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Effectiveness of UNFCCC in addressing climate change

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Abstract and Figures

Examines the effectiveness of UNFCCC in developing and co-ordinating climate change policy.
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Effectiveness of UNFCCC
in addressing climate change
Henk Harmsen
University of Nairobi
Wangari Maathai Institute for Peace and Environmental Studies
1 March 2018
Contents
1 Introduction 1
2 Methods 1
3 Results 2
3.1 Scientific evidence for climate change . . . . . . . . . . . . . . . . 2
3.1.1 History and scientific consensus . . . . . . . . . . . . . . . 2
3.1.2 The concept of climate change and its impacts . . . . . . . 4
3.2 Climate change policies . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2.1 History of climate change policies . . . . . . . . . . . . . . 5
3.2.2 Foundation: the UNFCCC . . . . . . . . . . . . . . . . . . 6
3.2.3 Binding commitments: the Kyoto Protocol . . . . . . . . . 7
3.2.4 Voluntary commitments: the Paris Agreement . . . . . . . 9
3.2.5 Doing nothing: undermining climate change policy . . . . 10
3.2.6 Emission of greenhouse gases . . . . . . . . . . . . . . . . 11
3.2.7 The rise and fall of the Clean Development Mechanism . . 14
3.2.8 Financial Mechanism . . . . . . . . . . . . . . . . . . . . . 18
4 Discussion 19
4.1 Climate change science . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 Climate change policies . . . . . . . . . . . . . . . . . . . . . . . . 20
4.3 Involvement of non-Annex I countries . . . . . . . . . . . . . . . . 20
5 Conclusion 21
References 22
A Climate change: cause and effect 27
i
B The Paris Accord emissions gap 28
C Governance structure of the UNFCCC 29
ii
List of Figures
3.1 The mechanism of climate change . . . . . . . . . . . . . . . . . . 4
3.2 Worldwide greenhouse gas emission trend . . . . . . . . . . . . . 11
3.3 Worldwide greenhouse gas emission trend per region . . . . . . . 13
3.4 CERs issued per project type. . . . . . . . . . . . . . . . . . . . . . 15
3.5 CERs issued per region. . . . . . . . . . . . . . . . . . . . . . . . . 16
A.1 Climate change: cause and effect of climate change . . . . . . . . . 27
B.1 Forecasted greenhouse gas emissions and gap with Paris Agreement
target .................................. 28
C.1 Structure of the UNFCCC . . . . . . . . . . . . . . . . . . . . . . . 29
List of Tables
3.1 Climate change science timeline . . . . . . . . . . . . . . . . . . . 3
3.2 Climate change policies timeline . . . . . . . . . . . . . . . . . . . 6
iii
1 Introduction
Humans influence the climate system, and recent climate changes are already re-
sulting in widespread impacts on human and natural systems (IPCC, 2014). Cli-
mate change is defined as:
“... a change of climate which is attributed directly or indirectly to hu-
man activity that alters the composition of the global atmosphere and
which is in addition to natural climate variability observed over compa-
rable time periods”. (United Nations, 1992).
The human activity referred to consists of the release of greenhouse gases into the
atmosphere and modification of carbon sinks. There are grave concerns that the
current and projected rate of emissions will lead to irreversible damage to the Earth’s
climate system (Ripple et al., 2017; Rockström et al., 2009; Steffen et al., 2015).
The United Nations Framework Convention on Climate Change leads global efforts
to limit climate change. The question is whether it has been effective in addressing
this issue between its inception in 1992 and the ratification of the Paris Agreement
in 2016.
2 Methods
The evaluation of “effectiveness” requires that the term is defined first. “Effective-
ness” is the relation between output and outcome (Inspectie Ontwikkelingssamen-
werking en Beleidsevaluatie, 2009; UNODC, 2017). In the case of UNFCCC, out-
puts are decisions and outcomes are policies that implement these decisions1. The
extent to which this policy is implemented in countries can be expressed in terms
of a reduction in the emissions of greenhouse gases that would not have occurred
in the absence of these policies.
1As opposed to “efficiency” (relation between inputs and outputs) and “relevance” (relation between
outcome and impact).
1
Decisions are taken on the basis of scientific evidence. The scientific evidence for
climate change has been mapped and is discussed in section 3.1. The policy de-
cisions that have been taken have been inventorized and are discussed in section
3.2. The policy reaction to a crisis such as climate change may be insufficient, even
in the face of overwhelming evidence. Political forces that counter climate change
policies are discussed in section 3.2.5.
