Tag: loopholes

Time to Get Serious About Loopholes

Here’s a quick reminder: According to the latest UNEP report, the weak pledges from Annex I countries get us only about a third of the estimated emissions reductions that are needed if we want to have a two-in-three chance of avoiding more than 2° C warming. Unfortunately we have even more bad news: loopholes!

Loopholes are weak rules that undermine reduction targets, usually resulting from political bargaining. The largest loopholes are:

  • The carry-over of ‘hot air’ due to the over-allocation of AAUs during the first commitment period.
  • ‘Creative’ accounting rules for forestry and land-use emissions (LULUCF) for Annex I countries.
  • CDM credits from projects that are either over-credited or not additional (would have been built anyway).
  • Double counting – attributing emission reductions to both developed and developing countries.
  • Emissions from aviation and shipping (“bunkers”) currently not accounted for under the Kyoto Protocol.

We took a closer look at the loopholes and compared their total size to the cumulative emission reductions that could be achieved with the current Annex I pledges. We found that the current ‘loopholes’ in the system could negate their pledges.

In the worst case, they could leave Annex I countries with sufficient allowances and credits to revert to a BAU trajectory, and could even enable the carry-over of surplus allowances beyond 2020.

As you can see, a graph says more than 1,000 words. Our findings match those of the UNEP Report, the Stockholm Environment Institute and others.

The size of these current loopholes is staggering. Strong action is required now to effectively and efficiently close these loopholes if we want to preserve the possibility of staying below 2° C warming. 

None of the technical issues around the loopholes are insurmountable.  If developed countries are serious about fulfilling their responsibility to lead the fight against climate change, they need to put ambitious targets on the table that are in line with the science and do away with all these rotten loopholes. 

There is no plan(et) B. Every passing day of inaction closes the door that much further on preventing catastrophic climate change.

Related Event: 
Related Newsletter : 

LULUCF: Are We Outraged Yet?

One of the most important principles in the climate negotiations is that of common but differentiated responsibilities. CBDR means that while it is everyone’s job to reduce emissions, Annex I Parties have the lion’s share of historical emissions and therefore should demonstrate leadership with more ambitious emission reductions.

Specifically, to have a chance of keeping warming below 2° C, Annex I Parties must reduce emissions 40% or more below 1990 levels by 2020, while developing countries should begin low-carbon development that rapidly diverges from their likely business-as-usual (BAU) emissions.

How on earth, then, do Annex I Parties justify accounting for their forest industry emissions against BAU levels, and not a much more ambitious benchmark. And as you might have guessed, it’s even worse – many of these proposed BAU reference levels are inflated to hide future emissions increases, and so are worse than “real” BAU.

How is it that Annex I ministers and heads of delegation have allowed a whole sector to avoid contributing a fair share of ambition? Seriously, this isn’t some obscure technical issue. It’s a basic point about whether the forest sector is helping to solve the problem or is just a free-loader.

Furthermore, how hypocritical is it for Annex I Parties to set forest reference levels with no ambition for themselves, and then include calls for ambition in their recent submissions on the evolving REDD+ mechanism?

If you’re not outraged, you’re not paying attention!

And yet there is still time here in Durban and there are better options in the LULUCF text. These options may not be perfect, but they are better than Annex I countries’ wholly unacceptable projected BAU reference levels.

Come on, LULUCF negotiators and heads of delegations! It’s not enough to deliver a set of rules everyone can agree on. These rules must neither undermine the integrity of the KP nor set damaging precedents that could see ambition undermined in other areas. Clearly they must deliver for the climate – and time is running out!

Topics: 
Related Event: 
Related Newsletter : 

Handing out medals in the LULU-lympics

Looking at the new reports being posted on the UNFCCC website, ECO feels some empathy for the reviewers tasked with ‘judging’ the forest management reference levels.

Since there was no agreement on the rules for reference levels, each Party has had to do its own thing.  And the results look as disjointed as a talent show.  Some sang, while others danced.  Some lifted impressive weights, while others performed magic tricks.  Maybe some have shown real talent, but how can we judge the quality of their performance when we have no basis for comparison?

Perhaps Parties should take note of another multilateral, global process – the Olympic Games.  In those Games, the rules are clear in advance, and thus the judges are able to score each performance on a set of common criteria – and those who don’t play by the jointly agreed rules, are disqualified.  

