Tag: surplus AAUs

Will Doha Burst the Hot Air bubble?

Submitted by rvoorhaar on November 28, 2012 - 1:00am

A staggering 13 billion emissions permits are left over from the first Kyoto commitment period. Hot air is looming large – and threatens the viability of CP2 and any future climate deal.

ECO would like to remind delegates that the problem is the result of extremely weak CP1 emissions targets well above what countries were projected to emit. Poland, for example committed to a 6% reduction from their 1988 emission levels, despite the fact that in 1997, when the Kyoto targets were set, Poland’s emissions were already about 20% below 1988 levels. ECO warns the distinguished delegates not to fall for the bogus claim that the existence of hot air is the result of dedicated action. It’s not – and the economic downfall of the nineties cannot lead to inherited rights in the climate change process.

But memories are short. ECO can’t help but notice that Parties are about to make the same mistake again: Low pledges for CP2 mean that another surplus of 3 to 10 billion tonnes will accumulate by 2020. Add to that the 13 Gt surplus from the first phase and you have rendered any Kyoto targets quite meaningless. Yet Russia, Ukraine and Poland, the largest surplus holders, insist on keeping the right to sell their hot air. ECO has looked into it and found this is a vain hope. Pledges for CP2 are so weak that no one will buy their surplus! Prices for AAUs have dropped from 13 EUR in 2008 to less than 0.5 EUR in 2012.

The problem is so big that even if developed countries were to increase their CP2 pledges, they could meet their more stringent targets by simply buying more surplus and without actually cutting their emissions.

For those delegates that are interested in returning a little bit of environmental integrity to the system, ECO would like to emphasise that they’ll need to burst the hot air bubble. Raising ambition and closing loopholes go hand in hand. ECO therefore suggests to start looking seriously at the proposal by the G77 and China. It effectively minimises the use of CP1 hot air in CP2, does not allow for trading, and, most importantly, cancels the surplus permanently by the end of the second commitment period.

Is it worth it? Look, we are now on a pollution path that could lead to warming of 4oC or more. In addition, impacts associated with even 2oC of warming have been revised upwards and are now considered “dangerous” and “extremely dangerous”. A world beyond 2oC will threaten the very existence of civilisation as we know it. Heard of it? Worried? Then go burst the hot air bubble.

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Kyoto Protocol 2nd Commitment Period Negotiations

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COP18/CMP8 Doha Climate Conference

rvoorhaar's blog

AAU Elephants

Submitted by Secretariat on September 3, 2012 - 8:44pm

Negotiators are truly having a tough time putting the pieces for a second commitment period together. But soon they will face the enormous elephant in the room. A recent UNEP report estimates that up to 13 billion tonnes CO₂ of surplus AAUs could be carried over to the next commitment period. This is almost three times the annual emissions of the EU. With the supply of hot air AAUs much higher than current reduction commitments (that are well under the 25-40% below 1990 levels by 2020 actually needed), carry-over would lead to no emission reductions compared to business-as-usual emission projections by 2020. As a matter of fact, CP2 commitments as they stand would likely lead to another surplus. This would be the case even if the large quantity of Russian surplus is excluded. Additionally, carbon credits from the CDM and JI that can be carried over would further lower actual emission reduction levels by 2020 by roughly 6%.

But there is hope! A proposal by the G77, which is technically sound and politically feasible in addressing this enormous loophole, could do the trick. Europe showed in Durban that it can pull its weight internationally by being the driving force behind the agreement for a new climate accord by 2015. This can’t be put at risk by domestic quarrels. The higher carbon price due to restricted carry-over could actually benefit surplus allowance holders, since it would avoid a likely price collapse after 2012.

However, ECO is deeply worried that a low ambition-laden second commitment period might emerge as a compromise. In particular, the differentiation of treatment between two types of hot air seems to be in the making. This could lead to an amendment that allows the European hot air that followed the economic crisis of 2008 to be fully carried over into the second commitment period. In particular, Brazil seems keen to allow such differentiation. ECO wonders why Brazil is so interested in helping further water down the weak European 2020 reduction target through the introduction of such a major loophole.

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Bangkok Climate Change Conference 2012

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UNEP: Bridging the Gap

Submitted by Anonymous on November 28, 2011 - 11:53pm

Many delegates at last year’s COP in Cancun failed to take note of a rather large elephant lurking in the meeting rooms and corridors. And now that elephant has made its way to this COP – and has grown even larger.

Just last week, the UN Environment Programme issued an updated version of its landmark Emissions Gap report. Once again, UNEP concludes that by 2020 global emissions need to be reduced to 44 gigatonnes if the world is to be on a credible pathway to keeping warming below 1.5° C or even 2°.

First the bad news – UNEP finds that the gap between what is needed and what is on the table increased even more over the past year. Even if all countries go to the top end of their pledge ranges to cut emissions, and all loopholes are closed, the gap in 2020 will still be 6 gigatonnes – as much as the annual emissions of the US.

