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A Brief History, and Looking Ahead

Dr Benito MüllerDirector, ECBI and Head of Fellowship Programme

european capacity building initiative

ecbi

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The United Nations Climate Change Regime

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UN Framework Convention on Climate Change

• Adopted at the Rio Earth Summit 1992 • Ratified by 189 out of 193 UN member countries• Entry-into-force 24 March 1994

Kyoto Protocol

• Adopted at COP3 in Kyoto 11 December 1997 • Ratified by 152 out of 193 UN member countries• Entry-into-force 16 February 2005

• Bundle of Greenhouse Gases (Annex A)• Quantified Emission Reduction Targets (Annex B)• Industrialised and economies in transition (Annex I)• Flexibility Mechanisms: International Emission Trading, ‘Joint Implementation’ (JI), ‘Clean Development Mechanism (CDM

The United Nations Climate Change Regime

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The United Nations Climate Change Regime

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0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

01/12/97

01/06/98

01/12/98

01/06/99

01/12/99

01/06/00

01/12/00

01/06/01

01/12/01

01/06/02

01/12/02

01/06/03

01/12/03

01/06/04

Romania

Poland

Canada

Russia

Japan

23/05/2002: 55 Parties

18/11/2004: 55 %

The United Nations Climate Change Regime

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Sadly, Kyoto lives

Tuesday, August 24, 2004

Like a masked serial killer in a teenage slasher flick, the Kyoto Protocol will not die.

Friday, October 01, 2004 Cabinet Gives Approval to Kyoto ProtocolBy Greg Walters and Anatoly Medetsky Staff Writers

The Cabinet endorsed the Kyoto Protocol on Thursday, making international implementation of one of the most far-reaching and controversial environmental initiatives a near certainty."The fate of the Kyoto Protocol depends on Russia. If we ... rejected ratification, we would be the ones to blame," Deputy Foreign Minister Yury Fedotov told the Cabinet meeting.

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Russia’s Ratification of the Kyoto Climate Treaty “Historic” Says Kofi Annan

Nairobi, 18 November, 2004 - In a move underlining the vital links between the environment and global peace, Russian Permanent Representative to the UN Andrey Denisov today formally handed over the accession papers on ratification of the Kyoto Protocol to Kofi Annan, Secretary-General of the United Nations. Mr. Annan said in a statement: “I congratulate President Putin and the Russian Federation for their leadership in making it possible for the Protocol to enter into force – as it will, 90 days from tomorrow, on 16 February 2005. This is a historic step forward in the world’s efforts to combat a truly global threat. Most important, it ends a long period of uncertainty.”

UNEP News Release 2004/49

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Tunisia

22/01/03

Qatar 11 Jan

05 UA

E 26 Jan

05

Saudi A

rabia 31 Jan

Algeria 16

Feb

Kuw

ait 11 M

arch

Russia 1 O

ct 04

OA

PE

C M

onthly B

ulletin 20 Nov

04

01/10/04 01/11/04 01/12/04 01/01/05 01/02/05 01/03/05

‘the importance of [OAPEC] member countries joining the Protocol so as to participate fully in the meetings of the Conference of Parties, which operates as an assembly for the parties to the Protocol.

OAPEC Monthly Bulletin 20 November 2004

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Some Recent Developments 1:

‘post 2012’ or ‘beyond Kyoto’

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Large Developing Countries: The Gleneagles Joint Declaration

Declaration at Gleneagles G8 Summit (6-8 July) by Brazil China, India, Mexico, South Africa

The Declaration proposes a new paradigm for international cooperation that must ensure:

• Accessibility and affordability of climate friendly technologies to developing countries

(requiring ‘a concerted effort to address questions related to intellectual property rights)

• Additional financial resources (over and above current ODA) to enable developing countries

to access such technologies

• Encouragement of North-South collaborative research on such technologies.

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Large Developing Countries: The Gleneagles Joint Declaration

Declaration at Gleneagles G8 Summit (6-8 July) by Brazil China, India, Mexico, South Africa

• ‘the Gleneagles Summit is an opportunity to give stronger impetus to the process of UN reforms aimed at providing a greater voice to developing countries in UN decision-making, and to send a positive message on international cooperation. • ‘the United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol establish a regime that adequately addresses the economic, social and environmental aspects of sustainable development.’

• industrialised countries to ‘take the lead in international action to combat climate change by fully implementing their obligations of reducing emissions and of providing additional financing and the transfer of cleaner, low emission and cost-effective technologies to developing countries’ • ‘there is an urgent need for the development and financing of policies, measures and mechanisms to adapt to the inevitable adverse effects of climate change that are being borne mainly by the poor.’

