Deepening the understanding of the several key issues in the

upcoming UNFCCC negotiations

ACP Ministerial Meeting on Climate Change 7 to 9 November 2012, ACP Secretariat

Briefing on current key issues in the UNFCCC negotiations and on the

positions of various negotiating groups

2

Contents

I. Introduction: General overview1. Background 2. The three core processes

II. The AWG-KP

III. The AWG-LCA

IV. The ADP

3

I.1 Background

The UNFCCC Executive Secretary has stated in the Ministerial meeting on climate change, which took place in Seoul in October 2012, that in Doha, Parties have the opportunity to show the world that the intergovernmental climate change process:has built a firm response which now goes into implementation;continues to build further in order to keep with fairness; andincreased ambition in order to keep within the two degree temperature limit.

4

I.1 Background

5

The UNFCCC Executive Secretary has also stated that in Doha, Parties:Can move the second commitment period of the Kyoto Protocol from lengthy negotiations to implementation as of January 1, 2013. Can move the broad infrastructure of support which they have been building under the AWG-LCA into firm implementation, while deciding where to handle still outstanding issues.In Doha, you can decide how you will implement the commitment of financial support to developing countries.

I.1 Background

In accordance with decision 1/CP.17, Doha should attend to three key processes:

1.Doha amendment (s) to the Kyoto Protocol to deliver a second commitment period

2.Closure of AWG-LCA

3.Launch of the work of the ADP with a view towards a new legal regime by 2015 to be implemented beginning in 2020

6

I.1 Background

A successful launch of the ADP will necessarily depend on the outcome of the first two processes – which many see as the real deliverables for Doha.

In turn, the work in and beyond Doha could be better advanced if a work plan with concrete milestones is agreed under the ADP.

In any case, a positive outcome on these processes will depend on an interrelated set of issues

7

I.2 The three core processes

For the AWG-KP:

legal certainty of the second commitment period

eligibility on the use of the Kyoto Protocol’s flexibility mechanisms

how to deal with excess units from the first commitment period

length of the commitment period, in light of the new regime launched by the ADP to be implemented in 2020.

8

I.2 The three core processes

For the AWG-LCA:

How to terminate its work and distribute pending matters. In principle, relevant issues not solved in Doha can be forwarded to the permanent Subsidiary Bodies or the COP.

However, views diverge on the extent to which work pursuant to the Bali Action Plan has been accomplished and on which, where and how key issues under the AWG-LCA should continue to be addressed

9

I.2 The three core processes

For the ADP:

New body meant to launch “a process to develop a protocol, another legal instrument or an agreed outcome with legal force applicable to all parties” by 2015 to come into effect from 2020 onwards.

10

I.2 The three core processes

The ADP:

Sets up two work streams:

1. matters related to paragraphs 2-6 of Decision 1/CP.17 (post-2020 regime); and

2. those related to paragraphs 7-8 (enhancing mitigation ambition during the pre-2020 timeframe).

11

II. The AWG-KP

The AWG-KP agenda for DOHA addresses issues related to:

Amendments to the Kyoto Protocol and its Annex B, including policy issues, and technical and legal issues, including:

1. Second commitment period

2. QELRO definition

3. Length of the second commitment period

4. Continuity between commitment periods

12

II. The AWG-KP: context

13

The Protocol’s first commitment period concludes on 31 December 2012, therefore formal adoption of a second commitment period cannot be postponed if a gap in the continuity of the regime has to be ensured.

In Durban, COP/MOP 7 adopted Decision 1/CMP.7 and agreed to “decide that the second commitment period under the Kyoto Protocol shall begin on 1 January 2013.” COP/MOP 7 mandated some specific work for narrowing down technical aspects required for adopting a second commitment period in Doha.

II. The AWG-KP: what is at stake

14

Developing countries support having a “robust” second commitment period and want to ensure the environmental integrity of the Kyoto Protocol, as they see it as the only international treaty that legally binds developed countries to lower emissions.

Developing countries prefer keeping the rules and the top-down system that the Protocol represents, as under the Convention the pledges presented by countries since Copenhagen are voluntary in nature, subject to conditions and not subject to common accountability rules.

II. The AWG-KP: QELROs

15

Quantified emission limitation or reduction objectives (QELROs) or commitments by Annex I parties are critical for the establishment of the second commitment period.

An amendment to Annex B of the Kyoto Protocol will be necessary for their adoption.

For developing countries the adoption of high targets to achieve real CO2 emissions reductions is key, given the increased risks that they have to counter act.

II. The AWG-KP: QELROs

16

Parties communicated in 1/CMP.7 their quantified economy-wide emission reduction targets and the intention of converting these targets to QELROs for the second commitment period under the Kyoto Protocol.

Thus, Decision 1/CMP.7 invited Annex I parties to submit information on their QELROs for the second commitment period by 1 May 2012, in order to enable the AWG-KP to “deliver the results of its work on QELROs” in Doha.

II. The AWG-KP: QELROs

17

This work is to be presented to COP/MOP 8 with a view for it to adopt these QELROs as amendments to Annex B of the Protocol.

The final QELROs will be determined once all the outstanding issues regarding the second commitment period have been resolved.

Participation of Annex I parties will, therefore, depend to a great extent on the rules adopted and the broader political context of negotiations.

