TWN Info Service on Climate Change (Mar23/07)
23 March 2023
Third World Network

Strong push at IPCC by North to fudge lack of climate finance in the South

Interlaken, 23 March (Prerna Bomzan): At the recently concluded 58^th session of the Intergovernmental Panel on Climate Change (IPCC), which approved the Summary for Policymakers (SPM) of the Synthesis Report (SYR) for the Sixth Assessment Report (AR6), there was a strong push by developed countries to completely change the narrative from a lack of climate finance delivery to developing countries to there being merely barriers to access finance.

Developed countries at the IPCC session demonstrated clear attempts to undermine their failure of meeting the climate finance obligations under the United Nations Framework Convention on Climate Change (UNFCCC) and its Paris Agreement (PA).

(It is to be noted that while their overdue commitment of USD 100 billion per year by 2020 has not been realized, this number is already an obsolete figure in terms of current financing needs of developing countries which actually amount to trillions to meet their climate actions.)

The SPM and the SYR were finally approved and adopted on 19 March in Interlaken, Switzerland, following intense day and night negotiations between developing and developed country governments as well as the IPCC authors, passing the deadline for the conclusion of the meeting by two days. The SPM was approved line by line while the SYR was adopted page by page.

The 36-pager SPM provides a high-level summary of the longer 85-pager SYR and is expected to serve as a key input to the annual climate talks scheduled to take place later this year in Dubai.

The SYR integrates the main findings of the AR6 Working Group (WG) reports on ‘The Physical Science Basis’ (WGI, 2021); ‘Impacts, Adaptation and Vulnerability’ (WG II, 2022); and ‘Mitigation of Climate Change’ (WG III, 2022); as well as the three Special Reports on ‘Global Warming of 1.5°C’ (2018), ‘Climate Change and Land’ (2019), and ‘The Ocean and Cryosphere in a Changing Climate’ (2019). (See earlier TWN articles on the IPCC meetings at www.twn.my ).

Narrative fight: lack of finance vs access to finance

Although the means of implementation for climate actions – finance, technology transfer, capacity building – is the foremost aspect of climate action for developing countries, the related section in the SPM entitled ‘Finance, Technology and International Cooperation’ was only opened for discussion on 17 March, which was the original scheduled closing day of the meeting.

Hence, this highly important matter which entailed lack of consensus on several issues, was hurriedly negotiated largely in contact groups (as opposed to in an inclusive plenary setting), co-chaired by representatives from Niger and Estonia.

The first contact group was triggered when developed countries contested the first sentence of paragraph C.7.4 which read, “The largest climate finance gaps and opportunities are in developing countries”. Switzerland called for removing this sentence arguing that there is “no definition” of climate finance as well as of developing countries, to which Saudi Arabia clarified that climate finance is defined in the SPM glossary. Brazil, India and Saudi Arabia strongly supported the sentence asserting that there are finance gaps and that it provides clear messages to policy makers.

Further, the United States (US) questioned the concerned author to prove whether the sentence was backed by the underlying assessment reports. In response, the author said that the sentence was taken directly from “approved text” (referring to the SPMs from Working Groups II and III) and that it was “very difficult” to change the language.

The US however asked for “specific” formulation of the sentence citing language from the WGIII SPM which read, “Tracked financial flows fall short of the levels needed to achieve mitigation goals across all sectors and regions”, which was also supported by France and Switzerland. They were trying to limit the issue to mitigation only, while the author was also clarifying that this held true for adaptation as well.

The author then proposed the following language which was finally agreed: “Tracked financial flows fall short of the levels needed for adaptation and to achieve mitigation goals across all sectors and regions. These gaps create many opportunities and the challenge of closing gaps is largest in developing countries”.

Before agreement on the above language, Germany tried to suggest that finance was “sufficient”, but was pushed back by Brazil who responded that this was the “wrong message” for policymakers. Additionally, Belgium, Luxembourg and the European Union (EU) had sought clarification on what was meant by “gaps create many opportunities” to which the author explained that gaps meant “missing” (finance) which can be met hence there are opportunities to close the gaps.

In order to underscore the fact that finance for adaptation is equally lacking, developing countries led by Tanzania, Turkiye, Kenya, Brazil, Egypt, Ecuador, Mexico, Saudi Arabia and India also managed to include “adaptation” in the next sentence in paragraph C.7.4, which reads: “Accelerated financial support for developing countries from developed countries and other sources is a critical enabler to enhance adaptation and mitigation actions and address inequities in access to finance, including its costs, terms and conditions, and economic vulnerability to climate change for developing countries”.

In a bid to entrench the narrative that climate finance is not lacking but “access” is the barrier, Germany, Switzerland and the US managed to insert the word “access” in the above sentence by altering the author’s original language.

In reference to the headline statement C.7, the sentence starting with “there is sufficient global capital…..” which was originally framed in the context of only barriers such as institutional, regulatory and market access (thus putting the onus on developing countries to enhance so-called enabling conditions), India sought clarification from the author since the important clause of  “barriers to redirect capital to climate action” was missing from the sentence which was contained in its related paragraph C.7.3.