3 Results
This section assesses the evidence for climate change (section 3.1) and the policies
that have been put into place to address it (section 3.2).
3.1 Scientific evidence for climate change
The history of climate change science is described in section 3.1.1. The concept of
climate change and its impacts are set out in section 3.1.2.
3.1.1 History and scientific consensus
The first measurements on the effect of greenhouse gases were made by John Tyn-
dall (Tyndall, 1859). The effect of a doubling of a the CO2 concentration in the
atmosphere was estimated at 5 C to 6C by Arrhenius in 1896, an estimate that is
not too far from our current estimation of 1.5C to 4.5C (Houghton, 2004).
The first concern about the relation between carbondioxide and climate change was
made in 1957; (Revelle and Suess, 1957) likened the CO2emissions to “an uncon-
trolled geophysical experiment”. It was however only in 1988 that the Intergovern-
mental Panel on Climate Change (IPCC) was created by the World Meteorological
Organisation (WMO) and the United Nations Environment Programme (UNEP)
(General Assembly of the United Nations, 1988). It produced a series of assess-
ment reports (IPCC, 1990, 1995, 2001b, 2007, 2014) that rapidly narrowed down
the certainty about the human origin of climate change and its effects from “not
possible yet” (IPCC, 1990) to “clear” (IPCC, 2014).
2
The rapid evolvement of climate science has been made possible by provision of
better data. In order to acquire reliable national greenhouse gas data, IPCC has
put into place a standard procedure for the collection, compiling and reporting of
greenhouse gas emissions for Parties to the UNFCCC (see section 3.2.2). This sys-
tem consists of reporting guidelines for national inventories (IPCC, 2006), quality
assurance procedures (IPCC, 2001a) and a common reporting format (CRF).
Today, over 97% of climate scientists are convinced that climate change is happen-
ing and attributable to humans (Maibach et al., 2014). The economic impacts of
climate change are estimated at “5% of global GDP each year, now and forever”
(Stern, 2007).
Year Event
1860 John Tyndall measures and documents infrared absorbtion capacity of CO2 and
CH4.
1896 Svante Arrhenius quantified effect of CO2 on the climate.
1957 Revelle and Suess liken the buid-up of CO2 in the atmosphere to a ”large-scale
geophysical experiment”
1979 World Climate Conference: ”It appears plausible that an increased amount of
carbon dioxide in the atmosphere can contribute to a gradual warming of the
lower atmosphere, especially at higher latitudes...”
1988 Establishment of the Intergovernmental Panel on Climate Change
1992 First Assessment Report: No unequivocal detection of the enhanced greenhouse
effect from observations is possible yet.
1995 Second Assessment Report: ”The balance of evidence suggests a discernable
human influence on global climate.”
2001 Third Assessment Report: ”An increasing body of observations gives a collective
picture of a warming world and other changes in the climate system.” ; ”There is
new and stronger evidence that most of the warming observed over the last 50
years is attributable to human activities.
2007 Fourth Assessment Report: ”Warming of the climate system is unequivocal.”;
”There is now higher confidence than in the TAR in projected patterns of warming
and other regional-scale features, including changes in wind patterns,
precipitation and some aspects of extremes and sea ice”.
2014 Fifth Assessment Report: ”Human influence on the climate system is clear, and
recent anthropogenic emissions of greenhouse gases are the highest in history.
Recent climate changes have had widespread impacts on human and natural
systems. ”
Table 3.1: Climate change science timeline
3
3.1.2 The concept of climate change and its impacts
The physical process behind the greenhouse gas effect is now well understood and
summarised in figure 3.1. Of the 100 units incoming short-wave radiation, about
30 are reflected by clouds or the Earth’s surface (albedo); 50 units warm the Earth’s
surface and 20 units are net input to clouds and atmosphere. To balance this incom-
ing radiation, 70 units are reflected back to space in the form of long wave radiation.
Without this natural greenhouse effect, the Earth would be 18 C instead of 15 C.
A surplus of greenhouse gases leads to a higher absorption of long wave radiation
in the atmosphere, and to balance the energy budget the Earth’s surface will have
to warm up (Clayton, 1995).
