Prospects of a new climate agreement

Prospects of a New

Climate Agreement

BEIRUT, LEBANON

EPTiKAR

Prospects of a New Climate Agreement IndyACT / November 2010

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INDEX

1 GENERAL STATE OF THE NEGOTIATION 3

2 THE COMPLEXITY OF CLIMATE TALKS 4

2.1 DISSECTING THE UNFCCC NEGOTIATIONS 4 2.2 INTERNATIONAL CLIMATE POLICY ARENAS 5

3 THE STUMBLING BLOCKS 9

3.1 LEGAL FORM 9 3.2 FUTURE OF THE KYOTO PROTOCOL 10 3.3 THE UNITED STATES DILEMMA 11 3.4 TRUST AND TRANSPARENCY 13

4 CANCUN EXPECTATIONS 15

5 THE ROADMAP AFTER CANCUN 18

6 RECOMMENDATIONS TO ARAB GOVERNMENTS FOR CANCUN 19


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Prospects of a New Climate Agreement

1 General State of the Negotiation

The failure to reach a comprehensive agreement in Copenhagen and to conclude the round of

negotiations started in Bali in 2007 did not come as a surprise to anyone involved in this process.

Since 2001 and after the Marrakesh Accord, the role of developing countries in fighting climate

change has increasingly been recognized as crucial. Developed countries which were at the center

of the negotiations in the Framework Convention on Climate Change and the Kyoto Protocol,

pushed for some kind of commitment by developing countries in the international regime.

Developing countries have continuously been resisting to the pressure of developed countries to

take international commitments, on the basis that the developed countries have so far failed on

fulfilling their commitments under the Convention and its Protocol. As a result, a huge gap has

emerged between developed and developing countries, which has been severely stalling the

negotiations and is the main reason for the failure of the current process, especially the relationship

between the United States and China.

Both sides have valid concerns. Developed countries are highlighting the scientific warnings that we

have little time to act. We need to cap emissions within less than a decade. Most of the emission

growth is happening in developing countries, who now contribute to 50% of global emissions.

Therefore, we will not stay within safe limits of avoiding catastrophic climate change impacts,

unless developing countries take on part of the burden. On the other hand developing countries are

arguing, on a historical basis that the problem was caused by developed countries. Developed

countries are responsible for most of the greenhouse gases in the atmosphere, and if emissions are

calculated on a per capita basis, developing countries are still emitting much less than developed

countries. Therefore the developed countries bear the responsibility of compensating the

developing countries for the harm that they have caused historically.

This debate has been at the core of negotiations since the start of the international climate regime.

In fact under the convention it was agreed that developed countries would provide financial and

technological support to developing countries to help them start reducing their emissions.

Nevertheless, negotiating the implementation of the provisions of the convention have increased

the gap between developed and developing countries, and has created great mistrust between the

two groups. The questions of how much emissions each group will need to reduce, how much


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financial support developed countries will provide, and how will this finance be provided seemed to

be impossible to agree on.

Nevertheless, since Copenhagen there has been some advancements on key issues, which has

helped create some trust and push the negotiations forward. The promise to provide 30 billion

dollars, as fast track finance, in the period between 2010 and 2011 inclusive, as well as the

compromise to establish a new fund under the convention, have been important requests made by

developing countries. Additionally, substantial agreement has been reached in discussions of key

issues including adaptation and technology transfer.

Would this positive movement be enough to save the negations process that many think is on the

verge of collapse? Cancun will be an important stepping stone to answer this question. Although,

most delegates and experts agree that the current negotiations process will not be concluded in

Cancun, they do see that COP16/MOP6 is crucial to regain faith in the UNFCCC as the only

legitimate venue for an international climate agreement.

2 The Complexity of Climate Talks

One important reason behind the difficulty of reaching a new global climate agreement is the sheer

complexity of the climate negotiations. Climate change is about everything. It is about economy,

development, energy, water, transport, trade, biodiversity, growth, forests, security, etc. Therefore,

agreeing on a comprehensive global climate agreement requires agreeing on how countries will

develop, how their economies will change, how much food and water they might have, what

conditions they will live in, how much growth they can have, what communities and nations will do

if their existence is threatened, and so on.

When governments agreed on the text of the convention and the Kyoto Protocol, it was easier back

then, since the convention only outlined the main principles and did not go into specific details.

Morevover, the Kyoto Protocol focused only on the first steps of what developed countries would

do. Even that did not go far since the United States did not ratify the Protocol and many developed

countries were not able to reach the targets they have set for themselves in the protocol.

2.1 Dissecting the UNFCCC negotiations

Under the UNFCCC, the current negotiation process is being conducted under two main tracks. The

first one is the Ad-hoc Working Group for Long-term Cooperative Action, known as the AWG-LCA,

which stems from the convention itself and is mandated by the Bali Action Plan (BAP). The second is

the Ad-hoc Working Group of the Kyoto Protocol, or the AWG-KP, which is mandated by Article 3.9

of the Protocol and aims at negotiating new commitments under the Protocol.


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The BAP has divided the negotiations of the AWG-LCA into five major pillars: shared vision,

mitigation, adaptation, financial support, and technology transfer. Each one of these pillars has its

own set of issues that are either formally or informally recognized. For example, under the BAP

mitigation is divided into: a general section on mitigation in developed countries, a general section

on mitigation in developing countries, mitigation through reducing emissions from deforestation

and forest degradation (REDD), mitigation action in specific sectors (sectoral approach), using

market mechanisms to enhance climate action, adverse impacts resulting from response measures

against climate change, and building synergies among actors and processes. Several of these issues

are then divided into a number of sub-issues. For example, the sectoral approach is further divided

into discussions around emissions from aviation and shipping, agriculture, and trade.

