Let us be smart about 'differentiation'

The core aspect of disagreement, or distrust, that has emerged at the Paris climate conference is “differentiation”, or how to differentiate the actions of developed and developing countries. This isn’t the first time this issue, that can only be resolved at the level of political decision-making, has figured or emerged as a core issue in climate negotiations. It has been there since the Bali Action Plan of 2007. In Paris, though, this issue has acquired a more serious dimension than ever before. At stake is the very integrity of the climate convention, the basis for all the negotiations that have taken place, and are taking place.

Developed countries want the annex-based differentiation to go. In the 1992 climate convention, two annexes, or lists of countries, were created. Annex 1 (developed countries) and non-Annex-1 (developing countries). This was created, and listed in the Convention via a rigourous INC process that lasted two years—INC stands for the Intergovernmental Negotiating Committee, that finalised the text of United Nations Framework Convention on Climate Change (UNFCCC), as it stands today, 1990-1992—to reflect the fact that some countries were historically responsible in causing the "forcing" that led to climate change and that some countries had pressing, important priorities such as poverty eradication and therefore had the right to emit, for their economic development. Under the Convention, developed countries were also mandated to support developing countries with finance and technology development and transfer, so that they could better adapt to the impacts of climate change and, also, better transition towards a low-carbon economy.

But now, developed countries believe that such differentiation is no more valid. They point to countries such as South Korea, Singapore, Israel, Saudi Arabia, Kuwait, UAE who are non-Annex 1 countries. These countries have high per capita emissions, high per capita income and high human development index. Lately, the North has also started including China, Brazil, South Africa and India in this "new", "changing" list because of their high aggregate total emissions and rapid economic growth.

Developing countries, on the other hand, are convinced that Annex-based differentiation must continue. Their conviction is based not only on the fact of historical emissions, but also that Annex 1 countries, even now, have very high per capita emissions. If we take 1850 as the starting point, then more then 60 per cent of all CO₂ emitted so far has been from developed countries. Developing countries believe the historical responsibility of developed countries remain as valid, today, as they were in 1992.

What adds to this belief is the sad fact that, since 1992, developed countries have hardly met their commitments. They have failed to meet their commitments on finance. They have failed, collectively, to reduce Annex 1 emissions as significantly as they promised. Whatever emissions have reduced in Annex 1 countries is because of outsourcing of emissions to countries such as China and India. That is, the developed countries, instead of manufacturing products in their own countries, are now outsourcing industrial products from the developing countries.

This contest now threatens to rip apart the Convention. Developed countries are now saying that the Paris agreement need not be under the UN Climate Convention, rather could be “supportive” to the convention. This is a red line for many developing countries. They will never accept this. Here is a devastating impasse.

To break this impasse, it important to deconstruct the politics of differentiation. So far as developing countries are concerned, even if some developing countries are not comfortable with annex-based differentiation (such as some least developed countries and AOSIS), all want, in greater or lesser degree, the Convention principles of Equity and Common But Differentiated Responsibilities (CBDR), to get reflected in each and every element of the Paris deal.

But developed countries are out to bypass the Convention, going by their press briefings and by their negotiation behaviour—the new redlines they keep proposing. The ‘differentiation’ quotient they have for different elements of the deal are all different. Whether it is mitigation, adaptation and providing finance and technology. For mitigations or emissions reductions, they have proposed (and now it is universally accepted) “self differentiation”. That is, countries will self-differentiate their mitigation targets through the bottom-up process of Intended Nationally Determined Contributions (INDCs). As President Obama put it in his original style at the opening of the Paris climate conference: "Targets that are set not for each of us, but by each of us’ (emphasis added)”. And as Todd Stern unilaterally declared in his first press briefing of December 2: ‘the [INDC] targets are not legally binding’ (emphasis added).

Formulations such as these are in the advantage of developed countries. In such a regime stark "self regulation", no one can push nations such as the US to undertake deep de-carbonisation of their economies. They, therefore, have provided significantly weak mitigation targets in their respective INDCs. In fact, they will continue to misappropriate the remaining carbon space.

The world just has 1,000 gigatonnes of atmospheric, emitting, space. Shouldn’t the developed world vacate this space so that countries like India, South Africa, Bolivia, Brazil, Angola, and another 129 developing, least-developed, existentially threatened nations survive and grow? This is the question the developed countries are assiduously avoiding at the Paris CoP.

On finance, they are talking about “dynamic differentiation”. They are using terms like “evolving responsibilities and capabilities” which means that when a developing country crosses a certain threshold (say in terms of per capita emissions or income), they too should contribute to finance. Lately, developed countries have started saying the developing countries “a position to do so” should contribute to finance.

