New Zealand has landed in a pickle over its forest accounts. The age structure of NZ’s plantations means that major harvesting is due to start late this decade and continue into the 2020s. Combine this with the new afforestation/reforestation debit-credit rule and the gains NZ wrangled in LULUCF look likely to evaporate – its carbon accounts skewed into the negative. ECO might even have a rare twinge of sympathy for NZ.
But ECO has no sympathy for New Zealand when it comes to gross emissions. They’ve continued rising since 1990 and are projected to continue rising, even with its much-talked-about-but-rather-weak Emissions Trading Scheme.
Worse, having agreed in Cancun that developed countries should write a low carbon development plan, New Zealand is showing no sign of writing one. It certainly has no plan to get gross emissions on a downward trajectory.
Instead New Zealand is planning just everything possible to increase emissions: dairy farming expansion, unprecedented levels of coal mining, a major road building programme, more oil and gas exploration, and, to cap it all (no pun intended) off, the state owned mining company wants to dig up 1.5 billion tonnes of lignite and turn it into fuel and fertiliser.
It’s no wonder New Zealand wants rules for setting QELROs that would enable it to meet its 20% by 2020 target and end the second commitment period with over 22 million spare AAUs – a tidy sum for a small country.
So, where does all this leave New Zealand’s decisions on CP2 of Kyoto, its 2020 target and its QELRO? NZ is quietly desperate to accommodate its planned increase in gross emissions and expected blow-out in net emissions. With no intention of actually reducing gross emissions, NZ’s only course of action is to play with the accounting system. This means trying to ensure maximum carry-over of surplus AAUs from CP1 to CP2, securing access to the cheapest carbon credits possible (euphemistically “full recourse to carbon markets”) and a handout of AAUs from new accounting rules.
It looks like New Zealand’s decision on CP2 will depend on who New Zealand wants to be friends with and whether the accounting system is sufficiently favourable. Failing to meet a voluntary commitment under the Copenhagen Accord has political consequences, but failing to meet a binding commitment under CP2 has political and economic consequences. So no surprises then that New Zealand has not submitted its QELRO, is focused on the accounting and has also created an impossible hurdle (see the demand for a "balancing agreement" in its recent submission) in case an excuse is needed to bail from the Kyoto ship.
Ministers, your attention is about to be rewarded. This article aims to preserve your sanity.
In the past, ministers have run out of closed rooms when asked to make decisions on LULUCF. When a minister once was asked how the LULUCF rules were progressing in Marrakesh he replied, “I have no idea. It is like fighting in a fog and the civil servants have all of the weapons”.
The basics of LULUCF are not hard, just weird, and they work in opposition to the rest of the UNFCCC process. For example, it is generally assumed that developed countries should be cutting their emissions, or at least trying to. This is not the case in the Alice in Wonderland world of LULUCF; quite the opposite in fact.
To begin with, the ‘rules’ are currently optional, so if a country thinks that a LULUCF activity such as forest management will result in an emission, then it can choose not to account for it. If it thinks that the activity will result in a removal, then it will account for it and take the credit.
Are you with us so far? Can you imagine the fuss if developed countries arbitrarily decided not to account for industrial emissions? This is what is commonly known as legalised cheating.
So we offer a remedy. Ministers should ensure that developed countries have to account for all LULUCF emissions and removals, not just the ones that suit them. This is called mandatory accounting and it really should be a core principle, or at the very least apply to forest management and wetlands.
It gets worse. The new rules on forest management are likely to allow countries to account for emissions however they choose, giving a whole new meaning to the word ‘rule’.
The most popular option (Option 1) is for the reference level (baseline) to be a projection, which assumes that emissions will increase, thereby ensuring that no emissions have to be accounted for.
Imagine this ‘rule’ being applied to electricity generation. A country could build as many new coal-fired power stations as it liked, and as long as the country first announced that it would do so, they would not have to account for any of the emissions. Bearing this in mind, ministers should reject Option 1 and go for either Option 2 (proposed by the Africa Group) or Option 3 (by Tuvalu) instead. These are not ideal but they are a lot better than Option 1; almost anything would be.
Now for another mind-bender. To fully understand Harvested Wood Products (HWP) requires a twists in logic that we hope that ministers will not countenance, so here’s very simple advice. Just go for Option 3.
Last but not least, there is a proposal called FLU, which is as nasty as it sounds. This is an attempt to rewrite the Kyoto Protocol’s article 3.3. Reject “flexible land use” out of hand.
Ministers – thank goodness you are here. Your delegations may have been burning some midnight oil in the last few days – but they have left the hard decisions for you! Here’s what your agenda for the next 4 days looks like:
1. Don’t just “Mind the Gap” – do something! Ministers, at Durban you must show that you live on the same planet as the rest of us and acknowledge that the current mitigation pathway puts us on track for over 4° C warming. You must explicitly acknowledge the 6 to 11 Gigatonne gap, agree to a 2012 work plan to close the gap by increasing developed country targets to at least 40% by 2020, and provide guidelines and timeframes for NAMAs to be registered and supported where required. The ambition work plan must include clear markers through 2012, including submissions, technical papers and a dedicated intersessional meeting, to ensure we don’t have another year of wishy washy workshops with outcomes.
2. Commit for the long term. Negotiators have made no progress at all in setting a peak year and a long term global goal for emissions. Ministers now should explicitly agree that each country contribute their fair share to the globally needed mitigation effort, leading to a peak by 2015 and a reduction of global emissions of at least 80% below 1990 by 2050.
