CCXG Forum Discusses Climate Finance, 2015 Agreement

OECD_NEWMarch 2014: A group of country delegates and experts, known as the Climate Change Expert Group (CCXG), held its Global Forum for exchanging information on technical issues in the international climate change negotiations. The Forum provided a platform for an informal dialogue among countries on climate financing, creating a durable and flexible agreement in 2015, and accounting.

The Forum, which was held in Paris, France, from 18-19 March 2014, was attended by, inter alia, the Co-Chairs of the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP). The event opened with an overview of energy research carried out by the International Energy Agency (IEA). IEA's four measures to keep average warming below 2°C were presented for countries' consideration in developing their own mitigation strategies. The four measures are: partial phase-out of fossil-fuel subsidies; energy efficiency policies; limiting use of inefficient coal plants; and reducing methane releases from upstream oil and gas operations.

The Organisation for Economic Co-operation and Development (OECD) presented analyses of climate change costs and mitigation benefits, as determined through its method called 'Cost of Inaction and Resource Scarcity; Consequences for Long-term Economic Growth' (CIRCLE). These results are particularly relevant to discussions of loss and damage, as they take into account sea level rise, health, ecosystems, crop yields, tourism flows, energy demand and fisheries. However, extreme weather and catastrophic risks are not included.

A break-out group on both days of the Forum covered replicating and scaling up climate finance interventions, with particular emphasis on lessons learned in working with the private sector. According to a presentation on the experience of PROPARCO (a French development finance institution) and ICCF (a European co-financing vehicle), renewable energy projects are relatively easier to finance than energy efficiency projects, and securing financing for higher-risk projects is often easier than finding private sector organizations willing to develop these projects.

The European Bank for Reconstruction and Development (EBRD) outlined barriers to its Sustainable Energy Initiative (SEI), such as regulatory constraints, lack of information and difficult access to finance. EBRD identified the key ingredients of SEI's success in overcoming these barriers as: an ability to work with governments to enable regulations; the provision of technical assistance and incentives; and mainstreaming SEI projects across the EBRD portfolio.

A session on creating a post-2015 climate change agreement that is both durable and flexible (to allow for scientific discoveries, external changes and shocks) considered options for revisiting and adjustment processes. The pros and cons of periodic, triggered and ad hoc mechanisms for revisiting parties' contributions to the agreement were presented.

The break-out session on accounting discussed approaches to measuring greenhouse gas (GHG) reductions under non-market and market transfers (such as trading emissions reduction credits for offsetting). IEA provided an overview of possible examples of double-claiming, whereby two parties might count the same emissions reductions toward their respective targets.

In closing the Forum, summaries of each of the three focus areas were presented. The key takeaways from the climate finance discussions were the importance of information flow, monitoring and evaluation (M&E), and institutions. Key elements of an enabling environment that attracts private sector investors were also summarized, with the suggestion that future work focus on how the post-2015 agreement could help foster that environment.

The emerging themes from the post-2015 agreement session were identified as, inter alia: the difficulty of changing domestic policy outcomes after they are completed, general agreement to embrace the role of non-UNFCCC actors, and the need for creative ways (i.e. safety valves, moratoriums) to discourage backsliding.

Lastly, accounting difficulties were summarized, including: the complications with using business-as-usual (BAU) reference levels; the complexity that diverse nationally determined contributions (NDCs) will create; and the possibility that the framework for REDD+ reference levels might converge with post-2020 land-use accounting.

CCXG usually meets twice a year, bringing together OECD and other industrialized countries, giving government, private sector and civil society representatives the opportunity to discuss and develop papers on technical issues related to climate change negotiations. CCXG was formerly known as the 'Annex I Expert Group.' [OECD CCXG Webpage] [CCXG Global Forum Agenda] [CCXG Presentations] [ADP Co-Chairs' Corner]