Mumbai: As world leaders prepare to meet in Glasgow, UK, in November 2021 for the COP26, experts say they must bolster the 'Paris Rulebook' in order to obligate countries to set adequate emissions targets, report on their progress transparently, provide finance to developing countries to meet their commitments, as well as operationalise carbon markets.

The 2018 Paris Rulebook governs how the world community of 191 countries must pledge emissions reduction targets under the Paris Agreement and report on their progress. It also contains provisions for rich countries to provide climate action finance to developing countries. But the Paris Rulebook has been largely ignored, a new report and an IndiaSpend analysis show. Countries have not yet agreed to the transparency and accountability mechanisms that will enable independent verification of the adequacy of their targets and the success of their efforts to meet them, and as many as 40% of countries (78) are yet to submit updated and more ambitious pledges called Nationally Determined Contributions (NDC), which were due in 2020.

In 2015, when countries came together for the Paris Agreement, they pledged to limit the rise in global temperatures to 1.5-2°C by 2030. For this, by 2030, the world would need to cut greenhouse gas emissions by 25-45% from 2010 levels, but the current NDCs of all the countries together would decrease emissions only by around 12%, found a United Nations Framework Convention on Climate Change (UNFCCC) report, published on September 17.

The Paris Rulebook does not compel countries to ramp up action, experts told IndiaSpend. "The rulebook does not bridge the gap between what the countries pledged in their NDCs and what is required for them to actually minimise climate change," said Neha Pahuja, a fellow at The Energy and Resource Institute (TERI), a New-Delhi based think-tank.

"Due to the bottom-up nature of the Paris Agreement, countries were largely able to determine their own NDCs, accounting and compliance rules," said Shikha Bhasin, senior programme lead at the New-Delhi-based research nonprofit Council for Energy, Environment and Water (CEEW).

The rulebook's guidelines on ensuring ambitious targets to meet the temperature cap, on international carbon markets, as well as on providing finance and technological assistance to developing countries are weak and ineffective, experts tell us. World leaders must finalise key details and strengthen the rulebook to give the world a realistic chance of meeting the 2030 target. Here's what must be fixed.

What is the Rulebook?

In 2015, the Paris Agreement solidified long-term, international goals to tackle the climate crisis, including limiting the rise in global temperatures, increasing adaptation and resilience to climate change, and aligning financial flows with low-carbon and sustainable development. But details on implementing this global pact were left unclear.

In 2018, at the 24th COP in Katowice, Poland, countries agreed on the Paris rulebook for guidelines on implementing the Paris Agreement. The "rulebook tells how the commitments need to be implemented and what are the obligations of the country towards meeting their commitment", said Sumit Prasad, programme associate at CEEW. These include updating the NDCs every five years and rules on how to report on the steps taken to control climate change, he explained.

What countries did not agree on in the rulebook

Accountability: Countries had earlier had two agreements on controlling the climate crisis--the Kyoto Protocol, and the Doha Amendment, which extended and amended the Kyoto protocol--but countries had not accepted the targets under these agreements, said Prasad. Because of this, "for the Paris agreement, strengthening accountability became important… but because the agreement is so decentralised, countries have avoided agreeing on common accountability and transparency mechanisms", of the rulebook, he added.

Carbon trading: Carbon or emissions trading is one of the most debated topics in the rulebook negotiations, said Pahuja. A carbon market allows countries and companies, that are unable to meet emissions targets, to buy carbon credits from those that have reduced emissions and have 'credits' for sale. For instance, from 2002 to 2012, Indian companies and the government together had earned hundreds of crores worth of carbon credits under the Kyoto Protocol by reducing industrial emissions, switching to renewable energy, energy efficiency in households and protecting forests, and sold some of them as credits to countries or companies that were likely to exceed their emission targets.

