By Michael Simire Deputy Sunday Editor, Daily Independent
Two major issues will be of outmost concern to Nigeria and other developing nations attending the United Nations Climate Change Summit that commences in Durban, South Africa next week: the Green Climate Fund (GCF) and the Kyoto Protocol (KP).
While countries are set, on one hand, to finally decide on the KP’s future – something they have put off for several years; the modalities and sources of finance for the GCF is, on the other, expected to be finalised.
A structure designed in 1997 to curb greenhouse gas (GHG) (or carbon) emissions – essentially from industrialised countries, the KP’s initial phase ends in 2012. Nigeria and other developing nations are clamouring for a second commitment period, stressing that a follow-up should, just like the original agreement, ensure that wealthy countries agree unilaterally to cut steeper emissions and poorer ones cut carbon voluntarily after financial assistance from the rich.
The Clean Development Mechanism (CDM) is a notable feature of the KP that numerous developing nations are involved in. The CDM provides option for a developed nation to buy emission reduction credits (CERs) from a project in a developing country. The CDM has so far financed low carbon projects in developing nations to the tune of $187 billion.
But the KP’s – and thus the CDM’s – outlook appears uncertain as Japan, Canada and the Russian Federation have said that no new treaty is possible unless all major economies – including the United States and China – agree to the same legal terms. The European Union has, however, left the door open to a second commitment period, pointing out that it would agree to a second phase only if it were linked to a solid agreement detailing how and when other countries’ pledges would be placed onto a legally agreement.
Of concern is the fact that there seems to be no definitive market for Nigerian and some other ‘African countries’ CDM credits after 2012. The EU has included the CDM credits only for the group of Least Developed Countries (LDCs), of which Nigeria does not belong. So, will the EU at Durban propose to accept CERs from all African countries and not just the LDCs after 2012?
Indeed, an extension of the KP or reaching another global agreement that makes significant use of CDM credits in Nigeria would increase demand and encourage more project development. Nigeria currently operates five CDM projects, three of which are gas capture schemes.
Also, Durban will decide whether Kyoto Protocol or Annex-1 financing through CDM type mechanism will be extended to post 2012, just as BASIC and other emerging countries will consider moving out of Annex-1 CDM type financing, to ensure progress in post 2012 talks.
Further, the decision whether to include market-based mechanisms such as CDM and carbon markets as part of developing country NAMAs will be taken at Durban, and could affect the development of Nigeria’s NAMA and resulting projects. In fact, uncertainties surrounding the KP’s continuation in the post-2012 era are likely to slow down the nation’s drive towards reducing emissions especially from gas flaring, which is currently supported by CDM income.
Will the GCF’s modalities and sources of funding finalised in Durban? Wealthy nations have vowed to deliver $100 billion annually by 2020 for poor and vulnerable nations to adapt to climate impacts and develop low-carbon economies. To make this a reality, countries have been in the process of establishing a format for the GCF, agreed to at last year’s summit in Cancun, Mexico.
A Transitional Committee comprising 40 members from developed and developing countries (excluding Nigeria) are mandated to design the GCF and make recommendation for the approval of the COP in Durban. A Standing Committee will assist the COP in mobilising financial resources and ensuring that it is measurable, reportable and verifiable. The World Bank was approved as the interim GCF trustee, which will administer the fund, subject to review three years after its (the fund’s) operationalisation.
Where the money will come from is generating controversy. Developing countries insist that the money – perceived as compensation to poor countries for the environmental harm industrialised ones caused by emitting carbon dioxide into the atmosphere for decades – comes from public coffers in the United States, European countries, Australia, Japan and other wealthy nations.
But the US and others do not see it that way – they insist that developing countries should have no say in where the money they get comes from. They maintain that, in line with the agreement in Cancun, it is up to developed countries how best to raise the money.
Nigeria however appears to lack an institutionalised framework that supports a domestic climate finance regime. The First National Communications under the UNFCCC last prepared in 2003 provides some form of guide on national circumstances on climate change, minus the financial needs assessment of what is required to address the situation. Though several climate change initiatives are being proposed, including the setting up of a Climate Change Trust Fund, most of such initiatives seem not within the context of any policy and are indeed yet to materialise.
A key requirement for accessing international funding is the ability for recipient country to demonstrate financial managerial integrity, with strong institutional and legal capacity to monitor and track funds in the implementation of projects and programmes. These condition precedents have fully come to play in the operations of funds like the Adaptation Fund and the World Bank’s Climate Investment Funds, thereby underlying the role of strong national institutions for climate governance.
Reducing Emissions from Deforestation and Forest Degradation (REDD), the climate change mitigation strategy that compensates poor nations for keeping their forests standing, will likewise get a look-in at Durban. The forum will decide whether the REDD mechanism will get a final shape to be used for compliance.
Recently, Nigeria made a breakthrough in its REDD+ Process when it was given the all-clear by the United Nations REDD Programme to access a $4 million fund to kick-start its local programme, which the state of Calabar in the nation’s South-South region is promoting.
The fund will support the country’s capacity to prepare and implement REDD+ strategies with the active involvement of local stakeholders, including Indigenous Peoples and other forest-dependent communities, with the ultimate goal of contributing to the global fight against climate change.
But some loose REDD+ ends might need to be tied at Durban, such as those related to appropriately defining the concept. It appears that words like “forest degradation,” “sustainable management of forests” and “conservation” are yet to be defined; a situation that could stall the measurement of progress or pay for performance, which is central to the REDD+ discussions.
Additionally, experts are of the view that more guidance is required for countries to develop national reference emissions levels (RELs), which will determine the potential compensation a country could receive from REDD+ for a given level of activity.
While Nigeria undergoes a series of pre-COP 17 deliberations that would decide the country’s official position at the global forum, it is pertinent that stakeholders strive to ensure that the interests of Africa in general – and Nigeria in particular – are properly reflected in the outcome of Durban. Indeed, parties should go all-out for a breakthrough to inherent questions if they are to be seen as serious about climate change.