Australia: COP21 and climate negotiations: The road to Paris (via Bonn)

Key Points:

Climate negotiations heat up in Bonn in the lead-up to COP21 in Paris, where parties to the UNFCCC are expected to agree on the successor agreement to the Kyoto Protocol.

Ambition and finance are likely to dominate discussions at the annual meeting of the parties to the UNFCCC in Paris, COP21, if the meeting in Bonn last week to finalise the draft negotiating text is any guide.

The Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) developed a 51-page draft text to take to Paris in early December, where the 196 signatories to the UNFCCC are expected to agree on the successor agreement to the Kyoto Protocol when its second commitment period expires in 2020.

If the negotiations are successful at COP21, the new agreement will contain commitment on issues such as emissions reduction targets and finance, to set a pathway to a low carbon global economy and limit global warming to 1.5C° or 2C°. It will apply to all signatories, with varying levels of ambition and financial contribution for developed and developing parties.

The Bonn meeting, however, suggests that UNFCCC will face some challenges in securing this global agreement at COP21, with diverging opinion over how the differentiated effort will operate and where issues such as funding for loss and damage should sit within this framework - and therefore what level of commitment parties are making to these issues.

Ambition: significant emission reductions

The draft negotiating text contains many options for the drafting of each article of the agreement. At its most ambitious, and driven by certain developing countries, the long-term goal of the agreement is for zero emissions by 2050, with a ceiling for peak emissions in 2030 and for global warming to be capped at 1.5C°. It is unlikely parties will agree to this option.

In the lead-up to Paris, parties have submitted Intended Nationally Determined Contributions (INDCs) which detail emission reduction pledges. These will form part of the COP21 agreement. To date, 127 INDCs have been submitted, reflecting the ambition pledges of 154 countries. The Australian Government has committed 26-28% below 2005 levels by 2030.

The UN will prepare a report analysing the INDCs submitted before 1 November 2015 for use at COP21. Independent analysis of the pledges made to date indicates that they are insufficient to limit global warming to 2C°. A mechanism for dealing with this emissions gap will be on the agenda at Paris, potentially entailing five-yearly reviews of INDCs.

In an effort to influence state parties to increase their ambition, the UNFCCC has implemented some novel initiatives prior to Paris. For example, non-state actors, such as cities and corporations, can participate through the Paris Lima Action Agenda, which aims to demonstrate the commitment of non-state parties to reduce emissions.

Finance: Paying for decarbonisation

Mobilising sufficient finance within developed countries, both to contribute to the Green Climate Fund and to reorientate carbon reliant economies towards low-carbon living, is a primary issue for negotiation at Paris. One option in the draft agreement references carbon pricing to achieve mitigation.

The Green Climate Fund's goal is to raise $100bn per year by 2020 to aid developing countries in adaptation and mitigation projects. An OECD report released in the lead-up to Paris concluded that $62bn had been raised in the year 2013-2014. Some of the developing nations have questioned the veracity of this analysis. The post-2020 financial commitment of developed countries is also unclear.

Fuelling the tension around climate finance is the fact that some developing parties, such as China, are not in the same economic position in 2015 and going forward as they were in the 1990s when the "developed" and "developing" division was established. China has responded to this tension by pledging $3.1bn in September 2015 to support climate programs in poorer countries.

What's next

Negotiations at Bonn show that some significant hurdles remain, parties have kept the negotiations on the road such that a global agreement in Paris is likely. Nobody wants a repeat of COP15 in Copenhagen (that resulted in an agreement to continue negotiating a binding agreement). The mechanisms in the draft agreement to periodically update ambition and funding pledges means that it is likely that an agreement will be reached on pledges that will be insufficient to contain global warming to 2C° ceiling and that these pledges will be renegotiated at future climate talks.

We will keep you informed on the outcome of the Paris conference.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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