COP26 did not succeed in meeting its stated targets, but it will be naïve to call it a failure. It has left a complex web of opportunities and challenges for everyone and the countdown has begun for COP27 that will be held in 2022 in the coastal town of Sharm al-Sheikh, Egypt. It is a test of Pakistan’s climate governance, diplomacy and entrepreneurial spirit to create and grasp opportunities. After all, as Sun Tzu said over 2,000 years ago, every battle is won or lost before it is actually fought.
Most countries that pledged net-zero targets have yet to put forward their implementation plans. Their 2030 targets do not always suggest near-term transformative actions. Pakistan has not committed to long-term net-zero, but to an ambitious 50 per cent reduction in its emissions by 2030, including 15pc unconditional. COP26 offers Pakistan five key takeaways.
Phasing down coal: The Glasgow Climate Pact (GCP) on phasing down, instead of phasing out coal, provides Pakistan an opportunity for an orderly transition. Pakistan’s usage of coal is small but growing, posing three dilemmas: a) coal imports are increasing to support not only energy generation but also cement and other manufacturing industries, b) Sindh’s ambition to exploit domestic coal exceeds the present national plans, and c) Pakistan has still to develop a business case for concessional finance for phasing out coal.
The run-up to COP27 is a test of our climate governance and entrepreneurial spirit.
For example, South Africa has clinched a $8 billion deal to phase out coal for a just transition. Pakistan’s opportunity rests in its minuscule size, compared to India and China, two coal-hooked neighbours. Meanwhile, coal use by small businesses in Kot Lakhpat in Lahore and in other cities will keep contributing to dangerous air pollution that has become a national health emergency.
Carbon trading: A major accomplishment of Glasgow is the finalisation of Article 6 of the Paris Agreement, reviving the much-awaited carbon market. While it is still riddled with challenges of non-transparent transactions and football emissions instead of actually reducing them, it also allows emissions trading between the countries. A small surcharge on carbon trades will be ring-fenced for poor countries and Pakistan needs to be engaged in discussions that the levy should be applied more broadly and it should seek a share of the proceeds from carbon market transactions. Since countries will pay an extra premium for these offsets and the funds could assist developing countries, there’s an opportunity for climate policy entrepreneurs to pre-position themselves for these transactions which can potentially help protect biodiversity; forest, coastal and mountain ecosystems; and remove carbon from the air in order to count against some of their emissions.
Pakistan had failed miserably with less than a dozen projects under the Climate Development Mechanisms in the early phase of carbon trading during Gen Musharraf’s rule. China and India became the envy of the world by registering over 1,000 projects each — more than 80pc of the total global projects. Glasgow has presented Pakistan an opportunity to design projects for the latter’s thus far ignored National Biodiversity Strategy and Action Plan, urban mass transit systems, off-grid energy solutions, or to use mangroves to serve as carbon sinks.
Access international finance: GCP was thin on specific financial commitments to developing countries. It assured them that the earlier commitment of $100 billion per year would be honoured, climate finance payments would “at least double” by 2025, and technical assistance would be furnished to help nations minimise loss and damage — though without creating a separate L&D fund — clearly accepting historical responsibility or the principle of retribution. The issue is not fully resolved, and battle lines are being drawn for the next round in Egypt. Pakistan needs to keep abreast of and engage with global trends on L&D and other specialised climate finance windows.
Pakistan’s fundamental problem is not that the developed countries have not augmented their commitments — which certainly need to increase during this decisive decade — to support developing countries. Pakistan’s most urgent challenge is two-fold: the inability to have direct access to concessional climate finance on the one hand, and, on the other hand, our inability to spend and absorb the finances that are secured in our name by others.
Pakistan has, for example, thus far secured three Green Climate Fund-supported projects through the UNDP, FAO and ADB. They all have remained unspent for reasons of operational challenges and thin absorptive capacity. Given Pakistan’s extremely tight fiscal space, it is time to seek accreditation and secure direct access to international finance, instead of unabashedly adding to the public debt from multilateral and private sector financing.
Revise NDC: The GCP has requested countries to revisit the 2030 targets and resubmit their Nationally Determined Contribution (NDC) by next year because the present commitments cannot help stabilise global temperatures at less than two degrees Celsius. The submissions are not obligatory but are deemed important to keep the downward momentum. It is in Pakistan’s interest to plan NDC revisions. The first order of business is to develop an NDC implementation plan, complete with budget and timelines.
This will require consultation with sectoral ministries and departments on the respective roles and responsibilities, specific targets and reporting mechanisms. This will also hinge on the long-awaited development of a ‘National Adaptation Plan’ and its provincial action plans that can serve as the yardstick for implementation. This internal process will help Pakistan retain its visibility in climate and other global forums.
Operationalise pledges: Pakistan has signed the Global Methane Pledge to limit methane emissions by 30pc compared with the 2020 levels. It can help accelerate the implementation of Short-Lived Climate Pollutants, particularly black carbon and methane reductions, given the urgency posed by worsening air pollution levels. Likewise, Pakistan has signed a pledge to reverse deforestation by the end of the decade. This needs satellite tracking and systems for third-party validation, accountability for deforestation and forest carbon fluxes. These interventions are urgent to strengthen ecosystem-based approaches that are the centrepiece of Pakistan’s decarbonisation plans.