What to Watch at the Bonn Climate Talks: On the Inside and Outside Tracks
From June 6-16, climate negotiators will meet in Bonn, Germany for two weeks for the UN Framework Convention on Climate Change intersessional meeting. Negotiators will focus on laying the groundwork to increase climate ambition and hammering out details to further buttress the Paris Agreement on climate change.
The meeting, however, is taking place in the context of the ongoing COVID-19 pandemic, energy security concerns, rising commodity prices and inflation rates around the world and high levels of debt for many low-income countries. Russia’s war in Ukraine has led countries to prioritize short-term energy security, such as doubling down on fossil fuel production, over longer-term climate change considerations. Even without these headwinds, countries still need to accelerate the pace of mobilizing resources to decarbonize their economies. In May, UN Secretary-General Antonio Guterres called for a tripling of public and private finance towards renewable energy by at least $4 trillion a year.
While the negotiators will tackle a longer list of agenda items, three major items on the technical side of the agenda are particularly noteworthy, including increasing mitigation ambition, kicking off a dialogue on a potential loss and damage facility and elaborating the details for the global goal for adaptation. In addition to the technical ‘inside’ track of negotiations, leaders will have to weave together political processes on the ‘outside’ track to create a robust basis for progress on climate change this year ahead of the 2022 United Nations Climate Change Conference (COP27) in Sharm El-Sheikh, Egypt. Ongoing discussions on replicating South Africa’s Just Energy Transition Partnership, scaling up multilateral development bank green financing and considering debt-for-climate swap proposals offer those ‘outside’ opportunities.
Inside Track – 1. Increasing mitigation ambition
At COP26 in Glasgow, UK, countries were asked to revisit their pledges to reduce carbon emissions ahead of COP27. While the difference between the required emissions trajectory for 1.5 degrees and the path implied by national pledges has narrowed over time, the gap in reductions remains major.
In Glasgow, countries agreed to create a work program to scale up mitigation ambition and implementation during this decade. The injection of urgency into the climate talks follows various studies, most notably the UN Intergovernmental Panel on Climate Change showing the misalignment between national pledges and Paris compliant emissions pathways. By creating this work program, the governing body of the Paris Agreement (the Conference of the Meeting of the Parties to the Paris Agreement “CMA”) has decided to ask countries to revisit their pledges on a more frequent basis than the five-yearly cycle originally envisioned in the Agreement.
The work program has the potential to provide a legal foundation for enhancing climate ambition. Since the Glasgow decision refers to both “ambition” and “implementation,” negotiators will have the opportunity to examine barriers standing in the way of speeding up implementation of existing pledges as well. Making progress on the mitigation work program would help to connect the technical work on mitigation ambition and the broader political push needed to enhance pledges.
Inside Track – 2. Discussing the creation of a loss and damage facility
Mobilizing finance for loss and damage – climate impacts that go beyond what societies can reasonably adapt to – has long been a priority issue for many climate vulnerable nations. These countries have been dissatisfied with the limited attention such finance has received under the Warsaw Institutional Mechanism for Loss and Damage – an international mechanism that was created under the UN Framework Convention on Climate Change. Last year’s UN Climate Change Conference known as COP26, however, offered a breakthrough. Countries agreed to hold a dialogue on loss and damage that will conclude in June 2024. The first session of the “Glasgow Dialogue” on loss and damage will happen at the Bonn meeting.
The mandate coming from Glasgow does not explicitly require countries to agree on a loss and damage facility; it only requires a dialogue to be held. This ambiguity on the outcome, however, provides plenty of space for proponents of the loss and damage facility to build consensus around a financing facility for loss and damage.
Inside Track – 3. Elaborating on the global goal for adaptation
As part of the Paris Agreement, countries agreed on a global goal for adaptation, aiming to “enhance adaptive capacity and resilience” and “reduce vulnerability.” Given the abstract nature of the goal, there has been a push to elaborate the details. Delegates at COP26 decided to establish a Glasgow-Sharm el-Sheikh work program to take this forward. The first workshop on the global goal will be held in Bonn. This two-year work program will conclude at the November 2023 climate summit.
A global goal on adaptation would help to hold both countries and the broader UN climate process accountable for progress made on adaptation. Unlike adaptation, mitigation benefits from relatively well defined and tractable metrics, such as percentage reductions in greenhouse gas emissions. Having a common understanding of how to track progress on adaptation would help ensure that what is measured is indeed managed.
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Apart from these technical negotiations, four “outside” items will require a political push for a successful COP27.
Outside Track – 1. Replicating the Just Energy Transition Partnership model
Countries are seeking to build on the momentum of South Africa’s Just Energy Transition Partnership (JETP), which involves major funders such as the UK and the US and targets to scale down coal-based power generation while increasing renewable energy deployment. The model of crowding in donors to reduce coal power while increasing renewables has been hailed as one that should be replicated around the world.
As the 2022 Group of Seven (G7) President, Germany has made JETPs a priority. JETPs with Indonesia, Vietnam and some other countries are expected to be announced at the G7 summit later this year. Germany also announced a $10.5 billion partnership with India when Prime Minister Narendra Modi visited Berlin in May 2022.
This emphasis on scaling up financing to bend the emissions curve is welcome. However, the funds mobilized must be new. It is unclear what portion of the $8.5 billion South Africa JETP is already committed funds or new pledges. Advanced countries are yet to make good on their commitment to mobilize $100 billion a year by 2020, let alone increase the scale of climate finance to what is really needed on the ground.
Outside Track – 2. Scaling up finance at multilateral development banks
What multilateral development banks (MDBs) finance – or rather, shouldn’t finance – has been a major focus thus far. For example, MDBs and Chinese policy banks have been under heavy scrutiny for supporting overseas coal power projects over the last decade. Apart from the MDBs’ portfolio, attention to the full scale of finance mobilized is also crucial. The Group of 20 (G20) has an important opportunity to help scale up finance that flows from the MDBs. A MDB optimized capital adequacy framework is on the G20’s agenda and UN Secretary-General Guterres has called on the MDBs to “use their balance sheets creatively to accelerate the renewable energy transition.”
Outside Track – 3. Unveiling the IMF’s debt-for-climate swap proposal
Rising levels of debt has been a major concern for climate vulnerable nations. Scaling up climate action will have to focus not only on increasing climate investments but also on reducing debt burdens so countries can mobilize domestic financing.
In April 2021, Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, promised to unveil a debt-for-climate swaps proposal ahead of COP26. As of June 2022, the IMF has not yet released this proposal. Since the initial announcement, the importance of making climate change central to a global debt workout has only risen in its salience. Ahead of Glasgow last year, the Vulnerable Group of 20 (V20) shared a proposal for debt restructuring specific to the needs of climate vulnerable nations.
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The technical negotiations in Bonn can help pave the way for a year of enhanced action on climate change by providing a solid foundation for the political track to build on. Leaders will have to complement the progress in Bonn with action in other forums to deliver a strong outcome on climate change at COP27 and beyond.
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