Reed Smith Client Alert

Authors: Peter Zaman Pryderi Diebschlag

Introduction

The high-level ministerial discussions continued on Wednesday with a focus on trying to reach a consensus as to scaling up finance to the “magic number” of US$100 billion per year by 2020.

The usual array of contact groups, informal consultations and meetings under the COP, CMP and AWG-DP workstreams continued throughout the day, culminating in the COP/CMP President convening another informal stocktaking plenary in the evening.

High-Level Ministerial Dialogue

Despite the announcement on Tuesday that the Like-Minded Developing Countries (LMDCs) would not support a move to raise funds through private investment, there were calls from both COP/CMP President Korolec and UN Secretary General Ban Ki-moon for the mobilisation of finances from a wide range of sources, including private investment. This was echoed by the Global Environment Facility (GEF), the entity charged with management of the convention’s financial mechanism, who referred to public finance as merely the catalyst for prompting private finance.

Following the calls for private finance, Lord Stern opened the afternoon session with the statement that government-induced policy risk was the most fundamental barrier to private investment. Similar statements requesting clarity and predictability were heard from Egypt and the United States.

There certainly appears to be broad agreement that a roadmap towards achieving the funding target is a priority, but this much was known and agreed at the start of the conference, and the deep divisions between the priorities of developing and developed countries remain. In light of this, the Republic of Korea called for a dedicated working group to be established to consider the issue of long-term finance.

AWG-DP

The annex to the draft decision text continued to provoke heated discussion between the delegates. There is currently a divide between parties who wish to use the text as the basis for further drafting (New Zealand and AILAC, among others), and those who wish to merely use the text as the basis for discussion (China and Brazil, among others).

According to the United States, some areas of convergence are appearing, including the importance of the Convention’s principles to any future agreement (especially common but differentiated responsibilities), its universal application to all parties, nationally driven commitments, and a staged implementation process that is sensitive to the parties’ individual circumstances. In addition, there continues to be agreement on the “global temperature goal” being a maximum of a 2˚C rise in temperatures.

However, while common ground was identified, China clashed with the United States, strongly resisting the suggestion that the Annexes to the Convention could be re-opened and could “evolve” as countries developed and their economic circumstances changed.

COP

Since the events of COP 18 in Doha, where the Chair gavelled through a decision despite objections raised by the Russian Federation, there has been a great deal of discussion as to the decision-making process under the Convention. The Convention provides that decisions must be made by “consensus”, but the precise meaning of the term, and the roles of the parties in determining when consensus has been achieved, remains unclear. No decisions were made and consultations will continue.

COP/CMP

Informal Stocktaking Plenary The mood at the stocktaking plenary was, perhaps unsurprisingly, not wholly positive. The Chairs of the SBSTA and SBI reported that discussions on REDD+ and methodological issues under the Kyoto Protocol needed more time, while on loss and damage, the ministers could only report that bilateral discussions had started. Even discussions as to the framework for various approaches have now been postponed for June 2014.

Some hope can, however, be taken from the slow convergence of views under the AWG-DP. Co-Chair Runge-Metzger announced that a new draft text was being progressed, and it was hoped that the working group could conclude its negotiations and close on Thursday.

Conclusion

With a roadmap to the climate finance target still evading us, and no agreement on a route towards a binding agreement in 2015, it could be said that we appear lost. However, Warsaw was only ever meant to be a “working COP”, so hope remains that slow, steady steps can be taken over the remaining two days of the Conference.

Nevertheless, quantifiable progress was seen with the UK’s announcement of new contributions to climate finance of £125 million, and Norway’s promise to maintain its funding of REDD+ at the same level until 2020.

Client Alert 13-314