The Negotiations: What’s on the Table

What Congress Needs to Know in the Lead Up to COP26: Briefing Series on the U.N. Climate Change Conference in Glasgow
Find out more about the briefings in this series below:
Part 1	Creating Policies, Coalitions, and Actions for Global Sustainable Development
Part 2	Momentum on Climate Adaptation
Part 3	The Role of International Climate Finance
Part 4	The Negotiations: What’s on the Table
Conclusion	Recap of COP26: Key Outcomes and What Comes Next

The Environmental and Energy Study Institute (EESI) held a briefing series on what Congress needs to know in the lead-up to the 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change.

COP26 is set to cover a wide range of topics, from negotiations on carbon markets to discussions on loss and damage, climate finance, and updated emission reduction goals in countries’ nationally determined contributions (NDCs). This briefing brought together experts to explain the key areas of negotiation expected to be at play at COP26, review possible outcomes, and explore what it all means for Congress. 

This briefing series was co-sponsored by the British Embassy Washington.

We are grateful for the partnership with the Henry M. Jackson Foundation that helped make this briefing possible.

Highlights

 

Jennifer Allan, Writer/Editor, Earth Negotiations Bulletin, International Institute for Sustainable Development

Background on the United Nations Framework Convention on Climate Change and expectations for the flow of U.N. climate negotiations (COP26)

• The United Nations climate change meetings are the largest meetings on the U.N. calendar.
  • The Conference of the Parties (COP) is the governing body for the U.N. Framework Convention on Climate Change (UNFCCC).
  • Over time, COP has become a place where everyone working on climate change gathers, even if they are not participating in or observing the negotiations. Activists often use COP as their platform to push for more ambitious climate action. COP has become a forum for mobilizing commitments from cities, subnational entities, and the private sector.
  • The media and public attention are often more engaged on climate change during COP.
  • In recent years, 20,000 to 25,000 people have been attending COPs. Country delegations and non-governmental organization (NGO) participation have grown over time.
• The governing bodies of the UNFCCC are:
  • COP, which is the Conference of the Parties to the Framework Convention on Climate Change,
  • CMP, which is the governing body that oversees the Kyoto Protocol, and
  • CMA, which is the governing body that oversees the Paris Agreement.
• Below the governing bodies are two permanent subsidiary bodies: the Subsidiary Body for Scientific and Technological Advice (SBSTA) and the Subsidiary Body for Implementation (SBI).
  • Below SBSTA and SBI are constituted bodies and expert groups that meet throughout the year to help do implementation work. These bodies provide reports and recommendations for the subsidiary bodies, and in turn, for the COP, the CMP, and the CMA.
• Week one of COP26 begins on October 31 with the opening plenary of all of the bodies—the COP, CMP, CMA, SBSTA, and SBI. This is where they adopt the agenda for COP26.
• The World Leaders Summit will take place on November 1 and 2. World leaders will give high-level speeches and potentially talk about their updated commitments to cut greenhouse gas emissions under the Paris Agreement (i.e., their nationally determined contributions) and financial pledges.
• The goal of the rest of week one is to allow maximum time for the SBSTA and SBI to meet in small groups and get through technical work. Because of the pandemic, in some cases, there are three years of work programs to consider during this time.
• Anything that cannot be finished during the first week will be passed on to week two. Week two will start on November 8 and will cover the political issues. Issues like finance will be brought up during week two.
• Ministers will begin to be engaged around November 11. COP26 will not likely finish on time, and last-minute deals are quite common.
• There will be a closing plenary to conclude the COP, and then parties will give their closing statements.

Tracy Bach, Co-Focal Point, Research and Independent NGOs, United Nations Framework Convention on Climate Change; Visiting Professor of Law, Washington University in St. Louis

