Tag: Commission of European Communities

And now we’re all here again, what is it that needs to be accomplished?

Clearly, on the KP track lamentably little progress has bee made over the past four years. ECO suggests that the following issues must be agreed this year, as a priority:

• LULUCF accounting rules – Annex I countries must stop trying to hide emissions from forest management and commit to reduce them instead.
• CDM/JI/emissions trading modalities – These must be revamped to avoid double counting of mitigation and financial support obligations, and to keep inappropriate sectors, such as nuclear and CCS, out of the CDM.
• New sources and sectors and other accounting rules around them (the “other issues”) should include new gases to the extent that is technically possible, and use the new IPCC AR4 global warming potential (GWP) measures over the 100 year timescale.
• The commitment period length, base year and the other modalities that will define the calculation of the quantified emission reduction obligation (QERO) and assigned amount from country pledges (here's a free hint! correct answers for the first two are: 5 years, 1990).

When the KP was first negotiated, Parties agreed targets first, and the following years turned into excruciating negotiation exercises that ended up agreeing a series of loopholes. ECO has long maintained that the rules should be negotiated first, so that the science-indicated reduction target of at least 40% on 1990 levels by 2020 can be fairly shared between the Annex B Parties.

For this reason, negotiating time in Bonn and for the intersessionals should be concentrated on clearing these issues, so that the targets and then the discussion on QEROs can be resolved rationally and equitably, based on a clear and common understanding of the underlying scope and rules of accounting. In the short term, then, negotiating time should be concentrated on resolving the issues listed above.

In the LCA track, a balanced agreement is needed by Cancún, with each of the Bali Action Plan building blocks being addressed. In Copenhagen, the LCA negotiating texts on adaptation, technology and REDD+ were well advanced, and agreement should be possible on these issues this year. Additionally, finance, MRV and low carbon development plans should be among the agreements reached this year.

Adaptation

Most Parties seem to agree that progress can be made in Bonn on the design of an adaptation framework for implementation. However, developed countries should stop resisting a firm institutional link that ensures the provision of regular, reliable and truly additional grant-based finance needed to make this framework a real implementation action tool.

Bonn II could also achieve greater clarity on the enhancement, establishment, composition and role of regional centres and initiatives as well as the proposed establishment of an adaptation committee. Another issue that must advance is how to address unavoidable loss and damage from climate change impacts when adaptation is not longer a viable option, e.g., when water resources disappear due to shrinking glaciers and livelihoods become untenable. Progress in Bonn would be achieved if Parties clearly recognise the need for an international mechanism to address loss and damage, and identify key substantive issues to be addressed in subsequent sessions.

Technology

Technology negotiations have progressed enough that areas of clear convergence can be identified, especially regarding the establishment of a technology mechanism. More clarity is required to ensure that it operates within UNFCCC authority and principles. Other areas to be further clarified are the role of regional innovation centres, as well as criteria for MRV for technology support and actions that may take place outside the UNFCCC mechanism. Negotiators should be willing to show more flexibility regarding intellectual property issues, acknowledging the valid concerns of all parties, while focusing on a solution that will preserve incentives for innovation and ensure and expand production of, and access to, climate technologies for mitigation and adaptation.

REDD+

While ECO understands and agrees that reliable and adequate long-term funding is essential, goals for REDD and the conservation and enhancement of carbon stocks remain essential. There should also be a finance goal for support, either a specific range – a number of studies have indicated that halving emissions by 2020 would cost $15-35 billion in 2020 – or simply an agreement to finance achievement of the carbon-related goals. It is crucial to move on this now given the speed of REDD negotiations and the launch of the REDD+ partnership for fast-start financing last week.

Successful mitigation outcomes from REDD+ activities by developing countries,  supported by developed countries, depends on using improved methodological guidance for estimating emissions by sources and removals by sinks. SBSTA needs to progress this issue.

Climate integrity is not the only concern for REDD+ activities; safeguards not only need to be agreed, but the LCA text needs to operationalize them.

Finance

Climate finance can be a valuable opportunity to build some momentum in a process that needs a shot in the arm. Here in Bonn, parties should set ambitious goals for finance outcomes in Cancún, whether or not a comprehensive deal is agreed by then. To be more precise, by Cancún parties can finalize decisions covering finance MRV, governance and institution, and make substantial progress on operationalizing sources of finance to mobilize funding at the scale needed.