It would have made the “judges” – the expert reviewers – job easier if Parties had agreed to a single method for setting reference levels back in Cancun.  And of course, if that method had environmental integrity, the climate would be the ultimate victor.   That didn’t happen in Cancun, and now Panama may be the last chance for Parties to recognize that such global reference levels are in the interest of all of our “national circumstances”.  ECO says: “Go for the gold!” 

Topics: 
Related Event: 

Panama: Progress or Paralysis?

Durban is shaping up as a critical moment in the 20-year history of the climate regime.  The world can either build on what has been created in the Kyoto Protocol, raise the level of ambition as demanded by the science, and provide sufficient finance to meet developing countries’ needs for adaptation, mitigation, and REDD. Or it risks relegating the UNFCCC to a side show with little legitimacy to meaningfully address the climate crisis.

Let’s review what’s needed to avoid a train wreck in Durban:

Mitigation:In the Cancun Agreements, developed countries accepted that their aggregate level of ambition should be in the range of 25-40%.  Even while this range does not guarantee that global temperature rise will stay below 2 degrees Celsius, current developed country emission reduction pledges will result in reductions of only 12-18% going down to ~2% if currently existing and proposed loopholes are taken into account.  ECO suggests four critical elements in the Durban mitigation package for developed countries:: clarify what the net emissions would be based on current pledges and assumptions; close the loopholes;  move to the high end of current pledges; and agree on a process to increase ambition beyond 40%, for adoption at COP18/CMP8.

Panama can and must reach agreements on closing the loopholes.  The recent Review of proposals on forest management under LULUCF clarifies the size of the forestry loophole.  Now, Parties must adopt forest management reference levels that are comparable and that don’t significantly undermine Annex I Party targets. Overall, LULUCF rules should encourage Parties to achieve ambitious mitigation from land and forests.  On carry-forward of AAUs, Parties must eliminate the risk of “hot air” undermining the environmental integrity of future reduction commitments.

Kyoto Protocol: As acknowledged by both Executive Secretary Figueres and incoming COP President Nkoana-Mashabane, the future of the Kyoto Protocol will be decided at Durban.  While some developed country Parties would prefer to overlook the KP or at best, make a second commitment period conditional on what happens in the LCA over the next four years, it is  essential that in Durban, we cement a second commitment period of the KP.  The alternative – a pledge and review world – just won’t cut it.

Convention mandate: Given the urgency of the climate catastrophe unfolding daily before our eyes, nothing less than the greatest level of commitment is needed from all parties.  Therefore, in addition to preserving the Kyoto Protocol, Durban must agree that by 2015 at the latest, the commitments and actions of all Parties should be inscribed in legally binding instrument[s], whilst fully respecting the principles of the Convention.

Finance:The last session on finance in Bonn was dominated by discussions on the Standing Committee.  Negotiations need to also focus on the critical issue of where the money is going to come from.  Urgent attention on scaling up sources of climate finance from 2013 to 2020 is needed.  In addition to expanding direct finance from national treasuries, Parties should commit to raise significant revenue for the Green Climate Fund from innovative sources, implemented in a way that has no net incidence for poor countries.  Progress on a mechanism to levy bunker fuels would be an especially noteworthy achievement here in Panama, which licenses so much of the world’s shipping.

Technology: CAN urges Parties to decide here in Panama on the criteria for the Climate Technology Center host, so that the Center and Network can be operationalized in 2012 as envisioned in the Cancun Agreement.

Adaptation: Parties aren’t far away from a good decision text on the Adaptation Committee.  Here in Panama, they should agree on the composition of the Committee with equitable representation, direct reporting to the COP, and linkages to other institutions, particularly on finance and technology.

Capacity Building: Parties should work with the Facilitator's notes and his new and highly comprehensive background paper to begin drafting text for a Durban decision. This paper should focus on the vital question of how to design effective and comprehensive co-ordination of new, additional and scaled-up capacity-building within the emerging new architectures for finance, technology, adaptation, MRV and mechanisms.

MRV: Parties should build on the MRV architecture agreed in Cancun by moving forward on common accounting rules for emission reduction targets and an enhanced common reporting format on finance. Parties should also adopt guidelines on the content, timing and structure of biennial reports, and agree procedures for strong International Assessment and Review (IAR) for developed countries and International Consultation and Analysis (ICA) for developing countries.  

On all these fronts, Parties need to agree here in Panama what text they will work from – and begin to constructively work on that text.  It’s time for all Parties to show they are serious about the UNFCCC, and serious about their commitment to prevent catastrophic climate change; small steps won’t cut it.

