A report from the World Meteorological Organization released just prior to COP25 offered a stark summary: 2019 was one of the hottest years in recorded human history and the year with the highest mean sea level on record. Other data suggest that nearly a third of all residents of remote island nations live no more than a few meters above sea level, meaning their survival is inextricably tied to the global community’s efforts to reduce emissions and prepare for climate change.
It is in this context that nations convened in Madrid last month for COP25. And it is in this context that parties punted discussions to the next COP meeting in 2020 about a global emissions trading system and a formal mechanism for funding climate change adaptation efforts in developing nations. According to Nathaniel Keohane from the Environmental Defense Fund on a recent episode of Resources Radio, this year’s conference “was basically a failure.” Robert Stavins, a university fellow at Resources for the Future (RFF) and a Harvard professor, is more optimistic, but he still argues that a lack of guidance on carbon pricing represents a “significant unfulfilled objective.”
One factor in the standstill is that smaller, developing countries—low-lying island nations, most prominently—are increasingly requesting financial assistance to deal with climate change. In debates over carbon pricing, these nations insisted on a “share-of-proceeds” tax on traded emissions offsets, which could finance an Adaptation Fund to help countries with modest financial resources meet the challenge of climate change. Such a mechanism would have the potential to hinder trade, according to both Keohane and Stavins, which would run counter to the ostensible purpose of an emissions trading system. But a mechanism like this also would provide recourse to the many countries that are already reckoning with the consequences of climate change.
Debate about a “loss-and-damage” mechanism unfolded similarly. “Loss and damage” effectively boils down to one question, according to Keohane: “Could we envision a UN mechanism to compensate countries that are suffering the impact of climate change … that would be paid for by the rich countries?” More specifically, a formal review of the Warsaw International Mechanism (WIM) for Loss and Damage, a framework to provide capital to countries vulnerable to the effects of climate change, was scheduled for this year’s COP. First created at COP19, the WIM was subsequently incorporated into the Paris Agreement, but only on the condition that it would “not provide any basis for establishing liability and compensation.” Much of the developing world has argued that this arrangement leaves the WIM effectively toothless.
A lack of agreement at COP25 over the purpose and structure of WIM was predictable to Keohane, but the tenor of the debate was notably “quite acrimonious.” A delegate from Tuvalu, a sparsely populated island nation especially vulnerable to changes in sea level, called the standstill “an absolute tragedy and travesty.” In response to resistance primarily from the United States and other big polluters, a Palestinian diplomat who organized a bloc of developing countries told Politico: “At the end of the day, [rich countries] started the fire … and the fire is eating everything around us.”
Disputes between the developed and the developing world over moral responsibility for climate change are nothing new. Stavins has written about how “developing countries had no emissions reduction commitments” under the Kyoto Protocol, an arrangement which especially riled developed nations like the United States. Comparatively, the Paris Agreement has had more success, according to Stavins, because it encouraged action from all signatories, subsequently inspiring a “broad scale of participation.” But at COP25, many vulnerable nations framed these long-running points of conflict around more contemporary shifts in the climate: they reiterated their desire to set new climate targets as prescribed by the Paris Agreement, but emphasized that such goals are too financially perilous if natural disasters continue straining their economies. While the world’s leading economies emphasized “ambition,” low-lying island nations made clear their more imminent priority is survival.
Already, negotiators for developing nations have signaled a refusal to walk back their positions at COP26 later this year. But beyond even the potential for a future share-of-proceeds tax or a loss-and-damage mechanism, the intensity of debates at COP25 suggest that future discussions might continue to be framed in terms of what the world’s leading economies owe to more vulnerable ones. If the currently dire projections for rising temperatures and sea levels remain the same, then small, developing, and island nations might amplify their calls for a paradigm shift in how responses to climate change are financed.