Earth's land and ocean surface
warmed to an average of 14
Heat and energy
in the atmosphere
Greenhouse gas
absorption: 350
Solar Radiation
absorbed by Earth
235 W/m²
Thermal radiation
into space: 195 Directly radiated
from surface: 40
168 324
492
67
The
Greenhouse
Effect 492
452
Figure 3.1: The mechanism of climate change. Source: Rekacewicz and Bournay,
UNEP-Grid-Arendal
4
Human activities, such as fossil fuel combustion and land use change, lead to in-
creased concentrations of greenhouse gases in the atmosphere. Apart from carbon-
dioxide (CO2), there are six other greenhouse gases, namely methane (CH4), ni-
trous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur
hexafluoride (SF6) and nitrogen trifluoride (NF3). Each of these six other gases has
higher capacity to absorb long wave radiation (Global Warming Potential (GWP)),
and this allows to convert a mix of greenhouse gases into CO2equivalents.
The increased concentrations of these gases lead to the enhanced greenhouse effect
as explained above. This global warming results in physical effects. The increased
temperature causes ice caps to melt and the oceans’ water to warm up; this results in
a sea level rise. Other physical effects are more extreme weather events, changes in
rainfall patterns and changes in the thermohaline circulation. Changes in climates
can be sudden and irreversible.
These physical effects damage ecosystems, with grave consequences for humans
(health, economy, safety) and other beings in the ecosystems (biodiversity). This is
summarised in figure A.1.
3.2 Climate change policies
The history of climate change policies is shown in section 3.2.1. An UN organisation
has been co-ordinate the development of climate change policy (section 3.2.2).
There are two groups of Parties to the UNFCCC: Parties with an emission reduction
target (Annex I) and those without one (non-Annex I). The Annex I Parties have
committed themselves to emission reductions via the Kyoto Protocol (section 3.2.3),
followed by the Paris Agreement (section 3.2.4).
Another line of action for coping with climate change is to declare it a hoax (section
3.2.5). Non-Annex I countries can achieve emission reductions via the Clean Devel-
opment Mechanism (section 3.2.7) and the Financial Mechanism (section 3.2.8).
3.2.1 History of climate change policies
Table 3.2 shows the timeline of the development of global climate change policies.
5
Year Event
1988 UN General Assembly A/RES/43/53: Establishment of Intergovernmental Panel
on Climate Change (IPCC)
1992 United Nations Framework Convention on Climate Change (UNFCCC): Establish
national greenhouse gas inventories; Annex I countries commit to GHG emission
reductions; Goal: stabilization of GHG to prevent dangerous human interference
with climate
1997 Kyoto Protocol to the UNFCCC: Annex B: countries with quantified emission
reduction commitments; Establishment of flexible mechanisms (Clean
Development Mechanism, Joint Implementation, Intergovernmental Emissions
Trading); Goal: Annex B countries reduce GHG emissions with 5% vis-a-vis 1990
baseline in the period 2008-2012.
2005 Kyoto Protocol entered into force Start of European Union Emissions Trading
System (EU ETS)
2012 End of the first commitment period of the Kyoto Protocol Doha amendment to the
Kyoto Protocol (not ratified as per January 2018)
2013 Start of the second commitment period of the Kyoto Protocol
2015 Paris Agreement: - Hold global average temperature increase well below 2C of
pre-industrial levels - Voluntary emission reduction targets via Nationally
Determined Contributions - Entered into force on 4 November 2016
2017 United States of America announces intention to withdraw from Paris Agreement
Table 3.2: Climate change policies timeline
3.2.2 Foundation: the UNFCCC
The IPCC assessment reports were quickly followed up by climate change policy.
The United Nations Framework Convention on Climate Change (UNFCCC) was
established during the Earth Summit in Rio de Janeiro (United Nations, 1992). The
objective of the Convention is “...stabilization of greenhouse gas concentrations in
the atmosphere at a level that would prevent dangerous anthropogenic interference
with the climate system”. In order to so, developed countries commit themselves to
limit emissions (Annex I countries) and to assist developing countries in meeting
the costs of adaptation to the adverse effects of climate change (Annex II countries).
The Convention created a number of bodies that support its operations:
the Secretariat (Art. 8): organisation of the annual Conference of the Par-
ties (CoP) and its subsidiary bodies, collect and disseminate information, and
facilitate assistance to the Parties, especially developing country Parties.
Subsidiary Body for Scientific and Technological Advice (SBSTA) (Art. 9):
provide the Parties with scientific and technological advice.
