Tag: Australia

Go Deeper for Cheaper

 

CAN hopes Australia's independent Climate Change Authority (CCA) had a useful time in Bonn gathering perspectives from Parties, in particular on how Australia's actions may help or hinder the road to a 2015 global deal.

With carbon pollution blasting through 400ppm and many nations preparing to ramp up their efforts, we guess you heard some stern views on the (lack of) adequacy and fairness of Australia's unconditional 5% target for 2020.

The good news? WWF earlier this week revealed Australia could bump up its target from 5% by 2020 to 25% at virtually no extra cost to its economy. A lucky country indeed! You'd be mad not to, wouldn't you? And while the cost to your GDP would be negligible, the kudos would be priceless.

In honour of your visit, ECO revisited Australia's conditions for moving to 15% and maintains these were comfortably satisfied by the Cancun Agreements and Durban Platform, along with new reporting requirements for developing countries and land sector rules under the Kyoto Protocol. But it's no secret that 15% falls well short of what a country with economic capability and clean energy resources like yours should be putting in. Wouldn't you agree? And as your own Professor Garnaut has made clear, with a coastal population, rising costs from extreme weather and shifting rainfall threatening to wreak havoc for your farmers, no developed country has a stronger national interest in keeping the global temperature rise as far below 2°C as possible.

Needless to say, the best way for Australia to protect its national interest and at the same time protect the environment is to set targets and budgets that accord with the science (remember the 40% below 1990 levels?) and represent a fair and defensible share for Australia. To ECO, setting your 2020 target to at least 25% below 2000 levels and setting an ambitious long-term national carbon budget looks like a no brainer. Smart for the planet, smart for the economy, and smart for Australia's world standing.  ECO hopes the CCA got that message loud and clear.

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Adaptation Fund: Progressive But Poor!

ECO would like to cast a bright light on whether there is sufficient progress in responding to the needs of the poor and vulnerable at an implementation level. We note that the Adaptation Fund is now established. It has approved funding for 27 adaptation projects with several projects more waiting to be funded. Furthermore, we see that 15 developing countries have already had their National Implementing Entities accredited and can directly access the Fund, and several more countries are in the process of accreditation. 

ECO also recognises that the Adaptation Fund has become a forerunner, having recently been ranked as the top climate finance institution by Publish What You Fund: the Global Campaign for Aid Transparency. Just two weeks ago it became the first climate fund in the International Aid Transparency Initiative. It has also been an early-mover in adopting an overarching results framework. The Fund has managed to speed up the project approval process while reducing implementing entities´ fees. 
 
ECO wonders why, with such accomplishments, the Adaptation Fund is the one multilateral fund that has received the least contributions from developed countries in recent years.  And to make matters worse, the price for emission reduction certificates (the key income source of the Fund) is now below US$1, largely due to the virtual collapse of the European Emission Trading Scheme. At current CER prices and estimated issuance levels, the Adaptation Fund would receive only $4 to $8 million in additional revenue to 2020. 
 
ECO is concerned that there has hardly been any progress in delivering the Fund’s target of $100 million by the end of 2013.  There are no new pledges and funding seems to be scarce. ECO calls on Parties to send a strong signal that they are committed to addressing the needs of the vulnerable developing countries by putting additional money into the Fund swiftly. 
 
ECO particularly would like to see countries like Japan, Norway, France, Finland, Netherlands, New Zealand, USA, Canada and others, who have not as yet contributed to the Fund, to do so immediately. Australia´s 2010 pledge has still not been deposited. ECO finds it ironic that Germany, the host of the Adaptation Fund, has only made one pledge of 10 million EUR in 2010, which is much lower than that of Spain and Sweden.
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Australia to join Carbon diet club...

Now you all know that ECO doesn’t like to be rude to Parties, but surely all would admit that Australia is carrying excess carbon weight and needs to lose some carbon flab. So ECO was delighted to hear a few weeks back that Australia was signing up as a member of the KP2 carbon weight loss club. ECO had visions of a trim physique of a zero-carbon economy.

