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High road to Dubai COP28: Can Bonn climate conference iron out disagreements around loss & damage fund

The funding sources should be expanded to include innovative sources such as taxes and levies

The current sources of climate finance are mostly loan based, which increases the debt burden of developing countries that are already facing development challenges. Photo: UNFCC. The current sources of climate finance are mostly loan based, which increases the debt burden of developing countries that are already facing development challenges. Photo: UNFCC.

The discussions around making the Loss and Damage Fund (LDF) fully operational by the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCC) seem to be heading in the wrong direction due to divergent views about the scope, scale and sources of the fund among developed and developing countries.

The Subsidiary Body (SB) conference at Bonn could be an opportunity for course correction to COP28, which will be held in the United Arab Emirates (UAE) later this year.

Also read: High road to Dubai COP28: Why discussions on carbon credits are important at upcoming Bonn climate conference

LDF was brought into existence at the COP27 in Sharm El Sheikh, Egypt, last November after a decades-long struggle by developing countries. The fund is essential for ensuring new, additional and predictable finance for communities most affected by rapid onset impacts of climate change, such as tropical cyclones, and slow onset impacts, such as sea level rise.

Among the 24 members of a Transitional Committee (TC) that was formed in March, 14 are from developing countries, and 10 are from developed countries. The committee’s formation was mandated by the decision text on LDF agreed upon at COP27, and its function was to make recommendations to COP28 towards the full operationalisation of the LDF.

The committee members had their first meeting from March 27 to March 29. In the first meeting, a work plan for the rest of the year was decided upon, which included the addition of a fourth meeting of the committee to the earlier three.

The members also decided that all the aspects of the LDF, such as the sources of the fund and other funding arrangements outside it and how these would be delivered to the communities/countries in need of the funds, would be discussed in each of the meetings.

In the first meeting, members agreed upon most things in principle, though fissures had begun to emerge about the scope and scale of the fund. They also decided on the importance that should be given to funding arrangements outside of the UNFCCC process, such as the Global Shield being led by the V20 group of vulnerable countries and the G7 group of developed countries.

After the first meeting, a workshop was held for the members from April 29 to April 30, wherein different humanitarian and environmental organisations and multinational development banks gave presentations about case studies related to addressing loss and damage.

By the second meeting from May 25-27, the Transitional Committee seems clearly divided between the global north and global south on the very focus of what the character of the fund should be.

At the SB 58, the second Glasgow Dialogue on June 8-10 would be an opportunity for the two sides to come together and course correct for the rest of the two TC meetings so that their recommendations for the COP can be delivered in time.

The developed countries want to minimise the scope of the LDF to addressing non-economic losses from slow onset impacts of climate change such as sea level rise.

Also read: High road to Dubai COP28: Climate finance will be key at Bonn Climate Conference

For relief and recovery after rapid onset events such as tropical cyclones, the developed countries want to rope in humanitarian agencies such as the International Federation of Red Cross and Red Crescent Societies and provide them with funding arrangements outside the UNFCCC process, such as the Global Shield which is predominantly based on insurance instruments with some social protection measures.

The humanitarian agencies are already overstretched with fatigue setting in for their donors. The scale, speed and access required for the LDF, especially in the context of continuous extreme weather events faced by countries, won’t be delivered by relying heavily on humanitarian agencies. However, their role cannot be downplayed.

“The developed countries basically want to minimise their contributions to the LDF and that is why they want to limit its scope as it would be under the UN process and the other funding arrangements outside the UN process such as the Global Shield would be more under their control,” said Harjeet Singh of the non-profit Climate Action Network International.

“Geopolitics should not decide the scale, scope and functioning of the LDF,” Singh added.

On the other hand, developing countries are calling for a grant-based, easily accessible LDF that has a broad scope and scale and can quickly disburse money to the communities in need of the fund. They also want it to be set up inside the UNFCCC process and governed by COP, with priority given to direct access to the funds for communities.

