Anuradha R V: Demystifying the Cancun climate Agreements

It's critical for India to ensure that the processes and methodologies that are put in place to implement the new deal do not become unduly burdensome

The December 11 ‘Cancun Agreements’ concluded by over 190 countries spell out the contours of a new climate deal. As has been widely reported, they represent certain fundamental departures from the existing provisions of the UN Framework Convention on Climate Change (UNFCCC) of 1992 and the Kyoto Protocol of 1997. The principle of “common but differentiated responsibilities” (popularly referred to as the CBDR principle) lies at the heart of the UNFCCC.

Under this principle, and as elaborated in the Kyoto Protocol, mandatory emissions reduction commitments were applicable only to developed countries. There was also a clear linkage under the UNFCCC between adherence by developing countries to their obligations under the convention, and the ‘effective implementation’ by developed countries of their commitments to provide financial resources and transfer of technology.

With the first commitment period under the Kyoto Protocol ending in 2012, there has been increasing clamour from developed countries that that they cannot continue to shoulder the burden of mandatory obligations on their own, and developing countries would need to undertake some commitments. The Copenhagen Accord that was concluded in December 2009 reflects the genesis of some of these principles, and the Cancun Agreements concluded last week provide the framework within which these would be made operational.

Like any other international agreement, the Cancun Agreements reflect results based on political compromise. While the texts emphasise the CBDR principle, the axis of the principle has moved from a situation of no binding obligations on developing countries to a progressive build-up of obligations. This article seeks to highlight the implications of the revised architecture for a developing country like India.

The key obligation on a developing country like India is to undertake “nationally appropriate mitigation actions” (NAMA) aimed at achieving a deviation in emissions relative to ‘business as usual emissions’ in 2020.

Specifically, this would entail:

• Voluntarily providing information on NAMA, which are required to be “measured, reported and verified” (MRV) at the national level, for which guidelines are to be developed under the UNFCCC;
• Identifying the NAMA which would require international support and the costs involved. All internationally supported action will be subject to “international MRV”, guidelines for which are also to be developed;
• Ensuring periodic national communications based on a format to be notified. The Agreements specify that there will be “international consultation and analysis” (ICA) of reports made to the technical body of the UNFCCC, which would involve “analysis by technical experts in consultation with the Party concerned”, and “result in a summary report.”

Scrutiny and assessment of mitigation actions that have availed of international funding is a perfectly understandable requirement. The concern however is with regard to the overarching requirement for assessment of all domestic actions, which is unprecedented in the international context. Until such time as the standards and parameters for MRV and ICA are put in place, this is likely to remain an issue of concern.

It would therefore be critical for the Indian government to ensure that the processes and methodologies that are put in place to implement the above do not become unduly burdensome, and further, that any voluntary notification of domestic action is set at a modest level, so as to leave adequate flexibility for settling our own internal processes and priorities, without external pressure.

This would mean, for instance, that:

• MRV for domestic actions not supported by international support should be confined only to those NAMA which a developing country has voluntarily reported to the UNFCCC. (This aspect is not clear from the existing language of the Cancun texts and needs to be clarified);
• The ICA principles developed and the summary report resulting from such ICA ensure due consideration for the various economic, political and environmental realities of a developing economy;
• The procedures and methodology for adhering to the commitment for national communication are set forth in terms that would not be administratively cumbersome.

The other critical elements of the Cancun Agreements are those dealing with finance and technology, both of which are critical for developing countries that face the dual challenge of ‘development’ and ‘climate change’. Inadequate flow of finance and technology has been a major criticism of the UNFCCC so far. Under the Copenhagen Accord, developed countries had committed to achieving a goal of jointly mobilising $100 billion per year by 2020 to address the needs of developing countries.

The Cancun Agreements emphasise that a significant proportion of the finances should flow through the “Green Climate Fund” which is to be established as the operating entity for the financial mechanism. There is however no obligation on specific amounts to be contributed by developed countries to the Fund. This obligation needs to be articulated in clear terms in order to ensure viability for achieving such a target.

On the issue of technology, there is universal recognition of the need for widespread diffusion of low-carbon technologies in order to redefine approaches to economic growth. The Cancun Agreements propose the creation of an international technology mechanism that seeks to facilitate the process of clean technology knowledge-sharing among all countries, with particular focus on developing countries. The effective implementation of this mechanism is another crucial element that will determine the effectiveness of the climate change regime.

Finally, of specific interest to India is the future of the Clean Development Mechanism (CDM) — the only market-based mechanism currently envisaged under the international climate regime. Despite several criticisms about the effectiveness of the CDM, India has been one of the largest beneficiaries of CDM projects, after China. The Cancun Agreements are curiously silent on the future of CDM after the Kyoto Protocol’s first commitment period ends in December 2012.

A clear signal for both project developers and investors in CDM projects is important in order to have predictability and continuity of regimes. Simultaneously, the government would also need to think of alternative market mechanisms, given the significant contribution that private sector investment flows will have in influencing patterns of low-carbon development.

At the heart of any climate regime is its commitment to binding emissions reduction targets. The Cancun texts only “urge developed country parties to increase the ambition of their economy-wide emission reduction targets”, but are silent on what those targets should be. The manner in which these are articulated and enforced will ultimately determine whether anything meaningful was achieved at Cancun.

The author is a partner at Clarus Law Associates, New Delhi