Compensation: Developing countries, particularly SIDS, have proposed an international mechanism to provide financial compensation for the unavoidable loss and damage caused by climate change, including damage both from extreme weather events such as cyclones and from slow onset impacts such as sea level rise. The cost of such events can cripple poor nations – in 2008, cyclone Nargis killed more than 138,000 people in Myanmar and caused an estimated US $ 4 billion in damages (equal to about 30 per cent GDP). But many developed countries are reluctant to agree to the mechanism, calling instead for ‘further study’.
Money Matters
If a global deal on climate change is to work in practice, it must include financial assistance, particularly for developing countries that cannot otherwise afford to implement agreed actions.
The UNFCCC is clear that the developed world has a responsibility to help poorer nations – particularly those most vulnerable to climate change – implement common objectives and meet adaptation costs. The Copenhagen Accord similarly emphasizes the need for funding, and includes a ‘collective’ promise of US $ 10 billion each year until 2012, rising to US $ 100 billion by 2020.
But a large gap remains between the level of funding made available and estimates of that which is needed. Progress in negotiating a deal on climate finance has been slow – the biggest obstacle is raising new and additional money through public funding sources of developed countries.
Another bone of contention are the ‘allocation decisions’ that determine who gets what and gives priority to adaptation and low carbon development efforts in developing countries. It is controversial because, according to the commitments made under the UNFCCC, developed countries are committed to provide financial assistance to all the developing countries. The extent to which developing countries will effectively implement their commitments under the convention depends on the effective implementation by developed countries of their commitments under the convention, in particular related to financial resources. But developed countries have so far failed to provide sufficient financial assistance to meet the adaptation and mitigation needs of developing countries. Instead, they want developing countries to commit to binding agreements and to prioritize countries among them for assistance. Compromise will be required on both sides to find middle ground on this issue. (See Tension in Tianjin)
Other unresolved issues in the negotiations on climate finance include:
- who will oversee the implementation of climate funds (the governance issues);
- how financial resources will be accounted for;
- how ‘new and additional’ funds will be defined;
- what will qualify as a clear and transparent baseline from which to count new funding.
Talking Technology
If access to funds is important for a successful global climate deal, so too is access to technology. Pursuing ‘greener’ growth strategies and adapting to climate change often relies on access to new technologies, from fuel-efficient cooking stoves and solar lanterns to low-emission power plants and renewable energy technologies.
Providing access to such technologies, through technology transfer, is firmly on the UNFCCC agenda. Both the convention and the Kyoto Protocol state that developed countries should help poorer nations access relevant mitigation and adaptation technologies.
How to do that has been widely discussed within global negotiations and, in many ways, has achieved real progress – from agreeing a framework for technology transfer in the Marrakesh Accords of 2001 to establishing the issue as a building block in the 2007 Bali Action Plan. Both the Copenhagen Accord and the current negotiating text on technology transfer provide for a ‘technology mechanism’ made up of a technology executive committee and a climate technology centre and network (CTCN) to help diffuse and transfer environmentally sound technologies.
But there are still sticking points in the negotiations, particularly around defining what the committee will do exactly and how it will work, as well as whether the CTCN should operate within or outside the convention. Another potential stumbling block is the issue of intellectual property rights. Many developed countries call for strong patent laws in developing nations to ease technology transfer, but some developing countries say that strictly enforced patent rights can lead to high licence costs and obstruct the use and adaptation of technologies for local conditions. Bolivia’s climate negotiators have suggested using ‘technology patent pools’ – agreements made by multiple patent holders to share intellectual property – as a solution to the problem but which course the negotiations in Cancun will take is not clear.
