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First day in Montreal - detailed NGO policy analysis

28 Nov 2005

The NGOs in Montreal produce a daily newspaper, called "ECO" that has a long tradition at the UN climate negotiations. It's provides detailed information and analysis and is essential reading for NGO lobbyists, the media covering the talks and even official negotiators. If you want to get to the crux of the detailed negotiations ECO will take you there. Monday's edition follows below.

If you would like an impressionistic account of the Montreal talks by 2 staffers from Friends of the Earth in London click here

ECO Volume CXI
Issue 1
NGO Newsletter

CoP-11, Montreal, Canada
November 2005


Table of Contents
1. Post-2012 Mandate
2. Imperatives for Negotiators
3. Action Required on Adaptation
4. Avoiding Pot Holes on Compliance
5. PNG Proposal


1. Post-2012 Mandate

Welcome to Montreal, the lucky city that is to host the first meeting
of Parties to the Kyoto Protocol (KP). Let us take a moment to reflect
on the great achievement of having brought this important Treaty into

Reflected? Good. Now to the business at hand: what should follow the
end of the first KP commitment period in 2012. No sooner than the KP is
born, the Americans are trying to strangle it in its crib. In a futile
effort to engage the United States, most Parties seem ready to start
negotiations on the second commitment period under the Convention, the
KP's parent Treaty. But the KP remains the best legal basis to discuss
the post-2012 climate regime, and here is why.

First, the KP represents an opportunity, not a threat, to development
for the world's emerging economies. While Annex B countries should of
course continue to take on absolute mandatory emission caps, nobody
seriously expects any but the richest developing countries to take on
absolute emission targets in the second commitment period. In fact, due
to its amendment procedures, the KP offers the flexibility for a multi-
stage approach incorporating a range of commitments and undertakings.
While deeper emissions targets for developed countries can continue to
drive flexible mechanisms, developing country engagement can take many
forms, taking into account development needs and national
circumstances. Nor would such commitments need to be subject to the
same compliance mechanisms as Annex I targets: the shape of new types
of commitments would evolve through negotiation.

Second, for those that truly wish to do something about the dangers of
climate change, the argument for holding negotiations on future
commitments under the KP could not be clearer. The Bush administration
has been very explicit: the US will block any attempt at progress under
the Convention, and as a Party is in a position to do just that. In
recent negotiations the US has developed a habit of making small,
essentially meaningless concessions at the end of negotiations, leaving
its partners always hoping that one day it will make a meaningful
concession. Surely by now the international community must have learned
its lesson: nothing good will come from this administration. The KP, in
which the US is a mere observer, is for now the only viable option for
serious action to address climate change.

Third, developing countries have a strong interest in a Montreal
mandate based on the KP. A KP-based negotiating process would be best
able to continue and build upon the existing flexibility mechanisms.
These mechanisms, primarily the Clean Development Mechanism (CDM), are
already leveraging private sector investment and technology cooperation
in ways fully consistent with development goals defined by host
countries. Continuing investment will depend on giving investors
certainty that this market will continue beyond 2012. Moving away from
the KP now could cripple the CDM market.

In addition, funding for adaptation and other developing country
priorities under the UNFCCC will remain inadequate, as it is entirely
reliant on voluntary direct financial commitments from Annex 1
governments. The adaptation levy on CDM projects offers the prospect
of generating much larger amounts of funding, but only as deeper
emissions reduction commitments under KP stimulate much greater
investment in such projects. New negotiations under KP would also
offer an opportunity to expand the adaptation levy to the other KP

Finally, achieving the emissions reductions necessary to avoid
dangerous climate impacts (which fall disproportionately on developing
countries) requires strengthened Annex B commitments under the KP.

These commitments also generate demand for developing country carbon
credits, thus facilitating progress towards sustainable development

None of this is to say that the Convention has lost its broader
importance; it will play an important role in the development of a post-
2012 regime. But given the current US stated commitment to blocking any
discussion of post-2012 commitments, the Kyoto Protocol is the most
viable arena for discussion of deeper and broader mitigation action.


2. Imperatives for Negotiators

COP/MOP1 is the first real opportunity in some years for serious
progress on the climate issue, now that the Kyoto Protocol (KP) has
entered into force. The old joke is that "the climate is changing
faster than the positions of the negotiators." Let us hope that Parties
can accept their responsibility and prove the cynics wrong.

They had better, because there is a lot to do. In addition to agreeing
on a mandate for post-2012 negotiations (see main article), negotiators

Adopt the Marrakech accords: This complex series of agreements were the
culmination of four long, hard years of negotiations. All attempts to
re-open them should be resisted. They should be adopted on Wednesday.

Agree on the Compliance system: A decision on the compliance system
should be adopted. An amendment is not necessary at this time. To
ensure that the compliance mechanism can be operationalised, the
decision should be made on Wednesday.