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The United States: The Federal Level

‘US unveils alternative plan to Kyoto treaty’ Financial Times,

‘Asia deal on table to counter Kyoto’ Financial Times,

‘US in plan to bypass Kyoto protocol’ The Guardian,

‘Le pacte climatique Asie-Pacifique "supérieur" à Kyoto (Canberra)’ Le Monde

‘Bush startet Alternative zu «Kyoto»’ Neue Zürcher Zeitung,

‘Clima, accordo a sei parallelo a trattato di Kyoto’ Corriere della Sera,

White House Fact Sheet 27 July 2005: The Partnership ‘will focus on voluntary practical measures taken by these six countries in the Asia-Pacific region to create new investment opportunities, build local capacity, and remove barriers to the introduction of clean, more efficient technologies [and] help each country meet nationally designed strategies for improving energy security, reducing pollution, and addressing the long-term challenge of climate change.’

The Asia-Pacific Partnership on Clean Development and Climate

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The United States: The State Level

The regional initiative would set up a market-driven system to control emissions of carbon dioxide, the main greenhouse gas, from more than 600 electric generators in the nine states. Environmentalists who support a federal law to control greenhouse gases believe that the model established by the Northeastern states will be followed by other states, resulting in pressure that could eventually lead to the enactment of a national law.

August 24, 2005

9 States in Plan to Cut Emissions by Power PlantsBy ANTHONY DePALMA

Officials in New York and eight other Northeastern states have come to a preliminary agreement to freeze power plant emissions at their current levels and then reduce them by 10 percent by 2020, according to a confidential draft proposal.

California, Washington and Oregon are in the early stages of exploring a regional agreement similar to the Northeastern plan.

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EU Emissions Trading Schemean entity-based domestic cap and trade emissions allowance programme

• Timing:– three-year mandatory start-up phase from 2005 to 2007– five-year mandatory Kyoto phase from 2008 to 2012, to be continued.• Allocation method:– Member States may auction up to 5% for 2005 to 2007– Member States may auction up to 10% for 2008 to 2012• Common allocation criteria:– transparency, comments by the public, scrutiny by the Commission

• Coverage:– five major downstream sectors with thresholds– start with carbon dioxide• Monitoring:– In accordance with EU-wide plant level monitoring guidelines• Currency:– Allowances, linked to Kyoto Assigned Amount Units andentitling emission of 1 ton of CO2equivalent• Sanctions:– Financial penalty of €40 / €100 per non-surrendered allowance (tonne of CO2)– Making up for a shortfall in following year

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Economics: The Issue of Competitiveness

Carbon Trust/Oxera Study: Headline results for Kyoto Period (2008-2012) (%)

Sector

marginal cost

increase

price increas

e

marginal cost increase

passed on to customers

Change in quantity

demanded

Change in operating

profit(EBITDA*)

‘Net Value at stake’

Aluminium smelting

5 3 66 –6 –31 51

Cement (base line)

55 14 83 –4 25 1.9

Cement (competition**)

55 11 66 –8 13 1.9

Cold-rolled steel

7 3 67 –5 17 4

* Earnings Before Interest, Tax, Depreciation and Amortisation** The base-line case assumes that the UK cement market is largely domestic, which is why a ‘competition’ scenario was also modelled, largely on the situation in Spain, assuming 30 percent non-EU imports.

The estimated impact of this for the UK utility sector under the Kyoto scenario yields a final position concerning the EU ETS impact of an increase in profitability (EBITDA) of 63 percent

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• Broader international participation in reducing emissions. The EU should continue to lead multilateral efforts to address climate change, but identify incentives for other major emitting countries, including developing countries, to come on board. During 2005, it should explore options for a future regime based on common but differentiated responsibilities.

• Inclusion of more sectors, notably aviation, maritime transport and forestry since deforestation in some regions significantly contributes to rising greenhouse gas concentrations in the atmosphere.

• A push for innovation in the EU to ensure the development and uptake of new climate-friendly technologies and the right decisions on long-term investments into the energy, transport and building infrastructure.

• The continued use of flexible market-based instruments for reducing emissions in the EU and globally, such as the EU emissions trading scheme.

• Adaptation policies in the EU and globally, which require more efforts to identify vulnerabilities and to implement measures to increase resilience.

‘Winning the Battle Against Global Climate Change’

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Developing Country Commitments

“We specifically and clearly refuse to open at this time any dialogue or process or indeed any wording that could be in any way interpreted as accepting to open discussions on new commitments on non-Annex I countries.”

Venezuela on behalf of G77+China, COP8

‘Broadening commitments’: only for Annex I countries

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SOG(India)E Conclusions

• Annex II commitments not met – emissions still rising, transfers of finance/technology minimal.

• Numerical forecasts of relative or absolute growth in GHG emissions from models vary widely and hence cannot drive policies

• However, qualitative insights if replicated by a range of models are useful

• Low per-capita GHG emissions in India are due to sustainable lifestyles & not poverty alone

• India is doing enough in mitigation of GHGs. Technological and Financial barriers to achieving identified energy initiatives must be removed

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• China is vulnerable to climate change

• China is a developing country with low per capita income. China’s development, urbanization, growth of population and high proportion of coal in the energy mix will unavoidably make its efforts to reduce/limit GHG emissions more difficult without efficient international technological cooperation.

• China urges the international community to engage in practical technological cooperation in the future so as to combat climate change effectively and promote global sustainable development.