6
Subsidiary Body for Implementation (SBI) (Art. 10): assist the CoP with the
assessment and review of the implementation of the Convention.
Financial Mechanism (Art. 11): mechanism for the provision of financial re-
sources on a grant or concessional basis, including for the transfer of technol-
ogy.
The overall structure of the UNFCCC is shown in figure C.1.
The Parties to the Convention are required to develop national emission registries,
and report their emissions to the UNFCCC according to a Common Reporting For-
mat (IPCC, 2001a, 2006; UNFCCC, 2018d). Each Party is also required to submit
National Communications (NCs). Annex I countries report on policies that aim to
reduce greenhouse gas emissions and enhancement of sinks. Non-Annex I coun-
tries focus on adaptation and the information on their greenhouse gas inventories.
Least Developed Countries (LDCs) also submit National Adaptation Programme of
Actions (NAPAs), which list the most urgent activities that are required to adapt to
climate change.
3.2.3 Binding commitments: the Kyoto Protocol
The Kyoto Protocol (KP) to the UNFCCC is the first quantitative emission reduction
commitment by Annex I Parties (United Nations, 1998). These emission reduction
targets apply to the commitment period 2008-2012 compared to the baseline year
1990 and are listed in Annex B.
Flexible mechanisms The Protocol allows for flexibility in achieving the reduction
targets, in the sense that Annex B countries can reduce emissions elsewhere. To
this end, each Party is allocated Assigned Amount Units (AAU) that correspond to
the total target emissions over the period 2008-2012. These AAUs can be traded
(International Emissions Trading). Alternatively, Annex I Parties can implement
emission reduction projects. The achieved emission reductions are then allocated
by the UNFCCC. Reduction projects in Annex I countries result in Emission Re-
duction Units (ERUs) via Joint Implementation (JI). Emission reductions in non-
Annex I countries are rewarded as Certified Emission Reduction Units (CERs) via
the Clean Development Mechanism (CDM).
7
These so-called “flexible mechanisms” have three advantages over conventional
national-based emission reduction programmes. First, they allow to achieve the
largest emission reduction for the lowest cost, as projects will focus on reductions
with low marginal costs. Second, the CDM connects Annex I and non-Annex I
countries. It thus allows Annex II Parties to meet part of their obligations by emis-
sion reductions and technology transfer to non-Annex I Parties. Finally, the flexible
mechanisms allow the private sector to develop and implement reduction projects.
This allows for implementation of projects for which funds would otherwise not
have been available.
The mechanisms, and especially the CDM, have been criticised as offering the 21th
century equivalent of Roman Catholic “indulgences”. This critique is especially pop-
ular with NGOs that conflate climate change policy with policy tools (see for example
(Smith et al., 2007)). The CDM is discussed in more detail in section 3.2.7.
Free riders: withdrawals from the Protocol The United States signed but never
ratified the Kyoto Protocol. The concerns listed about the Kyoto Protocol were that
“...it exempts 80 percent of the world, including major population centers such as
China and India, from compliance, and would cause serious harm to the U.S. econ-
omy.” (Dessai, 2001). After the start of the first commitment period (2008), it be-
came clear that Canada would not be able to meet its reduction commitments, and
Canada subsequently withdrew from the Kyoto Protocol. The Canadian environ-
ment minister, Peter Kent, said that “The Kyoto Protocol does not cover the world’s
largest two emitters, the United States and China, and therefore cannot work.” (The
Guardian, 2011).
European emissions trading The European Commission launched the European
Union Emissions Trading System (EU ETS) in 2005 (European Commission, 2018).
The EU ETS is a cap-and-trade emissions trading system that covers over 11,000
energy-intensive installations in the European Union. It covers 45% of greenhouse
gases in the European Union and is the world’s largest emissions trading market
(European Commission, 2016). The EU ETS allows linkage with other emissions
trading schemes, such as the CDM.
8
Fade out: the Doha Amendment Subsequent Conferences of the Parties (CoPs)
did not succeed in agreeing on binding emission reduction targets until the Doha
Amendment to the Kyoto Protocol UNFCCC (2012). The Doha Amendment forms
the second commitment period of the Kyoto Protocol (2008-2020), but is not rati-
fied to date UNFCCC (2018c). Moreover, the governments of Japan, Canada, New
Zealand and the Russian Federation informed the UNFCCC Secretariat that they
do “...not intend to assume a quantitative emission limitation or reduction commit-
ment for the second commitment period”.