Carbon markets under the Kyoto Protocol were known as the Clean Development Mechanism (CDM). Under CDM, countries could trade carbon credits--certificates that allow the holder to emit one ton of carbon dioxide or equivalent greenhouse gases. But 75% of carbon credits were unlikely to represent a reduction in greenhouse gas emissions, found a 2015 report by the Stockholm Environment Institute, a policy research organisation. CDM enabled emission cuts in countries where it was cheap to make these reductions while greenhouse gas emissions continued in other countries, wrote researchers Oscar Reyes and Tamra Gilbertson in the UN Chronicle. Credits were given for even minor adjustments by industries that did not have a larger environmental impact, they wrote.

Implementing a carbon market requires strong accounting procedures, said Pahuja. Countries fear that emissions traded between buying and selling countries might be double counted, while countries might also misuse the rules of carbon trading. For instance, under lax rules, a country selling the carbon credit might claim the underlying emission reduction for itself, while at the same time, the country buying the credit might also claim the same emission reduction, she explained.

Some countries, including Brazil, have favoured double counting of carbon credits under the Paris Rulebook. Under the Kyoto Protocol, double counting was allowed, but at that time countries did not have any emission reduction targets.

Some countries oppose the idea of an international body overseeing carbon trading under the Paris Agreement [reportedly Australia, Canada and Japan], and have argued for more control and flexibility between nations for buying and selling carbon credits.

What needs to be changed

Better enforcement of ambitious targets: The 26th COP is set to start the five-year process of updating emission reduction ambitions pledged by countries through their NDCs. So far, 77 countries, including the United States (US), United Kingdom (UK) and Canada, have announced net-zero targets.

But not all countries have ambitious targets and the rulebook fails to take notice of this, said Bhasin of CEEW. For instance, of Canada, the European Union, the UK and the US, only the UK's ambitions are rated in line with the steps needed for achieving the 1.5°C limit in temperature rise by 2030, according to the Climate Action Tracker put together by Climate Analytics and the New Climate Institute.

There is also pressure on countries, including India, to move towards net-zero emission targets, said Bhasin. Committing to net-zero targets would mean reducing emissions substantially and removing residual emissions through afforestation and deployment of expensive carbon capture technologies. In September 2020, China had announced it would achieve net-zero emissions by 2060. While India needs to take bold climate action, net-zero emissions is not a way forward given its economic circumstances, IndiaSpend reported in April 2021.

The emphasis on net-zero emissions also takes attention away from what countries are currently doing to limit climate change. "This entire narrative of net-zero is not a requirement of the Paris Agreement. But talking about the future target is a very convenient way of not taking into account what countries should have done till date," said Bhasin.

Stronger emphasis on common but differentiated responsibility: The United Nations Framework Convention on Climate Change adopted the common but differentiated responsibilities framework at the 1992 Rio climate summit. The framework acknowledges that richer countries have the responsibility for providing financial and technological assistance to developing and vulnerable countries to fight climate change. Further, not all countries would have similar emissions reduction targets, given that the historical responsibility of developing countries in greenhouse gas emissions is marginal compared to developed countries'. For instance, India accounted for 3% of the world's cumulative carbon emissions between 1850 and 2010, whereas the US accounted for 27%, according to the World Resources Institute.

India, along with countries in Africa and the Gulf, has reportedly demanded relatively softer language in the rulebook for developing countries. "The rulebook looks at every country to be equally responsible, and while there are flexibilities to developing nations, they are still not enough," said Prasad of CEEW.

Enforce financial help from developed to developing countries: A lot of countries pledged their NDCs on the assumption that developed countries would provide financial and technological support to meet these targets, said Bhasin, but that has not happened.

Developed nations will fall short of providing up to $75 billion of the $100 billion committed per year between 2020 and 2025 to financially support developing countries to reduce their emissions and control global warming, an Oxfam report, published on September 20, estimated. In 2017-18, developed countries effectively provided between $19-$22.5 billion of the estimated $59.5 billion that they had reported to the UNFCCC as climate finance, according to Oxfam's Climate Finance Shadow Report 2020. Further, 80% of all reported public climate finance for 2017-18 was not in the form of grants, rather loans and other non-grant instruments, the report estimated.

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