Kyoto to Buenos Aires, Bonn and beyond
Global climate change may well be the most significant environmental problem of our time. Significant not only for its portended consequences, which are severe, but for its ability to test the extent of humankinds collective conscience to take moral responsibility for a problem of its own making.
If the ongoing international negotiations are any indication, the world community is yet to come of age. Since its inception, the climate process has witnessed intense bickering between and within the developed and developing world over who should take responsibility, in what measure and under what conditions to avert climate change.
Diplomats from over 170 countries met in Bonn, Germany, between May 31st and June 11th 1999 for the tenth meeting of the Subsidiary Bodies to the United Nations Framework Convention on Climate Change (UNFCCC) to continue discussions on these issues.
The Kyoto Protocol to the UNFCCC, adopted in December 1997, requires certain developed country Parties listed in Annex I to the Convention to reduce their overall emissions of a basket of greenhouse gases by at least five per cent below 1990 levels in the commitment period of 2008-2012. The United States agreed to an emissions cut of seven per cent, Japan six per cent and the European Union eight per cent.
The Kyoto Protocol provides three mechanisms to aid Parties in achieving compliance with these commitments Joint Implementation and Emissions Trading between Annex I countries and the Clean Development Mechanism (CDM) between Annex I and non-Annex I countries.
The Buenos Aires Plan of Action, a follow-up to the Kyoto Protocol, resolves to show demonstrable progress according to established time frames on, inter alia, the mechanisms of the Kyoto Protocol. The meeting in Bonn, the first since the Fourth Conference of the Parties in Buenos Aires in November 1998, made incremental and painful progress towards the deadlines set for late 2000.
Parties spent inordinate lengths of time at Bonn in formal sessions discussing when, where and how the key unresolved issues would be discussed. The generous two-year timelines established by the Buenos Aires Plan of Action, allows Parties the luxury of time and they lost no time in availing themselves of it.
Parties used the Bonn meeting essentially to take stock, of the process to date. They clarified their positions on the mechanisms and made initial comments on compliance under the Protocol. They debated divergences on the Secretariats budget, national communications from non-Annex I Parties, and land use and land-use change and forestry. They resolved to draft a new synthesis report on mechanisms and hold workshops on compliance under the Protocol as well as transfer of technology and land use, land-use change and forestry.
The few conflicts and controversies were behind closed doors in regional and other common-interest group meetings rather than on the floor. Despite incremental progress on a few technical issues, characterized largely by an exchange of views and crystallization of positions, delegates left the bulk of the unresolved political questions for future meetings. Of these, the issues relating to the design of the mechanisms and voluntary commitments are likely to be the most difficult ones to contend with in times to come.
Parties had arrived at Bonn expecting a showdown between the European Union and the Umbrella Group (a fluid grouping of Annex-I countries including the United States, Australia, New Zealand and Canada) on the long-brewing conflict on ceilings, but it was not to be. Prior to Bonn, the European Union proposed a set of complex formulae to establish a ceiling for the use of Protocol mechanisms. The ceiling would, in effect, ensure that at least 50 per cent of the emissions reductions are achieved through domestic action, a position the United States, with 25 per cent of the worlds greenhouse emissions, has long been averse to.
Newspapers, before the meeting, reported that United States officials were set to oppose the European Union proposal, as their participation in the Kyoto Protocol was premised on the flexibility of the Protocol mechanisms to ensure cost-effectiveness in meeting the targets. The European Union and the Umbrella Group, however, maintained a truce on the question of a ceilings at Bonn, perhaps in deference to the conventional wisdom that the unresolved political differences are so fundamental that a premature debate could derail the process. The United States and the European Union merely noted divergence on the issue.
Views were exchanged on various elements of a draft synthesis of proposals on the Protocol mechanisms. The G-77/China group, after a week of internal consultations, emerged with a position paper on the CDM, skilfully crafted to be open-ended on most of the controversial issues.
Due to the potentially uneven flow of financial benefits from the CDM to countries within the G-77/China group, the group has been hard put to arrive at a common negotiating position. Some believe that the CDM will only favour countries that are on a high emissions trajectory such as India and China. Indeed, the CDM has been playfully nicknamed the China Development Mechanism. It is no surprise that those countries within the G-77/China group that do not perceive themselves as benefiting directly from the CDM, as currently understood, are seeking to redefine the nature and scope of it to suit their needs.
The prevailing understanding of the CDM is that it allows Annex I Parties to invest in project activities in non-Annex I countries and use the accrued certified emissions reductions to comply with their commitments under the Protocol.
South American countries have of late been advocating unilateral CDMs in conjunction with tradeability of certified emissions reductions. The host country would invest in a project, register it as a CDM, obtain third party certification for the emissions reductions and then bank, lease or sell the certified emissions reductions on the international market.
While this may well be an ingenious way for developing countries to gather the low hanging fruit themselves, such a system would raise questions about additionality.