Nationally Determined Contributions

• Nationally Determined Contributions (NDCs) are the backbone of the Paris Agreement. The concept of NDCs builds on Articles 4 (commitments) and 12 (communication of information related to implementation) of the 1992 UNFCCC founding document.
  • NDCs set out each country's nationally determined contribution to the global response to climate change. All parties are undertaking ambitious efforts on climate change, as defined in the Paris Agreement's Article 4 on mitigation, Article 7 on adaptation, Article 9 on finance, Article 10 on capacity building, Article 11 on technology transfer and development, and Article 13 on transparency.
  • Overall, countries are trying to achieve Article 2 of the Paris Agreement to limit global warming to “well-below 2 degrees Celsius,” and ideally below 1.5. degrees Celsius.
  • NDCs apply to all parties (i.e., countries) and represent a progression over time. At the same time, the Paris Agreement recognizes the need to support developing countries to meet their NDCs.
  • The Paris Agreement is bottom-up. Each party is required to submit an NDC every five years.
• Article 13's enhanced transparency framework (ETF) drives ambition by requiring countries to be more transparent about their commitments and progress.
• Article 14 is the “global stocktake” article, which gauges cumulative international progress toward staying under 2 degrees Celsius of global warming.
• NDCs started with the adoption of the Paris Agreement in 2015, and 2020 was supposed to be the first milestone for creating new or updating existing NDCs. This milestone will now happen in 2021 due to COVID-19. NDCs are set to be updated every five years as parties to the Paris Agreement make their way to meeting the Article 4 goal of mid-century net-zero emissions. The first two global stocktakes will take place in 2023 and 2028. The idea is that, through filing new and more ambitious NDCs, and then taking cumulative stock on progress, the ambition of individual countries will increase.
• The non-governmental organization Climate Action Tracker keeps track of NDCs. A number of countries have proposed and submitted stronger NDC targets ahead of COP26, but others have not. A major diplomatic ambition of the U.K. Presidency is to get more updated NDCs announced and to have most, if not all, countries adopt stronger targets.
• Many countries have NDCs on different timelines, making comparisons and stocktaking difficult. Starting in 2031, NDCs will have to be on a same timeframe, but countries have not yet agreed on what it will be. This is something to monitor at COP26. Paris Agreement. Article 6 (voluntary cooperation in the implementation of NDCs—see next speaker’s notes for details) and article 13 (enhanced transparency framework) would be easier to follow, track, monitor, and review if they were based on NDCs that have common timeframes.

Derik Broekhoff, Senior Scientist, Stockholm Environment Institute

Article 6 of the Paris Agreement (voluntary cooperation in the implementation of Nationally Determined Contributions)

• Article 6 of the Paris Agreement formally recognizes the possibility for countries to voluntarily cooperate in the achievement of their NDCs, with the idea of allowing for higher ambition.
• At COP24 in Poland in 2018 and COP25 in Madrid in 2019, negotiators failed to reach an agreement on the implementation of Article 6, so it is on the agenda for COP26.
• There are three sections of Article 6 that set out different mechanisms for cooperation:
  • Article 6.2 recognizes voluntary arrangements between two or more countries in which they agree to engage in trades or transfers of mitigation outcomes.
  • Article 6.4 establishes a centrally administered mechanism for the creation and transfer of emission reduction credits. Article 6.4 is basically the successor to the Clean Development Mechanism under the Kyoto Protocol. Article 6.4 would allow countries that may not have the capacity to develop domestic emissions trading systems to participate in international cooperative arrangements.
  • Article 6.8 recognizes opportunities for non-market approaches, meaning one country might invest in climate change mitigation efforts in another country. The funding may be contingent upon the performance of those mitigation activities, but there would be no transfer of the mitigation outcomes to the funding country.
• Why does Article 6 matter?
  • Article 6 is a foundation for cooperation. It is more cost effective to achieve emission reductions collectively if countries are allowed to trade mitigation outcomes. Studies have estimated that mitigation trading could lead to 50 percent more emission reductions by 2030.
  • Carbon markets are likely the most effective way to achieve net-zero emissions by mid-century.
  • Article 6 could mobilize private sector investment in clean technology around the world.
• The two big Article 6-related issues to be negotiated at COP26:
  • Coming to an agreement on how to avoid double counting emission reductions (more details below). Negotiators have failed to reach an agreement on the rules for implementing these mechanisms and, in particular, the accounting that needs to be done to ensure these mechanisms are effective.
  • What to do about all the Kyoto-era emission reduction credits. The Kyoto Protocol established a global emissions trading system and generated a lot of emission reduction credits that are still unsold and unbought. There is a question of whether the credits can be recognized under the Paris Agreement.
• Climate adaptation finance is also on the agenda for COP26. There is a stipulation in Article 6.4 that every time a credit is generated and sold, a share of the proceeds from the sale goes into the Adaptation Fund. There is a question of whether that should apply to Article 6.2, as well.
• Details around crediting rules and standards are being negotiated for Article 6.4. Negotiators are trying to figure out what “overall mitigation in global emissions” means and whether it should also apply to Article 6.2.
• The basic idea behind avoiding double counting of emissions is that no two countries should be counting the same emission reductions toward the achievement of their NDCs. For example, let's say Country “A”, the seller country, is overachieving on its NDC target. It could transfer credits to a buyer country, Country “B”, that is not as far along on meeting its emissions targets. Country A should no longer count those emission reductions for itself, but they could be counted toward Country B's targets.
• There are some complications with preventing double counting.
  • First, countries create their own emission reduction targets, so there are many targets specified for single years. There is the question of how you sort out the accounting in the interim years leading up to when these targets are set. And, some countries have renewable energy generation targets, so their targets are not specified in terms of greenhouse gas reductions.
  • Another issue is that not every country has set an economy-wide greenhouse gas emission reduction target; in many cases, the targets focus on particular sectors. It is not always easy to determine the emission reductions that are occurring inside or outside this scope.
  • The other issue is that if emission transfers are allowed to occur between inside and outside the scope, then countries that do not have economy-wide NDCs have a disincentive to expand the scope of their NDCs because then they will have to start accounting for these transfers. The solution is to require corresponding adjustments in all cases, including between targeted sectors and non-targeted sectors.
• Another concern is that if the carryover of Kyoto-era credits is allowed, it would allow countries to collectively relax their efforts in achieving their NDCs. The United States and the European Union oppose carryover, but Brazil, India, China, and Australia argue that there should be at least some carryover. The most likely outcome is some sort of compromise that would allow limited carryover.
• There will likely be an agreement that Article 6.2 should encourage contributions to the Adaptation Fund and the meeting of overall global emission reduction goals; but these will likely not be requirements, as they are under Article 6.4.
• Article 6.4 rules and standards are mostly technical issues that need to be resolved, but the motivating idea is to not repeat some of the mistakes that plagued the Clean Development Mechanism under the Kyoto Protocol. There are some studies that suggest that up to 70 percent of the credits issued under that program did not represent real additional emission reductions.
• The Article 6 section of the Paris Agreement Rulebook could lay a foundation for international cooperation. The big question is how and whether countries will use Article 6 to effectively raise global ambition.