The AWG-KP also has its own topics and sub-topics. Each element in this figure requires deep

understanding and careful negotiations. Some country delegations, especially those from

developing countries, are overwhelmed by the extensiveness of all the discussions, and are not able

to follow more than few issues (see table 2.1 for the change in the number of delegates in each

Arab country compared to others). Undoubtedly, this puts some countries at a disadvantage, which

causes a huge delay in the negotiations. Of course, the issue not only lays in the number of

delegates, but also in the skills and preparedness of the delegates. Many delegates from developing

countries are not experts on climate change policy, but yet handle several other issues in their

ministries due to the lack of human resources.

Some countries try to mitigate this by forming alliances with like-minded countries, such as the

Alliance of Small Island States (AOSIS), where countries share capacity. Nevertheless, a lot of

countries are not able to form a coherent group that can fully rely on each other, and defend each

other’s interests.

2.2 International Climate Policy Arenas

The above section described the negotiations within the UNFCCC. Nevertheless, international

climate change policy has also been discussed in various other political fora. For example The

International Maritime Organization (IMO) and the International Civil Aviation Organization (ICAO)

have already started making decisions to reduce emissions from both shipping and airlines.

Additionally, almost every other UN convention is now addressing climate change in one way or

another. Actually, the Montreal Protocol for eliminating gases that destroy the Ozone layer has

achieved more in terms of reducing greenhouse gases than the Kyoto Protocol. The Montreal

Protocol has also agreed to phase out HCFCs by 2030, and is considering the possibility of phasing

out HFCs. Both HCFCs and HFCs are potent greenhouse gases.

Countries have also targeted some conventions to influence the negotiations under the UNFCCC.

For instance, in the recent COP10 of the Convention of Biological Diversity (CBD) that took place in


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Nagoya, Japan, countries attempted to affect the choice of technologies and processes for dealing

with climate change. Discussions during this meeting included the use of geo-engineering, mono-

culture plantation, and adaptation to potential impact on biodiversity due to climate change.

Table 2.2 lists a number of processes that address climate change policy. This list is not

comprehensive, and additional processes are continuously starting to engage in climate change

related issues.

Table 2.1 Change in the number of Arab country delegates attending the UNFCCC intercessionals

Arab Countries Bonn 4-09

Bonn 6-09

Bangkok 10-09

Barcelona 11-09

Bonn 6-10

Bonn 8-10

Tianjin 10-10

Average

Algeria 2 20 11 17 6 2 5 9

Bahrain 0 1 1 0 0 2 0 1

Comoros 3 2 4 2 2 2 2 2

Djibouti 1 1 2 2 1 2 1 1

Egypt 1 11 9 6 14 7 9 8

Iraq 0 0 0 0 3 0 0 0

Jordan 1 2 1 2 2 1 3 2

Kuwait 6 13 12 21 10 6 5 10

Lebanon 1 2 2 2 3 2 3 2

Libya 3 3 2 2 6 1 2 3

Mauritania 2 2 2 3 2 2 2 2

Morocco 4 5 2 2 7 5 4 4

Oman 3 3 2 1 2 0 2 2

Palestine 0 0 0 0 0 0 0 0

Qatar 5 5 5 6 6 4 5 5

Saudi Arabia 16 15 18 13 15 11 10 14

Somalia 0 0 0 0 0 0 0 0

Sudan 13 10 12 15 9 9 8 11

Syria 1 1 2 1 1 0 2 1

Tunisia 2 3 4 3 3 2 3 3

UAE 6 15 13 13 8 10 6 10

Yemen 1 2 2 2 13 12 13 6

Other Countries

U.S. 43 45 37 59 44 43 37 44

Brazil 15 23 34 30 34 20 21 25

Argentina 3 5 9 7 9 6 8 7

Singapore 16 19 21 22 28 26 28 23

South Africa 16 28 20 24 26 12 17 20

Iran 0 9 14 17 3 1 8 7


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Table 2.2 Other international processes addressing Climate Change (outside the UNFCCC)

Process Recent Developments and Main Outcomes Related to Climate Change

G8

Declared commitment to limit global temperature rise to 2˚C, and endorsed emissions reduction targets for 2050. Latest meeting (June 2010) additionally addressed the need to reach low carbon and climate resilient economies.

G20

Discussed phasing out "medium-term inefficient" fuel subsidies. Latest meeting (June 2010) primarily addressed energy subsidies, climate change, and food security; and determination to ensure a successful outcome at COP16 was reiterated.

Major Economies Forum on Energy and Climate (MEF)

Latest meetings (July then September 2010) sought to accelerate the deployment of clean energy technologies and discussed how to advance prospects for a successful outcome at COP16. 11 new initiatives were announced, which together will eliminate the need to build more than 500 mid-sized power plants.

Petersburg Climate Dialogue

Environment and climate ministers from 43 countries (May 2010) discussed concrete steps to reach an ambitious outcome at COP 16. Germany, South Africa and the Republic of Korea launched an initiative to support developing countries in elaborating environment- and climate-friendly growth strategies.

UN High-level Energy and Climate Change Advisory Group

Seeks to reduce global energy intensity by 40% by 2030 and ensure universal access to modern energy services (from low-emissions sources if possible). Latest meeting (July 2010) focused on new public-private partnerships and other ways to support these goals.

UN High-level Advisory Group on Climate Change Financing

Seeks to identify sources of longer-term financing for developing countries, with a view to scaling up support to reach 100 billion dollars per year by 2020 in addition to 30 billion dollars until 2012. Latest meeting held in July 2010.

Montreal Protocol (UNEP)

Has helped both reduce global warming and protect the ozone layer through limiting ozone depleting substances including greenhouse gases. Latest meetings (November 2010) focused on controlling hydrochlorofluorocarbons (HCFCs) and hydrofluorocarbons (HFCs) and simultaneously achieving climate benefits.