But oh dear Australia – what happened with your target? 99.5% of carbon emissions – really? That’s a carbon loss goal so small that a bit of rounding and pffft it’s gone. Haven’t you heard that carbon flab is bad for your health? The UNEP doctor has said you need to trim down by 25-40% for all our sakes. Surely a sporty nation like yours knows about “no pain no gain”? Especially as your own economy doctor Garnaut has said the sooner you start the easier it will be.
 
Could your fossil fuel addiction be swaying your resolve? ECO knows you have all those stashes – but you’ve got amazing clean energy resources as well to help wean you off.
 
So where do we go from here? Well you do have a reasonable weight loss goal in column 6 and there’s plenty of support meetings over the next two weeks.  Let’s hear you stand up and say: “My name is Australia, I’ve been on the wrong path, but I’m going to make Kyoto count and commit to strong targets and strong rules.”
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“We are sinking” and “no-agreement-text”- What is the relation between both ideas?

Mónica López Baltodano
Officer for Climate Change
Centro Humboldt
Nicaragua

While the negotiations in the UNFCCC concluded in the Bangkok intersessional meeting in September 2012, many questions arise for us in preparation for COP 18 in Doha. Can we find any logical relationship between developed countries’ claims that this was an “informal session, meaning “no-negotiation-text” should be agreed in Bangkok, while we read there´s super-shrinkage of the Arctic sea ice?

The massive heat wave melting the Arctic is just one –of many- clear signals that expose governmental representatives of countries around the globe aren´t achieving what they are supposed to in UNFCCC negotiations. The ultimate objective of United Nations Framework Convention on Climate Change is to guarantee the “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”. But, that clearly can´t be achieved if developed countries are limiting the negotiation process, hiding their lack of political will to act with procedural claims and “formality” excuses.

Coming from a highly vulnerable country to the impacts of climate change, this seems more like a bad joke - not funny at all. Even though we understand that climate change claims for actions in the developing world, particularly in emerging economies, we cannot accept this to be an excuse for developed countries not to act as needed.

When we hear United States, Australia, Japan, Canada, Switzerland, the European Union, New Zealand and others saying there is not supposed to be any negotiating text on adaptation issues and finance under the LCA, we fear this is leading to a dead-end. Of course, there is clearly a much needed link between, for instance, Adaptation Committee, Standing Committee and Green Climate Fund Board´s work. Why would developed countries fear this should be in an agreed text coming out of Doha?

There are no “political skills” necessary to understand that this might mean they are not truly committed to fund adaptation actions in our countries as needed (i.e. promptly and effectively). If this is true, it would certainly undermine any strong effort in the most afflicted countries, including LDCs, SIDs and Central American countries.

We surely expect that, in the road to Doha, these countries find the logical connection between “we are sinking” –in all of its meanings- and the need to complete the work in the LCA track. This means an agreed outcome is a MUST, including a clear agreement on international finance for adaptation actions to take effect now.

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Keep up your end of the bargain, Parties.

In Durban, Parties agreed to a package – the adoption of a second commitment period of the Kyoto Protocol, a successful conclusion of the LCA, urgent action to close the pre-2020 mitigation gap between the 2 degrees goal and the collective pledges now on the table, and collective movement toward a fair, ambitious and binding agreement in 2015. Parties must honour this political bargain.

Let's start with the KP. Those trying to get another bite of the negotiation cherry by dragging out submitting their carbon budgets (QELROs) have to understand that this will be perceived as acting in bad faith. Australia – ECO remembers the brinkmanship with your QELRO last time. So for you, as well as New Zealand, Ukraine and others on the fence on the Kyoto second commitment period, ECO demands to see your QELROs up front. And, of course, just any old KP second commitment period won’t suffice. We must have a robust, ratifiable agreement that respects the original intention of the KP to raise ambition and create real environmental integrity. The AOSIS and Africa Group proposals will facilitate this endeavour. Effectively eliminating surplus AAUs and ensuring the environmental integrity of the CDM is also essential – you can’t have your cake and eat it too.

On to the LCA. There are a number of elements that jump to the head of the queue in importance. We need a positive decision on finance – including ensuring that the discussion on scaling up Long Term Finance following the report of this year's work programme, among others, has a home in 2013 and beyond. And who needs an empty fund? We hear that the EU, Australia, Japan and Canada already have budgets they could allocate. Don’t be shy!