Jennifer Allan, Writer/Editor, Earth Negotiations Bulletin, International Institute for Sustainable Development

Climate finance

• Why do we need climate finance? Developed countries industrialized using fossil fuels, and now they are asking developing countries to undertake a different model of development that does not use fossil fuels.
  • Finance for adaptation is needed to build resilience to the effects of climate change.
  • Finance to compensate for loss and damage, which are the permanent and irreparable effects of climate change, will also be brought up during COP26, especially in the second week.
• Ten years ago, developed countries agreed to provide $100 billion a year in international climate finance by 2020 for developing countries, but the goal has not been met. The Organization for Economic Cooperation and Development (OECD) found that developed countries are about $20 billion shy of the goal. This is a matter of trust, and developing countries are starting to wonder why they should take on more reporting requirements when they do not know if there is financial support. This is becoming a crucial issue in the negotiations, and if it continues to fester, it will start to permeate the negotiation dynamics in other areas.
• A lot of the money currently provided through the $100 billion a year climate finance goal is in the form of loans that have to be paid back, rather than as grants. This is increasing the debt burden of a lot of developing countries. Developing countries want to start rebalancing the funds towards grants.
• There have been some recent financial pledges on the $100 billion a year climate finance goal. The United States recently promised it will provide an additional $11.4 billion per year by 2024. The European Union has said it will provide an additional $4.7 billion per year up to 2027, for a total of about $25 billion a year.
• Finance is a key cornerstone of COP26. Almost all of the finance priorities will be negotiated in the second week. Finance priorities include:
  • Providing guidance to the Global Environment Facility and the Green Climate Fund. The COP gives these entities guidance, but it has not been able to recently because of the pandemic.
  • For the first time ever, there is a report that assesses the level of finance needed by developing countries. There have been some controversies over the report because compensation for loss and damage was excluded.
  • The UNFCCC’s Standing Committee on Finance will unveil a report providing an overview of climate finance flows.

Q&A

Q: What do you expect to see on loss and damage at COP26, and why is it important?

Bach: Loss and damage is permanent loss that countries cannot adapt to. This sits within the Warsaw International Mechanism for Loss and Damage associated with Climate Change Impacts (WIM) that was created to be a processing entity for the parties to make recommendations to the COP about how to proceed on loss and damage. Prior to that, loss and damage was treated by the UNFCCC as a sub-issue of adaptation. The adoption of Article 8 of the Paris Agreement does not mean that developed countries are liable to developing countries for climate change loss and damage, but the strategy is to start individual conversations and propose creative ways to provide funding to deal with loss and damage. Additionally, the Santiago Network that came out of COP25 aims to educate countries about loss and damage.

 

Q: If someone has interest in a specific issue area, how can they track it at COP26? How can Congressional staff effectively engage with COP26?

Allan: There are a range of issues that are not on the formal agenda, but that the COP26 Presidency will focus on—for example, the U.K. Presidency has been talking about "coal, cars, cash, and trees." The UNFCCC website has information on events that will be streamed virtually. The COP Presidency's website has information on the thematic initiatives. The Earth Negotiations Bulletin provides a daily report of what happens in the negotiations.