Developed nations have been vocal about their financial support to Least Developed Countries and AOSIS and not to countries like India. This is pure "salami tactics": break the unity of developing countries in Paris. They are offering money to some of the poorest countries of the world, so that they just keep quiet vis-a-vis the positions of countries like India.

So, at this juncture, it is important for the developing countries to be smart about differentiation. They cannot keep parroting the old melody.

On the mitigation side, it is quite clear the bottom-up, self-differentiated approach is built on weak climate integrity. It will always be "lowest common denominator". We will never be able to keep global temperature increase within the 2-degrees safety threshold under this approach.

Similarly, on finance it is impractical on the part of developed countries to say that their financial support will only be for Least Developed Countries. Simply because countries such as India have a very large number of poor people and they, too, need support for adaptation and loss & damage.

Lastly, it is in no one’s interest to say that countries like South Korea, Saudi Arabia, UAE, Kuwait or Singapore should not do more. But it is unfair to treat these countries as if they were developed countries. The reason is very simple. Their historical responsibility in causing climate change is still far lower than that of developed countries.

So how should we move ahead?

• We can solve the problem of differentiation by operationalizing equity and allocating fair share of carbon budget to countries based on the CBDR principle. This will allow every country to know their limits. Every country will have clear targets on mitigation- developed or developing. This will be a true differentiation, for those countries that have used their carbon budget in the past will have less in the future and vice-versa. This approach also has in-built environmental integrity, for the total carbon budget that will be distributed will be compatible to meeting the 2 degrees target
• Under any fair distribution formulation, developed countries will have a relatively low budget from now till 2100, because they have overused their budget. So they will have to perform mitigation actions in developing countries to meet their fair target. This will unlock the carbon market. Developing countries can decide to sell their fair share to developed countries and use the money to invest in low carbon infrastructure and energy access. Developed countries can invest in low carbon projects in developing countries to take emission reduction credits. But all this should be done keeping in mind the big mistakes made in the Clean Development Mechanism (CDM)
• On technology, developed and developing countries (including the private sector in both spheres) should come together and invest in technology development and make Intellectual Property Rights (IPR) of key technologies accessible to all. All countries can contribute. And all relevant IPR should be there for the taking. India’s International Solar Alliance is one such example where all countries can invest to reduce the cost of solar technologies and make it accessible to all. Similarly, President Obama’s Mission Innovation will help both developed and developing countries on clean energy. So, on the question of technology, there can be global collective effort to make technology available to everyone that wishes to decarbonize. Here, it is hoped developed countries show the same hunger, or spirit, to decarbonise as they are urging developing countries to. The pace of decarbonisation can only be equal, truly global
• On adaptation and loss and damage, it should be the responsibility of developed countries to financially support developing countries to adapt, and provide, as well, relief & insurance for loss & damage suffered by them. The rationale is that the current impacts of climate change are because of the historical emissions of the developed countries. They, therefore, have the moral responsibility to ensure that the developing countries are shielded as far as possible from the impacts of climate change. Here it is important to understand that developing countries are already investing hugely on adaptation and loss and damage and would continue to do so in the future. Developed countries are just putting in money to enhance action. So, overall money is being put in adaptation and loss & damage by all parties
• On finance, developed countries must collectively meet their pledge of $100 billion by 2020. We know that this will not be sufficient and hence we must agree on some mechanism to ratchet up the contribution of developed countries post 2020. But this won’t be sufficient
• So I propose that developing countries with resources can contribute to a South-South solidarity fund run by the United Nations or some other multilateral body. China has already announced its contribution to South-South Cooperation Fund. Other developing countries can also do so
• So, we will have two funds – one contributed by the developed countries (including GCF) and other by developing countries
• On financial support, those developing countries that do not want to take the support can unilaterally announce so at Paris. I would propose developing countries with high Human Development Index (0.85 and above) should certainly unilaterally announce that they would not take support from developed countries. Countries like South Korea, Singapore, UAE, Saudi Arabia, Kuwait and so on fall in this category. These countries should also be encouraged to contribute to the south-south fund
• On reporting and transparency, which is largely a matter of capacity, developed countries should financially and technically support developing countries in building their capacity for the next 10 years. 2025 onwards, there can be a uniform system of reporting for all. So, the differentiation here is merely time-bound, though support-dependent
• Reporting and transparency of the financial support of the developed countries is also very important. So, there should be a detailed protocol on how developed countries would report and verify their financial contributions.

The above 10 point approach is a honest way to deal with differentiation. It keeps the annexes yet encourages more developed non-Annex countries to contribute more to strengthen global solidarity around climate change. It also operationalizes differentiation is true sense through fair allocation of carbon budget.   

All the above things can be done within the Convention and therefore there is no need to rewrite the convention or the annexes.

Let’s be smart. It is too late to get bogged down.