EU Opts For ‘Transformation’ Rather Than ‘Decarbonization’ For COP21

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Originally published on Energy Post.
By Sonja van Renssen

European environment ministers have agreed a negotiating mandate for the EU for the UN climate conference in Paris in December (COP21). Under the influence of Poland and other Eastern European countries, they couched the EU’s ambitions in terms of “transformation” and “climate neutrality”, rather than decarbonisation, leaving room for coal and gas use with carbon capture and storage. The EU is also shifting from a “narrow focus on accounting” of emissions to giving equal priority to climate finance and the adaptation needs of developing countries.

On 18 September, EU environment ministers argued over two points in particular of the EU’s mandate for the global climate talks. First, how the world should phrase its long-term ambition on climate change and second, what kind of regular review process countries should commit to, to get there.

On the first point, ministers ultimately put together a paragraph which seems designed to accommodate many different points of view. In their conclusions, they reference international climate science, the goal of limiting global warming to two degrees Celsius and a need to peak greenhouse gas emissions by 2020 at the latest. They call for emissions to “be reduced by at least 50% by 2050 compared to 1990 and be near zero or below by 2100”. They welcome a G7 declaration from June that calls for “decarbonisation of the global economy over the course of this century”. Finally, they call on all parties to “pursue transformative pathways towards a long-term vision of global and sustainable climate neutrality and climate resilience”.

The EU recognises that “Paris will not solve the climate problem,” according to an EU source close to the talks

For the 2050 target, the European Commission wanted the environment ministers to endorse its own proposal for a 60% cut in global emissions below a 2010 baseline. Poland and its Central and Eastern European allies however, wanted the 50% below 1990 wording. Note that “60% below 2010 levels” is identical to “50% below 1990 levels”, which is at the upper end of the “40-70% below 2010 levels” proposed by the G7. In other words, all these formulations amount to the same proposal. Why the fuss? EU sources close to the talks suggested that Poland wanted the apparently lower 50% figure in the run-up to national elections on 25 October. A 1990 baseline also suits Central and Eastern European countries because they realised enormous emissions reductions in the early 1990s after the collapse of the Soviet Union.

It was also Poland and its allies that pushed for “transformative pathways” and “climate neutrality”, said EU sources, rather than “decarbonisation”. Polish climate envoy Marcin Korolec told journalists the phrases were a “Polish formulation”. He argued “climate neutrality” is more likely to appeal to developing countries – as it does to Poland – because it does not mean that CO2 cannot be produced, rather that if it is, it cannot be allowed to escape into the atmosphere. Korolec talked about carbon capture and storage (CCS), carbon capture and use (CCU) and forestry. He is looking to the EU’s recently launched reform of the EU emission trading scheme (ETS) to help promote these options.

The second point of disagreement between EU ministers was about whether governments should be forced to increase their mitigation pledges over time. Internationally, there is broad agreement that pledges should be reviewed every five years, but not over whether this should lead to any action. In the end, EU ministers decided that every signatory should be required every five years “to either submit new or updated commitments, without falling behind previous levels of commitment, or resubmit the existing ones”. Critical for the Commission was the middle bit, which guarantees that countries cannot backtrack on their existing pledges. Poland wanted the backtrack option in there – as do some others in the international talks – but countries such as Germany, Denmark, Sweden and the UK opposed it. Note that since ministers could not agree on requiring a rise in ambition either however, this is no guarantee that the gap to a two degrees world will be closed.

Ratcheting up ambition

At their meeting, EU environment ministers showed themselves “concerned about the lack of substantial progress on the negotiating text” for a new global agreement in Paris in December.

So far over 62 countries have submitted national pledges (so-called Intended Nationally Determined Contributions, or INDCs) covering close to 70% of global emissions. It has long been clear that these do not add up to enough to give a one-in-two chance of limiting global warming to two degrees Celsius. This is why the post-Paris review mechanism is garnering so much attention.

Whoever the next president is, it will be hard for them to reverse much of this, because climate action in the US is based on the Clean Air Act

Can the EU do anything about the lack of progress? There is only one formal international negotiating session left between now and then – from 19-23 October – but many observers speculate that a second may be added. The negotiating text needs to be cut from its current 80 pages to 20 or 30 pages, says an EU source close to the negotiations. If the talks’ co-chairs Ahmed Djoghlaf (from Algeria) and Daniel Reifsnyder (from the US) do not do it, “someone else will, for example the French [COP21] presidency”, he added.

The EU recognises that “Paris will not solve the climate problem,” according to an EU source close to the talks. “But it is a very important step to set out a certain level of ambition and create an international framework to combat climate change.” Paris can give the energy transition a big boost and keep two degrees within reach, say observers. It can be a platform for action. The Commission is organising a conference in Rabat, Morocco, together with the incoming Moroccan presidency of the UN climate talks, on 12-13 October, to discuss the INDCs and clarify what Paris can deliver and what the post-Paris follow-up will need to accomplish.

EU and US bottom lines

The two issues that so occupied EU environment ministers last week are also still being hotly debated at the international level. Another big question there is what will be legally binding and what not. The minimum for the EU is that an operational long-term goal, the five-year review process with no backsliding allowed and accountability rules of some kind are mandatory. (Accountability could be in the form of binding principles such as that a country must have domestic policies in place to fulfil whatever goal it commits to at national level.)

The bottom line for the US is that the deal includes emission reduction commitments from all countries. “The US government is going to Paris for a deal,” according to an EU negotiator.