Related Event: 

First Week Wrap Up

ECO is pleased that parties finally managed to agree on agendas last week. (Imagine how much quicker it could have been if agenda discussions were held transparently in plenary, as opposed to shenanigans occurring behind closed doors). This week Parties must make up for lost time – and convince everyone that another intersessional would be productive.  After all, there is much work to be done between now and December so that Durban can successfully lay the basis for a fair, ambitious, and binding global climate change regime.

Essential to Durban’s success is securing a second commitment period of the Kyoto Protocol.  Intrinsically linked is the binding outcome under the LCA, where Parties now need to discuss the substantive issues. Our ultimate objective must be a legally binding architecture, which is fair and ambitious.

Last week, the list of issues under shared vision began to resemble a bag of assorted cookies.  ECO suggests focusing on the agreed global goal with peak year, and only including issues essential for these discussions – such as effort sharing.  Agreement of a mid-term goal of -80% by 2050 and a 2015 peak year for emissions must be the aim.

On mitigation, some issues may look technical but are in reality political. This week ECO suggests focusing on the following three areas required to address the gigatonne gap: (i) clarifying assumptions; (ii) closing loopholes; and (iii) preparing to move beyond the high end of the current pledges by Durban. ECO assumes parties remain serious in their commitment to 1.5/2°C – you are aren’t you?

This week also offers opportunities for LULUCF.  The re-analysis of this issue as a significant loophole in the mitigation workshops could allow Annex I land and forests to contribute to genuine emissions reductions.  And technical discussions on force majeure provisions for forests could genuinely reflect extraordinary circumstances.  Or, if Annex I parties are up to their usual tricks, could this be yet another way to avoid accounting for emissions?

Parties should also take the opportunity to draft a CDM appeals procedure to grant affected communities and peoples access to justice.  And this week parties should move closer to  a  decision

to address climate forcing HFC in cooperation with the Montreal Protocol and exclude all new HCHC-22 facilities from the CDM.

The two groups on REDD+ (in the LCA and in SBSTA) got off to a good start last week. In this second week, ECO anticipates significant progress on both reference levels and information on safeguards, hopefully followed by expert meetings prior to Durban.

Adaptation negotiators should press ahead on substance to make the Cancún Adaptation Framework operational in Durban.  Parties should strengthen the role of the Adaptation Committee to promote coherence in adaptation, and to ensure meaningful stakeholder participation in its operations.  Furthermore, this week must see parties launch the activities of the work programme on loss and damage.

With the end of the fast start finance period only one year after Durban and no indication of how rapidly public finance will be scaled up from the $10 billion per year currently committed, parties need to start discussions here in Bonn on effort sharing, scaling up finance, and on new innovative public sources such as raising finance from international transport.  For this to happen, the US and its Umbrella Group allies need to stop blocking the discussion of sources and scale of long-term finance.

ECO has two requests for technology negotiators over the next week. First, fill up the nominations of the Technology Executive Committee. Secondly, decide on the terms of reference and likely locations of the Climate Technology Centre and Networks to maintain balance of adaptation and mitigation technology.

Among other issues that should be addressed, Parties need to deal with technical issues. ECO is waiting eagerly for some technical workshops and expert meetings. In the coming months, technical experts should make progress on technical issues such as biennial reports, reporting on support, IAR/ICA, REDD safeguards, etc.  These discussions must feed into the negotiating process.

Given the uncertainty over whether another intersessional will take place, the next five days will determine whether Parties will be able to secure an effective and balanced outcome of COP 17 in Durban. Parties should make the best use of this time and ensure both political and technical issues get addressed.

Related Event: 
Related Newsletter : 

Memo to Ministers: Close the LULUCF Loophole!