SOG(China)E Abstract

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EU and China Partnership on Climate Change

Reference:  MEMO/05/298    Date:  02/09/2005

• The Partnership contains two concrete co-operation goals, to be achieved by 2020. The first is to develop and demonstrate, in China and the EU, advanced “zero-emissions” coal technology. The second cooperation goal is to significantly reduce the cost of key energy technologies and promote their deployment and dissemination.

• The Partnership will also reinforce EU-China cooperation on the Kyoto Protocol’s Clean Development Mechanism (CDM). It foresees a dialogue on the further development of this mechanism ‘post 2012’ in combination with an exchange of information and experience on the use of market-based mechanisms such as the EU emissions trading scheme.

• The EU and China today [2 Sept 2005] agreed a Partnership on Climate Change as one of the major outcomes of the China-EU Summit. The Partnership will strengthen cooperation and dialogue on climate change and energy between the EU and China.

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Unavoided Climate Impacts

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Economic and Insured Losses with Trends. 1950 - 1999

Great Natural Disasters, Decadal Comparison, Factors 90s : 60s Number of Disasters Real Economic Losses Real Insured Losses

3.2 8.6 16.1

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Small and Medium Disasters (less than 50m affected each)

Large Disasters (annotated with annual totals of millions harmed and main disaster)

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

As % of Global Population

41

1529

59

240

86

30

163

190

89

32 30

417

212

168

87

286

78

187 194

275

213

67

344

211

255

151

India (D

t)

India (D

t)

India (D

t)

India (D

t)

Bangladesh

(Fd)

China

(Fd)

India (F

d)

China

(Fd)

China

(Fd)

China

(Fd)

China

(Fd)

China

(Fd)

China

(Fd)

India (D

t)

Dt = Drought; Fd = Flood

Trend +160%

People Affected by Weather-related Disasters 1975-2001

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1991–2000: Average Shares of Global Totals

Africa

6%

Asia

90%

People affected by weather related disasters

N-America Oceania Europe C/S America

1% 1% 2%0.1%

GDP CO2 Emissions Population Size

31%

25%

5%

2% 1% 0.5%

6%5%

8%

2%3%

13%

25%

35%

60%

30%

13%

34%

People Affected by Weather-related Disasters 1975-2001

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People Affected by Weather-related Disasters: The BaU Projection

0%

5%

10%

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

1975: 70m (2%)2030 Population: 8bn

2001: 250m (4%) 2030: 550m (7%)

417 million

2030 95%-confidence intervals 460–630 million (6–8%)Trend Value:220–860 million (3–11%)Individual Values:

Source: B. Müller (2002), Equity in Climate change: The Great Divide

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This year’s catalogue of natural disasters, while engendering a compassionate public response, has shown beyond all doubt that the world needs to get better at delivering humanitarian aid and carrying out reconstruction.

There is a UN Office for Coordination of Humanitarian Affairs and an existing UN fund for emergency response. But the fund is only $50 million and can be used only to loan money to UN agencies that already have pledges from donors.

For reconstruction to work, emergency assistance must also work, a fact recognized within Europe by the creation of the European Solidarity Fund in 2002. So it is clear there is a need for a new humanitarian world fund into which donors pay and from which humanitarian coordinators can immediately draw funds when a crisis threatens

Our priority, then, must be to reform the UN’s Central Emergency Revolving Fund, and the UN Office for Coordination of Humanitarian Affairs will indeed later this month make detailed proposals for this reformed fund. At present six donors have pledged around $150 million (of which Britain’s contribution is $70 million, but we would like to see this grow.

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Some Recent Developments 2:

Montreal 2005

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Dion’s 3-is

Stephane Dion, Canadian Environment Minister, President of the Conference proposed to structure the conference agenda around “3-is”:

• implementation

• improvement

• imagination

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Implementation

• Adoption of the Marrakech Accords

• Adoption of the Kyoto Protocol Compliance Regime

Improvement

• CDM: Strengthening of the CDM Board capacity

• CDM: Allowing for ‘programmes of activities’

• JI: Joint Implementation Supervisory Committee established

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Imagination

“To the reticent nations, including the United States, I say this: there is such a thing as a global conscience, and now is the time to listen to it. Now is the time to join with others in the global community, now is the time for resolve, for commitment, and for leadership. And above all now is the time for action, because only by coming together can we make real and lasting progress.”

Paul Martin, Prime Minister of Canada

• Kyoto Protocol post-2012 negotiation initiated

Two-track strategy

• Dion Dialogue on ‘future action’ under the UNFCCC

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The Montreal Message

The Kyoto Protocol – with its emission caps and trading mechanisms – is not only fully operational, but has moved on from being potentially merely a “one-period wonder” to the only viable existing multilateral effort to combat greenhouse gas emissions, which is here to stay!

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The Way Forward

• USA: Link up regional US trading schemes with EU ETS and Kyoto flexible mechanisms

Strategy to address large Kyoto non-Party emission

• Large Developing Country emitters: address individual ‘luxury emissions’

• Levy on international air travel for adaptation funding

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cbiThank you!