3. Stop spinning wheels in the Review. Ministers need to ensure that the Review will be effective, and limiting the scope will help it get off the ground as an effective instrument. We must focus on the important things: reviewing the long-term goal and the overall progress towards achieving it. Leave the biannual reports under MRV to cover the inputs like the means of implementation.
4. High Time for legally binding. A 5 year long second commitment period of the Kyoto Protocol is an absolute necessity as it contains important architectural elements which are crucial to ensure that mitigation commitments are legally binding and have environmental integrity. Nobody believes that a temperature rise of 4° C might be OK. So now is the moment to act decisively. An LCA mandate to agree a comprehensive legally binding instrument can build on the KP. Parties need to go beyond their long stated positions and immediately kick off negotiations toward a comprehensive, fair, ambitious and binding agreement to be agreed no later than 2015.
6. KP is essential – but it must have integrity. When added together, loopholes in the KP could wipe out Annex I ambition for the second commitment period.
In LULUCF, hidden and unaccounted emissions could significantly undermine Annex I targets, and cause us to doubt your commitment. Ministers must therefore ensure emissions from forests and land use are accurately accounted and reject the options on the table with the lowest environmental integrity.
All of the parties to this relationship know that the hot air / carried over AAUs is a bad joke that threatens to sour our relationship. To keep it pure we need you to retire your surplus AAUs, or at least reduce them to 1%. Flexible mechanisms need clear rules and governance structures to avoid double counting of both emissions and finance, strengthen additionality testing and ensuring the standardization frenzy does not leave us with a highway for free-riders. Let’s start by keeping CCS and nuclear out of the CDM and let’s exclude coal power projects. Last but not least, we do indeed need stakeholder involvement in the CDM. Don’t back down, we are counting on you!
PS: CDM’s little brother JI has been up to a bunch of no-good stuff: hot air gussied up in new clothes (ERUs) is still hot air.
7. Fill the Fund. Operationalising the GCF in Durban is essential but not nearly enough – an empty fund is no good to anyone. We need initial capitalization of the GCF from developed country Parties in Durban. Reaching $100 billion per year by 2020 will require a commitment to scaled up finance from 2013 onward and clear progress on innovative approaches to generate finance. In Durban, parties should move forward on the establishment of mechanisms in the shipping and aviation sectors in a way that reduces emissions, generates finance, and ensures no burdens and costs on developing countries. Countries must also agree to a detailed one year work programme under the UNFCCC to consider a full range of innovative sources of public finance and report back to COP 18 with a proposal for action.
8. Gear Up and Deliver Technology. Technology is heading in the right direction, but speed is needed! Don’t be held back by other laggards. The Tech Mechanism could be operational by the end of COP 18.
9. Feel the Love for Transparency and Stakeholders. Your negotiators excised stakeholders’ right to participate from the IAR text and subject to heavy bracketing in ICA. But we know, Ministers, that you recognize the worth of engaging stakeholders to create a better process – rather than having us only campaign from the outside. Current text also falls short on common accounting rules for Annex I countries and clarification of pledges for all countries. Surely we’ve learned from the financial crisis! Robust reporting, such as Biennial Reviews and Biennial Update Report guidelines, including tables for reporting actions, and a common reporting format for finance must be agreed in Durban, so countries can complete their biennial reports in time for the first review. And where would this relationship between us and the planet, be without compliance for our commitments!
10. An ambitious adaptation package at the African COP. Good agreements on Loss and Damage and the Nairobi Work Programme have already been reached. Wrapping up the package will require agreement on a strong Adaptation Committee including active civil society observers and direct reporting to the COP (as well to the SBs when COP does not meet). Furthermore, guidelines for National Adaptation Plans for Least Developed Countries must be adopted, plus modalities on how other developing countries can take these up. The prioritisation for LDCs must of course not be undermined.
A strong role for local, affected communities and civil society in national planning processes, building on the principles agreed in the Cancun Adaptation Framework, is essential. Finally, Parties must ensure that the Adaptation Fund does not dry up because of decreasing CER prices and lack of new pledges to the Fund from developed countries.
ECO recognises that significant time and effort have gone into improving the transparency and technical robustness of Annex I Parties’ proposed reference levels for forest management.
However, although the review process achieved those objectives, this is in no way sufficient to ensure the environmental integrity of the reference level approach to forest management accounting. Put bluntly, the policy premise of the reference level approach is deeply, irrevocably flawed.
Although the review process was able to identify and correct technical issues and inconsistencies in individual country reference levels, it was never intended to assess the broader policy implications of the reference level approach. These implications include the following:
Environmental integrity. The reference level approach would allow Annex I Parties to increase net emissions of greenhouse gases relative to current levels over the next commitment period without penalty. Over time, this approach could seriously undermine global climate change mitigation and result in a loss of forest carbon stocks in developed country forests.
Economy-wide mitigation. The forest management reference levels for some Annex I Parties have been set in a way that allows them to hide increases in emissions from managing their forests and therefore allows them to avoid undertaking mitigation actions in other sectors.
Comparability. One supposed strength of the reference level approach is that it is flexible enough to allow all Annex I Parties to adopt mandatory forest management accounting.
However, reference levels overshoot the flexibility actually needed several times over. The result is a framework in which a tonne of mitigation in one country is not necessarily equivalent to a tonne of mitigation in another country.
The review was designed to assess the technical robustness and transparency of Parties’ reference levels, and it did its job. It is now plainly and utterly apparent just how bad the effects of the reference level approach could be.
ECO therefore implores Parties to take a step back, consider the broader implications of the reference level approach and reject it in favour of one of the more robust options on the table as we head into the critical second week of negotiations here in Durban.
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.
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.
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!