Corporates see trillions adding up on climate action

As miners worry about their jobs, delegates at Katowice are warmed by diesel generators.

UN Secretary-General Antonio Guterres gives a speech during the opening of the COP24 summit on climate change in Katowice, Poland, this week. Picture: AFP.

The UN Climate Change Conference in southern Poland is being held in a space station-like portable city built around a convention centre that has been plonked on top of a disused coalmine.

Days before the conference began, a cold snap plunged temperatures in Poland to well below freezing and outside the plastic marquee walls there are banks of diesel generators to blast hot air inside.

The host city, Katowice, is fully booked to accommodate the tens of thousands of delegates to what has been billed as the most important climate conference since Paris in 2015. It is still possible to get a room at Bytom, about 20km away, where half the town works in the coalmining industry and the centuries-old buildings are cracking under the strain of earthquakes caused by extensive underground excavation.

The air stings the eyes and there is an unmistakeable smell of burned coal in the air. But it is overcast and still. Throwing out a solar panel or wind turbine most probably would be in vain.

As delegates at COP24 worry about the future of the world, the miners in Bytom worry about their jobs. The Polish trade union Solidarity has issued a joint statement with Chicago-based think tank the Heartland Institute rejecting the science of climate change, which the institute says is “climate totalitarianism” propaganda invented by “the socialist internationalist green movement”.

However, inside the conference there is a grinding sense of ­inevitability. The political difficulties of agreeing on what to do are being subsumed by a global corporate recognition sparked in Paris that this is a multi-trillion-dollar opportunity.

China estimates it will spend $US7 trillion ($9.6 trillion) just to meet its commitments for 2030 and an International Finance Corporation report estimates the spend for emerging markets overall will be $US23 trillion.

One developed country lead negotiator tells Inquirer: “The corporates are saying if this is a transition of the entire global economy sector by sector, there are bucketloads of money to be made.’’

To make the point, the World Bank this week set a five-year target of $US200 billion for climate-linked finance. Major European institutions have said they no longer will lend money to things that are not consistent with the Paris Agreement goals.

To push things along, protest groups have implemented a global strategy under the branding “extinction” to mobilise children as the frontline to demand government action. The school protests are the first sign of things to come.

The political challenge is to avoid the vast gaps that already exist from widening further, between nations and between the elites and middle and lower classes who increasingly are feeling the pinch of change. The riots in Paris sparked by threatened increases in fuel taxes as part of climate change measures have been a wake-up call. After French Prime Minister Edouard Philippe pulled out of the opening session, it meant not one G20 leader was there to hear David Attenborough warn of pending societal catastrophe.

The heads of state and heavyweight delegates fly in this weekend, when they will be faced with the same three-cornered dilemma that has characterised global ­climate talks for the past two ­decades.

The tripod on which global ­action rests is that all countries agree to take action, that all are willing to be open about what they have actually done and that there is confidence that money will be made available to developing ­nations from the developed world.

The Paris Agreement secured only part of the deal. It has been described by sceptics as a “Claytons agreement” because it is voluntary and can be enforced only by peer pressure.

Negotiators prefer to describe the Paris deal as a “postmodern” agreement for much the same ­reasons.

But the Paris Agreement is an agreement in name only. It will not become operational until the details of all three elements of the tripod can be agreed. The deadline for agreement on the rule book is the end of this year.

In Poland, countries must agree exactly how nations will measure and report what they are doing. Ultimately, this will be the foundation for peer pressure should things not turn out as promised.

Already there are cracks. The promised withdrawal of the US from the Paris Agreement from next year has removed the big-stick negotiator for the developed world. In fact, there would be no Paris Agreement had then secretary of state John Kerry not thrown a tantrum in a late-night session in 2015 and threatened to pull the US out if developing countries did not agree to be in the one deal with the developed world.

The issue of differentiation or bifurcation has always been a deal-breaker.

“The Paris Agreement is essentially saying let’s get all ­nations on the same page,” a lead negotiator says. “Let’s accept we can be at different places on that same page, but let’s not have a system where you can have a different set of rules for developed and developing countries. That is clearly what the Paris Agreement was saying.”

But with the US on the way out, China has assumed more of a leading role in climate talks, claiming to be acting as a good global citizen. But its interests are more aligned with developing nations.

Throughout the negotiations. China has been encouraging others to push for greater division within the agreement that undermines the fundamental basis on which the Paris deal was done.

The main countries involved in the pushback are China, India, Iran, the Arab Group and Vietnam, with broad support from many within the so-called G77.

Small island states want stringent rules for everyone, as do many South American countries.

The unknown in Poland is how much of the pushback is a negotiating tactic by China and how firm the developed world is prepared to stand against it. The China-led group is pushing for a maximalist approach for developed countries, with a more flexible regime (blanket flexibility) for the developing world.

At the extreme, this would mean major developing country emitters, including China and India, would not have to be open or transparent with their emissions plans or results.

The Paris Agreement allows for some flexibility according to capacity (technical or financial), but it was never intended to retain the division of the developed and developing worlds.

Blanket flexibility for developing nations would allow all such countries to have lesser reporting requirements. A qualified flexibility would give flexibility to those without the means to account properly.

The pressure is being felt. Says an insider: “It could still come out blanket flexibility for optics for China, but India and China could say they were not going to use the flexibility. You could have this weird world where you have got blanket flexibility.’’

What is sure is that this sort of flexibility is not what was envisaged and would never have been agreed in Paris.

Former US negotiators have said if such a deal is accepted in Poland it will mean the US never re-enters the Paris Agreement, under the Democrats or the Republicans.

Right now, the Trump administration is more concerned about the money. It has scaled back the US presence in Poland but is holding a showcase in ­Katowice early next week where coal and nuclear power will be very much on the agenda.