Protocol Article 12(5) (Clean Development Mechanism) suggests that only emissions reductions additional to those that would anyway have occurred can be certified emissions reductions. Where a country has the technology and finance to take up its clean development, it is questionable if it can claim that the emissions reductions are additional to any that would otherwise occur. India and China, staunch proponents of a principled approach to the mechanisms are a little bewildered, and in keeping with their suspicion of market mechanisms, wary of this new creature.
At Bonn, a tentative agreement was reached to postpone resolution of the issue. The G-77/China groups position paper deleted an earlier reference disallowing tradeability of certified emissions reductions, leaving the issue wide open for deliberation in future sessions.
The concept of emissions avoidance is the African attempt to reshape the CDM. It is argued that, since Africas energy consumption is less than two to three per cent of the global energy resources, there are relatively few options for implementing CDM projects in Africa that reduce emissions from existing sources. The mechanism should be designed so as to reward projects which promote sustainable development using clean technologies. For instance, infrastructure development in the energy sector would not only meet sustainable development needs but also avoid emissions.
Proponents believe that Africa can be meaningfully integrated into the Kyoto Protocol only if the principle of emissions avoidance is encouraged and incorporated into the determination of baselines. Though this argument is intuitively appealing, the concept of emissions avoidance is difficult to define and, therefore, impossible to implement. Indeed, how will a judgement be made about the emissions avoided by a particular project? The judgement will, of necessity, involve an evaluation of the project in question vis-à-vis a project that might otherwise have been undertaken. It puts the evaluator in the position of assessing the intent of the government or authority in question a near impossible task.
The conflicts within the G-77/China group over this issue arose perhaps from this concern permitting an undefined and vague concept into the one mechanism under the Kyoto Protocol that involves developing countries cannot but dilute its efficacy. The G-77/China groups position paper made no reference, positive or negative, to emissions avoidance but with the African group insistent on maintaining an integral role in the process, and partaking a slice of the CDM cake, the issue is far from dead.
Just before the Kyoto meeting, the United States voiced its refusal to take on binding obligations under the UNFCCC until key developing nations meaningfully participate. Since then, it has mounted a full diplomatic press to involve developing countries (read China, India, Brazil, and such like) in the battle against climate change (Stuart Eizenstat, Under Secretary of State for Economic, Business and Agricultural Affairs, 1998). Indeed, Bill Richardson, the United States Energy Secretary, has openly admitted that without India there is not going to be ratification of the Kyoto Protocol (Economic Times, 21 May 1999).
As the historical responsibility for climate change lies at the doors of the industrialized nations, the G-77/China group has refused to accept new commitments under any guise. The United States move is, therefore, viewed as an attempt to win the climate change battle on the backs of developing countries.
At COP-4 in Buenos Aires, Argentina and Kazakhstan broke ranks with the G-77/China group to announce their intention to take on voluntary commitments. Argentinas announcement, however, bears testimony to the success of the United States full diplomatic press rather than to a serious breakdown in developing country opposition to the idea. Indeed, passions have run high on this issue in the past, so much so that voluntary commitments could well prove to be a north-south deal-breaker.
It is, perhaps, in recognition of this that certain developed countries are now approaching this issue gingerly. No overt references were made to voluntary commitments at the Bonn meeting, but the issue was seldom far from the surface. In the discussions on national communications from non-Annex I countries, for instance, certain developed countries enthusiastically proposed technical assessments of non-Annex I national communications to identify information gaps and even expressed willingness to fund such assessments. Given the usual reluctance to part with finances, this approach reeks suspiciously of a desire to generate data to strengthen the United States claim that without meaningful participation from developing countries the climate change regime would be fundamentally flawed.
Perhaps in keeping with their cautious approach to the issue, the voluntary-commitments proponents are saving their negotiating capital for the Fifth Meeting of the Conference of the Parties in late October 1999.
Several potential triggering factors are on the table. Argentina, pursuant to its announcement at Buenos Aires, is expected to announce its national target at COP-5. Kazakhstans request to amend Annex-I to include itself is expected to be on the agenda.
The Alliance of Small Island States, in an interesting move, has requested that, given the overall increase in Annex I emissions, there be a review of implementation of Annex I Party commitments at the next Conference of the Parties. This could, if discussed, have the welcome effect of shifting the focus from developing country participation to developed country good faith and political will.
In the corridors, Argentina has begun to cautiously reveal that after the Kyoto Protocol has been ratified it may push for the adoption of a new Protocol to include developing countries wishing to take on commitments, different in form and nature from the developed country commitments under the Kyoto Protocol. It has expressed interest in a World Resources Institute proposal that developing country participation take the form of lowering the greenhouse gas intensity of economies rather than limiting absolute emissions, premised on an assessment that there is no discernible relationship between carbon intensity and level of development in developing countries.
All in all, in the words of UNFCCC Executive Secretary, Michael Zammit Cutajar, the issue of voluntary commitments is still with us.
Lavanya Rajamani, Hertford College, Catte Street, Oxford OX1 3BW, UK. Email: firstname.lastname@example.org.
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