3.2.4 Voluntary commitments: the Paris Agreement
Following this de facto collapse of the Kyoto Protocol, the Parties reached the Paris
Agreement during CoP21 in 2015 (United Nations Framework Convention on Cli-
mate Change, 2017). The Agreement entered into force on 4 November 2016 and
will start in 2020 (UNFCCC, 2018e). The aim is to keep the increase in global
average temperature well below 2 C above pre-industrial levels.
The Paris Agreement does no longer foresee in mutually agreed quantitative emis-
sion reduction. Instead thereof, Parties submit Nationally Determined Contribu-
tions (NDCs); these define what each Party thinks is an ambitious and achievable
target. Initial NDCs were set in 2015.
There is no enforcement regarding the setting and meeting of emission reduction
targets. Progress on implementation of the NDC will take place via a “Facilitive
dialogue” that will not focus on individual Parties. In spite of the non-committal
nature of the Paris Agreement, the United States nevertheless announced its inten-
tion to withdraw from it on June 1st, 2017, citing “draconian financial and economic
burdens the agreement imposes on (the United States)” (White House, 2017). The with-
drawal of the United States is thought to affect climate finance rather than global
emissions (Urpelainen and Van de Graaf, 2017).
9
3.2.5 Doing nothing: undermining climate change policy
Climate change deniers: doubt is our product Science moves slowly: it forms ten-
tative hypothesis which are tested, updated, challenged, improved and refined. It
cannot offer absolute proof, only falsification, something that politicians and me-
dia feel uncomfortable with. This is leveraged by industrial groups and politicians
that have no direct interest in the reduction of greenhouse gas emissions, for ex-
ample because they support the fossil fuel industry. This demand for “proof” from
scientific research in order to undermine its credibility has been termed “Scientific
Certainty Argumentation Methods (SCAM)” (Freudenburg et al., 2008).
The tobacco industry realised that it is easier to fight scientific consensus than poli-
cies (as formulated by an employee in the tobacco industry: Doubt is our product”,
(Unknown, 1969)). Small amounts of scientific dissent can significantly under-
mine the public support for environmental policies (Aklin and Urpelainen, 2014).
This phenomenon has been exploited by the tobacco industry (Bricker, 2014; Ong
and Glantz, 2001) and further used by the American Petroleum Industry (American
Petroleum Institute, 1998) and American conservate think-tanks (Lewandowsky
et al., 2013).
Emails have been stolen from climate scienctists and wilfully misrepresented
(Bricker, 2013; Editorial, 2010). ExxonMobil has pursued climate change denial
strategy towards the public while its own scientists were convinced of and concerned
by climate change (Supran and Oreskes, 2017). The media contribute to the per-
ception that there is no scientific consensus by given equal amounts of coverage
to climate change deniers and mainstream scientists (Brüggemann and Engesser,
2017).
Conspiracy theories: the Chinese hoax The findings of climate change science can
be construed as a secret plot by powerful individuals or organisations (Lewandowsky
et al., 2013; Uscinski et al., 2017). This is found to be related with ideology (Douglas
et al., 2017): for example, only 7% of American conservative republicans believe that
climate scientists’ reseach findings are using the best available scientific evidence;
only 13% believes that human behaviour is responsible for climate change (Funk
and Kennedy, 2016). Below is one example of conspiracy thinking:
The concept of global warming was created by and for the Chinese in
order to make U.S. manufacturing non-competitive. - (Trump, 2012)
10
3.2.6 Emission of greenhouse gases
Historical emissions in relation to the Kyoto Protocol The emission of greenhouse
gases worldwide is shown in figure 3.2. The emissions have been split into the world
total (“World”) and countries that have committed to an emission reduction under
the Kyoto Protocol (“Annex B”). There are Annex B countries that are in a transition
towards a market economy, these have been labeled as “Annex B, transition”. Figure
3.3 shows the historical greenhouse gas emissions per region.
Figure 3.2: Worldwide greenhouse gas emission trend. Data source: (European
Commission et al., 2018)
11
The plot shows that the countries with an emission reduction target under Annex
B of the Kyoto Protocol represent only a small portion of the World’s greenhouse
gas emissions. During the negotiation of the Kyoto Protocol they represented 18%
of the global greenhouse gas emissions (United States excluded). At the end of the
commitment period (2012) this was reduced to only 13% (Canada included), due to
the rapid growth of the emissions of non-Annex I countries. The Doha Amendment
has seen the withdrawal of Japan, New Zealand, the Russian Federation and Canada.
