Saving the planet - in three acts

In order to solve a problem, we have to first acknowledge it. Climate negotiators failed to do so in Madrid, despite taking more time than in any other annual climate talks (overrunning the scheduled time by more than 44 hours) before ending up with a non-deal. The Paris Agreement was a compromise, offering something for everyone. This year’s Conference of the Parties (COP-25) offered nothing for anyone. Failed climate talks are not the issue. The real problem is that we do not trust each other. 

Restoring trust in any relationship must start with honesty, then shift to addressing past wrongs, eventually leading to vows to work together. Here is a plot spoiler for saving the planet in three acts.

Act 1: Rectitude. Honesty is a trait; credibility a reputation. Promises at climate negotiations are not credible because there is little honesty about two bitter truths: The climate has already changed; and actions are nowhere near sufficient. The world is on track for at least 3.2 degree Celsius of warming above pre-industrial levels. The UN Environment Programme recently warned that greenhouse gas emissions must fall 7.6 per cent each year during 2020-2030 if warming were to be limited to 1.5 degree Celsius above pre-industrial levels, as the Paris Agreement aspires.

Against this evidence, there is expectation that each country would raise ambitions. But the concept is flawed because there is no sense of urgency. If a country announces a net-zero emissions target by 2050, it is considered a climate leader. There is no reprimand for not acting sooner or for not planning to reduce emissions earlier. Delays in actions by the historically largest polluters (rich countries) shrinks the carbon budget left for the majority of the world’s population. Long-term strategies are not credible if countries remain dishonest about basic carbon arithmetic. 

The first act should end with a dramatic show of moral rectitude: Countries tabling long-term strategies and enhanced ambition must also report how far their plans are frontloaded and what checks and balances are in place to ensure that they get implemented.  

Act 2: Redressal. It is easier to forgive than to forget. Rich countries have not lived up to their pre-2020 promises. No developed country upped its ambitions in line with the Doha Amendment to the Kyoto Protocol, nor have sufficient countries ratified the Amendment. This means that emissions reductions fell far short of what was needed by 2020 (against a 1990 baseline). Moreover, instead of the promised $100 billion in climate financing by 2020, multilateral climate funds approved only $10.4 billion for mitigation during 2013-18; adaptation funding was at $4.4 billion. 

A third challenge is that there are 4 billion unsold certified emissions reductions under the Clean Development Mechanism (CDM). Not paying for them undermines confidence in carbon markets. Carrying them over would flood a post-2020 carbon market with credits and lower the price of offsets further. Couldn’t the past be forgotten and all just focus on implementing the Paris Agreement from January 1,  2021? Unfortunately, on all three counts — unambitious actions, unfulfilled financial commitments, and unsold carbon credits — the nagging question remains: “How do I know you won’t cheat again?”

The second act demands that past grievances be redressed. By September 2020, developed countries should commit that the gap between their pre-2020 commitments and outcomes would be met entirely by domestic actions in addition to their post-2020 pledges. Further, the unsold CDM credits (now worth less than $1) should be paid off by developed countries via a one-time settlement. Negotiating the discounted rate (as in bankruptcy proceedings) would be fraught. But any settlement value would be minuscule compared to the trillions that could be unlocked for low-carbon investments. Such a settlement would preserve the integrity of a post-2020 emissions trading market under Article 6 of the Paris Agreement. Both these actions could significantly lift trust in governments and markets. 

Act 3: Renewal. All relationships deserve a second chance. A renewal in the promise of collective climate action is possible with a reformed focus on finance and technology, offering an uplifting finale.

Emerging economies have the opportunity to leapfrog to low-carbon infrastructure. China, India, Mexico, among others, are already demonstrating this through investments in renewable energy. But the cost of finance remains prohibitive because of risks that institutional investors perceive (often greater than real conditions). A new deal on finance is needed: Global finance should follow a risk-risk approach in comparing climate risk and investment risk; premiums should be priced to reflect reality not perception; small amounts of public money should be used for a facility to hedge multiple risks across countries.

Similarly, a new deal on technology would establish genuine collaboration platforms for different categories of technologies: (1) those needing commercial pilots to scale (efficient appliances, distributed energy, etc.); (2) those needing significant early-stage investments to prove technical viability (efficient solar cells, energy storage, low-carbon cooling technologies, etc.); and (3) pooling funds and scientific talent for riskier but high-potential horizon technologies (renewables-derived hydrogen for industry; carbon capture storage and utilisation; other carbon dioxide removal methods). 

“Love all, trust a few, do wrong to none.” Shakespeare’s memorable line offers good guidance as we head into another year of fraught climate talks, culminating in Glasgow in November 2020. We must love the planet, undo past wrongs, and rebuild trust bit by bit. The advice comes from All’s Well That Ends Well. For honest and effective climate action, though, we are far from that curtain call.

The writer  is CEO, Council on Energy, Environment and Water (https://bsmedia.business-standard.comceew.in). Follow @GhoshArunabha @CEEWIndia

This article has been revised to correct an error in the earlier version regarding the implementation period of the Paris Agreement.