United Nations Convention on Biological Diversity (CBD)

Ecosystems play a key role in the global carbon cycle and in adapting to climate change. The latest CBD meeting (October 2010) set a Strategic Plan with 20 targets for 2015 and 2020, including: minimizing anthropogenic pressures on climate-vulnerable ecosystems; and enhancing ecosystem resilience and the contribution of biodiversity to carbon stocks, thereby contributing to climate change mitigation and adaptation.

United Nations Commission on Sustainable Development (CSD)

Process at the origin of the UNCBD, UNCCD and UNFCCC (Rio Earth Summit, 1992). Latest meetings consisting of a preparatory process for the Rio+20 conference (2012) identified climate change as one of the main cross-border


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challenges threatening prospects for sustainable livelihoods.

United Nations General Assembly (UNGA)

Climate change often figured at the top of UNGA agendas and Heads of States’ interventions. Latest meeting (September 2010) addressed Small Island Developing States (SIDS) as priority issue, and focused on reducing their vulnerabilities and strengthening their resilience through, inter-alia, a robust post-Kyoto agreement.

World Trade Organization (WTO)

Parties at the latest meetings (February then September 2010) debated how to reduce fossil fuel subsidies and unlock the current environmental goods and services negotiations at the WTO. Parties renewed focus on liberalizing trade in climate-friendly products, and exchanged views on national experiences in carbon footprint schemes.

International Civil Aviation Organization (ICAO)

Latest Assembly session (September/October 2010) adopted a roadmap for action on CO2 emissions by 2050, building on systems initiated in 2007 for: improving aviation fuel efficiency of 2% per year up to 2050; setting a framework for development and deployment of alternative fuels; and creating a carbon dioxide standard for aircrafts by 2013.

International Maritime Organization (IMO)

Marine Environment Protection Committee focuses on setting up a comprehensive regulatory regime aimed at limiting or reducing greenhouse gas (GHG) emissions from ships. Latest meeting held in September 2010.

Asia-Pacific Partnership on Clean Development and Climate (APEC)

Partnership established to advance clean development and climate objectives through enhancing cooperation between Partners. Participants at latest meetings recalled their “Declaration on Climate Change, Energy Security and Clean Development” which set out an APEC-wide aspirational target of reducing energy intensity by at least 25 percent by 2030 and increasing forest cover in the region by at least 20 million hectares of all types of forests by 2020.

Commonwealth of Independent States (CIS)

The 2009 Commonwealth Heads of Government Meeting titled “Partnering for a more equitable and sustainable future” included a special session on climate change.

Africa-EU Energy Partnership (AEEP)

First High Level Meeting (September 2010) focused on energy access, energy security and renewable energy. Participants endorsed a Road Map committing partners to different targets aiming at increasing sustainable energy production and use; and launched the Africa-EU Renewable Energy Cooperation Programme (RECP) aimed at enhancing industrial and business cooperation in the energy sector between the two continents.

Asia-Europe Meeting (ASEM)

Leaders underlined at their eighth Meeting (October 2010) the centrality and legitimacy of the UNFCCC process and the need to address the remaining gaps on all major issues at COP16. Leaders also recognized the importance of promoting sustainable forms of production and consumption, through including the promotion of a green, low-carbon economy.


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3 The Stumbling Blocks

3.1 Legal form

One of the main dilemmas of the current negotiation process under the UNFCCC is the final shape

of the agreement. Parties have been negotiating under the two tracks for almost three years now,

but there is still no agreement on how the two tracks will be concluded. Each track should result in

a specific outcome, and the nature of this outcome will affect its strength.

There are three main options available:

1- The merging of the two tracks into a one single outcome in the form of a ratifiable treaty that would replace the Kyoto Protocol,

2- two ratifiable outcomes in the form of an amended Kyoto Protocol with a second commitment period under the AWG-KP and a new Protocol under the AWG-LCA track,

3- an amended Kyoto Protocol under the AWG-KP, while under the AWG-LCA there will be a set of COP decisions

The main difference between a decision and a ratifiable treaty is that a treaty is considered more

legally binding, since it involves national legislative bodies to approve it. This makes it a national

law, and countries would be obliged to implement the agreement, especially if it includes a strong

compliance mechanism. On the other hand, a decision does not require ratification, and it is only a

commitment by the cabinet or administration. If there is a change in administration, or if the

legislative body voted otherwise, then the Party could possibly not implement the decision.

Major emitters from developing countries are concerned that a ratifiable outcome under the AWG-

LCA might force commitments upon them. Therefore, they prefer the third option of having a set of

COP Decisions under the AWG-LCA, and an amended Kyoto Protocol, which focuses on the

commitments of developed countries. This way, they would delay any commitments that they could

face to at least the next negotiation process.

On the other hand, most developed countries prefer the first option outlined above, which would

put all countries under the same instrument, and would dilute the difference between developed

and developing countries. These countries would like to see the major developing countries under

the same mechanisms, although they agree that the nature of commitments should be different

between developed and developing countries.

Developing Countries want to preserve Kyoto Protocol, as it is the only legal instrument that has

concrete targets for developed countries. If the first option is chosen it means that the existing

architecture in the Kyoto Protocol might be lost, and countries would end up with an instrument

that is weaker in terms of commitment on developed countries.


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There are a set of progressive countries that prefer option two, which asks for the most ambitious

outcome, ie two ratifiable instruments, one under each of the two tracks. These countries are the

coalition of small island states (AOSIS), South Africa, and Lebanon.