Strengthen the Clean Development Mechanism (CDM): The CDM is now up and
running, and approving projects at an increasing rate, despite
constraints. Both industrialised and developing countries have a strong
interest in the success of this mechanism in providing both emissions
reductions and sustainable development benefits. However, some
proposals to "streamline" the CDM approval process seem to be code for
either weakening or removing the additionality requirements in the
system. Additionality is the key criterion that determines whether CDM
projects will result in real emissions reductions or generate bogus
credits that undermine the KP. The CDM Executive Board and Methodology
Panel deserve praise for their efforts to enforce a credible
additionality test in the face of governmental and corporate
pressure.The real short-term need is for increased resources for the
CDM administration.

Finance: Parties have the obligation to move the adaptation issue
forward with a solid, five-year programme of work on the scientific,
technical and socio-economic aspects of adaptation, which must be
adequately funded by industrialised countries. Parties should also
ensure that the outstanding issues on the Special Climate Change Fund
transport, energy and economic diversification) are resolved, and a
clear and transparent process for administering the Adaptation Fund is


3. Action Required on Adaptation

Increasing acceptance of the scientific evidence of the impacts of
climate change has also led to growing recognition of the need for
urgent action on adaptation. Under the UNFCCC, adaptation activities in
developing countries is to be supported by the Global Environmental
Facility's own Trust Fund, as well as the Least Developed Countries
Fund (LDCF) and Special Climate Change Fund (SCCF) which were set up
under the Marrakech Accord at COP7. There is also the Adaptation Fund
set up in the Kyoto Protocol which draws on proceeds from the Clean
Development Mechanism through a levy on certified emission reduction
(CER) units. To date, these funds have only supported studies,
assessments and capacity building. Support is needed for adaptation
activities on the ground.

At COP 11, Parties will review the status of these funds and provide
further guidance for their operationalisation. They need to ensure that
the LDCF provides full cost support for LDCs to implement priority
actions identified by their National Adaptation Programmes of Action
(NAPAs). Parties must also provide guidance to the GEF to start funding
action on adaptation immediately under the SCCF as well as contribute
substantially larger and longer-term funding from its own Trust Funds.

Another related issue to be discussed at COP11 is guidance for the
Adaptation Fund. Parties need to instruct the GEF to ensure that funds
disbursed are controlled by the COP and not by the GEF Council and
World Bank. The US, which is not a party to the KP, should not be
allowed to control the Adaptation Fund through the back door.

If Annex I countries want developing countries (DCs) to undertake
mitigation activities, they must assist DCs to cope with the impacts of
the past emissions of Annex 1 countries. The amount of funding provided
by developed countries for adaptation activities in DCs continues to be
a small fraction of what has been allocated for mitigation. It needs to
be increased by an order of magnitude.


4. Avoiding Pot Holes on Compliance

Finally, we are here at the first session of the COP/MOP. With regard
to compliance, ECO hopes by Wednesday to see the activation of the
compliance system through its adoption by a COP/MOP decision. This
decision will provide a strong political signal that the entire Kyoto
Protocol structure is alive and kicking. Indeed, it will ensure the
immediate operationalisation of the compliance system, i.e. the
facilitative and the enforcement branches can begin their work. That is
great news.

But Saudi Arabia is up to its tricks again. While appearing to ask for
a super-powerful compliance system (directly linking their amendment to
the decision), they are actually undermining the chance of having a
compliance system at all. It might even impede the negotiations dynamic.

Of course, in addition to the COP/MOP decision, a parallel process for
an amendment could be initiated, but the priority is to get the system
up and running now.

However, while the COP/MOP decision must be adopted at this session,
the most appropriate way to deal with this issue will be to wrap it up
in the mandate for the post-2012 regime. This would avoid any legal and
procedural dilemma.


5. PNG Proposal

Reducing the rate of tropical deforestation, an issue discussed
xtensively since the signing of the UNFCCC in Rio in 1992 and ltimately
rejected as an activity eligible for carbon credits, has re-emerged in
2005 as an important issue in the climate policy debate.

A new proposal by Papua New Guinea (PNG) and Costa Rica, and supported
by Chile, Nicaragua, Bolivia, Guatemala, Dominican Republic, Central
African Republic and the Republic of Congo, attempts to address
concerns of additionality and leakage by calling for
establishing "national deforestation baseline rates which support clear
targets" in forest-rich developing countries.

The proposal leaves several issues unresolved, such as compliance, how
deforestation targets should be set and how the crediting system will
work. Nevertheless, this is a refreshing start in addressing a key
problem facing the next commitment period. It shows that some
developing countries really do want to take action. Tropical
deforestation is responsible for about 20 to 25 per cent of all global
greenhouse gas emissions and has negative impacts on biodiversity,
local communities and air quality.

Bringing tropical deforestation into the climate regime should
contribute to limiting global emissions and staying below 2oC warming,
rather than just letting industrialised countries off the hook for
their current commitments. It is indeed necessary to find a way to
include tropical deforestation in future commitment periods, while
addressing leakage and ensuring permanence of emissions reductions in a
credible and transparent manner.


- Nithi Nesadurai & Sander Wijsman
Web Edition & Electronic Distribution:
- Karim Harris

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