In response, the author proposed revised language which was eventually agreed and reads, “There is sufficient global capital to close the global investment gaps but there are barriers to redirect capital to climate action”. This balanced sentence was initially resisted by France and Switzerland.

India, Saudi Arabia, Brazil, and China also collectively pushed to insert language on the unmet USD 100 billion commitment in paragraph A.4.5 under the section entitled ‘Current Mitigation Progress, Gaps and Challenges’ and thus managed to restore balance in the text, which reads: “In 2018, public and publicly mobilised private climate finance flows from developed to developing countries were below the collective goal under the UNFCCC and Paris Agreement to mobilise USD 100 billion per year by 2020 in the context of meaningful mitigation action and transparency on implementation”.

The final attempt by developed countries to muddy the picture on the levels of climate finance needs required was at the plenary on 19 March, during the page-by-page adoption of the longer SYR.

When it came to ‘Figure 4.6’ on ‘Higher mitigation investment flows required for all sectors and regions to limit global warming’, the US, Netherlands, Switzerland, Canada and France resisted in approving the figure which has a controversial history going back to the approval of the WGIII SPM in 2022. Back then too, the figure which appeared in the underling report and hence in the draft SPM, was rejected by developed countries led by the US to be included in the SPM, primarily due to the reference of “developing countries” and “developed countries” in the figure – where the fight over country classification was the flashpoint (See TWN article).

China stated that a lot of developing countries support the figure while only a few countries are resisting, further urging to “abide by the spirit of cooperation” in the name of those majority of developing countries who were not present in the plenary having already left the session.

IPCC Chair Hoesung Lee who presided over the plenary, also asserted that the figure is an approved figure in the WGIII underlying report and the expert authors decided for its inclusion, notwithstanding that each member government may have different views.

The figure was eventually adopted, thus reaffirming the bifurcated classification of countries into “developing” and “developed” under the UNFCCC and its PA and hence, the financial obligations of developed countries to developing countries.

Key barriers in relation to technology transfer omitted

In relation to technology transfer as a vital component of means of implementation which has seen no progress in terms of its provision by developed countries, China consistently stated in both plenary sessions as well as in contact groups, that “current international cooperation for technology transfer to developing countries is insufficient due to political and legal barriers within developed countries”.

It wanted this important language to be initially included in C.7.5 but the concerned author responded that it is an “important element” and the following paragraph C.7.6 addressed the issue. However, when the reading came to C.7.6, the author conversely said that the concern was raised in C.7.5 which was already approved. China then reacted to the incoherent process to which the IPCC Chair Lee reiterated that the previous paragraph had already been approved.

In response to the unfair process, Bolivia strongly stated that countries are negotiating in “good faith” and that there is a need to have “integrity”, urging for inclusion of the language in C.7.6 but Chair Lee kept the issue in abeyance saying that authors would need further consultation. He additionally refuted that the IPCC process has never involved “deception”. However, this important issue failed to come back and the approved SPM falls short of such existing barriers vis-à-vis technology transfer to developing countries.

Cherry-picking references relating to the Paris Agreement

While there was resistance to referencing the USD 100 billion commitment of developed countries to developing countries, there were huge efforts especially by Germany, Luxembourg, the US, Switzerland, Norway, France, Japan, and Australia to include language on “aligning financial flows with ambitious climate action” (which is in reference to Article 2.1(c) of the PA) in paragraph C.7.6.

(Article 2.1 (c) of the PA provides as follows: “Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”, and has been controversial in the climate negotiations among developed and developing countries, with differing interpretations about what its scope is. Developed countries in the climate negotiations have been advancing a very broad interpretation of the Article which includes looking at financial flows from all sources, including from a broader donor base which covers developing countries as well as the private sector, while developing countries argue that the article should be read within the context of Article 9 of the PA, which makes developed countries responsible for the provision and mobilization of climate finance.)

When the author agreed to include the said language, Saudi Arabia in response, urged to also include “funding needs” for balance, which is already approved text from the WGIII SPM. This was also supported by South Africa, China, and India and eventually the author also confirmed that including funding needs is in line with the underlying assessments.

The US however continued to stand ground that it could not “accept” the additional language, which triggered a huddle to deal with the deadlock, and it displayed a sudden turnaround by stating that it could accept the revised text “in the spirit of compromise”.

The approved language reads, “Climate resilient development is enabled by increased international cooperation including mobilising and enhancing access to finance, particularly for developing countries, vulnerable regions, sectors and groups and aligning finance flows for climate action to be consistent with ambition levels and funding needs”.

Germany, Switzerland, the US and France attempted to introduce the same language on “aligning financial flows” in paragraph C.7.1 as well in relation to availability of and access to finance. However, the concerned author made clear that there was no need for repetition and that he did not feel “comfortable” with the Article 2.1(c) reference in that particular context.

It is to be noted that while references to the PA were resisted as much as possible by developed countries in relation to the interests of the developing countries, the former selectively used it to advance their interests in the IPCC process, for the purpose of the upcoming climate negotiations.