Nevertheless, deciding on the legal form is not such a straight nor easy process. Judging legal form

depends on many factors that need to be taken into consideration, such as effectiveness,

accountability, durability, flexibility, comparability, enforceability, etc. For example, some

developed countries that are under the Kyoto Protocol are angered to see the United States having

a free ride outside the Kyoto Protocol, and hence would like to see the United States under a

comparable regime.

There recently has been some movement on the legal form, where the EU has announced its clear

acceptance of a second commitment period under the Kyoto Protocol, and thus bringing

themselves closer to developing countries. Nevertheless, many countries have drawn a red line on

the legal form, and it appears that they will not move at all from their taken positions. For example,

Japan clearly rejects a second commitment period under the Kyoto Protocol, and the US will never

be able to join Kyoto. On the other hand, China is firm in its position on only having COP decisions

under the AWG-LCA.

3.2 Future of the Kyoto Protocol

The future of Kyoto stems from the debate of the legal form, but has wider implications. The

question is: what will happen to the Kyoto Protocol, if there is no agreement on the legal form? If

no second commitment period is agreed upon, then there will be a gap in commitments, and for a

few years even developed countries will have no international obligation to reduce their emissions.

For developing countries, the survival of the Kyoto Protocol is one of their key aims. As a result, it

has also been affecting all their other positions. For example, they are concerned that any progress

in the mitigation text under the AWG-LCA would encourage developed countries to abandon Kyoto

and instead include their commitments under the LCA agreement. It is for this reason that in the

last session in China, there was the least progress concerning the mitigation issue. But not having

progress on mitigation under the AWG-LCA could also weaken the Kyoto Protocol. Many countries

want the United States, which is outside the Protocol but under the AWG-LCA, to be under a similar

regime to the Protocol. Therefore, the lack of progress on mitigation under AWG-LCA would put the

Unites States under no mitigation obligation, and this would make the Kyoto Protocol increasingly

unattractive for some developed countries.

Numerous developed governments are not satisfied with the Kyoto Protocol, as the United States is

not part of it and developing countries do not have any obligations under it. Japan has made it clear


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that it will not accept the continuation of the Kyoto Protocol. Canada most probably will not ratify a

second commitment period. Similarly, Russia is giving a strong indication that it does not want

another commitment period.

Developing countries are trying to find the best strategy that would keep developed countries

within the Kyoto Protocol and not leave it. Nevertheless, many experts believe that developing

countries have very little power to prevent a developed country from leaving the Kyoto Protocol. To

remain within the Kyoto Protocol, a country would have to ratify in its parliament any amendment

to it. Therefore, even if developed countries accept a second commitment period for the Kyoto

Protocol in the UNFCCC negotiations, they can still be out of the Protocol if their parliaments do not

ratify this change.

If a second commitment period has been negotiated, the amended Kyoto Protocol will go into force

after at least 55 countries ratify it, incorporating at least 55% of the emissions of Annex I countries

of the total emissions for 1990 of Annex I Parties. This means that there could still be a gap between

first and second commitment period until enough countries ratify the new amendments. It is very

doubtful that a second commitment period will be agreed upon in Cancun. If the agreement

happens in COP17 in South Africa at the end of 2011, this leaves countries only one year to ratify it

in order not to have a gap in commitments, since the first commitment period ends at the end of

2012.

3.3 The United States dilemma

After the United States rejected Kyoto, many Parties and experts declared the failure of the

international climate regime. The media was obsessed about it, and the Kyoto Protocol would

almost never be mentioned without stating that the US did not ratify it. Having the United States

outside the Protocol meant that half of all developed countries emissions were not accounted for.

Therefore, many delegates and experts argue that the whole purpose of the Bali Action Plan, which

kicked the negotiations under the AWG-LCA track, was to put the United States under some kind of

international obligations and commitments to reduce their emissions. Developing countries viewed

the mitigation discussion for developed countries in the AWG-LCA being about what the United

States will do, since all other developed countries were already accounted for under the Kyoto

Protocol.

The Obama Administration understood the need for having the United States under an

international regime, but they did not want to repeat the mistake of the Clinton Administration.

When the Clinton Administration was negotiating the Kyoto Protocol, and at that time Al Gore was

on the negotiating team, the United States was most ambitious. The problem is that after the text

of Kyoto Protocol was agreed within the UNFCCC process, the Protocol needed ratification from


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parliaments. The legislative bodies in the United States did not share the view of the Clinton

Administration, and the Kyoto Protocol was not passed, triggering international disappointment.

In order not to repeat the same mistake, the Obama Administration decided to get an agreement

domestically before going to the international negotiations. Unfortunately, matters were not that

simple. The Obama Administration failed to pass a national bill on climate change, and it does not

look that the Senate will accept any climate change bill any time soon. This is due to the climate

skeptics who have a very strong voice and deny the existence of a human caused climate change.

Moreover, there are concerns that the extra cost of reducing emissions might put the United States

at an economic disadvantage, especially in regards to China. This means any decision or agreement

that could be agreed in the UNFCCC process could possibly not be implemented in the United

States.

That is why many countries and experts believe that the negotiation process is on the verge of

collapse, since whatever the shape of the agreement would be the United States would be out of it.

The Obama Administration disagrees by stating that there could be domestic action without having

a bill. For example, the US Environment Protection Agency (EPA) has listed carbon dioxide as a

pollutant that needs to be regulated, and the agency can take action to reduce emissions. Last year

the EPA has put in place a very significant vehicle regulation to reduce emissions. Also action could

be taken at the level of states, and the State of California already has a climate change law in place.

The Administration is also increasing the budget for climate change finance on a yearly basis.

The Administration is reaffirming their commitment to cut greenhouse gas emissions by 17 percent

below 2005 levels in the coming decade and more than 80 percent by 2050, which was part of the

Copenhagen Accord. Nevertheless, the lack of interest in climate change on the national level in the

United States did affect the negotiation process severely.