This reduces the share of Annex B countries in the world’s emissions to a non-
significant (but not unimportant) fraction.
The East European countries and the Russian Federation experienced an economic
recession in the early 90’s, resulting in a sharp decrease of greenhouse gas emis-
sions. This created a large gap between the baseline year (1990) and the the commit-
ment period (2008-2012). The gap liberates a large amount of Assigned Amount
Units that these countries wanted to sell; these emissions are known as “hot air”.
In summary, UNFCCC has not been effective in introducing effective climate
change policies. The countries with emission reduction targets represent just 13%
of the world’s greenhouse gas emissions; the United States and Canada have left
the Kyoto Protocol; part of the emission reductions can be attributed to economic
effects rather than an effort to reduce emissions; the countries without emission
reductions have seen sharply increasing greenhouse gas emissions. The situation
is depicted in the plot below.
12
Figure 3.3: Worldwide greenhouse gas emission trend per region. Data source:
(European Commission et al., 2018)
Even the successful emission reduction of the European Union is not without
caveats. The production of goods for this economic bloc is increasingly taking place
in non-Annex B countries, such as China. This means that greenhouse gas emis-
sions are “outsourced” from the European Union, a phenomenon known as “leak-
age”. One study estimated this leakage at 1.6 Gt CO2 in 2008 (Peters et al., 2011).
Including these emissions in the Annex B group would void the emission reduction
success.
Projected emissions under the Paris Agreement UNEP estimates that the cur-
rent Nationally Determined Contributions (NDCs) are not consistent with the goals
of the Paris Agreement. The annual greenhouse gas emissions are projected to
be around 60 Gt CO2eq/year in 2030, whereas an emission of around 42 Gt
CO2eq/year is required to keep global warming within 2 C pre-industrial levels
(UNEP, 2016). This is shown in figure B.1.
13
3.2.7 The rise and fall of the Clean Development Mechanism
The case of the Clean Development Mechanism (CDM) is important to evaluate how
the role of UNFCCC has played out in the relation between Annex I and non-Annex
I Parties. The mechanism is administered by the Executive Board (EB), assisted by
the Secretariat of the UNFCCC.
Because CDM projects take place in non-Annex I countries, there are no “quota”
to transfer (such as Assigned Amount Units (AAU) from International Emissions
Trading (IET) between Annex I Parties). The CDM therefore generates offsets (emis-
sion reductions) via een project-based baseline-and-credit system. These Certified
Emission Reductions (CERs) can be used to (1) meet the requirements of installa-
tions that participate in the European Commission Emissions Trading System (EU
ETS), and to (2) allow Annex I Parties to meet their Kyoto targets.
The EB instructed UNFCCC to issue around 1.9 Gt in CERs in the period 2005 to
date. As can be seen in plot 3.5, this has mainly been for Asia and the Pacific region
(mainly China and India), and mainly for industrial gases. The CDM also covers
afforestation and reforestation projects, the so-called Reducing Emissions from De-
forestation and Forest Degradation in Developing Countries (REDD+) (UNFCCC,
2018g). In January 2018 25 projects were registered and 11 Mt CERs were issued
(Fenhann, 2018).
14
Figure 3.4: CERs issued per project type. Data source: (Fenhann, 2018)
15
Figure 3.5: CERs issued per region. Data source: (Fenhann, 2018)
Generating CERs is a complex procedure, and involves obtaining Host Country ap-
proval, demonstration of project additionality, independent validation of the Project
Design Document (PDD), monitoring and independent validation of the monitor-
ing report. The time period between the start of public consultation and issuance of
the first CERs takes typically between 1,000 and 1,500 days (Fenhann, 2018). The
complexity of the rules, the costs of hiring independent third parties and the waiting
times contribute to high transaction costs.
The criticisms of the CDM can be centered around the following topics: (1) design;
(2) additionality; and (3) governance.
