By Kithmina Hewage
Research Assistant, IPS On the 12th of December, 195 countries achieved what many regarded as the impossible by agreeing on a framework to tackle climate change. The 21st session of the Conference of the Parties (COP21) committed to a deal to limit the rise in global temperatures to 2 degrees Celsius. The countless rounds of negotiations that failed to achieve universal approval magnify the significance of this agreement. Therefore COP21 is a major victory for multilateralism and especially the United Nations Framework Convention on Climate Change (UNFCCC). However, as the saying goes, “the devil is in the details” – which appear thin for now about its implementation. This blog post briefly discusses the political-economy challenges and opportunities presented by the Paris Agreement, with particular emphasis on developing countries.
Ratification
The eventual success of any international
agreement depends on what Robert Putnam regards as the “two-level game” –
interlink of domestic politics with international diplomacy. To achieve a
successful conclusion to the simultaneous negotiations that occur on the
domestic and international fronts, however, some common ground should exist
between the parties involved. Climate change has, over the years, been a
divisive issue in American politics and common ground is few and far between. The
division was highlighted most clearly when the Clinton Presidency failed to
ratify the Kyoto Protocol. Similar to COP21, the Kyoto Protocol was also heralded
as an important “first step” in tackling climate change.
The Obama administration is likely to face
similar challenges in ratifying the Paris Agreement through a Republican
Congress, especially with a Presidential election cycle currently taking place.
Whereas President Obama has consistently advocated for a proactive climate
change policy, the Republican controlled
Congress has been much more sceptical about Climate Change. In fact,
Republicans have already moved to undercut President Obama’s climate
change policies in Congress. Some important developments since Kyoto could,
however, provide some hope of ratification. Crucially, since Kyoto, the body of
scientific evidence on climate change and its
effects have grown substantially. Despite some scepticism among a minority in
leadership roles of the American political establishment, politicians are
finding it more difficult to ignore scientific evidence and consequently,
climate change. Secondly, unlike with Kyoto, developing countries such as China
and India have taken increased responsibilities to curb their levels of
pollution – a factor strongly advocated for by the US. Thirdly, the rise of
civil society organisations has created a more vibrant dialogue on climate change in the United
States and has created a more favourable domestic platform for climate change
policy. Failure for US ratification will be catastrophic to implementing the
Paris Agreement and developed and developing countries alike will be keenly
observing the process.
Financing
Developing countries will require
significant technological upgrades in order to pursue their respective growth
agendas in an environmentally friendly manner. The UNESCAP estimates that closing infrastructure gaps and
expanding social protections while addressing climate mitigation and adaptation
would cost the region (Asia and the Pacific) between $2.1 trillion and $2.5
trillion per year. Recognising the necessity for financial resources to enhance
the implementation of climate change policies, the Paris Agreement establishes
a Green Climate Fund with contributions from developed nations for the benefit
of developing nations amounting to $100 billion per year by 2020.
In spirit, the fund is supposed to act
separately from existing international aid mechanisms – especially the
commitment by OECD countries to provide 0.7% of GNI as international aid.
However realistically, it appears that developed nations are likely to simply
divert funds from existing aid allocations to the Green Climate Fund. In fact,
the UK government has already confirmed that its contributions to the fund will come from
the existing international aid budget. This will undoubtedly curtail the successful
implementation of the Paris Agreement in several ways and create considerable
challenges to developing countries.
Firstly, developed countries have
historically failed to uphold their foreign aid commitments. Tellingly, among
28 OECD countries only three countries fulfilled the commitment to provide 0.7%
of GNI as aid in 2014. Therefore, the financial resources available for
developing countries are inherently limited in scope. Secondly, within the
scope of limited finance and the decision of developed countries to divert
money from existing aid budgets for climate change, developing countries are faced with
particularly harsh opportunity costs. Developing countries will have to choose
between using available funds to address issues such as poverty and healthcare
or technological upgrades to promote sustainable development.
This situation is unfortunately not unique
to this context. In 2005, the WTO announced the Aid for Trade programme that
attempted to direct financial resources to specifically address trade-related
issues in developing countries. Similar to that of the Green Climate Fund, the
Aid for Trade programme was also, in spirit, meant to be outside the scope of
existing foreign aid allocations. However, in practice, the programme has
received funds from overall international aid budgets in developed countries. During
the Fifth Global Review for Aid for Trade held in Geneva, attended by the
author, several representatives of developing countries bemoaned the need for
governments to choose between trade and poverty. Given the choice, the
delegates noted that governments could not suitably justify using available
resources for trade related projects when a vast majority of their citizens
were in hunger. If the Green Climate Fund continues in the same vein, a similar
trend is likely to occur and the efficacy of the Paris Agreement will be
constrained. Therefore, it is vital that state and non-state actors involved in
drafting the agreement hold developed countries accountable to their
commitments.
Opportunities
for Local Entrepreneurship
In the absence of dependable financial
resources from developed countries, developing nations will require to be
somewhat self-sufficient in pursuing a sustainable development agenda. In doing
so, significant demand is created for low-cost technological upgrades suitable
for developing countries. Sri Lanka could potentially benefit by taking an
initiative to promote research and development into technological innovations
that facilitate sustainable growth – this could include industrial technologies
as well as tools to respond to effects of climate change. As a developing
country, innovations that come from within would be better suited to other
developing countries with similar levels of technological advancements, rather
than complete upgrades needed for technology from the developed world. Therefore,
given recent measures to spur an outward-looking economy, the government should
encourage public-private partnerships to make best use of the opportunity. A
combination of government support and private sector initiative will likely
spur a culture of entrepreneurship in affordable, environmentally friendly
technology using local knowledge.
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