Meeting of the Major Economies Forum
September 29-30, 2015
The Major Economies Forum met in New York on September 29-30, 2015. The meeting was chaired by U.S. Deputy National Security Advisor Caroline Atkinson and attended by ministers and officials from 16 of the major economies, with ministers and officials from Angola, Egypt, the Gambia, Marshall Islands, New Zealand, Norway, Peru, St. Lucia, Saudi Arabia, Singapore, Switzerland, Turkey, and the United Arab Emirates also participating. The co-Chairs of the ADP attended, as did representatives of the UNFCCC Secretariat and the UN Secretary-General’s Office. In addition, U.S Secretary of State John Kerry hosted a session for foreign ministers. This summary reflects the conclusions of the Chair.
At the Special Foreign Minister’s Session, Secretary Kerry stressed that climate change has to remain a top priority. He noted the progress made in the last year, including with the U.S.-China Joint Announcement, and with Intended Nationally Determined Contributions submitted by countries amounting to over 70 percent of global emissions. He recognized the technical aspects of the negotiations but urged Foreign Ministers to stay focused on the bigger picture. The incoming president of the Conference of the Parties, French Foreign Minister Laurent Fabius, emphasized that all issues cannot be settled at the last minute, and encouraged negotiators to find compromises before Paris, at the next negotiating session in Bonn. Several foreign ministers highlighted the role that foreign ministers can play in advancing momentum toward a Paris outcome. They stressed the serious threat posed by climate change for security and for economic and social development, characterizing climate change as an urgent foreign policy issue. A number of ministers highlighted the importance of resolving specific issues, including: giving greater effect to the long term temperature goal; ensuring that the agreement is durable and can promote increased ambition over time in a dynamic manner; ensuring that the agreement reflects the concerns of the particularly vulnerable countries; and reaching robust outcomes on adaptation and support.
Over the two-day meeting, facilitators led thematic sessions to seek convergence on how the Paris outcome could address certain key issues. The first day covered three topics: sessions on transparency and on a long-term goal were facilitated by Kwok Fook Seng of Singapore; and a session on differentiation was led by Michael Zammit Cutajar, Adviser to the Institute for Sustainable Development and International Relations (IDDRI, Paris). The focus of the second day was on finance, with Elliot Diringer, of the Center for Climate and Energy Solutions, facilitating three sessions.
A constructive transparency session built upon the discussion at the July MEF. Participants agreed that robust transparency for action and for support is critical for both the credibility of the agreement and to build confidence among Parties.
There was growing convergence on the need for a new, enhanced transparency system, applicable to all. A number of Participants emphasized that a robust system will need to track individual and collective Party performance over time. Participants acknowledged the fact that different Parties have differing capacities, and that, as a result, differentiation must be built into the system, for example by providing flexibility on frequency and content.
Some Participants noted there should also be a transition period for those countries with capacity constraints. In this regard, there was general agreement that capacity building is essential to help developing country Parties in need to enhance their reporting ability over time and thus participate effectively in the system. A suggestion was made that capacity could be bolstered through a system similar to that adopted under the Montreal Protocol, which would fund dedicated in-country positions to help build expertise.
More specifically, there was general or emerging convergence that:
- the enhanced system should be facilitative, non-intrusive and non-punitive;
- it should promote improvement in reporting over time;
- the fundamentals of the system should be established in the agreement, with details to be worked out in the post-Paris work program;
- the system would be tailored as appropriate for the different areas of action and support;
- for mitigation, reporting and review is critical to track Parties’ progress towards, and achievement of, the implementation of their nationally determined mitigation contributions;
- it was important to have common accounting rules;
- for adaptation, reporting is important to facilitate the sharing of experiences and lessons learned; and
- for support, there should be clarity and transparency on tracking progress in the provision and receipt of support, and outcomes achieved.
In the long-term goal discussion, Participants addressed the issue of whether the Paris outcome should contain an additional long-term goal beyond the below 2-degree temperature goal.
A number of Participants, recalling that Parties had agreed at Cancun to review the below 2 degrees’ long-term temperature goal, as well as work under the 2013-2015 Review, supported strengthening it to a ‘below 1.5 degree’ goal. Other Participants expressed concerns about complicating the landscape with additional goals, beyond the stabilization of greenhouse gases objective contained in the Convention and the below 2 degree temperature goal. Still other Participants emphasized the importance of an aspirational goal that provides a direction of travel to mid- and/or end-century, and sends signals at both the national and global levels, including – importantly – to the private sector to spur investment and innovation.