But it must be decided here in Bonn to achieve this by Cancún, and that means a negotiating text must be developed that will result in this outcome. ECO gives fair warning: for any parties thinking of blocking progress on finance because they didn’t get what they want in other areas, it's time to open eyes to the bright light of negotiating reality.

MRV

ECO recognizes the crucial role of gathering, in a consistent and comparable way, accurate information relating to emission reduction activities undertaken by Parties, as well as the support provided. Indeed, this is central to the integrity of the climate regime. Thus, it is vital to continue discussions on the nature of MRV, in particular its scope and architecture, that is tailored to Parties’ differentiated obligations.  In so doing, Parties should agree a process at this meeting to elaborate the main issues associated with MRV. Additionally, Parties should give the Chair a mandate to develop text on MRV for this and future negotiations. Parties should also consider how to provide capacity building and support to construct and maintain domestic reporting and verification systems in non-Annex I countries.

Zero- and Low-Carbon Action Plans

As part of the essential process to build trust among Parties through transparency of action, ECO would like to highlight the need to agree by Cancún that both developed and developing countries (with optional participation by LDCs and SIDS) will produce national plans showing how developed countries can get their emissions to near-zero by 2050, and how developing countries can reduce their emissions -- with support from developed countries as defined and agreed previously, including the Convention and the Bali Action Plan -- in line with the required overall global carbon budget.

Time for action is so short, there is no time to lose, and actions are needed now in line with the scientific imperative. There is much that can progress at the multilateral level this year. In Bonn, Parties must build upon progress in the LCA and KP tracks to date and define the expectations for a balanced and ambitious outcome in Cancún.

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Developed countries should produce Zero Carbon Action Plans (ZCAPs) to map out the institutions and policies needed for them to achieve their targets under a five-year commitment period, with the longer-term aim of near-total decarbonization by 2050.  ZCAPs would also serve to document how each country proposes to achieve their support obligations to developing countries.  Both parts of the ZCAP would be subject to MRV procedures to help ensure the environmental integrity of the deal and also to give all countries increased confidence that others will not free-ride.  The long-term component allows countries to begin to develop a long-term vision for their economies and to plan for related socioeconomic transition. The reporting, review and compliance components of the ZCAP proposal are therefore essential to the integrity of the overall deal and giving confidence that targets will be met.

Developing countries, over the short to medium run and depending on capacity, will produce visionary low-carbon action plans (LCAPs) that provide a road map and outline a trajectory for their pathway to a low-carbon and climate-resilient economy, clearly linking development and climate goals to achieve sustainable development.  These plans should be developed through a bottom-up, country-driven process and should build upon national plans for adaptation and mitigation, recognizing the linkages already in place in many countries between these issues.  They should provide an integrated framework where a country's NAMAs can form a coherent package.  These NAMAs would then form essential building blocks of a LCAP, and together their cumulative impact should result in the long-term objective of a low-carbon economy as well as stay within atmospheric limitations.  Mitigation efforts together with adaptation all contribute towards the overall LCAP.

ZCAPs and LCAPs link to a number of existing agenda items.  They are in the LCA text and are also relevant in the MRV discussions (MRV mitigation on non-Annex I, Annex I, the “firewall” between them, and MRV finance).  Because ECO sees them as being related to national communications, but forward- rather than backward-looking, SBI agenda items 3 and 4 (national communications for developed and developing countries) are also relevant.

The US proposal on financial architecture has received considerable interest over the last few days, and with good reason. It is an interesting mix of new and old, good and bad, promising and perverse.

ECO can see movement in two respects.

First, after consistently resisting calls for a new institution, the US has now endorsed the creation of a new fund.

Second, as Article 11 requires, the US has agreed that the fund should be under the guidance of and accountable to the COP; that the COP should determine its policies and priorities; and that it should have balanced and equitable representation of all Parties.

The more cynical among ECO readers may wonder whether restating the provisions of the Convention really counts as progress. But we will take movement wherever we can find it. After all, in the quest for a useful negotiating text, we could do a lot worse than the Convention itself.

