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Notes from Bangkok

Written By Gopal Krishna on Tuesday, October 06, 2009 | 2:01 AM



The Story So Far

The first part of the ninth session of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) and the first part of the seventh session of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA) is taking place between Monday 28 September and Friday 9 October 2009 at the United Nations Conference Centre (UNCC) of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), Rajdamnern Nok Avenue, Bangkok, Thailand .

At a meeting of AWG-LCA Contact Group on Mitigation (paragraph 1(b)(v) of the Bali Action Plan (BAP), G-77 and China opposed proposals unifying mitigation in Annex I and non-Annex I parties. China highlighted that NAMAs are voluntary and decided by developing countries, and that actions needed to be discussed alongside support. India highlighted that support should cover full costs of measures and not be based on assessments of needs. It also highlighted that unsupported actions cannot be subject to verification. The G-77 and China noted that the Protocol’s targets were based on pledges, which was not the solution preferred by all countries, and stressed the need for adequate mid- and long-term mitigation by developed countries, saying “this goes far beyond countries putting forward national numbers.” It stressed that: mitigation under sub-paragraph 1(b)(i) must take the same form of quantitative targets as under the Protocol; rules on MRV for all developed countries should be the same as in Kyoto Protocol Articles 5, 7 and 8. India said that central ideas that protect economic growth in developing countries should be retained in the text. The G-77 and China said that the structure of the text should be streamlined and emphasized that the key message on adaptation finance should not be lost. He highlighted the need for immediate medium- and long-term adaptation actions.

G-77 and China underlined that this mechanism should lead to action on technology and go beyond assessments or information exchange. China said that a tangible mechanism should be established to kick off action on technology.India emphasized that technology transfer does not refer to commercial transfer but to concessional transfer.

G-77 and China emphasized the importance of principles and drew attention to problems arising from a lack of coherence and the multiplicity of governance systems that deal with financing. She underscored direct access as a separate principle, while the EU questioned whether all the principles were required. The EU expressed preference for, inter alia, formulations addressing: the needs of the most vulnerable countries; simplified access to financial resources while maintaining principles of sound financial management; and leveraging other forms of financial resources, such as private-sector financing. China noted that one of the functions should be the provision of financial resources, primarily from the public sector. The EU emphasized the importance of the private sector and the carbon markets, while acknowledging the role of public international finance. In the context of private sector funding, India and China drew attention to double counting arising from emission reductions achieved through offset mechanisms.

The G-77 and China said that funding pledged outside the Convention did not fulfill developed countries’ commitments under the Convention. The US noted that many mitigation challenges were in fact investment opportunities and highlighted the ten-fold increase in funding to vulnerable countries by the US Congress. He also observed that many countries that are not in Annex II of the Convention have the capacity to contribute financially. He said that the US domestic system limits consideration of levies and taxes, and noted that as the US is not a party to the Protocol, it could not participate in auctioning of AAUs.

China underscored the fundamental responsibility of Annex I parties to reduce their emissions in aggregate by 40- 45% by 2020 and said that if parties disagreed with this level of responsibility they should define what they felt their collective responsibility was.

Venezuela voiced objection to proposals seeking to “market the atmosphere,” which he said amounted to “who pays may pollute.” China said estimates concerning how much finance the private sector and markets could generate had been exaggerated.

The US stressed that agreement on binding language on MRV would provide a way of evaluating obligations, and that a long-term perspective is important in measuring adequate stringency. The US said experiences in the past ten years have shown that markets have enabled more cost-effective emission reductions and that the CDM has stimulated clean investment, stressing that the proposals could make an important contribution to the Convention’s objective. The US outlined his country’s proposal for establishing a technology hub, which would provide full-time experts available to parties.

Bolivia highlighted the structural link between climate change and markets. It noted the necessity of removing barriers to technology transfer.

Some negotiators felt that the legal nature of the outcome was not on the agenda, but we were discussing the document or documents that might come out of Copenhagen, other negotiators felt that it was difficult, if not impossible, to isolate discussions on form from discussions on legal nature, continuing: “I think that the number of lawyers in the room might be a testament to that notion.”

G-77 and China opposed including the proposals for frameworks as well as the related structural proposals, stressing the distinction between mitigation by developed and developing countries both in magnitude and legal nature. The US explained that their vision is different from the Protocol and builds on the Convention’s commitments and obligations that are common for all parties. He called for enhancing action and reporting by all parties, while recognizing that actions would be different for developed and developing countries. He stressed the need for upfront information on countries’ actions, noting that national communications convey such information only years after actions have been taken. The US also outlined plans for a legally-binding and economywide national system, highlighting a long-term perspective.

India stressed that the proposals contained in the frameworks conflict with the Convention and the BAP, as they seek to erase the distinction between developed and developing countries and impose new mitigation and reporting commitments on the latter. China opposed the proposals, noting historical responsibility and the clear distinction between mitigation by developed and developing countries, also reflected in subparagraphs 1(b)(i) and 1(b)(ii) of the BAP.