Participants explored the merits of various collective aspirational options including: decarbonization; net zero; climate or carbon neutrality; global low-carbon transformation; and a green low-emission development path.
A number of Participants also noted the importance of Parties submitting longer-term, low emissions strategies focused on the period beyond 2030 and potentially out to 2050. Finally, it was generally agreed that a long-term goal might usefully include references to climate resilience and adaptation, an issue that was discussed in greater detail at the July MEF.
The constructive session on differentiation continued the July MEF discussion on the subject in relation to mitigation. There was broad agreement that the mitigation element of the agreement should be based on “nationally determined” contributions, that all Parties should submit such contributions, that LDCs should have discretion with respect to implementation, that there should be support for certain costs incurred by developing countries, and that there should be an expectation of forward movement over time (sometimes called “progression”). As to whether such elements sufficiently reflect common but differentiated responsibilities and respective capabilities, in light of different national circumstances, an interesting discussion followed. No one disputed the need for differentiation to continue in the new agreement; the question was whether to present Parties’ mitigation efforts by category or as a continuum. It was also noted that, as a de facto matter, well over a hundred Parties had, as of the meeting, already submitted INDCs, covering over 70 percent of global emissions. Parties will need to be able to view the agreement as reflecting an appropriate balance between their varying national circumstances and the collective effort.
The day-long discussion of finance identified areas of convergence and divergence.
Participants recognized that shifting to a low-emission, climate-resilient global economy will require actions by all Parties. Many Participants noted that the Paris outcome should reflect a shared effort by all Parties to mobilize resources from all sources, both public and private, including domestic resources. In this regard:
- Participants differed as to which Parties should provide support to those in need post-2020. Although most Participants expressed the view that the Paris outcome should recognize an expanded donor pool, some Participants described this as parties “willing to do so” while others used the formulation “in a position to do so” or those who “can.”
- There was a general sense that the Paris outcome should reflect the fact that all Parties should integrate climate considerations into investment decisions both internationally and domestically.
- Some Participants expressed the view that the Paris outcome should address the need to scale down international investment for high-emission activities and fossil-fuel subsidies, and some Participants noted that the Paris outcome should address carbon markets.
- Participants generally agreed that domestic regulatory and investment frameworks (i.e., enabling environments) play a critical role in attracting and effectively deploying climate-friendly finance. However, some Participants noted that this is an issue for all countries, not just recipient countries. They noted that cooperation and capacity-building may be required in order to enhance developing countries’ enabling environments, but that the creation of enabling environments cannot be used as a condition for assistance.
- Participants recognized that public resources should be focused where they are needed most, noting the vulnerabilities of small island developing states and the least developed countries in this regard. Some Participants emphasized that adaptation efforts are more dependent upon public resources, while others cited examples where private investment can play a role in adaptation projects.
- Finally, all Participants recognized the importance of transparency in building trust and confidence in the critical area of finance, with several highlighting that transparency is important not just with respect to support provided and received and the use to which funds are put, but also with respect to actions taken to enhance domestic regulatory and investment environments.
All Participants believed that financing should continue at robust levels post-2020, but they differed as to whether the Paris outcome should contain a quantitative target.
- Some Participants believed a quantitative target was necessary to provide some certainty and predictability post-2020, and that the Paris outcome should contain both quantitative and qualitative elements. They expressed the view that finance post-2020 must build upon pre-2020 commitments, such as the $100 billion goal. Some considered that the absence of a quantitative goal post-2020 would be “backsliding,” while others rejected the notion that the 2009 mobilization goal set a floor for the future.
- Other Participants outlined the reasons why they believed a quantitative target for post-2020 does not make sense or could be harmful (e.g., it looks as if finance is a means in itself; any such number would be inherently arbitrary and/or inappropriate for a durable agreement; it would not take into account the role of enabling environments, etc.).
With respect to forward-looking finance strategies, there was a general sense they could be a useful component of the Paris finance outcome, but a range of views were expressed on the parameters for such submissions:
- Some Participants expressed the view that all Parties should submit such strategies, with recipient countries providing information relevant to their domestic regulatory and investment environments.
- Some Participants said it was important for such strategies to provide quantitative information, while others stressed they could not support a requirement to provide forward-looking quantitative information.
- On timing, some Participants noted that the timing of finance strategies will depend in part on national budget cycles, which vary and may require built-in flexibility.
A number of Participants emphasized the importance of enhancing transparency and predictability of climate finance in the pre-2020 period, including through replenishment of funds targeted at the needs of LDCs, and by continuing to strengthen the methodologies for tracking mobilized climate finance.