Enhanced post-2012 climate finance is essential to enable developing countries to implement low-carbon development strategies and facilitate desperately needed adaptation. Deciding to hold back on finance until the last moment – or not coming forward at all in Doha – will undermine confidence and faith in moving the climate negotiations forward.Japan, Canada, Russia and the United States, do not think that by jumping overboard from the Kyoto Protocol that you’re diving into balmy waters. You're still on the hook to do your share of closing the gigatonne gap, by putting forward quantified economy wide emissions reductions AT LEAST as stringent as the QELROs of Kyoto Protocol parties, and using common accounting to an equal standard as the Kyoto Protocol. We also expect to see your QEERTs well before Doha.

On these and the other LCA issues, it is essential that the LCA Chair, and the spin-off group facilitators, be supported to develop text proposals to put forward in Doha. Finally, on the ADP, you all need to do your homework between now and Doha on the ADP work programme. Doha must agree to a plan of work, including a clear timeline and milestones. So let’s take inspiration from our setting here in Bangkok – these milestones can incorporate a period of “contemplation” on some issues. How equity and CBDRRC will apply in the 2015 protocol will require a work stream that allows discussion and agreement on principles before being applied to all of the elements that will constitute the final deal. On other elements, including ways to urgently enhance short-term ambition, Parties must pick up and start negotiating immediately in Doha and beyond.

Leaving the workplan “loosey goosey” will result in a repeat of the Copenhagen tragedy. Rather, parties must agree on specific issues to manage each year while ensuring compilation text by COP19, complete negotiating text by COP20 and draft a fair, ambitious and legally binding protocol to be circulated by May 2015.This is indeed an ambitious agenda for Doha. But it is the least the peoples of the world demand, and expect their political leaders to deliver at a time when the impacts of climate change – and the costs in terms of both human suffering and economic development – are more evident than ever.

Markets On Our Mind

While most developed nations remain unwilling to commit to legally binding targets for CP2, discussions about market mechanisms have been (un)surprisingly vivid. The fact that carbon market prices are at a record low and surplus allowances threaten to bring prices near zero hasn’t added much urge to increase ambition.

ECO wonders why the many carbon market industry lobbyists haven’t made it clear yet that markets can only flourish with vigorous demand, which can only be created by binding reduction commitments. Let’s get that right: allowing emissions trading schemes from countries without enough demand to reach their voluntary targets with international offsets won’t help. The recent announcement of the Australian ETS linking up to the EU ETS has stirred worries that the lack of an international accounting framework will create a fragmented market that will undermine the environmental integrity of carbon markets altogether.

My dear negotiators, would you honestly buy the right to pollute with Japanese Yen from an Indian company if you don’t know whether the emissions reductions are calculated in watts, horsepower or feet? ECO presumes not. However, it’s definitely maths time: do the numbers and calculate the emissions reductions you need for your market to work.

Not only that, we also need a common accounting framework (look to your left) that ensures 1 tonne is 1 tonne. We also see the need to develop a UN common framework, with rules for countries that transfer credits and allowances for meeting QELROs, to ensure reductions are additional and not double counting. ECO looks forward to the outcome of the Parties’ calculation exercises to be presented in Doha, so that the environmental integrity and fungibility of carbon credits can be assured. All this, obviously, must be under the condition of strong and binding emission reduction commitments.

Clarifying Clarifications

The two panels on quantified economy-wide emission reduction targets by developed country Parties left ECO feeling that there was something missing since Bali - like four years perhaps? - or a bit of ambition?

Surely Parties can cite 1(b)(i) from the Bali Action Plan in their sleep (“comparable” – remember)? Yet, as St Lucia pointed out, we still have different base years and metrics. That’s not going to help spotting the loopholes and freeloaders - oh sorry...everyone’s acting in good faith so no need to worry about transparency.

All in all, there are some surprisingly unsophisticated approaches on the table from some rather sophisticated economies – putting forward point targets rather than carbon budgets. And yes, ECO’s talking about those north of Latin America. This includes no clear idea how international credits used by states and provinces are going to affect the national level.  ECO was intrigued at issues for California being considered “within the noise” of measurement. Yes, who could possibly be concerned about accounting problems within an economy the size of Australia?