The United States Administration is trying hard to make the negotiated text appear more appealing

to domestic bodies. The United States delegation is trying to portray the Copenhagen Accord a

success, and use it as the main basis for any future agreement. Nevertheless, many countries are

unsatisfied with any references made to the Copenhagen Accord, especially when it comes to the

issue of International Consultation and Analysis of unsupported climate change mitigation action in

developing countries. For many developing countries they see this part of the Copenhagen Accord

as a way to force commitments on developing countries, and will not accept such language.

The United States does not want countries to pick and chose elements from the Copenhagen

Accord. As a result, they have clearly stated that what the leaders have agreed upon in Copenhagen

is a package. The United States will not go forward with the goal of mobilizing 100 billion US dollars

per year by 2020 and other issues important for developing countries unless there are the other

elements of the Copenhagen Accord. They claim that what was reached in Copenhagen is the best

balanced agreement that could be reached, especially in terms of plugging the commitments and


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actions of developed and developing countries in Annexes and the issue of International

Consultation and Analysis.

Both of these issues are considered by many developing countries as a way to force commitments

on them, especially China, and they would not accept them. The frustration has reached an extent

that some Parties and experts (such as Nicholas Stern) are suggesting moving ahead with or without

the United States. This would require strong support from other developed and developing

countries, and acceptance of a second commitment period under the Kyoto Protocol. This scenario

could happen if Parties realize that the United States will not implement any commitment without

the Senate’s support.

The reality is that it does not look that the legislative body in the United States will be ready any

time soon to tackle climate change. In early November, President Obama lost a lot of votes in the

house and the senate to the republicans, who are greatly reluctant to act on climate change. This

means that it could take more than four years to have a change of political reality on the domestic

level in the United States, and have the chance to pass a national legislation on climate change.

3.4 Trust and Transparency

The gap in trust between developing and developed countries had reached its peak just before the

Copenhagen summit. During the summit, countries from both sides were resistant to compromise.

Moreover, the process by which the Danish government handled the COP Presidency in

Copenhagen has also increased this gap. Although the Danish presidency followed standard

procedures in order to reach an outcome, most developing countries believe that the process

during Copenhagen was not transparent. This indicates a huge lack of trust, and many developing

countries constantly believed that something is happening behind their backs. The gap during

Copenhagen became so wide that countries within the G77 and China grouping stopped trusting

each other, and sometimes accused each other of being unfaithful to the group or of serving the

interests of developed countries. Even now, developing countries who have not signed the

Copenhagen Accord view those who have as unfaithful.

Nevertheless most of this gap lies within the individual negotiators rather than with the Capitals

and governments those individuals represent. The language of some of the ministers during

Copenhagen was different from the language of the negotiators. For example, many negotiators

from countries who have signed the Copenhagen Accord did not defend it in the negotiation

process.

Many parties understand the need to reduce the gap between developed and developing countries

to achieve any progress in the negotiations in 2010 or 2011. That is why the Mexican government

focused on rebuilding trust in the early months of 2010. Also, new groups have emerged that


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include both developed and developing countries, such as the Cartagena Group or the

Mediterranean Climate Change Initiative. These groups have helped bridge the gap, and bring the

different views together.

There were also other factors that helped increase trust. For example, the commitment from

developed countries in Copenhagen to provide 30 billion US dollars as fast-track finance in the years

from 2010 to 2012, as well as establishing a new fund under the Convention. There is also the

agreement to provide long-term finance reaching a scale of 100 billion US dollars by the year 2020.

Therefore, many countries believe that there is enough trust and transparency to reach an

agreement in the coming years.

Nevertheless, there are some steps that could be taken to further build trust. One important aspect

that has been on the table in the past few negotiation sessions is the transparency in the delivery of

fast-track finance. Many developing countries are questioning the delivery of the fast-track finance

that developed countries committed to in Copenhagen. Developing countries want to see more

clarity and transparency in how the fast-track finance is being provided. They are even asking for a

decision to be made in Cancun on fast-track finance that would make the process transparent and

would provide information on the sources of the 30 billion US dollars.

Developed countries have already reacted to this issue, and started providing reports on their

climate financing. The Dutch government has even established a specific website on fast-start

finance to outline how much and from where climate funds are coming and where they are going.

Developing countries are still questioning the sources of the funds, and are requesting that the fast-

track financing be new, additional and above the Official Development Assistance (ODA).

The governance of the new fund is another element through which trust can be increased. In

Copenhagen, countries saw that the US had agreed to have a new fund completely regulated by

under and within the convention. However, this was not entirely true. Although the United States

did support establishing a new fund through the convention, they did not envision the convention

controlling it, which is the opposite of what developing countries wanted. Still, there is significant

room to compromise on this issue and a strong possibility of achieving an acceptable agreement.

The European Union has already suggested a compromise that could be acceptable to all countries,

which is establishing an ad-hoc committee for one year within the convention to design and draft

the governance and guidelines for the fund.


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4 Cancun Expectations

Whatever the political momentum there still is in Cancun, Parties should benefit from it to reach a

successful outcome for Cancun. Although political will is minimal, it is projected that it will become

even more minimal post Cancun negotiations, especially with the recent changes in the domestic

legislative bodies of the United States. It is doubtful that a stronger outcome could be reached in

the next 17th COP in South Africa. The question is what could be considered a successful outcome in

Cancun.

The last UNFCCC intersessional in Tianjin, China, focused on the decisions that could be taken in

Cancun. The opinion ranged from having no decisions taken there so that not to prejudge the shape

of the final outcome, to having a set of decisions on almost all issues, including a clear roadmap on

when and in what form Parties will conclude the current negotiations process.