It now appears that we have a broader basis for agreement on parts of some critical issues of financial architecture and
governance (we are assuming, of course, that the silence of some other umbrella Parties and the EU can be taken as assent). And it would appear that the US has heard the concerns of developing countries regarding simpler administrative procedures and, perhaps, on direct access to financing.

The proposal may also provide a basis for a deal on another contentious issue – the use of existing institutions. Many Parties have expressed their bitter experience and deep frustration with the procedures and governance of multilateral development banks. And while ECO is not a Party, we cannot see giving a policy-making role to an institution like the World Bank. Its own senior sustainable development economist recently called the Bank’s continued support for coal a moral imperative. Another contentious issue is a reaffirmation and expansion of the role of the GEF, which may provide additional fodder for developing countries to resist this proposal.

But we understand that the US may wish to use existing institutions only for fiduciary oversight and auditing functions, leaving the substantive work to the new mechanism and its technical panels. If this is indeed the US position, they should say so clearly. Nobody wants to see this money squandered, so the need for strong fiduciary oversight should attract broad support.

Unfortunately, the US proposal brings us no closer to agreement on a number of other key issues. All countries except LDCs will be expected to contribute, and there are no guarantees that the funds that are made available will be new and additional to existing ODA.  And assessed contributions are off the table. Instead, the fund is to be replenished on a voluntary basis. Periodic pledge parties, rather than a common understanding of historic responsibility and capacity, will determine contributions. This ECO is told will maximise contributions and provide predictability.

Other issues remain to be resolved. Key among these are the specific makeup of the board, how it will be appointed, and whether there will be separate thematic windows.  But for the US, these issues can be negotiated. The key point is that it provides sufficient fiduciary assurances that donors will put money into it.

Of course, fiduciary oversight is only an issue if there is actually money to safeguard. Now let us see some movement on scale. ECO has previously stated that US$150 billion of public financing is required to deal with climate change in developing countries.

Look carefully around you: there is an elephant walking the hallways in Bangkok (it’s not the local type). It’s an intangible but very sizable beast: 7.5 to 10 Gt CO2e worth of surplus assigned amount units (AAUs).

It’s important to understand the scale of the AAU elephant - almost a third of current, best-case Annex I pledges. If this gets off the track, it threatens to undermine real emissions reductions and collapse the price of carbon when carried over from Kyoto’s first commitment period to a post-2012 regime. This represents a serious threat to the goal of limiting warming to as far below 2^oC as possible.

The collapse of economies in transition during the 1990s produced real social and economic hardship. Yet emissions fell dramatically, delaying the reduction of carbon space in the atmosphere.

However, this was by no means the result of climate policy, and rewarding this phenomenon as “early action” contravenes the principle that only targeted, policy-driven changes in greenhouse gas emissions should be accounted for. In addition, to no one’s surprise, surplus AAUs are currently the “grubby outcasts” of the carbon market (even worse than HFCs).

It wasn’t the best idea in Kyoto for Parties to allocate the surplus, but they can join together to correct this error in Copenhagen.

If countries with surpluses want to trade, that needs to be part of a credible, environmentally sound solution.

For example, countries holding extra AAU amounts could agree to a stringent discount (e.g., 60%) of the surplus, if carried over, and the remaining Annex I countries could increase their pledges by another 5%, insuring that overall Annex I aggregate emissions stay more than 40% below 1990 levels in 2020. If countries can’t agree to this kind of solution, carry-over should be forbidden under the Copenhagen agreement.

The EU Commission took a strong position on the AAU surplus issue. Options they have been considering should be rolled into the kind of compromise described above. AAUs cannot be used for compliance in the EU post-2012 climate and energy package. Now the EU can set the tone internationally, reaching a solution to absorb its surplus out of the global compliance system before Copenhagen.

Russia and Ukraine have set 2020 targets, but according to IIASA, those levels could actually be achieved by business-as-usual emissions growth from current levels, while still generating hundreds of megatons of credits annually. Talk about a free elephant ride!

This could divert huge financing flows away from mitigation in developing countries.

Russia and Ukraine should set more ambitious targets, well below BAU, and address the current surplus. While their emissions collapse slowed the growth of GHG stocks, this would be reversed if the Kyoto surplus was used to achieve targets, and especially so if future weak targets generate yet more questionable credits. From ECO’s viewpoint, that would be about as absurd as watching a magician pull an elephant out of a hat.