COP 23 : News, and Events on Climate Finance; Discussion of Coal Phaseout (06–08 Nov)

What’s the big news these days?

As the conference started, Germany announced a pledge of 50 million Euro for the Adaptation Fund and another 50 million for the Least Developed Countries Fund.

Syria confirmed its intention to join the Paris Agreement. If the US is to withdraw from the agreement as Trump planned by 2020, it will become the largest carbon emitter in the world that is not regulated in the agreement; before that, Taiwan will continue to have the “honor” to hold that title.

Australia’s coalition government has been undermining renewables’ progress and expanding its fossil fuel exports and usage, leading it to earn the second “Fossil of the Day” award. The Climate Action Network votes for the award in a daily routine; it is quite interesting to see the reasons why the nations, organizations or people they’ve chosen are on the list.

For more complete news digest one can refer to CLEW:

Climate Finance: Negotiation Continues While NGOs Stressed Concerns

Climate finance was already a top issue when Trump accused the ineffectiveness of Green Climate Fund in June, and it got more attention ever since Barbara Hendricks announced the 100 million pledge into different funds.

In the Paris conference, a total of 100 billion USD of climate financing by 2020 was agreed. The roadmap to materialize such goal will be mainly discussed this year, and publicized in the next COP.

In a panel held by WWF this afternoon, “Better Practices for Accounting for Climate Finance”, the issues remaining in the accounting and implementation of climate finance was examined thoroughly by NGO members and invited negotiators from Honduras, Finland, and Norway.

Negotiators from Honduras, Finland, and Norway

Three key problems of the current climate financing accounting system were posed:

  1. The equivalent value of the grants may be erred: loans should not be considered a kind of climate finance, because the money would eventually be paid back, which is a weird thing since it was the developed countries who owe the developing countries a historical climate debt. Countries such as Norway and Finland exclude loans in their accounting, but most countries don’t.
    On the other hand, when the only criterion to value the achievements of climate finance is money, the real values we actually care (such as carbon reduction amount or positive impact on biodiversity) will be overlooked. Then the cost effectiveness of these projects may be raised into question.
  2. The climate relevant proportion in a project is evaluated differently: a handful of countries such as the US and UK rated the climate relevant proportion in a project case by case. Most countries however, sum all the budget of a project into their climate finance accounting once they regard the project as “significantly” climate-related.
    Another issue on the granulated system is the evaluation of the necessity of the project. Only the finance which has a counterfactual conditional relationship with the positive effect it was meant to bring should be taken into account. Afterall, if a project would have existed even without the fund from the government, then it would be unnecessary to give the grant in the first place. Obviously, this concept is easier said than applied.
  3. The unbalanced ratio between funds for mitigation and funds for adaptation: the Paris Agreement gave equal emphasis between adaptation and mitigation; however, fundings are usually given to mitigation projects. This unbalanced situation may cause vulnerable communities to get insufficient amount of aid, even if the 100 billion goal is achieved.

Apart from the three main issues given by the speakers, the audiences also raised some concerns; for example, the transparency of multilateral development projects was questioned, leading to a concern of double counting.

Quick remarks on this topic:
The field of climate finance is filled with tedious terminology and complicated methodology. However, the true issue behind all these debates on technical details is mainly the trust between nations. The developing countries ask if developed nations are providing sufficient climate financing that could compensate their historical carbon debts, whereas in return the developed countries ask if the grant receiving parties are using the money in the right way. That is why such issue always take a long time to negotiate.
Ex. Turkey threatened to leave Paris if no funding is granted

Read the full version of discussed report during this event here:

Coal Phaseout: Visions, Obstacles, and Strategies

In another side event, “No more Coal: Research and Campaigns for a Global Coal Phase Out”, representatives from Climate Analytics, Rainforest Action Network, International Coal Network, and Urgewald gathered to discuss how a global coal phase out, the main demand of the Klima-Kohle-Demo last Saturday, is possible and what should be done.

Bill Hare from Climate Analytics began by stating why a global coal phase out is unavoidable if the goals of Paris Agreement are to be achieved. Then he showed results from a study of his organization that depict the roadmap of achieving this in different regions.

Check the link below for the report he mentioned during the panel. I have had the honor to use their emission calculator tool on coal power plants in East Asia this summer, and was very amused; the calculator is also based on the data given in this report.

Alison Kirsch from the Rainforest Action Network also brought up a report I was familiar with. This summer, her organization published an amazing report detailing how the biggest banks all over the world invest in high risk fossil fuel industries. This report was particularly useful for me because at the very same time I was digging out how much money our school invested in fossil fuel related industries or highly involved banks. Unfortunately for my previous university of Taida (National Taiwan University), the school board actually invested many money in the Chinese banks listed in that report. The sustainability department of the student’s government in Taida is still discussing methods to pull that money out. Check the link below for that report.

Gerry Arances from the International Coal Network brought up the issue of coal capacity increase in the regions of South Asia, Southeast Asia, and East Asia. Again as a Taiwanese this is something I found myself easily connected to the issue.

”China has become the white elephant in the room.”
A horrifying image of how many new coal power plants are planned in East Asia

The role of Chinese power and mining companies in these regions and also in Africa is becoming more dominating, although traditional players like the Japanese and the Koreans are also increasing their investment in this region. Bill Hare called for “a change of narrative” for what these countries are doing to their neighbors; for instance, China doesn’t only build solar panels in Pakistan, but also plans to build more coal power plants there; when regarding these advanced nations as a leading power in renewable technology export, reporters and journalists should not neglect both facts.

Finally, Heffa Schücking from Urgewald shared her experience of persuading the Swedish Pension Funds to divest from fossil fuel related industries, and also provide some details of a to-be-published coal industry portfolio. The current industrial classification benchmark system underestimated the amount of companies that are heavily involved in fossil fuel industries, so her organization sketched up a more inclusive list of criteria that took proportion of power produced by coal, total amount of coal usage and new build capacity of coal power plants into account. You should see it in the following link by 9th of November.

“It’s like having a blind date with the coal industry; you thought you were dating a dwarf, but it turned out to be a giant.”

Quick remarks on this topic:
As a unavoidable topic in the energy transition, phasing out coal is becoming a more popular issue in Germany, Taiwan, and many other nations alike. We must remind ourselves that the rapid growth of renewables is still a crucial key for it to happen.

It is also worth noting that in his analysis, Bill Hare didn’t show how nuclear would evolve during the next ten years at all, as if the nuclear power plants all over the world would just disappeared overnight. Although this won’t be the reality, it is not far away from the reality; even China, who plans to build the largest nuclear fleet in the world (100GW), predicts itself to only have a nuclear power mix of around 5% by 2030.

What I will report tomorrow:

China and Europe might be announcing a common carbon market plan in the latter stage of the conference. I will join side events relative to topics on market-based mitigation strategy and try to find out more about that issue.

As mentioned in the climate financing section, adaptation has long been overlooked when people talks about climate change. Therefore I will also join sessions involving that topic.

Finally, many participants I met these days expressed doubts on the intermittency of variable renewables. Also, natural gas sounds much cleaner than coal. The Russia Pavilion thus portraits the Nordstream 2 project as a very important and necessary carbon reduction method. Is switching coal to gas the ultimate answer to climate change mitigation? How will the grid maintain balance with 100% RE? I will dig deeper into these questions tomorrow.