Why in news?

Negotiators from 196 countries finalised a rulebook for the 2015 Paris Agreement at the climate change conference in Katowice, Poland.

What is the rulebook for?

• The Paris Agreement seeks to keep the global average temperatures “well below” 2°C from pre-industrial times.
• It specifies the steps that countries need to take in the fight against climate change.
• The rulebook prescribes how to do those things, and how each of them would be measured and verified.
• It holds the operational details of the Paris Agreement, the processes and guidelines for its implementation.
• Notably, the rulebook is a dynamic document, as new rules can be added or existing rules amended.
• It would facilitate the implementation of Paris Agreement which is supposed to replace the existing Kyoto Protocol in 2020.
• Nevertheless, several countries and NGOs feels that the deal reached in Katowice, though welcome, was not enough.

What are the highlights?

• The Paris Agreement says every country must have a climate action plan to be periodically updated and submitted to the UN climate body.
• The rulebook now specifies what actions can be included in the action plan, how and when to submit them.
• Further, the Paris Agreement asks every member nation to submit information about their greenhouse gas emissions every two years.
• The rulebook now specifies
  • which gases to measure
  • what methodologies and standards to apply while measuring them
  • the kinds of information to be included in their submissions
• Article 4 of Paris Agreement mandates nationally determined contributions (NDCs) by countries.
• The rules now say that support shall be provided to developing country Parties for the implementation of Article 4.
• Parties shall provide the information necessary for clarity, transparency and understanding as applicable to their NDCs.
• The Paris Agreement demands developed countries to provide “climate finance” to developing countries and submit an account of this.
• The rulebook says what kinds of financial flows - loans, concessions, grants - can be classified as climate finance.
• It specifies how they should be accounted for and the kind of information about them needed to be submitted.

What were the contentious issues?

• Carbon Credits - An emissions trading system already exists under the Kyoto Protocol.
• But it has become ineffective over the last few years and is meant to end with the end of Kyoto Protocol in 2020.
• So Article 6 of the Paris Agreement talks about setting up a market mechanism for trading of carbon emissions.
• A carbon market allows countries, or industries, to earn carbon credits for the emission reductions they make in excess of what is required of them.
• These carbon credits can be traded to the highest bidder in exchange of money.
• The buyers of carbon credits can show the emission reductions as their own and use them to meet their own reduction targets.\
• In the last few years, several countries walked out of the Kyoto Protocol, and no country was feeling compelled to meet its 2020 emission reduction targets.
• So there has been virtually no demand for carbon credits.
• As a result, developing countries like China, India and Brazil have accumulated huge amounts of unused carbon credits.
• Together, China and Brazil are estimated to account for about 70% of global unused carbon credits.
• In Katowice, these countries called for considering as valid their unused carbon credits in the new market mechanism that was being created.
• But the developed countries strongly opposed this, questioning the authenticity of the unused carbon credits.
• They pointed to the weak verification mechanisms of the Kyoto Protocol that allowed dubious projects to claim carbon credits.
• So failing to arrive at an agreement, the discussion over carbon markets was deferred to the next year.
• But the confrontation would re-emerge as countries seem to attach more importance to the new emission trading system.
• IPCC Report - The report highlighted the need to slash carbon pollution by nearly half before 2030 in order to hit the 1.5°C target.
• The countries were divided on the IPCC report; US, Saudi Arabia, Russia and Kuwait refused to “welcome” the report.
• So the Katowice meet welcomed “the timely conclusion” of the report and invited “parties to make use of it”.
• But it did not accede to the demand for IPCC's (Intergovernmental Panel on Climate Change) findings to form a key part of future planning.