16
Design The CDM works with a project-based baseline-and-credit system because
it takes place in Parties that have no “quota” or emission reduction targets; the de-
mand must come from baseline-and-credit systems that have such quota (mainly
the EU ETS). The oversupply of emission quota in the EU ETS and the economic
recession of 2008 reduced the demand so much that the price of CERs fell to 0.40
EUR/CER (Carbon Pulse, 2016), down from 20 USD/CER in 2008 (The Economist,
2012). This resulted in the collapse of the CDM, as new issuances result in a loss
for the CDM projects. As can be seen in the plots above, the supply curves flatten
out after 2012, meaning that supply essentially stopped.
Additionality Each project must undergo an additionality test before it is regis-
tered UNFCCC (2018b). The Executive Board has approved around 40 tools for
assessing additionality, baseline validity and emissions leakage. Broadly speaking,
additionality refers to the likelihood that a project would have taken place in the
absence of the policy intervention, in this case the CDM. Assessing additionality is
difficult because the project baseline has gone once it starts; the validator has to as-
sess an unobserved, hypothetical scenario (Gillenwater, 2012). In view of the CER
price volatility outlined above, financial additionality for CDM projects is a risky un-
dertaking. The additionality of industrial gases projects was deemed insufficient,
leading to the banning of these projects from the EU ETS (European Commission,
2011). Concerns were also raised over the additionality tests of hydropower, noting
the improbability that a mature and common practice technology would depend on
CDM to go ahead (Haya, 2007).
Governance The governance of the UNFCCC is has led to high transaction costs.
The CDM does not allow direct contact between project proponent and the UN-
FCCC secretariat; procedures are lengthy; the perception is that CDM is “slow,
opaque, unresponsive and politicized” (High-Level Panel on the CDM Policy Dia-
logue, 2012). The Executive Board is legislator, administrator and judge, all at the
same time (UNFCCC, 2018a), and therefore the “Trias Politica” of good governance
is violated.
17
3.2.8 Financial Mechanism
The Convention has a Financial Mechanism, consisting of the Green Climate Fund
(GCF) and the Global Environment Facility (GEF). The GEF administers the Least
Developed Countries Fund and the Special Climate Change Fund. During the 21st
Conference of the Parties it was decided that all these funds would serve the Paris
Agreement. Another fund, the Adaptation Fund may be included later. (UNFCCC,
2015). The World Bank’s Clean Investment Funds consist of the Clean Technology
Fund, the Strategic Climate Fund, the Pilot Program for Climate Resilience, Forest
Investment Program, and the Scaling Up Renewable Energy in Low Income Coun-
tries Program (Climate Investment Funds and CIF, 2018). As can be seen in the
overview below, there is overlap between the activities of some of these fund.
GCF helps developing countries limit or reduce their greenhouse gas (GHG)
emissions and adapt to climate change (GCF, 2018).
GEF invests in energy efficiency, renewable energy, sustainable transport and
climate-smart agriculture to support mitigation (GEF, 2018).
The Adaptation Fund finances climate change adaptation and resilience activ-
ities in developing countries (Adaptation Fund, 2018).
Clean Investment Funds (Climate Investment Funds and CIF, 2018):
The Clean Technology Fund (CTF) provides middle-income countries to
scale up the demonstration, deployment, and transfer of low carbon tech-
nologies in renewable energy, energy efficiency, and sustainable trans-
port.
The Pilot Program for Climate Resilience (PPCR) is helping developing
countries integrate climate resilience into development planning.
The Scaling Up Renewable Energy in Low Income Countries Program
(SREP) is helping to deploy renewable energy solutions for increased
energy access and economic growth in the world’s poorest countries.
The Forest Investment Program (FIP) supports efforts of developing
countries to reduce deforestation and forest degradation and promote
sustainable forest management that leads to emissions’ reductions and
enhancement of forest carbon stocks (REDD+).
18
The withdrawal of the United States from the Paris Agreement has consequences
for climate funds. It contributed about USD 2.7 billion per year in 2013 and 2014,
constituting for over 10% of the public climate finance that flowed from developed
to developing countries. The United States has pledged 3 billion USD to the GCF,
but has delivered only 1 billion. The remaining 2 billion USD are unlikely to be
delivered, thus jeopardizing 20% of GCF’s budget (Urpelainen and Van de Graaf,
2017).
4 Discussion
Climate change science (section 4.1) has developed rapidly, whereas implementa-
tion of policy measures has been developing much slower (section 4.2). After an
initially rapid development, the CDM (section 4.3) has sizzled out and has not yet
been replaced by a more robust policy instrument.
