from CFACT
David Wojik
Trillions of dollars in fantasy financial negotiations are becoming increasingly complex and uncertain, which makes sense because reaching a deal may be impossible.
At the beginning, the co-chairs of the negotiating group submitted a 9-page draft text on the New Collective Quantitative Targets (NCQG) for climate finance. Subsequently, numerous negotiators added their proposed changes or additional text, and the draft grew to 34 pages.
What's eerie is that most of the growth isn't extra text. It is an optional language for existing text. Many of these options are not simple edits; they are distinct texts.
The biggest choice is of course the amount of the “quantitative target”, that is, how much government funding developing countries receive each year. The starting figure ranges from $100 billion to $2 trillion, with the midpoint ranging from $1.1 trillion to $1.3 trillion. This is certainly a shocking difference.
There are also editorial-like differences, which obviously mean a lot to the Diplomat. For example, does NCQC “support” or “address” national plans?
There are many secondary questions, such as whether fossil fuel subsidies should be phased out by 2025, 2035 or “as soon as possible”.
Each set of options is displayed using colorful brackets. Typically, a sentence begins, and then there will be a series of at least two optional text fragments, each in brackets, followed by the end of the sentence. There may be so many bracketed options that it's difficult to read.
Of course, sometimes the beginning and/or end of a sentence is also bracketed, or there may be several sets of bracketed options in a single sentence.
This is completely different from the draft text, so news reports about such text are highly misleading. Within these 34 pages there are hundreds of bracketed options, all of which must be addressed if the text is to be actually approved at NCQC. It can be said that there are as many draft texts as there are options.
So there is no draft text yet, just a lot of serious disagreements. Most of these problems can probably be solved by discarding all options and deleting entire sentences. Diplomats can always achieve agreement by saying nothing of substance.
Some of the questions are actually quite interesting. One of my favorite rules is that funding new coal-fired power plants does not count as climate finance. It turns out that this was proposed to adapt to climate change, as electricity can help people cope with extreme weather.
Not surprisingly, developed countries have introduced options to reduce their responsibilities. The NCQC's $100 billion option is obvious, but other options are less obvious.
One approach that may work is to set an “investment” goal that does not earmark a government contribution. Any form of renewable energy or resilience infrastructure development will have a role to play, regardless of who funds it. Private investment is specifically included.
According to reports, staggering amounts of money are being spent on solar and wind energy facilities around the world, and this option could even push the trillion-dollar mark annually. Local residents will ultimately pay all costs, including profits, which is obviously irrelevant. But most of the current $100 billion a year is in the form of loans rather than grants. These loans should at least be repaid.
Next week, senior ministers from member states will be flying in to try to sort out the endless confusion of brackets. Some sentences will be resolved and many will disappear. Remember, every country has a veto, so nothing radical can happen.
Given the bizarre nature of the game, it's no surprise that the final files are often hammered out at 2 a.m. by people who haven't slept in 48 hours and probably no longer care about its contents.
But the end of Sleepless Night is still far away. Stay tuned to CFACT as the mid-term tournament unfolds. There will be surprises.
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