Of course, the amount of progress that will happen in Cancun depends on the political will to reach

an agreement. It is clear that political will has declined among many countries since Copenhagen,

especially after the failure of having a climate bill in the United States. Nevertheless, many

countries are aware that a failure in Cancun can threaten the whole UNFCCC process. For most

developing countries the UNFCCC is the only platform where they can protect their interests.

Therefore, there will be a tremendous effort from many developing countries, especially small

island states and least developed countries, to achieve a step forward in Cancun.

The minimum that Cancun should achieve is substantial progress on all areas of discussion, ie

substantially reduce the number of brackets in all negotiating text. An important milestone could

also be surpassed if countries reach an agreement on the final legal form, as well as when and how

will they reach it. Agreeing on the legal form will be challenging and many consider it unlikely,

however achieving this would definitely propel the negotiations forward.

Having outlined the main three potential legal forms above, a potential acceptable agreement on

the form could be a combination of two of the proposals. This would be an agreement to have

another three- or five-year commitment period under the Kyoto Protocol with a set of decisions on

key issues under the AWG-LCA, on an agreed condition that there will be a new single ratifiable

agreement to replace Kyoto Protocol after the end of this second commitment period.

Nevertheless, there is a minimum set of decisions that should be taken in Cancun in order to ensure

environmental integrity and close the gap between the level of ambition and what science is

demanding. Some of these key decisions that could be achieved in Cancun are:

Establishing a new fund under the convention to allow the start of preparing guidelines for

its development during 2011, in order to avoid a gap in funding availability between fast-


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track funding and long-term funding. The governance structure of the fund should also be

agreed in Cancun.

Developing a technical paper on the socioeconomic impacts and costs of exceeding 1.5°C,

and the costs associated with remaining under 1.5°C, to determine the level of ambition

needed, and reassess the gap between current commitments (especially from developed

countries).

It is unlikely that developed countries will accept an aggregate reduction target in Mexico, i.e. how

much they will have to reduce their emissions compared to 1990 levels by 2020. Their level of

ambition is considered by almost all scientific assessments to be significantly below what is required

to effectively fight climate change. Increasing this level of ambition will be a difficult political shift in

the capitals of developed countries, and most probably will not happen. Not agreeing on a

developed country targets also means that there will be no agreement on developing country

targets, or a peak year for global emission. This of course, threatens the overall environmental

integrity of the convention, and Parties must recognize that. It would also be highly desirable to

agree in Cancun on a process that would allow periodic review of targets, and provide assurance on

the trajectory of countries of government developments to stimulate investment in a low-emission

economy.

Therefore, at Cancun the following key decisions under the AWG-LCA could also be achieved:

Agreeing on the review paragraph in the shared vision section of the negotiation text. This

paragraph could act as a backup plan in case environmental integrity has been

compromised.

Agreeing that each developed country should produce Zero Emission Plan and each

developing country should produce a Low Emission Plan that would outline the emission

trajectory of each country, and their ambition towards a green economy. These plans would

generate a positive assurance for investment in low-emission technologies.

The acceptance and approval of the United States will be a big challenge to achieve the above

decisions under the AWG-LCA. The United States, as previously mentioned, made it clear that what

has been agreed upon in the Copenhagen Accord by World leaders in December comes as a

package. What is important for the United States are the issues of measurement, reporting and

verification (MRV) and the international consultation and analysis (ICA).

Most developing countries view the MRV of unsupported action as an interference with national

sovereignty, and are delaying the discussions on MRV as much as possible. Nevertheless, it looks

unlikely that the United States will agree on important issues for developing countries such as

finance, technology and capacity building without reaching an agreement on the MRV discussion


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first. Many Parties see measuring, reporting and verifying the work done by each country is an

essential tool to quantify the level of ambition, and assess the effectiveness of global effort. On the

other hand, many other Parties see MRV as a method to start putting commitments on developing

countries, and are weary of its consequences.

Nevertheless, MRV works in both ways. MRV of mitigation action requires that countries report on

the mitigation work they are doing and then verify these actions through some kind of agreed

mechanism. At the same time, MRV of support requires that developed countries report on the

financial and technological support they provide to developing countries and then verify this

support through an agreed mechanism as well.

There is a lot of room for change within the MRV. Consequently, there is great potential to find an

agreement on MRV that is acceptable to all Parties. However, one main obstacle in achieving this, is

the fact that most Parties have not yet discussed MRV internally, and do not have a full view on

where it can go. Countries need to seriously prepare on the issue of MRV before attending Cancun.

The outcome in Cancun largely depends on the work of the COP President, which in this case is

Mexico. Mexico embraces this responsibility and has been active all through the year in engaging

countries on various key issues. The Mexicans are determined to achieve results in Cancun and have

appointed the Minister of Foreign Affairs as the COP President, understanding that the climate

change negotiations is more of a political discussion than it an environmental one.

Since the beginning of the year, the Mexican government has worked to build trust among Parties

and focused an important part of its efforts on consultations around the legal form. The

government has highlighted the criticalness of these two topics for the negotiation process. They

have conducted meetings around the legal form starting from the August intersessional in Bonn,

and have been careful to be substantially transparent in all their work in order to strengthen the

trust between Parties and the upcoming Presidency.

The Mexicans are looking for a balanced outcome in Cancun, which includes a number of decisions

on finance, REDD, adaptation, technology, and capacity building. They feel that this will be feasible,

especially after the past couple of negotiation sessions, where delegates have expressed more

comfort with the existing negotiating text.


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5 The Roadmap after Cancun

Cancun will only be a stop, and the negotiation process will continue till South Africa. Still, there is

also a big possibility that the negotiations will not conclude there. At the moment, there is no sign

that indicates a change in country positions between now and end of next year. Therefore, the

roadmap after Cancun needs to be considered on even a longer-term.