4.1 Climate change science
The IPCC has managed to provide clarity on climate change science in a relatively
short time span. The majority of climate scientists (> 97%) now agrees that climate
change is caused by humankind and that there will be grave consequences if the
issue is not addressed urgently. Another achievement of IPCC is the introduction
of standardized national greenhouse gas emission inventories, which are regularly
reported according to a common reporting format. This makes it possible to add
greenhouse gas emissions of different countries, the development of scenarios and
the setting of meaningful reduction targets.
Climate science has proven to be an easy target for climate change deniers and
conspiracy theorists. These groups have learned from the tobacco industry that
it is easier to fight climate science than climate policies. This is made possible
because the general public concludes that absence of absolute proof means that the
science is likely to be correct. The media make matters worse by giving as much
attention to the 97% mainstream climate scientists as to the 3% climate deniers -
thus suggesting a 50/50 consensus. The withdrawal of the United States from the
Paris Agreement has proven that climate change deniers and conspiracy theorists
have real influence on climate cooperation.
19
4.2 Climate change policies
Global climate change policy, as coordinated by UNFCCC, has made less progress.
The first and only international agreement that sets outs quantitative targets - the
Kyoto Protocol - has seen limited success. Canada and the United States have with-
drawn from the protocol during the first commitment period (2008-2012), whereas
Japan, New Zealand and the Russian Federation have indicated that do not intend
to participate in the second commitment period (2012-2020). The Doha Amend-
ment to the Kyoto Protocol has not been ratified as per January 2018. The emission
reductions that it would cover have become marginal with the withdrawal of the
aforementioned countries. Moreover, the greenhouse gas emissions of countries
that were not covered by reduction targets (non-Annex I) have grown rapidly.
The Paris Agreement, the policy environment for 2020 onwards, hinges on an im-
portant assumption, namely that countries can be trusted to set and implement
their own emission reduction targets. The current targets (Nationally Determined
Contributions) are not sufficient to limit global temperature rise well below 2C
above pre-industrial levels. The United States has chosen to be withdraw from the
Agreement, leaving a financial gap in the Green Climate Fund.
4.3 Involvement of non-Annex I countries
An attempt to include non-Annex I Parties in the reduction of greenhouse gas emsi-
sions has also been only partially successful. The Clean Development Mechanism
has been able to generate 1.9 Gt in emission reductions. However, this was mainly
achieved in a select group of countries and focussed on industrial gases. Doubts
have been raised over the additionality of industrial gas and hydropower projects.
The governance of the CDM has not been able to develop an accessible and stream-
lined process and it combines too many roles. The CDM depends on demand from
policy regimes with an enforced emission reduction target. The supply of emission
reductions has outstripped that demand, leading to the collapse of the CDM after
2012.
There is a plethora of climate funds with sometimes overlapping objectives. The
withdrawal of the United States from the Paris Agreement has jeopardized an im-
portant source of funding for the Green Climate Fund.
20
5 Conclusion
The vast majority of climate scientists agree that climate change is occurring and
manmade. Damage to ecosystems is already occurring and the costs are estimated
at 5% of global GNP, now and forever. It is therefore of vital importance that climate
change policy as coordinated by the UNFCCC finds a response to this threat in the
short term.
The effectiveness of UNFCCC can be expressed as the extent to which global policy
decisions are implemented in national measures to reduce climate change policies.
The UNFCCC has been effective to only a limited extent. Global emissions of green-
house gases are rising; the Kyoto Protocol covered less than one fifth of these emis-
sions; the Doha Amendment to the Kyoto Protocol has not been ratified and has
also become irrelevant with the withdrawal of some large emitters; and the Paris
Agreement hinges on the assumption that countries will collectively implement
sufficient voluntary emission reduction measures - which is currently not the case.
The withdrawal of the United States from the Paris Agreement has jeopardized the
Green Climate Fund.
21
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Annexes
A Climate change: cause and effect
Figure A.1: Climate change: cause and effect of climate change. Source:
Rekacewicz and Bournay, UNEP/GRID-Arendal
27
B The Paris Accord emissions gap
Figure B.1: Forecasted greenhouse gas emissions and gap with Paris Agreement
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C Governance structure of the UNFCCC
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29
... 2 Another example is the Financial Mechanism, see (Harmsen, 2018 (Reuters Staff, 2012). All registered CDM projects have successfully argumented that they need CER revenues to function. ...
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