The climate and us | An inequitable status quo remains in climate action

The proposal by India and other developing countries to establish a loss and damage financing mechanism to compensate vulnerable countries for losses caused by climate-related disasters has not been on the agenda of the negotiations of the next COP27.

“Loss and damage” is a general term used in the United Nations (UN) climate negotiations to refer to the consequences of the climate crisis that go beyond what people can adapt to, according to World Resources. Institute. These consequences include slow onset events such as sea level rise, desertification, retreating glaciers, land degradation, ocean acidification and salinization.

The Group of 77 and China wrote to UNFCCC Executive Secretary Patricia Espinosa on June 13 proposing that loss and damage financing modalities be included on the COP 27 agenda. The wealthy, especially Switzerland, the EU and the US, opposed the call for such a facility and discussions were subsequently stalled. The G77 countries wished to introduce an item on the agenda of the Subsidiary Body for Implementation titled Questions relating to the Glasgow Dialogue on Loss and Damage. This was to push for formal decisions on substantive discussions on loss and damage. Developed countries opposed this and discussion of any other issue related to establishing financing arrangements for loss and damage, explained Diego Pacheco, Bolivia’s chief negotiator.

There has been a battle over the issue of the global stocktake also scheduled for 2023. The Paris Agreement established a global stocktake process to assess collective progress towards achieving the long-term goals of the Paris Agreement from from 2023 and every five years thereafter.

We haven’t made much progress and there will be intense disputes over who has done or hasn’t done anything. At the closing plenary of the technical dialogue on the global stocktake held in Bonn, several developing countries and their groupings stressed the importance of taking into account equity considerations in assessing the collective progress of parties in the implementation of the objectives of the Paris Agreement.

“Many of them highlighted the need to address equitable access to the carbon budget to limit temperature rise under the Paris Agreement while taking into account historical emissions from developed countries. Equity and just transitions have been highlighted as overarching considerations for developing countries in scaling up mitigation ambition,” said the Third World Network, an international research and advocacy organization that observes the Evolution of Climate Negotiations and the World Trade Organization The fight over global stocktake processes will be fierce at COP27.

Questions of climate finance, adaptation and mitigation also remain unanswered. During Bonn, a parallel discussion was organized by the Third World Network, in which India also participated.

Richa Sharma, India’s chief negotiator, said the Glasgow climate pact from COP26 adopted last November is centered on mitigation, unlike the provisions of the Paris Agreement which place equal emphasis on climate change. adaptation and mitigation of the climate crisis, and that COP 27 will have to find the balance. For developing countries, historical emissions have been significantly low in per capita terms and therefore they experience the impacts of climate change disproportionately. Developed countries with higher Gross Domestic Product (GDP) per capita have the best adaptive capacity, and therefore developing countries also speak of achieving rapid and sustainable development that allows them to build the resilience of their people, she said. There are now strong calls for a clear definition of climate finance and a new financial target, far bigger than the $100 billion target that was to be reached by 2020, which has still not been met. .

South African negotiator Zaheer Fakir said there is a critical need for a common definition of climate finance to ensure common accountability which is still under discussion. “Without funding provision, terminologies such as ambition, tipping point and urgent climate action don’t matter,” he said in Bonn. He referred to the findings of the first “Requirements Mapping Report” (of the UNFCCC Standing Committee on Finance) which shows that only 30% of developing countries’ needs cost between $5 trillion and $11 trillion, which eclipses the $100 billion goal.

With all of these issues unresolved, COP27 will get off to a tense start. But after COP26 in Glasgow, geopolitical tensions have also derailed climate action in many parts of the world. The REN21 Global Renewable Energy Status Report 2022 published last week stated bluntly that there is no energy transition on a global scale. A spike in energy prices in the second half of 2021, followed by the Ukraine crisis earlier this year, contributed to an unprecedented global energy crisis and commodity shock, the report said, which led governments implement short-term measures to diversify fossil fuel imports. sources of energy, increase national production and subsidize the use of energy.

“This situation has exposed the world to increasingly pressing climatic disasters as well as geopolitical and economic threats,” the report said.

Over the past year, China has announced plans to increase coal production by 300 million tons (or 7% of current levels), the United States has seen a boom in new fracking projects and drilling, and the European Union has launched a series of short-term measures to diversify gas imports, most of which have benefited the fossil fuel industry.

According to a report by the International Institute for Sustainable Development entitled Mapping India’s Energy Policy 2022 in FY2022, India provided 9 times more subsidies for coal, oil and gas than for clean energy. However, overall fossil fuel subsidies have also fallen by 72% since 2014. For renewables, subsidies have fallen by 59% since FY2018, while for electric vehicles they have increased by 205%. Support remains weak compared to ambition.

Take, for example, the Life Insurance Corporation’s initial public offering (IPO) crisis last month. There was a $17 billion wipeout in the market value of Life Insurance Corporation of India’s public offerings this year. Their offerings have fallen 29% since its May 17 debut, and India’s biggest IPO now ranks second in terms of market capitalization loss since its IPO, according to data compiled by Bloomberg. published on June 13.

According to a researcher who studies the investments of LIC and the investments of several other global and Indian insurers, Indian insurance companies are still heavily exposed to carbon-intensive industries through their investment portfolios. LIC, the country’s largest asset manager, is heavily exposed to financial risks arising from the transition to a low-carbon economy, with 21% of its equity portfolio invested in carbon-intensive industries. In comparison, only 0.11% of LIC’s portfolio is invested in the renewable energy sector

Ahead of LIC’s public offering, climate transition risks for its investments were disclosed in its Red Herring Prospectus Project (DRHP), which revealed that as of January 2022, LIC had invested $25.8 billion in carbon-intensive industries, representing 21% of its total equity holdings portfolio. It currently has no publicly available investment policy covering climate change, and climate transition risks have not been recognized in its DRHP, despite some acknowledgment that exposure to natural disasters is a material climate risk .

From the climate crisis to air pollution, issues of development-environment trade-offs to India’s voice in international environmental negotiations, HT’s Jayashree Nandi brings her in-depth knowledge of the field to a weekly column

Opinions expressed are personal