On Intellectual Property Rights (IPRs), Australia called for greater cooperation with relevant organizations such as the World Intellectual Property Organization and, with the US, noted that IPRs incentivize technology development. G-77 and China reiterated that IPRs represent a barrier to technology transfer. Bolivia said strong IPRs increase costs of R&D, and India alongwith the Philippines suggested compulsory licensing. At a “off the media” briefing, the US negotiator said that some countries do not realize that things can work even without compulsory licensing.

On whether it was possible to use 1990 as the base year with multiple reference years. Australia supported using a single legally binding base year with multiple reference years. Canada stressed that their pledge used 2006 as the base year. It recommended using a table with base years as defined by individual countries in their pledges, as well as columns comparing 1990 and other common base years.

The EU, Iceland, Switzerland, and the Russian Federation supported a single base year of 1990, with multiple reference points that could be used for communication or policy purposes. The G-77 and China, Norway, AOSIS, Brazil, Saudi Arabia, India and the African Geoup called for retaining 1990 as the base year for the sake of simplicity, comparability and transparency.

The G-77 and China emphasized that a common internationally binding base year would not preclude countries from translating their commitments into other reference years for domestic purposes. The EU expressed concern that using multiple base years would require a Protocol amendment, as several provisions, including Protocol Articles 3.5 and 3.7, refer to “1990” rather than to “base year.” Australia noted that multiple base years present challenges in the calculation of AAUs. Japan stressed that while their new pledge is relative to a 1990 base year, there should be flexibility to choose other base years to facilitate the participation of the broadest number of countries.

The EU highlighted their proposal on sectoral crediting, which would move a number of developing countries from the CDM. AOSIS proposed considering improved access to the CDM by building on elements in the text related to positive lists of project activities and on text on financing validation, verification and certification of projects in certain host parties. Bangladesh highlighted the high cost of operationalizing CDM projects, including the registration fee and validation by a Designated Operational Entity, calling for exemptions for LDCs.

On promoting co-benefits for CDM projects, Canada said projects with co-benefits receive a premium from the market and proposed including in the project documents a place for listing co-benefits. It also suggested considering the timing of the registration fee. BRAZIL supported postponing payment of the registration fee until the first issuance of Certified Emission Reductions, saying the CDM Executive Board could take prompt action.

India has noted that the new report by the World Bank on the Economics of Adaptation to Climate Change estimates that US $75-100 billion per year is required for adaptation in developing countries. It stressed that this range “is probably an underestimate” but should be used as a starting point for discussions on the scale of resources needed. Delegates considered the finance section (FCCC/AWGLCA/INF.2). Canada emphasized the need to provide support for adaptation to the poorest and most vulnerable countries, and called for creation of an architecture that maximizes the effectiveness of delivery. Japan supported using existing institutional mechanisms. The use of existing mechanisms was opposed by the G-77 and China, LDCs, and the African Group. The G-77 and China stressed that existing institutions had failed as a finance delivery system, objected to co-financing and said that the architecture should be concentrated in “one house.” The African Group underscored that financial mechanisms must be subject to MRV. The LDCs emphasized that existing institutions have failed to provide adequate financing and that a new multi-window institution is needed. He stressed that funding should come from public sources in developed countries and be supplemental to official development assistance.

There were discussions in the corridors about the impact of the introduction of the Boxer-Kerry climate bill in the Senate and the regulation of greenhouse gases by the Environmental Protection Agency under the Clean Air Act.

Mexico proposed a green fund, highlighting that participation in the fund would be voluntary, but that once parties had opted in, their contributions would be based on assessment criteria related to emissions, population and economy. Saying that developing countries’ contributions would be “much smaller but not zero,” it expressed concern that, without developing countries taking any responsibility to act, “the victims of today may become the culprits of tomorrow.” It highlighted, inter alia, that: the LDCs would be the only “accepted free-riders;” developing countries would get more than they contribute; and the green fund would not eliminate obligations under other elements of the financial architecture. The G-77 and China, LDCs, and the African Group expressed reservations with the Mexican proposal.

Venezuela said that developed countries were using “green excuses” to get out of their historical responsibilities. The EU emphasized that the “core” of the negotiation is how to mobilize effective financing and that parties need to discuss linkages between sources of funding to create a coherent system. Venezuela, with China, stated that market approaches play a limited role in the Protocol and are not mentioned in the Convention, suggesting their inclusion poses a legal problem. The US proposed emphasizing that the use of market mechanisms is voluntary.

India, Nepal and Thailand highlighted the need to keep REDD-plus separate from NAMAs. Vice-Chair Dovland of AWG-KP CONTACT GROUP referred to the previous lengthy discussions on carbon capture and storage (CCS) under the CDM, identifying it as an issue that “might not get resolved before Copenhagen.” He explained that views expressed by some parties at the informal meeting in August, that CCS under the CDM should not be restricted to geological formations, has been reflected in the new text. On the inclusion of nuclear activities under the CDM, Vice-Chair Dovland said that the issue “would probably need to be resolved at the political level in Copenhagen.

Saudi Arabia highlighted work on ocean sequestration under the IMO.

New Zealan, Norway, Switzerland, the EU and AOSIS raised concerns over the inclusion of ocean sequestration under the CDM. Australia, opposed by AOSIS, proposed referencing the existing approach under the 1996 London Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter.
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