US President Barack Obama is the most ambitious American president ever on climate change, says Nigel Purvis, Founder and CEO of Climate Advisers, a Washington-based consultancy specialising in US climate change policy. (Purvis served as a senior US climate change negotiator under the Bill Clinton and George W. Bush administrations.) If US emissions were expected to grow out to 2025 under George W. Bush, they are due to fall by 17% by 2020 under Obama, he says to illustrate.

Many European companies rely on the growth of a middle class in emerging markets; if climate change were to push those people back into poverty that would be bad for business

Obama has finalised a Clean Power Plan and just finished an 11-day speaking tour on climate change across the US. Paired with Secretary of State John Kerry, who as a Senator had a greener voting record than Al Gore, notes Purvis, Obama has been able to put climate change at the top of the international agenda and bilateral meetings. Whoever the next president is, it will be hard for them to reverse much of this, he adds, because climate action in the US is based on the Clean Air Act. This is a science-driven law so any challenge to it would be open to litigation.

Yet there is a catch: the US Senate rejected the Kyoto Protocol before it was even signed. Obama’s goal therefore is to negotiate an agreement that he does not have to submit to Congress or the Senate for approval. There is a long tradition for such agreements in US foreign policy. For it to work for climate change however, means that certain things cannot be in there, for example US pledges for climate finance and emission reductions.

In a nutshell, the deal has to be one that the US president could implement under existing law. “The [emission reduction] target itself cannot be legally binding but the process and architecture can be,” Purvis told journalists in Brussels. He added that the US is hardly alone in not wanting national goals made legally binding. With regard to accountability, Purvis said: “Compliance will be a political question. There is no international climate police.” A collective global emission reduction target might be possible, he says, but he does not expect it to be binding.

Climate finance: an opportunity for the EU?

Perhaps the biggest determinant of the strength of a deal in Paris – because everyone expects there to be a deal of some sort – is still climate finance. Ahead of Paris, the French COP21 presidency will present a progress report on the US$100 billion a year that developed countries agreed to make available to developing countries in climate finance by 2020. The EU expects to contribute US$30-40 billion of this and of that, Germany alone $10 billion. Europe has been the biggest financial donor so date.

But the big question is what happens after 2020. EU environment ministers made no pronouncements on this on 18 September. Instead, they left it to their economy and finance counterparts to adopt conclusions on climate finance at a council on 13 November.

The EU finds itself once again the “guardian of ambition”, however difficult that may be to swallow internally

The role of Europe in the negotiations today is to keep ambitions high, says Liz Gallagher, Head of think tank E3G’s climate diplomacy programme. “The US-China dynamic and US pro-activeness have led to a kind of cruise control. The role of the EU is to disrupt that G2 dynamic. [For that] it will have to put something concrete on the table on climate finance.” The EU needs to raise the stakes for developing nations, potentially critical allies in pushing for an ambitious new climate agreement with strong accounting rules that bind even the G2. Its offer will inevitably be part public, part private finance.

Yet the EU’s weakness to date has been its lack of leadership on precisely climate finance and adaptation, Gallagher says. It has had a “very narrow focus” on getting a strong accounting regime in place for emission reductions, she suggests. But this may be changing. At the end of the environment council, EU Climate and Energy Commissioner Miguel Arias Cañete said: “For the EU, adaptation and loss-and-damage needs to be treated with the same priority and urgency [as emission reductions].” Gallagher points to progress on these issues at the last UN negotiating session in Bonn too, at the start of September.

There are plenty of reasons why the EU has an interest in a strong global climate deal. Commission President Jean-Claude Juncker has linked climate change to the refugee crisis facing Europe today. Ambitious climate action is needed to “tackle the root causes of the next migration wave”, he said in his first State of the European Union speech on 9 September. Many European companies also rely on the growth of a middle class in emerging markets; if climate change were to push those people back into poverty that would be bad for business. Europe needs open, stable borders for trade, without the protectionist rhetoric that climate change might provoke. Finally, Europe has invested a lot in low-carbon growth and is looking to reap the advantages of those investments.

Nevertheless, there are very different ideas of whether there should be any numbers for climate finance in the new agreement at all. If there are, they will probably not be binding. The US$100 billion was not binding either, after all. The climate finance discussion – and indeed what should count as climate finance in the first place – is set to intensify over the next weeks and months, with heads of state discussing it during the UN General Assembly in New York on 27 September, for example.

Mixed reactions

NGOs were disappointed by the 18 September results. They want the EU to increase its “at least 40%” emission reduction target for 2030. Wendel Trio, Director of Climate Action Network (CAN) Europe said: “EU ministers failed to provide details on how they will scale up climate action […] they did not specify what additional measures the EU will take before 2020 [nor] how and when the EU will increase its 2030 climate target […and] ministers failed to provide clarity on […] climate finance.” Meanwhile, BusinessEurope also said EU environment ministers “should have sent a stronger signal”. But in a different direction: “A clear call for comparable efforts by major carbon emitting economies outside Europe is missing,” said Markus J. Beyrer, BusinessEurope’s Director General.

The world has changed since Copenhagen. Back in 2009, the Copenhagen climate conference did not deliver a new global climate treaty. But since then the energy transition to a low-carbon economy has only picked up pace in terms of technology, financing (think of the divestment movement and carbon bubble debate) and politics: the US-China G2 declaration is unprecedented. Moreover unlike in the run-up to Paris, all levels are talking from heads of state to ministers to negotiators. The groundwork is being done. Heads of state will attend the start, not end of COP21 and Juncker is likely to be there on behalf of the EU, Arias Cañete said last week. The EU finds itself once again the “guardian of ambition”, however difficult that may be to swallow internally.

Reprinted with permission.