The funding sources should be expanded to include innovative sources such as taxes and levies in line with the principles of equity and common but differentiated responsibilities. This could include taxes on Shipping and aviation sectors and contributions from historical emitters of greenhouse gases.

This is because the most affected by the extreme weather events are also the least responsible for the greenhouse gas emissions that have caused the planet to warm by 1.1°C and changed major aspects of its climate, including extreme weather events.

The current sources of climate finance are mostly loan based, which increases the debt burden of developing countries that are already facing development challenges. LDF should also act as an oversight mechanism which would monitor the activities undertaken by the fund and assess if they have their intended impact.

Hence its governance is of utmost importance, which is being considered to be under the Santiago Network for Loss and Damage, which already has the mandate to advise countries on the technical aspects of Loss and Damage. A separate and new LDF with its own governance is the need of the hour.

This is not to undermine the roles of governments, whether national or local, in acting as the coordination nodes for the disbursements of the fund. All these aspects would hopefully be discussed and ironed out at the second Glasgow Dialogue at the SB 58.

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High road to Dubai COP28: Why discussions on carbon credits are important at upcoming Bonn climate conference

Bonn Conference will advance the work on how countries can cooperate to fulfil their nationally determined contributions to address climate change 

Carbon markets will be a key discussion topic at the Bonn Climate Change Conference in Germany, scheduled from June 5-15, 2023. 

The Bonn Conference will deal with technical details to feed discussions at the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change, which will be held in December 2023 in the United Arab Emirates.

COP27, hosted by Egypt last year, led to securing the establishment of a loss and damage fund, which had been negotiated upon and postponed for over three decades.

The Bonn Conference will advance the work on how countries can cooperate to fulfil their nationally determined contributions (NDC) through provisions made under Article 6 of the UN-mandated Paris climate pact. More than 66 per cent of countries plan to use carbon credits to meet their NDCs, according to the World Bank.

Also read: High road to Dubai COP28: What to expect at the upcoming Bonn climate conference

Carbon markets are trading systems in which carbon credits are sold and bought, according to the UN Development Programme.

Article 6 of the Paris Agreement deals with trading carbon credits. Clause 6.2 allows countries to trade greenhouse gas emission reduction outcomes, and 6.4 establishes a market for trading these reductions between countries under UN supervision.

Credits are certificates representing one tonne of carbon dioxide equivalent that has either been prevented from entering (emissions reductions) or removed from the atmosphere (CO2 removals). They can be generated from projects such as restoring forests, setting up renewable energy, managing industrial gases, etc.

In 2021 at COP26 in Glasgow, parties created a rulebook for carbon markets — a feat that took six years to achieve.

But the rulebook is far from complete. Negotiators still have to work out the architecture of the market and how emission reductions have to be reported, said Vladislav Malashevskyy, a member of YOUNGO, the official youth constituency at the UNFCCC. 

What happened at COP27?

Transparency emerged as a hot topic. Under 6.2, parties decided to keep information on carbon credits hidden after they had justified the reasons to the reviewers. If the review team spots inconsistencies, the party is encouraged to address them. They, however, cannot make confidential findings public, according to the adopted decision on Article 6 at COP27.

Some countries used national security to push confidentiality. “I think that’s a front for keeping the system secretive, which allows dodgy dealings to go on, which we know already happens under carbon markets and will allow countries to cheat the system, potentially,” Matt Adam Williams, climate and land lead at The Energy and Climate Intelligence Unit, a non-profit had told Down To Earth.

Article 6.4 had a rocky start at CoP27. The Supervisory Body — tasked with overseeing the Article 6.4 mechanism — recommended carbon removals. This was criticised by civil society groups and indigenous peoples.

Carbon removal’ means removing carbon dioxide from the atmosphere. It can be land-based, like afforestation or reforestation, ocean-based and engineering-based such as direct air capture (where big machines suck CO2).