Broekhoff: The side events this year will likely have a virtual attendance option. Check out the agenda for side events, which often cover specific issue areas.

Bach: The UNFCCC website has information on side events and the annotated agendas for each of the bodies. If you click on those agendas, you will find the more granular agenda items that relate to specific issue areas. Pro tip: skip to the annotation section of the agendas, where there are links to synthesis reports, draft recommendations, and products.

 

Q: How do the Intergovernmental Panel on Climate Change (IPCC) reports and other scientific reports feed into what happens at the COP? How do new global warming projections inform the negotiations?

Broekhoff: The IPCC summary of the science has guided the negotiations. There is a goal in the Paris Agreement to achieve a balance between greenhouse gas emissions and removals by mid-century to limit global warming to well-below 2 degrees Celsius, and as close to 1.5 degrees Celsius as possible. This reflects the progression of science because the goal used to be to limit warming to around 2 degrees Celsius. The Paris Agreement also reflects that we may be warming faster than we expected. The scientific understanding that has been raised in IPCC reports is helping to inform how folks are thinking about the global stocktake, for example.

Allan: There is an agenda item called the “long-term review of the adequacy of the global goal” to evaluate whether the 1.5- or 2-degree Celsius goals are adequate. The global stocktake is going to have at least a year-long scientific phase. There is a lot of input to get more science into the system. In many cases, we already know what many of the issues are, and science adds urgency to them.

Bach: There is a standing SBSTA agenda item on research and systematic observation where they set out a plan for educating policymakers on the latest science on climate change. There is also an Earth Observation Day at each COP. The COP26 Presidency is holding a science and innovation day on November 9. The Research and Independent NGO (RINGO) constituency group is hosting a research and action day on November 10.

 

Q: Within the context of achieving net-zero emissions in the coming decades, what is the ratio of tons of carbon sequestered to tons emitted that is being negotiated or discussed at COP26? How does what is being discussed domestically on net-zero goals relate to what is happening at COP26?

Allan: The Paris Agreement says “to achieve a balance between emissions and removals.” It does not say net-zero. There is no effort right now to define net-zero beyond that at COP26.

Broekhoff: The Paris Agreement is bottom-up and each individual country has to put forward pledges for emission reductions. It is up to countries to come together and agree on a common approach to balance emissions and removals.

Bach: There is some appetite to talk about this a little more seriously because of what happened under the Kyoto Protocol. There is a fairly robust private carbon market. Non-state actors are increasingly being called on for emission reductions. For example, Global Climate Action is getting businesses to adopt climate goals that are as—or more—ambitious than those of the countries they are headquartered in. They are driving these voluntary carbon markets, but the definition of net-zero is a problem. Many are saying “Paris aligned.”

 

Q: If each country can come up with its own definition of net-zero, is this a downside of the bottom-up approach?

Broekhoff: Climate change is a global problem, but we do not have a global government. Under Kyoto, parties, excluding the United States, agreed on an approach that would set binding emission limits on industrialized countries. That had mixed results. The big step forward with the Paris Agreement was to create a regime that was globally inclusive. Provisions around reporting, transparency, ratcheting up of ambition, and the global stocktake are designed to push things forward, but they are contingent upon the goodwill and cooperation of countries. Article 6 of the Paris Agreement can provide a mechanism for countries to achieve more aggressive targets, but also work with other countries to motivate things like private finance.

Bach: This sounds similar to when the Senate said it would not ratify the Kyoto Protocol because China was not one of the countries that would have targets underneath it. It could be a race to the bottom, but it could also be a race to the top in terms of ambition. Article 6 of the Paris Agreement will bring in a set of countries that will, in theory, increase their ambitions if consumers in the developed world give recognition to the fact that China’s greenhouse gas emissions are high because of the products it produces for them. There is a consumer movement that has led companies to make climate commitments. The nature of international relations is that they are trying to find the individual pieces that hook countries based on their interests and hold them accountable, and that is what the NDC bottom-up approach is trying to do.

Allan: We have a bottom-up approach because it allows all to participate, including the United States. Compliance in international relations is surprisingly high even when there is not a stick making countries comply.

 

Q: What would be one outcome from COP26 that, from your perspective, would make COP26 successful?

Allan: One is to have a Paris rulebook that is as near to complete as possible. The second is that leaders leave with the sense that they actually need to start making sure they hit the targets they promised.

Broekhoff: Agreement on the Article 6 portion of the Paris rulebook. The symbolic value of that is tremendous.

Bach: More ambitious NDCs that are announced at the World Leaders Summit. There also needs to be some sort of credible path beyond the goal of $100 billion a year in international climate finance.

Highlights compiled by Savannah Bertrand and edited for clarity and length. This is not a transcript.