Ministers, would you like a glowing ECO article with your name on it?  
As you delve into the unresolved issues with the KP, the first thing you need to know is that the main proposal for LULUCF doesn’t ensure a robust, environmentally sound approach to forest management accounting.  While sorting this out may seem daunting when you are presented with the complex draft text, we can help make your mission very clear: close the Logging Loopholes!  And if you do, ECO will put your decision in lights and say your country did something really great to truly reduce emissions.
To get a sense of the problem, consider that the proposed reference levels for forest management, tucked away in an innocuous looking annex, would allow an increase in annual emissions of 451 Mt relative to the historical average (1990-2008). That’s a lot of tonnes!  
Surely a half-gigatonne divergence from recent trends is a red flag. The Copenhagen pledges are for emissions decreases, and yet the LULUCF reference levels go up. Up versus down, hmmm.  That means Annex I Parties now assume their own logging increases while asking other countries to reduce their emissions from deforestation. The forest sector should not be excluded, so how about actually building ambition right into the 
LULUCF rules.
So one huge step is to close the loophole of the projected reference level approach, which will only make climate change worse.  
And there are lots of ideas floating around the Moon Palace on how to do this.  Some of them already appear as options in the draft text: use a historical baseline (Tuvalu); combine historical and projected baselines (Africa Group); fix the rules and policy cut-off dates for reference level setting; revert to the current rules for the first commitment period.  Most of these options can be judged against their ability to shrink the loophole.
ECO stresses that LULUCF accounting must be mandatory, and not only for forest management, but for all sectors (to the extent it’s technically feasible).  For example, emissions from draining and rewetting wetlands are considerable, and they should be counted.
But it’s also important that mandatory accounting not come at the price of deeply flawed rules. The objective of this process wasn’t just to produce new LULUCF rules, but rather to produce better ones.
Another large loophole in the draft LULUCF text is the provision to allow Annex I Parties to exclude from the accounting books emissions from wildfires, infestations, extreme weather events, and the like.  This is known as force majeure, a legal term that means these emissions ‘could not have reasonably been foreseen by the Party’. Some Parties are trying to exploit this provision to exclude all emissions from natural disturbances, a recipe for diminished accountability and lost mitigation potential.  
Normal variations in natural disturbances and even increasing trends as a result of climate change can both be reasonably foreseen.  This means the force majeure text must involve a threshold below which emissions are not excluded.
Ministers, we’re facing a daunting gap between emissions reductions on the table and what science says is needed to avoid the worst impacts of climate change. It’s time to get serious and tackle emission reductions wherever we can. Start by closing the logging loopholes, and headlines galore will follow.

Topics: 
Related Event: 
Related Newsletter : 

LULUCF: Moment 
of Decision

The future of Annex I forests and their role in climate change mitigation is about to be decided here in Cancun.
ECO has long highlighted how inappropriate and possibly fraudulent LULUCF accounting rules could be used by Annex I Parties to avoid accounting for their forestry emissions. This week a group of NGOs assessed the scale of these impacts, in particular, the magnitude of proposed forest management baselines relative to the ambition of Parties’ pledges. Astonishingly, the emission reduction efforts of some Parties could be reduced by up to 66% as a consequence of unaccounted emissions from logging their forests.
There is still more than one proposal on the table, and it is clear that the impact of forest management accounting on countries’ pledges will differ depending on the approach agreed upon.
A review process was proposed by developing countries earlier this year to evaluate the robustness of favoured baseline proposals by Annex I countries. The new KP Chair’s text calls on Parties to provide the required information by February 2011 and for expert reviewers to conclude their review by May.
But let’s be clear.  The impact of the proposed reference levels is unacceptable and a review won’t fix that. However, broadening the review to include an objective analysis of all accounting options could help Parties make an informed decision about which approach should be used in the second commitment period. To do this, Parties would need to provide information about each of the potential options on the table and how it will impact their pledges.
This analysis is urgently required for a meaningful discussion on numbers. That will achieve two crucial things: the discussion of ‘numbers’ will go forward with consideration of all potential options, and decisions will be made based on the likely real impacts on the climate.

 

Party Emission Reduction Pledge % 2020 Unaccounted Logging Emissions %
Canada -17 +1.4
New Zealand -10 to -20 +66.0
Norway -30 to -40 +8.7
Russian Fed -15 to -25 +5.5
Australia -5 to -15 +4.0
Japan -25 +3.6
EU -20 to -30 +2.7
Switzerland -20 to -30 +2.4

Notes: Figures are percentages of country-specific base years.  Pledged emission reductions for 2020 (rel 1990) from FCCC/KP/AWG/2010/INF.2/Rev.1.  Unaccounted logging emissions equals the difference between Party’s proposed reference levels and average of historical net emissions.  The estimate of average historical net emissions from Annex I forest management calculated using data from 1990-2008 (forest land remaining forest land) from Parties’ 2010 
inventory submissions.  Any adjustments were made on consultation with Parties and technical experts.  Japan has not yet indicated whether its pledges include accounting for forest management.

Related Event: 
Related Newsletter : 

Pages

Subscribe to Tag: loopholes