The Supervisory Body’s recommendations provide a broad definition of removals. It does not distinguish between types of removals, including each activity’s requirements, risks and implications, according to Geoengineering Monitor, a project of Biofuelwatch, Heinrich Boell Foundation and the Global Forest Coalition. There were also concerns over human rights violations. 

Towards the end of the negotiations, parties asked the supervisory body to re-examine the recommendations on removals after considering the views of the parties and observers.

Another major aspect was renaming unauthorised emissions reductions — credits not authorised for NDCs or other international mitigation purposes — but could still be sold on voluntary carbon markets; the name was changed to “mitigation contribution emissions”.

Corporates, therefore, cannot use credits to offset their emissions when emission reductions are counted by a country, Gilles Dufrasne, Carbon Markey Watch’s lead on global carbon markets, said in a blog post.

What to expect at Bonn?

Under Article 6.2 discussion at Bonn, the Subsidiary Body for Scientific and Technological Advice (SBSTA) will recommend additional rules to help operationalise the cooperation between countries.

This includes discussing the special circumstances of least developed countries and small island developing states in the mechanism and transfer of Internationally transferred mitigation outcomes (ITMOs), a unit of trade. ITMO trading allows countries to purchase ITMOs from other countries

It would also address the question of when information should be treated as confidential regarding mitigation efforts, their transfer, and appropriation. The discussion would also cover other agendas, such as corresponding adjustments and the process for authorising and using ITMOs.

SBSTA’s agenda for Article 6.4 involves further work on the rules, modalities and procedures developed last year at Sharm-el-sheikh. Discussions will focus on three key aspects:

1. Determining if ‘emission avoidance’ (credits on projects that aims to prevent deforestation or pump less oil and gas) and ‘conservation enhancement’ (which could partially include land use emissions) activities fall within Article 6.4’s scope.

2. Establishing the specifics of the connection between the mechanism registry, international registry, and other registries, including interoperability between them. A registry is a centralised accounting and reporting platform.

3. Addressing the necessary information required for host parties’ authorisation statements on Article 6.4 Emissions Reductions (A6.4ER) transfers. The authorisation statement will declare whether the country requires A6.4ER for its own NDCs or other purposes.

Further, the Supervisory body will discuss removal activities based on the information note released by the secretariat. The note has attracted negative attention for its favoured stance on ‘nature-based removals’ as against ‘engineered removals’.

What should lie ahead?

After adopting a rule book for international cooperation at Glasgow, discussions on Article 6 have taken on a subdued tone, primarily focusing on procedural and technical questions. However, with increasing interest in meeting climate goals through markets, parties and non-party stakeholders are interested in having more clarity on the full operationalisation of Article 6.

The work done so far on Article 6.2 has enabled countries to start implementing the framework, with Switzerland signing bilateral agreements with multiple countries and Ghana providing the first set of authorisations for ITMOs to be used by Switzerland. However, the prescriptive framework provided in pursuit of the Article needs more carvings as answering questions on how countries would report information on mitigation and what information disclosures would be necessary.

The supervisory body needs to address several outstanding agendas, such as developing methodology, organising registries (including the overall infrastructure), and clarifying the activities that would be recognised as carbon removals to operationalise Article 6.4.

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‘Painting with fire’: How northern Australia developed one of the world’s best bushfire management programmes

From April to June each year, fire managers aim to create small, ‘cool’ fires with care and precision to reduce fuel loads before conditions get severe

Satellite imagery shows how burnt areas in central Arnhem Land are lines carefully ‘painted’ across the landscape. Photo: Sentinel Hub EO Browser, CC BY Satellite imagery shows how burnt areas in central Arnhem Land are lines carefully ‘painted’ across the landscape. Photo: Sentinel Hub EO Browser, CC BY

Right now, hundreds of bushfires are burning across northern Australia. But this is not a wildfire catastrophe — in fact, these burns are making things safer in one of the most fire-prone landscapes in the world.