In the real world the gap is more likely to be around 11 gigatonnes. Developed countries are stuck on weaker, conditional pledges and their targets are riddled with loopholes. In fact, with the current weak pledges and lenient accounting rules, UNEP says that developed country emissions will be hardly any different than business as usual.

But there is also some good news in the report. UNEP says that with strong action now, it is possible to do even more than close the gap, without significant technical breakthroughs or prohibitive cost. How? By strongly focusing on energy efficiency and clean, renewable energy. By a major drive to halt deforestation. By improved waste management and agricultural practices. And by taking action on the currently unregulated sectors of international aviation and shipping.

To enable these real, practical solutions to prosper, the ambition of current pledges must be increased. All countries can and must do more. But first, developed countries need to raise their game dramatically. The Cancun Agreements recognised that developed country targets should be in the range of 25-40% below 1990 levels. In ECO’s view, the ambition must rise above 40% if you are serious about 2° C – let alone the 1.5° C small islands need to keep afloat.

In a rational world, countries at Durban would listen to the trumpeting of the elephant and increase their pledges here and now. So ECO lives in hope.

Land use, land use change and forestry. UNEP says that weak LULUCF rules could contribute 0.6 gigatonnes to the emissions gap. These rules would allow developed countries to increase emissions from forestry activities while still claiming credits. Parties must discard these bad rules, and instead focus on accounting options with environmental integrity.

Surplus AAUs. The use of surplus allowances from the first commitment period could increase global emissions by as much as 2.9 gigatonnes in 2020, UNEP says. Strong rules to prevent or minimise the carryover of this surplus are essential.

Double counting of offsets against both developed country targets and developing country pledges could, along with fake offsets, increase the gap by 2 gigatonnes. Governments can and must rule this out once and for all.

Here in Durban, governments must also agree a robust process to formally recognise, quantify and close the gap. They must also agree to a peak year of 2015 in the Shared Vision. And they must agree a second commitment period to the Kyoto Protocol, alongside a mandate for a comprehensive legally binding agreement to be concluded no later than 2015 and enter into force on 1 January 2018, a timeline that will not rule out the prospects for an early peak in emissions.

Delegates should pay heed to the wise words of African proverbs. “A man who is trampled to death by an elephant is a man who is blind and deaf”. Or, more positively: “When an elephant becomes as small as a monkey, it ceases to be an elephant.”

If you want to find out more about the Bridging the Emissions Gap report, UNEP is holding a side event in the African Pavilion at 18.30 on Thursday 1 December.

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Double counting offsets

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Forests-Sinks

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COP17/CMP 7 – Durban

Anonymous's blog

CAN Position - Views on Carry Over of Kyoto Surplus of Assigned Amount Units (AAUs) - June 2011

Submitted by Anonymous on July 27, 2011 - 2:05pm

June_2011_CAN-I_position_paper_on_AAU_surplus_FINAL.pdf

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AWG-KP

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Bonn June 2011

Surplus AAU Solutions

Submitted by Anonymous on December 7, 2010 - 10:20am

This is not the first time ECO has commented on the surplus of assigned amount units (AAU) present from the first Kyoto commitment period, and how the overflow could deliver a body blow to the future aggregate actions of annex B countries if carried over to the second commitment period. So far this issue has not seen much progress at all in the AWG-KP.
However, the Chair’s new revised KP text proposal contains interesting options which might bring us quite far in solving the AAU loophole crisis, which threatens the future environmental integrity of the Kyoto protocol.
Option 2 on Article 3, para 13 and 13bis shows a smart way of ensuring that this surplus does not contaminate the domestic aggregate reductions of Annex B countries. This is done by allowing the AAU surplus to be exclusively used by countries which have registered such surpluses, and only where their emissions are higher than their AAUs for the second commitment period. This option also does away with the risk of ‘AAU laundering’ where second commitment period AAUs are sold off and the first commitment period surplus is used for compliance.
However, there still is a risk that this option might encourage countries with AAU surpluses to stall their climate action. ECO once again suggests that the surplus for domestic compliance also have a discount applied to limit the availability. This could be achieved by combining option 1 in the chair’s text with option 2.
ECO in particular invites the EU to remove the gag from its mouth and speak out in an ambitious way. Wasn’t the EU one of the parties demanding more environmental integrity in the Kyoto Protocol as condition of signing on to a second commitment period? Bonjour Bruxelles, it’s crunch time!
Finally, let’s also not forget the bigger picture and learn from the past. Vast amounts of surplus AAUs could continue to occur in the second commitment period if the current low pledges of developed countries are not improved significantly. To further minimize the negative impact on environmental integrity, all countries should commit to climate friendly investments of the revenues from the sales of second commitment period AAUs through transparent and internationally monitored Green Investment Schemes. The existence of a complex problem does not negate possible solutions. Instead, it accelerates the need for them.