There are two important political stops in the coming five years. One is the 3rd World Summit for

Sustainable Development (Rio+20), and the second is the ‘1.5 review’ article in the Copenhagen

Accord that could start around the time when the next IPCC reports are published. Both of these

opportunities could generate again the needed political momentum that we saw before

Copenhagen. This time we need to make one of the opportunities a success.

The problem with the second opportunity is that we will not have a new agreement before 2015.

Therefore, real global action will not start before 2017 or after, meaning that we will not be able to

stick with the goal of keeping well below the 1.5 or 2 degrees temperature rise. The consequence

on humanity and the planet would be too high, and we could even reach certain tipping points that

are irreversible.

Therefore, it is crucial to try to finalize the negotiations by Rio+20 in 2012 at the latest. After signing

the new agreement in Rio, Heads of State need to get the agreement into full implementation as

soon as possible in order to have some chance in keeping global temperature increase well below 2

degrees.

To achieve an agreement in 2012 also requires a change in political dynamics and positions. The

United States elections towards the end of 2012 have the potential to do so, but it will require

intensive work on changing public opinion on climate change in the United States. It also depends

on what the big emitters among the developing countries will put on the table. Will these countries

suggest something different in the coming two to three years? This also depends on various factors.


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6 Recommendations to Arab Governments for Cancun

Arab delegations must work on safeguarding the international regime. The Arab region will lose a

lot if countries disengage the UNFCCC and take the climate change negotiations outside the formal

process. Arab countries are strongest within the UNFCCC, where they receive the support of

G77+China, and can ensure their interests. Therefore, Arab countries need to be more progressive

in Cancun, show a spirit of compromise, and work on building trust and agreement between the

different views.

Arab countries should also push for agreement on the final legal form of the two working groups.

Achieving this difficult task would for sure regain faith in the process. Arab countries need to

continue to push for a second KP commitment period.

Also, Arab countries should not support the concept of ‘nothing is agreed until everything is

agreed’. Arab governments should show flexibility and allow for certain issues to be finalized and

start being operated.

Under the LCA, these issues include:

Establish the new fund with adequate governance structure

Agree on MRV mechanism for developed countries mitigation and support commitments

and developing countries mitigation actions, including the development of Zero Carbon

Action Plans for developed countries and Low Carbon Action Plans for developing countries

Agree on an Adaptation Framework and establish an Adaptation Committee to coordinate

adaptation efforts, including a mandate to address loss and damage caused by extreme and

slow onset climate change beyond the limits of adaptation

Establish a Technology Executive Committee (TEC) to develop a Global Technology Objective

and Global Technology Action Plans or Roadmaps

Agree on a REDD+ framework that ensures safeguards for preserving natural forests,

biodiversity and social benefits and the rights of indigenous peoples.


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APPENDIX I

Recommendations for the UNFCCC

National Communications Process for Developed Countries By IndyACT, Germanwatch, Greenpeace and WWF

*Annex 1 National Communications guidelines should be revised to include guidelines for zero carbon

action plans for 2050

*The 6th National Communications to the UNFCCC should be submitted by December 31, 2012,

including the first iteration of each country’s zero-emission plan for 2050. The 4-year cycle for full

national communications should be continued, however biennial updates should be made.

*An annual financial inventory should be required that includes robust accounting and reporting

standards for support provided by developed countries to developing countries for mitigation, including

REDD, and adaptation. This report would be in addition to annual GHG inventories that are already

submitted by developed countries.

*The review and compliance process for Annex 1 National Communications and inventories should be

revised and enhanced. The scope of expert review should be expanded such that reviewers are able to

flag early warning signals of non-compliance (e.g. when emissions are more than [15%] off of the linear

trajectory to the target). Such instances would be addressed, and continued inaction by the Party would

lead to consequences. The enforcement branch of the Compliance Committee should deal with all cases

of ultimate non-compliance.

Zero Carbon Action Plan (ZCAP)

Zero Carbon Action Plans (or Zero Emissions Plans) for industrialized countries would not only assist in setting a pathway towards a low carbon economy for each country, they would also help to build trust globally by demonstrating that each country is indeed making adequate short and long-term institutional and financial investments to meet its emissions reduction target. ZCAPs need consist of an integrated adaptation and mitigation planning framework, projecting the many interlinkages and potential mutual impacts between mitigation and adaptation actions. Guidelines for this forward looking plan should require that Parties:

Detail an emissions reduction trajectory through 2020, 2030, 2040, and 2050, that will have the country achieving near-zero emissions by 2050. Include details of where national emissions are relative to the outlined trajectory.

Identify the transformation strategies, and policies and measures the country plans to implement to transform all relevant sectors of its economy to meet its quantified emissions reduction commitment and be on a trajectory towards near zero emissions by 2050.


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Develop a clear roadmap for the investments in clean technology with sustained scaling up of development, diffusion and deployment of clean technologies in the short, medium and long term

Outline how a country proposes to meet its MRV finance, technology and capacity building support obligations

include technology roadmaps, RD&D plans, and plans to remove long-lived high-emissions infrastructure that are commensurate with the 2050 vision, and take into account climate impacts

The ZCAP should be updated within each 5-year commitment period, in line with obligations for that

period.