From April to June each year, fire managers — such as Traditional Owners, park rangers and pastoralists — aim to create small, “cool” fires with care and precision to reduce fuel loads before conditions get severe later in the dry season. This work, “painting” landscapes with fire, is constantly informed by satellite data.

The combination of space technology with Indigenous knowledge and the know-how of pastoralists and park rangers has been everyday practice across northern Australia for the past 20 years.

Not only does this work produce some of the best fire management outcomes in the world, it also demonstrates how cutting-edge technology can inform local and traditional knowledge for environmental management.

The satellite view

In the early 2000s, researchers and land managers brought together by the Cooperative Research Centre for the Sustainable Development of Tropical Savannahs realised satellite imagery could be of great help for fire management across Australia’s vast tropical savannas.

These landscapes have always been prone to fire. After First Nations people moved away (or were forced) from these areas over the course of the 20th century, savanna fires became more frequent and intense.

Satellite imagery had long been used to understand the extent and severity of fires and other landscape-altering events. But researchers realised it could also be used to manage those fires — if up-to-date imagery could be provided to the public on a daily basis.

The result was regularly updated maps of recently burnt areas distributed via a website launched in 2003, hosted by Charles Darwin University — North Australian Fire Information (NAFI).

Twenty years on, NAFI’s maps of active fires and burnt areas underpin fire management across northern Australia. The maps are used for planning, response, implementation, and reporting.

Carbon credits and international attention

NAFI’s fire information also informs the federal government’s calculations for carbon credits related to reduced savanna burning, which many people across Australia’s north are using to generate income. Some of this income is then put back into work to reduce the extent and severity of fires.

NAFI fire data also inform the national Australian Fire Danger Rating System so it can be more effectively applied by bushfire agencies in remote areas.

The same data have provided evidence showing north Australia has had one of the most significant declines in fire across any large landscape globally.

The successes of the NAFI service are drawing international interest as a model for fire information in other fire-susceptible regions around the world.

Painting with fire

Most Australians have a poor understanding of the history of fire on this continent. Fire has been a key human—ecological force that shaped landscapes over tens of thousands of years.

Over the past 20 years, proactive use of fire for landscape management has been revived in northern Australia.

The scale of the work undertaken by Northern fire managers, particularly at this time of year when fuel load reduction burns are underway, is easy to see on NAFI.

A snapshot from NAFI from 15 May 2023. Each coloured dot represents an active fire. Photo: NAFI

Landscape-scale fire management, as applied in Northern Australia, is a sophisticated endeavour where science, technology and engineering support local knowledge.

Beyond science and technology

In a world rapidly being transformed by climate change, the skills required to make our societies sustainable and resilient involve more than just science and technology. Good environmental management will also require diverse, locally based skills and capacity to act.

Good fire management, as a case in point, requires an ability to blend skills and ways of thinking across multiple knowledge systems as well as a huge amount of hard work on the land.

Enabling easy, appropriately curated access to satellite-derived land information — and training to understand it — is critical.

Tiwi Rangers at a training session on using satellite data and digital mapping for fire management. Photo: Rohan Fisher, Author provided

NAFI also develops and delivers training for land managers.

Through workshops delivered across regional Australia, from remote Indigenous communities in the Kimberley and the top end to pastoralists in northern Queensland and central Australia, we are building high-tech capacity among those with the vital on-ground knowledge.

The journey of NAFI and fire management in northern Australia over the past 20 years illustrates how innovation is not just about technology, no matter how advanced. Innovation produces results when it is combined with other knowledge and put into the hands of the right people in the right way.The Conversation

Rohan Fisher, Information Technology for Development Researcher, Charles Darwin University and Peter Jacklyn, NAFI Service Manager and Knowledge and Adoption Coordinator, Charles Darwin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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