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U.N. Climate Meeting is a Fork in the Road

Union of Concerned Scientists

Annual United Nations (U.N.) climate treaty talks taking place between Nov. 28 and Dec. 9 in Durban, South Africa, represent “a crucial fork in the road” for negotiators, according to Alden Meyer, director of strategy and policy at the Union of Concerned Scientists (UCS), who has been attending these negotiations for more than 20 years.

“With the Kyoto Protocol’s first emissions-reduction commitment period ending next year, countries face a stark choice,” Meyer said. “They can preserve Kyoto’s legally binding architecture and commit to build on it by negotiating a more comprehensive and ambitious treaty over the next few years that includes commitments for the U.S., China and other major emitting countries. Or they can fail to act, let countries make emissions cuts as they see fit, and just hope that those reductions will be enough to prevent the worst impacts of climate change.”

A number of countries already have announced they will make specific emissions cuts under the Copenhagen Accord, which was established at the annual U.N. climate conference two years ago. Those promised reductions, however, would not be enough to prevent average world temperatures from rising more than 2 degrees Celsius above pre-industrial levels, an increase that many scientists say would ensure some of the worst consequences of climate change. Consequently, the 190 nations participating in the ongoing talks have made a commitment to avoid a 2-degree Celsius temperature increase.

“The world has the best chance of staying within that threshold by establishing a binding climate treaty,” said Meyer. “There’s always the chance that countries will make enough progress on some important issues—namely reducing deforestation and providing funds to help developing countries reduce their emissions and adapt to climate change—that it buys negotiators another year to continue talks. But even under that scenario, key sticking points likely would remain.”

One of the primary hurdles is the United States' refusal to negotiate a new treaty unless major developing countries, such as China, India and Brazil, agree upfront that they will accept the same kind of legally binding commitments as the U.S.

“The U.S. position on developing countries and binding commitments is not realistic,” said Meyer, “These countries may be willing to make binding commitments at the end of negotiations a few years from now, but only if their concerns about the level of industrialized country actions to cut emissions and ramp up financial and technology assistance to developing countries are meaningfully addressed.

The U.S. knows its preconditions for new negotiations are non-starters, and will serve only to block progress in Durban,” he added. “We need more flexibility on this issue from the United States to get to ‘yes’ by the end of the talks.”

Meanwhile, the European Union has agreed to abide by its Kyoto Protocol emission-reduction commitment beyond 2012 if other major carbon emitters, including the U.S., China, India and Brazil, agree to work toward a treaty. Japan, Russia and Canada have stated that they will not maintain commitments under Kyoto beyond next year under any circumstances, but there would be pressure on them to reconsider this stance if delegates reach an agreement on negotiating a broader treaty.

Climate Finance and the Green Climate Fund

The other big issue in Durban will be climate finance—how to ramp up financial assistance for a developing country to deploy clean technologies, reduce deforestation and adapt to the rapidly mounting impacts of climate change. Specifically, negotiators will try to make progress on establishing the Green Climate Fund that delegates supported at last year’s climate talks in Cancun, Mexico, and will discuss options for meeting the commitment made by developed countries two years ago in Copenhagen to mobilize $100 billion a year by 2020 for developing country actions on climate.

The U.S. is an obstacle to progress on this front as well, joining Saudi Arabia in blocking consensus at a preparatory meeting in Cape Town, South Africa last month on recommendations for setting up the Green Climate Fund, and objecting to holding discussions on ways to meet the long-term climate finance goal.

“No one is expecting the United States to put specific pledges on the table in Durban,” Meyer said. “But there needs to be progress on the finance issue, or developing countries will justifiably question whether the commitments made in Copenhagen and Cancun are real.” He pointed out that other donor countries, such as the European Union, support starting a process in Durban to identify sources of long-term finance that can help meet the $100-billion goal.

Reducing Emissions from Deforestation

Treaty negotiators also will focus on producing a plan that would help developing countries reduce their emissions from tropical deforestation, which is responsible for about 15 percent of global warming pollution.

“Brazil has its own version of this plan and it’s proven successful,” said Doug Boucher, director of climate research and analysis at UCS. “With financial help from Norway, Brazil reduced tropical rainforest destruction by two-thirds between 2005 and 2010. This year’s data, which will be released within the next few weeks, likely will show a slight increase but still at the same low levels.

“Thanks to the country’s deforestation plan, since 2005, Brazil emitted about a billion tons less global warming pollution per year than what it emitted between 1996 and 2005,” he added. “To put that into perspective, that’s nearly the same amount of reductions that last year’s U.S. Senate climate bill would have brought about between 2005 and 2020.”

Negotiators in Durban will discuss the deforestation level each country should use to gauge its reductions. They also will consider ways to ensure indigenous communities and biodiversity are protected under a prospective deforestation plan.

“Also on the table is the question of who will provide funding to help developing countries reduce their deforestation rates and where the funding will come from,” said Boucher. “It could come from governments, like Norway’s multibillion-dollar funding that helped Brazil make such a huge dent in its deforestation rate, or from a carbon market, such as the one California is setting up.”

Technology Sharing to Reduce Emissions and Enhance Adaptation

In Cancun, countries agreed to establish a “technology mechanism” to encourage countries to share technology and know-how to reduce emissions and help countries cope with the impacts of climate change.

“Negotiations at Durban should ensure that this technology mechanism becomes fully operational in 2012,” said Rachel Cleetus, a senior climate economist at UCS. “A rapid global transition to clean, renewable energy sources is critical to addressing the challenge of climate change. Communities at risk from the impacts of climate change, some which are already happening, also need technologies that will help them build resilience and adapt.

“The big question is where the funding for the technology mechanism will come from, so we will be waiting to see what happens at Durban with the Green Climate Fund,” she said. “That said, negotiators can make key decisions about the technology mechanism’s governance, structure and work program independent of the fund, and they should push for the most ambitious outcome possible.”

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The Union of Concerned Scientists is the leading U.S. science-based nonprofit organization working for a healthy environment and a safer world. Founded in 1969, UCS is headquartered in Cambridge, Massachusetts, and also has offices in Berkeley, Chicago and Washington, D.C.

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Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:

Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.

Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."

According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.

The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.

But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.

The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.

Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.

Thaís Borges.

An Uncertain Future

The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.

Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.

There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.

Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).

Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.

One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).

Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."

Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.

The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.

The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."

Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.

Hydro / Halvor Molland / Flickr

Alternative Amazon Funding

Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.

In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.

Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."

Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."

Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.

Council of Hemispheric Affairs

Looming International Difficulties

The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.

In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.

But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."

The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."

Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.

Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.

Senado Federal / Visualhunt / CC BY

Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."

Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.

Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."

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