II. The AWG-KP: Length of the SCP

18

In Durban, the COP/MOP decided that the second commitment period “shall begin on 1 January 2013” and “end either on 31 December 2017 or 31 December 2020, to be decided by the AWG-KP 17.”

Parties need to agree on the length before adopting the second commitment period.

A five-year long commitment period to avoid locking-in the level of ambition and facilitate the updating of mitigation commitments on the basis of the fifth IPCC assessment report

II. The AWG-KP: Continuity

19

To ensure legal continuity, QELROs or commitments from industrialized countries presented in a second commitment period have to be legally-binding as of 1 January 2013.

Adopting an amendment to the Kyoto Protocol could give these commitments the required legal force.

If negotiations in Doha conclude in the adoption of amendments to the Kyoto Protocol Annex B, it will require ratification by parties through their – usually lengthy- domestic processes.

A gap will arise as amendments to the Kyoto Protocol itself or its Annexes require time to enter into force following acceptance.

II. The AWG-KP: Continuity

20

Proposals: – Ratify amendments in an expedited manner– Provisional application– to “decide that parties to the Kyoto Protocol will apply

their commitments and other responsibilities under the amendments to the Protocol.”

– to welcome declaration/s in an appendix, which reiterate parties’ commitment to the Kyoto Protocol to ensure that there is no legal gap between commitment periods.

II. The AWG-KP: Continuity

21

Flexible mechanisms:

Parties will have to define who can operate the flexible mechanisms, taking into account both Annex I parties not signing up to a second commitment period and non Kyoto Protocol parties.

If it is agreed to grant eligibility to these Parties, then they will need to define for which mechanisms, since when and the conditions that would apply.

II. The AWG-KP: Continuity

22

Carry over of AAUs:

The carry-over of AAUs refers to a situation where a country, having reduced its emissions beyond its target during the first commitment period, can then carry-over or bank these surplus emission units, and sell or use them domestically to meet future mitigation commitments. Currently the Protocol places no limitations.

If no restrictions are placed on the carry over of surplus AAUs, this could lead to no emission reductions compared to business-as-usual emission projections by 2020, unless the parties’ targets are significantly raised to compensate for the excess in supply of AAUs.

III. The AWG-LCA: Context

The Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA) is a subsidiary body under the Convention established by Decision 1/CP.13 (the Bali Action Plan) to conduct a comprehensive process to enable the full, effective and sustained implementation of the Convention through long-term cooperative action, now, up to and beyond 2012.

23

III. The AWG-LCA

Relevant decisions:

In Durban, CP.17 adopted Decision 1/CMP.17 and agreed to “extend the Ad Hoc Working Group on Long-term Cooperative Action under the Convention for one year in order for it to continue its work and reach the agreed outcome pursuant to decision 1/CP.13”, at which it “shall be terminated”.

24

III. The AWG-LCA

Relevant decisions:

The COP in this Decision mandated further work to be taken to Doha on specific issues, including:

shared vision;

developed country mitigation;

developing country mitigation;

REDD+;

sectoral approaches;

various approaches, including markets; and,

Review

25

III. The AWG-LCA

Playing field and what is at stake:

How to terminate its work and distribute pending matters.

In principle, relevant issues not solved in Doha can be forwarded to the permanent Subsidiary Bodies or the COP.

However, views diverge on the extent to which work pursuant to the Bali Action Plan has been accomplished and on which, where and how key issues under the AWG-LCA should continue to be addressed

26

III. The AWG-LCA

Playing field and what is at stake:

Developed countries consider that most issues have already been forwarded to the permanent subsidiary bodies or other relevant institutions created for that purpose, such as the Technology Executive Committee, the Green Climate Fund, the Adaptation Committee and the Durban Forum on Capacity Building.

27

III. The AWG-LCA

Playing field and what is at stake:

Many developing countries support the continuation of the work of the AWG- LCA until a successful outcome is reached on all elements of the BAP, including issues, such as means of implementation and finance for the 2013-2020 period, that need to be adequately addressed.

28

IV. The ADP

Context:

Adopted last year in Durban under Decision 1/CP.17 as one of the key elements of the Durban package.

Has held two meetings so far: ADP 1-part 1, in Bonn in May 2012, and ADP 1-part 2, in Bangkok in late August – September 2012.

29

IV. The ADP

Context:

Sets up two work streams:

1.matters related to paragraphs 2-6 of Decision 1/CP.17, referring to a “post-2020” period that will be covered by the new “protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all parties.” (post-2020 regime); and

2.those related to paragraphs 7-8, referring to enhancing mitigation ambition during the pre-2020 timeframe.

30

IV. The ADP

Relevant issues:

How principles should guide the work of the ADP?

– divergence of views among developing countries as to whether the common but differentiated responsibilities and the equity principles, as currently interpreted and made operational, should continue to apply.

What “applicable to all” implies?

– argument that “universality of application” should not become “uniformity of application” and that universal participation must take into account the variety of national circumstances.

31

IV. The ADP

Relevant issues:

Whether focus should be retained on mitigation or equally consider the other Bali pillars?

– while most developed and some developing countries support focusing on mitigation, particularly on raising the level of ambition for the pre-2020 era, many developing countries believe all elements, in particular adaptation, finance, capacity building and technology, should be central to its mandate.

32