South Africa


  • Service: Advisory, Risk & Compliance, Sustainability Services
  • Type: Business and industry issue
  • Date: 2010/12/07

Moving towards climate change consensus – expectations of Cancun 

The United Nations Conference on Climate Change in Cancun, Mexico (COP 16) from 29 November to 10 December 2010 occurs in a vexed context and amidst some of the toughest debates around negotiations on international climate policy. The last meeting in Copenhagen (COP15) in 2009 failed to produce agreement on mitigation action, irregularities in climate data dented the credibility of climate science and public support for climate action has diminished. Yet, much can still be achieved at Cancun to create enabling conditions for an overarching climate deal at the next meeting in Durban in December 2011.

Grounding a deal on forests

Estimated to account for 12% to 17% of total greenhouse gas emissions, deforestation is likely to remain a prime area of focus. The Copenhagen Accord, the non-legally binding political statement of COP15, provided broad support to combat deforestation through the Reducing Emissions from Deforestation and Degradation (REDD) mechanism, which uses carbon markets to provide economic incentives for protecting forests. Africa, rich in forests of prime conservation value, is an important stakeholder in this process and stands to be a primary recipient of carbon finance through this mechanism.

Clarity in Cancun on the specifics of REDD would be a major win to halt the destruction of forests, and a key lever for including developing countries in an overarching climate change mitigation agreement. The key areas requiring attention include the types of forests and restoration quality required under the scheme, how changes in forest stocks will be monitored, reported and verified and the types of financial support that developing countries will receive for implementing REDD projects.

Building trust through finance

Under the Copenhagen Accord, developing countries are to receive financing from advanced economies to mitigate their emissions and adapt to the impacts of climate change. Cancun would do well to develop the financial architecture required to support these commitments, which are estimated to require a total of US$30 billion over the next three years and US$100 billion a year from 2020. Africa’s minimal share of global emissions and high vulnerability to climate change makes carbon finance a key aspect of any future deal for the continent.

This must address three key components: how the funds will interact with existing aid commitments and delivery, the bilateral and multilateral channels that will be used to disburse the payments, and the monitoring, reporting and verification requirements accompanying the use of the funds. Delivering on these funding commitments is critical to establish the elusive trust amongst developed and developing nations upon which a global climate deal hinges.


Bringing adaptation to the fore

The need to help countries adapt to the expected impacts of climate change is well recognised in the Copenhagen Accord. Building this resilience and capacity is of utmost importance to Africa and inextricably tied to meeting the continent’s pressing developmental needs. However, the exact mechanisms through which resources for adaptation will be disbursed and the means of coordinating these activities at a global level remain unresolved. Against the backdrop of a series of extreme weather events in 2010, finalising an agreement on adaptation in Cancun would provide a clear direction to steer negotiations on mitigation actions.

There are many multilateral initiatives already underway for climate change adaptation in developing countries such as the Kyoto Protocol Adaptation Fund and the Global Environment Facility. Cancun needs to provide clarity on what a future adaptation framework will consist of, and how it will interact with these existing instruments. A credible, broadly acceptable framework that urgently facilitates adaptation in developing countries would demonstrate clear and present progress towards global action on climate change.


Looking ahead

The prospects of a binding climate deal emerging from Cancun are slim. Yet, it represents an opportunity to address questions of detail in the implementation of emerging mechanisms so that we are firmly on the road to a ‘Durban Declaration’. Equally, the multilateral process is only one conduit for global cooperation on issues related to climate change. Key decisions are taken through other multilateral initiatives such as the Major Economies Forum and the G20, as well as through bilateral agreements similar to carbon markets agreements initiated by Japan. Amidst this amalgam of global cooperation of climate change, a strong and growing contingent of businesses, communities and individuals have embraced a more responsible attitude towards the environment. Clearly, this will place them in good standing when the policy dust has settled.


Rohitesh Dhawan, a Resource Economist at KPMG in South Africa, will be in Mexico for the duration of COP16 and can be followed on Twitter.