Climate Governance and Finance - Einzelansicht

International Climate Governance and Finance
University of Potsdam, Winter 2023/24
Prof. Dr. Charlotte Streck

Summary

As one of the greatest challenges of our time climate change has introduced a new pivotal point in human development. Consequently, environmental governance and, more specifically, climate governance has become a matter of foreign relations in the 21st century. The increasing competition for resources (land, food, and fuel) by existing and emerging world powers has profoundly changed the context of international environmental governance.

Climate change has the potential to amplify every crisis humankind faces, including population growth, strained water, food and other resources, and energy insecurity. The resulting need to impose limitations on the emissions of greenhouse gases and provide for adaptation strategies raises a multitude of political questions with a severe impact on the design and architecture of international agreements.

In 2015, 196 Parties to the UN Framework Convention on Climate Change (UNFCCC) adopted the Paris Agreement, a legally-binding framework for an internationally coordinated effort to tackle climate change. Achieving the 1.5C temperature goal of the Paris Agreement requires a quick de-carbonization of all sectors of our economy as well as enhanced carbon removals to balance emissions and sequestration of carbon in the second half of our century. The course will discuss to which extent the Paris Agreement and its implementation decisions are apt to facilitate ambitious mitigation and adaptation action.

One of the pillars of the climate regime is the commitment to support developing countries in their efforts to abate greenhouse gas emissions and adapt to the consequences of climate change. Support can come in the form of capacity building, technology transfer and finance (together: means of implementation). In this course, we will dive a bit deeper in the conditions and instruments of climate finance. We will discuss the channels of finance and the modalities on how finance is being awarded. In this context the class will gain starter knowledge about carbon pricing and carbon markets.

The course will be given an introduction into the climate regime in the context of international environmental governance and discuss it against the backdrop of geopolitical developments.

Modules

1. Module: Background

A. The fundamentals. To establish the basis for the course, we set out with broadly discussing the causes and implications of climate change. We will also briefly touch on the public perception of climate change and the challenges associated with climate policy making. What is climate change? What makes it such a wicked problem?

B. Global environmental commons. The class will introduce climate change as collective action problem as well as discussing the general problem of administering global commons. The course will introduce key concepts such as the ”tragedy of the commons” , ”whicked problems” and ”free-riding”, and discuss key academic developments in the understanding of the management of global commons. How can global commons be governed?

2. Module: Building Blocks of the International Climate Regime

C. The climate regime. We will then move on to discuss the history and status of the international climate regime. We will discuss the development from the initial rounds of negotiations that led to the 1992 adoption of the UN Framework Convention on Climate Change to the 2015 Paris Agreement. This module will ensure that the students develop a firm grasp of the fundamental dynamic of climate change negotiations while introducing the main legal instruments that form the backbone of the climate regime. Which treaties form part of the climate regime? How do they work?

D. Mitigation governance. This module will discuss the global temperature and neutrality goals of the Paris Agreement We will discuss the concept of Nationally Determined Contributions (NDCs) and how these plans are integrated into the system of the Paris Agreement. Students are encouraged to read and analyze a number of sample NDCs. Can a bottom-up mitigation system work?

E. Fairness, Climate Justice and Distribution of Burden. We will start the second module of the course with a discussion of the concept of fairness in international negotiations and its application to the international climate regime. One of the key challenges of the climate regime is the definition of a burden-sharing regime that divides the responsibility to contribute to climate change mitigation among parties. This burden-sharing is closely related to the notion of equity and fairness under the climate regime. In this context it is also important to look at climate change as impediment towards human development in developing countries. What is fair? What is equitable?

F. Adaptation Governance. We will then discuss and analyze the second pilar of the climate regime: adaptation, goals, programs and governance. Historically the stepchild of the climate regime, the Paris Agreement puts not emphasis on adaptation. Is it sufficient?
G. Loss and Damage. The Loss & Damage negotiation point goes beyond adaptation. Loss & Damage requires a compensation for climate change related losses that do not allow any longer adaptation. Does it work?

H. Compliance. We with then consider when and why governments adhere to their international obligations and what makes them decide to walk away from a treaty in general or any specific obligations in particular. We also discuss the link between compliance and accountability and review the role non-state actors can play in an international compliance regime.

3. Module: Actors and Context

A. Geopolitical Context. The discussion on treaty compliance will lead us to the discussion of the geopolitical context in which the climate regime unfolds. We will look at the historical evolution of the climate regime – to which the course should be well acquainted at this point – against the backdrop of broader geopolitical changes: the end of the cold war, the rising of big developing countries and their coalition-building, the role of the U.S., Europe, as well as groups of smaller, but particularly forceful countries. How has the world changed and how is this reflected in the climate regime?

B. Actors and roles. We will discuss the plurality of the international climate regime. We will assess the role of state and non-state actors, and the different interests among non-state actors and their representation at international climate negotiations. Looking at various functional roles, we will differentiate between roles relevant to the climate diplomacy and negotiations on one hand, to implementation and furthering of climate action on the other.

C. Geoengineering. It has become clear that traditional mitigation will not be sufficient to meet the climate goals of the Paris Agreement. Technological and engineered solutions that manage solar radiation and suck carbon dioxide out of the ambient area are now discussed as real policy options. What are the implications?

4. Module: Climate Finance

A. Climate finance. Climate change policy comes at a cost. The mobilizing of resources, distribution of costs, and transfer of payments are essential challenges of an effective and equitable climate regime. The climate regime through its financial mechanisms and designated finance institutions mandates developed countries to support mitigation and adaptation efforts by developing countries. Climate change economics attends to this issue by offering insights relevant to the design of policies to reduce, avoid, or adapt to climate change. Climate finance discusses, among others, on how funds can be allocated and distributed among policies and measures.

B. The Green Climate Fund. The GCF is the financial mechanism of the Paris Agreement (together with the GEF). It plays a major role in channeling the USD100bn / year to developing countries. How is it governed? What does it finance?

C. Carbon markets in the context of the climate regime: the CDM and Article 6 PA. Baseline-and-credit systems allow the generation of tradable emission reductions. The Clean Development Mechanism of the Kyoto Protocol is/was the most widely used and known offset mechanism. The concept of carbon offset projects remains popular and has survived in Art. 6 of the Paris Agreement. How are tradable carbon credits generated?

D. Corporate climate goals and offsets. Voluntary carbon market transactions have seen a sharp increase in the last two years. Exploding corporate engagement and climate pledges channels millions into offset projects. Does the market hold its promise and contribute to mitigation targets?