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Anonymous's blog

Taking Bold Steps  on Mitigation

Submitted by Anonymous on December 7, 2010 - 10:05am

The phrases ‘legal form’ and ‘anchoring of pledges’ are on everyone’s lips in the corridors and sidewalks of the Moon Palace. While these are indeed crucial issues, like many of the Parties who spoke at Saturday’s stocktaking plenaries, ECO wants to see serious work this week on mitigation content for both the KP and LCA.
Looking first at the KP, if Parties are not able to fully agree a second commitment period here in Cancun, there must be at least a clear deadline and process to ensure that this will happen in Durban. Further agreement on some of the thorny details of the KP like the rules on LULUCF and surplus AAUs are also keenly awaited.
As regards the individual and aggregate Annex I targets for the second commitment period, there has been a lot of talk about how and where they will be recorded. But what about the minor matter of what the numbers actually are, and whether they bear any relation to science?
The new text has put the need for developed country targets to add up to at least 25-40% below 1990 levels by 2020 in brackets. The KP negotiating mandate towards Durban must include an explicit requirement that both aggregate and individual country pledges be clarified and assessed against this 25-40% figure, and their level of ambition increased accordingly in the final KP second commitment period agreement.
And don’t forget, there are two tracks in these negotiations. For the sake of balance the non-KP Annex 1 Parties (primarily, of course, the US) must take on comparable commitments to the KP Annex I Parties.
The Chair’s text provides some workable openings for this, though it needs significant enhancement. Several options are given for the listing of pledges, but ECO’s most serious concern is that wherever they end up, there must be a clear acknowledgement in the relevant COP decision that they fall far short of what science requires – creating the Gigatonne Gap that was highlighted in the UNEP Emissions Gap Report.
Unlike the KP, the LCA text does not so far include an explicit reference to the quantity of emissions reductions entailed by the goal of keeping global temperature increase well below 2^o C, let alone 1.5^o. That should be an immediate priority.
Acknowledgment of the inadequacy of the current pledges should be accompanied by a clear process to elaborate and facilitate the measures that will help to close the gap. The Chair’s text neatly includes a cross-reference to the KP, and if the KP Parties’ pledges are strengthened as set out above, they will contribute appropriately to the overall goal.
This leaves the pledges of developing countries and of the US. There should be agreement in Cancun on a mandate for next year’s negotiations under which the US will take on its fair and comparable share, and developing country pledges for nationally appropriate mitigation actions will be clarified and adequately supported.
ECO was very pleased to see that low emission development strategies are mentioned in the Chair’s text. Such long-term strategic plans are needed to ensure the global goal is actually met, although there is room for elaborating the scope and nature of the strategies for developed countries. Agreement to all this would be a very positive signal of the seriousness of intent by developed countries.
Climate change demands that we keep a constant eye on what science is telling us and on the adequacy of our agreed actions. The review set out in in Chapter V of the Chair’s text provides a channel for this. The re-inclusion of the 1.5^o C global goal in welcome, although the proposed completion of this work only in 2015 is alarming. We know that emissions must already peak by then. In addition, it is not clear is how the results of the review would be operationalised into the updating of both the aggregate and individual country targets, another point to be addressed before we leave Mexico.
There is a lot of work to do this week, but Parties noted on Saturday their desire to see this centrepiece of the negotiations addressed. Now is the time to stand and deliver.

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CAN Intervention - KP Opening Intervention - 1 Jun 2010

Submitted by admin on April 9, 2010 - 8:09pm

CAN_KP_intervention_opening_plenary_1June2010_final_for_delivery.pdf

Thank you Mr Chair, Distinguished delegates, Clearly, progress is needed on the KP track here in Bonn.

CAN would like to remind delegates that when the KP was first negotiated, Parties agreed targets first, and the following years were spent agreeing the loopholes to accommodate them - loopholes that have contributed to the gigatonnes gap between accounting for emissions and what the atmosphere actually sees.

It is CAN’s long-standing opinion that the underlying rules should be negotiated first, so that the needed reduction target of at-least -40% can be allocated between the Annex B Parties, based on a clear and common understanding of the underlying scope and accounting rules.

Negotiating time in Bonn and for the subsequent intersessionals should therefore be focused on reaching agreement on a number of issues, including:

Accounting rules that actually reduce net LULUCF emissions;
Modalities for the flexible mechanisms – to avoid double counting of developed country mitigation and financial support obligations, and keep out inappropriate sectors, such as nuclear and CCS
The AAU banking loophole
The scope of new sources and sectors and other accounting rules – the “other issues”
Commitment period length and base year

These issues need to be agreed, but not agreed at any cost. CAN has strong concerns about some of the proposals currently being discussed, especially for LULUCF.

In the LULUCF negotiations, Annex I Parties are proposing to make their forests part of the climate change problem, rather than part of the solution. They are proposing to increase their annual net emissions from forest management by approximately 400 Mt CO2e without even accounting for it. This type of proposal has absolutely no place in a global climate agreement.

At this session, Annex I Parties must stop the accounting games. Annex I Parties must commit to absolute reductions in net anthropogenic emissions from LULUCF and they must protect their forests and other natural ecosystems as reservoirs of greenhouse gases. Parties could then quickly agree to LULUCF rules that transparently meet these two principles.

Like so much in this process, time is not required to fix LULUCF, only political will and ambition.

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