of more of the same discussions, preparing the reopening of the issue during the next APA meeting (APA 1-3) during COP24.
In other words, COP23 proved once more that developed countries do not want to be tied to their promises when it comes to financing climate solutions. Although the many speeches from prime-ministers and presidents during COP sounded very ambitious, negotiations showed reluctance to make those promises a reality.