A complex set of negotiations are underway as countries aim to create a stronger and more comprehensive agreement on tackling climate change. At United Nations-led climate-change talks in Bali, Indonesia last year, nations agreed to launch a new round of negotiations under the UN Framework Convention on Climate Change (UNFCCC). A set of parallel-track negotiations under the UNFCCC and its Kyoto Protocol, whose first set of targets run out in 2012, now aims to conclude in December 2009 in Copenhagen, Denmark.
The elements of this post-2012 agreement will be based on the “Bali Action Plan”, which lays out the elements for a shared vision of a low-carbon economy, increasing countries’ efforts on mitigation (emissions reductions), climate-change adaptation, technology cooperation and finance. At the same time, countries party to the Kyoto Protocol have also been in detailed negotiations since December 2005 on strengthening Kyoto Party industrialised country caps in the treaty. Not having ratified the Protocol, the US is only an observer to these talks. These negotiations are also scheduled to end in December 2009. Since Bali, countries have now met three times, with the latest meeting wrapping up in Accra, Ghana on August 27, 2008.
The weeklong Accra meeting included two workshops on sectoral approaches and measures to reduce emissions from deforestation and forest degradation in developing countries. The talks also delved deeper into some promising proposals from parties in the area of finance. There were concerns expressed by green groups and some about the slow pace of negotiations and the urgent deadline for action, but many have noted that some progress was made in Ghana.
A deeper understanding of different countries’ positions began to emerge, as did new some options to be negotiated in important areas. The chair of the UNFCCC Ad Hoc Working Group on Long-term Cooperative Action outlined a detailed process to ensure that a negotiating text is being formulated, if not on the table, by the end of the next meeting in Poznan, Poland, in December 2008. These are all small steps needed to move towards actual agreement, but they do not yet reflect the transformational changes that scientists are warning we need in our economies and societies.
Many of the most progressive proposals that came out of the talks were in the area of finance. The action plan says that there is a need to address “enhanced action on the provision of financial resources and investment to support action on mitigation and adaptation and technology cooperation”. Improved access to adequate, predictable and sustainable financial resources is a crucial issue in the design of an agreement. The UNFCCC estimates that developing countries need between US$28 billion and $67 billion in additional investment and financial flows by 2030; a figure that far exceeds the Convention’s current financial mechanism and points to the need for new means to generate revenue for mitigation, adaptation, technology transfer and reducing emissions from deforestation. Norway proposed that this could be met by auctioning a percentage of each industrialised country’s emission quota and placing it in a fund. For instance, auctioning 2% of this asset could generate an annual income of between US$15 billion and $25 billion. The amount of funding needed could determine the percentage or number of allowances auctioned.
This simple yet effective approach would use revenue generated by the climate-change regime to fund its own needs. It would, of course, require a decision to use that new source of funding for climate purposes, rather than other needs in the economy (such as health care), but it avoids the intractable debate about increasing official development assistance (ODA). The European Union will decide on the third phase of its Emissions Trading System this autumn, and the increased use of auctions and their revenue for climate-change purposes is on the table. Since the EU has yet to outline its proposal for financing in international negotiations, it is vital that finance ministers understand the link between national debates and international expectations and needs.
Sectoral mechanisms, a key issue about which there has been much confusion, were also discussed in Ghana. Many countries were unsure about the intentions of countries, such as Japan, which propose the sectoral approach. But the workshop helped clarify country positions and showed where difficulties might arise. It is clear now, for example, that industrialised countries must take on national caps and not substitute them with sectoral commitments. The next US administration looks as if it will support this national cap approach, although the level of effort in the targets is under discussion.
In developing countries, where national caps are unlikely, sectoral approaches could be useful in identifying sectors for greater efforts to reduce emissions, such as the power industry. The meeting in Accra showed a growing interest in sectoral-crediting mechanisms that would link developing-country sectoral actions with the carbon market. It would be necessary, however, to invest quickly and robustly in the capacity to measure, monitor and verify such emissions if this were to go ahead. The sectoral approach could also come into the discussions around technology transfer.
Many observers have tended to focus on the negotiations around the Bali Action Plan, but attention should also be given to debates under the Kyoto Protocol, which may foreshadow all the negotiations to come. In Accra, a set of texts were agreed that outline the options on all the issues under negotiation in the treaty. As the Kyoto negotiations are about strengthening targets and reviewing the means to meet those targets, all of the flexible mechanisms (such as emissions trading, the Clean Development Mechanism and Joint Implementation), as well as the land-use change and forestry rules, are being discussed. In fact, there are specific outlines of proposals emerging on the carbon market, sectoral mechanisms, crediting for developing-country actions and deforestation. These texts make clear the decisions that countries will have to make in just over a year in Copenhagen. They are, however, far from fully outlined, understood or agreed; this points to the massive amount of work to be done.
Accra was one of a number of meetings on the road to Copenhagen, but it was useful because it began to identify the choices for politicians in the post-2012 agreement. Through the fog of the Bali Action Plan and the Kyoto Protocol, proposals are emerging that negotiators can examine. The challenge is to ensure that stakeholders and governments across the world can also see them, and are able to participate in making these crucial choices.
Jennifer Morgan is director of the Global Climate Change Programme at E3G (Third Generation Environmentalism)