 And talking of the latter – ECO believes the EU’s urgings were heard loud and clear.  Australia and New Zealand, you’re wanted in the KP.  As they say in those parts, “Come on Australia.” 

All in all, some in the Umbrella group must have been wishing they had their brollies to hide behind. Can’t imagine how “banking and borrowing” can be used with inventories and point targets? Well no problem in adding a ban to the UNFCCC rule book then... And funny how those with issues with their emissions trajectories seem to be the keenest for flexibility and most concerned that harmonisation might prevent full participation. A tip to New Zealand – choirs and rugby sides seem to manage it. 

So to clarify all that clarity, ECO supports South Africa's proposal for a common accounting workshop before Doha to assist the successful conclusion of 1(b)(i).  

ECO was rather more encouraged to see some of the good progress on NAMAs presented by developing country panellists. And just a reminder to those who seem to have forgotten exactly what NAMA stands for – it’s Nationally Appropriate Mitigation ACTIONS. It’s apparent that here, too, provision of detailed information is important because it gives more clarity on what measures countries are undertaking. And this clarity will provide confidence and facilitate access to further support. On this note, ECO is having a bit of difficulty seeing the support – more of this in a minute.

Now, even with the focus on actions rather than outcomes, it is still vital that we are able to understand what emission reductions have been achieved below BAU. Not to hold developing countries to a particular goal, but to track emission reductions on a country level in the context of collective efforts.

Panel 2 on means of support seemed to have a great deal of agreement.  Capacity building and, again, this cleverly invisible means of support for developing countries to be able to develop and design effective long-term NAMAs (aligned with low carbon development pathways) was emphasised time and time again.

 Particularly notable was how this was coming almost equally from both sides of the 1(b)(ii) equation – from developing countries in order to be able to act, and from developed countries in order to ensure value for their hard-to-find money. Given this last factor, ECO is left absolutely baffled as to why many developed countries seem to believe they have a logical basis for their determination to block the capacity building negotiation in the LCA. (But hey, ECO has gotten used to being baffled by flights of logic from developed countries many times before.) And let’s face it – some of those non-KP developed countries seem to need a bit of capacity building to help them produce their QELROs.

A Tenuous Linkage

ECO cautiously welcomes the announcement made this week by Australia and the EU that they have entered into negotiations to link their carbon trading schemes by 2018. If implemented with ambition, this could be a positive step toward greater international cooperation in carbon pollution reductions.

However, ECO wants to respectfully remind delegates that if two dogs play together they will catch each other’s fleas. In the case of linking carbon markets together, weak ambition may be contagious. If neither emissions cap meets the targets that science suggests, then linking is only a gimmick.

Europe is already and will continue to face deficiencies in the EU ETS. Unless policymakers move to restore scarcity to the oversupplied European carbon market, they risk weakening incentives for zero-carbon development not only in Europe but also in the countries to which they link. Australia’s economy is the size of Spain’s, and could be overwhelmed by a flood of cheap European emission allowances, undermining climate action there. We note that this linkage is marginally better than allowing a flood of even cheaper CDM credits into the Australian scheme, which was a distinct possibility before changes were made in order to link with Europe, but, as feared, is likely to undermine climate action on both sides.

Full linking with the Australian scheme after 2018 also presents potential dangers for the EU. Since Australia’s 2020 climate targets remain considerably weaker than Europe’s, an insufficiently robust Australian cap could see a reverse flow of cheap Australian credits into the European market exacerbating the existing oversupply. Also, there is a danger that Australian land-based credits could enter the European scheme by the backdoor.

ECO urges the EU to act quickly and decisively to make structural adjustments to the EU ETS by permanently removing surplus emission allowances to fix the glaring problem of oversupply.

Australia regrettably had to do away with its intention to install a carbon floor price, which provided an important safety net to ensure a minimum level of investment in domestic pollution-saving activities. Removing this safety net means that other policies become even more important. ECO urges Australia to commit to extend and increase the Renewable Energy Target to at least 40 per cent.

Finally, ECO can’t help wondering…surely the EU did not forget to make joining the second commitment period of the Kyoto Protocol a pre-condition for bilateral negotiations between the EU and Australia to proceed?

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