COP26 Live: Finance key as negotiations run into overtime

12 November 2021

UN climate negotiations in Glasgow are now running on overtime – as usual. COP26 was scheduled to end on Friday at 6 pm, but is now expected to last until Saturday afternoon. The day in Glasgow has exposed the differences on the new proposed texts for an agreement, centered on finance, in particular for adaptation and loss and damage, and rules for carbon markets.

As usual, the release of new text proposals on Friday morning was followed by a stocktaking in the afternoon, where countries and blocks of countries presented their views.

As for mitigation and the parts of the texts covering the need to ratcheting up pledges and climate action in the coming years, in order to keep the 1.5℃ target “alive”, there seem to be an emerging consensus. The new texts are defended by big players among the developed world – the EU, the US, Canada – vulnerable countries like small islands (AOSIS), the least developed countries (LDC) and the so called High Ambition Coalition.

European commissioner Frans Timmerman drew applause during the plenary by showing a picture of his one year old grandchild, emphasizing the need to pursue the 1.5℃ target and “avoiding a future which is unlivable”. He also admitted that rich nations have failed on delivering money to developing nations and claimed that the EU would step up on climate finance. 

US climate envoy John Kerry emphasized the need to reduce emissions by 45 percent during this decade and insisted that the texts on mitigation should not be watered down. He also admitted that the US was responsible for a large share of global emissions and called fossil subsidies “the definition of insanity”, needed to be phased out.

Other parties, like AOSIS and Norway, criticized that the unique mentioning of fossil fuels and call to phase out of coal and fossil fuel subsidies had been watered down and reframed to ‘unabated’ coal and ‘inefficient’ fossil fuel subsidies. The new words are probably demands from key fossil fuel dependent nations like Saudi Arabia.

Leaving mitigation as it is, the crucial remaining differences for an agreement in Glasgow are now on finance and on article 6, defining the rules for carbon markets and use of carbon credits.

African nations and the large block of developing countries and emerging economies, G77+China, underlined that the language on finance, and in particular on adaptation and loss and damage, is too weak and that increased ambitions on mitigation should be paired with increased ambition on finance and adaptation, in an equitable manner in line with the Paris Agreement, meaning that developed nations should take the lead. Frustration on missed promises by developed nations to deliver 100 billion dollars in climate finance by 2020 is still hovering over COP26.

LDC, AOSIS and representatives of small islands insisted on faster scale up of finance for adaptation, and AOSIS called finance for loss and damage a necessity for a deal in Glasgow. Many speakers also questioned why a recent proposal for a new financial mechanism for loss and damage, raised by G77+China, was absent in the text. As it stands, proposed finance for loss and damage only covers technical assistance, a fact which got Kenya’s representative to lash out: “We don’t need consultants flying around giving us advice. We need a real financial mechanism for loss and damage.”

So far, the EU and the US are holding back, both on demands to substantially raise finance on adaptation in the coming years and on the demands for a new financial mechanism for loss and damage. 

The demands for scaled up finance on adaptation and a financial mechanism for loss and damage from developing nations are both understandable and reasonable, Jens Ergon at CCL Uppsala University says. We are not talking about cash on the table in Glasgow, but trustable promises to deliver in the upcoming years. These issues, together with divergent views on carbon markets, are the key issues to solve in the hours to come.

Divergence on article 6 and carbon markets caused a stalemate at the last COP in Madrid two years ago, and could potentially do it again. AOSIS, G77+China and other groups demands that carbon markets should deliver “real emission reductions”, with mandatory cancelations of old carbon credits, while others, including Japan and the US, support a voluntary and less rigorous framework.

During Friday representatives of civil society criticized the new text for being too weak on many points, staging a walk-out of the COP26 and presenting a joint declaration with demands on the outcome. During a press conference in the afternoon the directors of Greenpeace, Oxfam and the umbrella organization Climate Action Network zoomed in on the same contested issues still under intense negotiations: Lack of finance for adaptation and loss and damage and the risk for skewed carbon markets.

New texts are supposed to be issued during the night and made available around 8 am in Saturday morning, followed by a new short stocktaking before 10 am and formal plenaries in Saturday afternoon. If they can resolve the differences, however, remains to be seen. If not, negotiations could potentially go on well into the weekend.

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