Annual Financial Inventory

The current financial reporting done through national communications is not frequent enough, and lacks consistency among countries. As discussed in a UNFCCC Secretariat document from 2007, a number of issues exist related to financial reporting (FCCC/SBI/2007/INF.6/Add.2). In addition to concerns raised by the Secretariat, the lack of a definition for ‘new and additional’ has hindered analysis of financial commitments by developed countries. To address the gaps in MRV of finance, an annual Financial Inventory should accompany the annual GHG Inventories produced by developed countries. Guidelines for these inventories should:

Define the term ‘new and additional’, including a specific base year

Define categories of acceptable funding, including a breakdown of specific activities financed (see Tirpak et al. 2010. Guidelines for Reporting Information on Climate Finance.” WRI)

Require that Parties distinguish funding for climate change within the total amount given to multilateral institutions and bilateral institutions. Current requirements to disclose the total amounts given to multilateral institutions are not sufficient for assessing contributions relevant to climate.

Include recipient countries of finance

Provide a common format for reporting of bilateral contributions, so that they can be compared across countries.

Provisions for reporting on other types of support (technological, capacity building).

Cycle of Annex 1 National Communications and Inventories

Developed countries should be required to produce full national communications every 4-years with

biennial updates. The 6th full national communication, including the first iteration of a country’s Zero

Carbon Action Plan, should be submitted by December 31, 2012. Zero Carbon Action Plans should be

updated at least once a commitment period (at the beginning of the period). The submission of annual

inventories should be continued, however an account of support provided to developing countries (a

financial inventory) should be included.


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Strengthened review and compliance process for Annex 1 National Communications and Inventories

The system for reviewing developed country reporting must give confidence that countries are complying with their obligations. The compliance mechanism established under the Kyoto Protocol is a step in the right direction, however this system has not been effective in detecting potential cases of non-compliance. A strengthened early-warning flag should be added (e.g. when emissions are more than *15%+ off of the linear trajectory towards meeting a country’s target). Specifically, expert reviewers should be empowered to flag early signs of potential non-compliance as assessed in national communications or inventories, and refer questions of implementation to the Compliance Committee. Such instances would be addressed, and continued inaction by the Party would lead to consequences. The Enforcement Branch of the Compliance Committee should deal with all cases of ultimate non-compliance. To ensure compliance with commitments, any mechanism must be part of a future legally binding treaty.


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APPENDIX II

Recommendations for the UNFCCC

National Communications Process for Developing Countries

By IndyACT, Germanwatch, Greenpeace and WWF

It is imperative that Parties make progress on MRV issues, particularly Annex I reporting, review,

compliance and financial support (see separate briefing) and Non-Annex I (NAI) reporting, review and

facilitation. Many of these issues need to be resolved by Cancun (2010), with any remaining details

completed by South Africa (2011). This brief examines where Parties need to make progress on one

particular element of the MRV system for developing countries, namely, the NAI National

Communications process.

National communications should serve three purposes:

To report emissions data through a GHG inventory in a transparent, consistent and comparable manner with as complete and accurate information as possible;

To outline a country’s climate resilient low carbon action plan to 2050;1 and

To report on adopted and/or implemented policies and measures (NAMAs) to reduce GHG emissions, including a quantitative estimate of the impacts of individual policies and measures or collections of policies and measures, compared to a reference level, and the underlying assumptions.

From this list, one may derive three observations:

Significant and sustained capacity building support (both technical and financial) will be needed to enable developing countries to meet these reporting challenges;

Not all of this information needs to be submitted with the same frequency; and

The current guidelines for national communications need significant revisions.

Capacity for developing country national communications must be built up over time. We will need a

transition period which requires those countries that have capacity, and also contribute significant

shares of global emissions, to produce national communications earlier. Those countries who clearly

need more capacity should build that capacity over time, in line with the convention’s principle of

common but differentiated responsibilities and respective capabilities. All countries should receive

adequate support for their individual capacity building needs.

1 Developed countries would also be required to produce the more stringent zero emission plans.


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By Cancun, Parties should:

Agree that National Communications from developing countries should be submitted every 4 years, with an update, including a GHG inventory, submitted every two years. As many developing countries will complete their national communications in 2010, the first update should be due at the end of 2012, contingent to finance being provided in time. While not exempt from developing national communications, LDCs and SIDS may submit their updates as their capacity is enhanced over time.

Agree that developing countries with more than 1% of global annual emissions (in a year to be decided by Parties) should begin formulating climate resilient climate resilient Low Carbon Action Plans, LCAPs (or low emission plans) immediately, with technical and financial support by developed countries. The first provisional iteration of these plans should be incorporated into the national communications updates at the end of 2012. These plans should outline how developing countries plan to achieve their substantial deviation from baseline in emissions by 2020 and include indicative 2030/2050 aims for the transition to a climate resilient low-carbon economy. Parties would also identify their support needs. A full version of these plans should be included in the national communication due at the end of 2014.

Other developing countries should also be required to submit climate resilient low carbon action plans in their national communications due at the end of 2014 but are encouraged to do so earlier. LDCs and SIDS may submit these comprehensive plans at their discretion.

Agree to a comprehensive support package for assisting developing countries to establish and maintain the national systems necessary to support this enhanced reporting, particularly with respect to GHG inventories and the climate resilient low carbon action plans. As with the rest of the activities under the Convention, equal attention should be given to mitigation and adaptation plans (including vulnerability assessments). Rapid disbursement of these funds will be crucial to enabling developing countries to meet these reporting requirements and ambitious timelines.

Prior to Cancun, Parties must agree on a process to ensure that all of the relevant guidelines are

finalized by Cancun.

NAMA Registry

By Cancun, the NAMA Registry and the new climate fund need to be established. After Cancun, and in

time for the South African COP, additional guidelines for the measuring, reporting and verification of

supported NAMAs need to be agreed. To be clear, supported NAMAs should be internationally MRVed

as part of the Registry process. There would be no international MRV of unsupported NAMAs; the MRV

of unsupported NAMAs would only occur as part of the broader review of National Communications

outlined above.

Verification and Facilitation

Who reviews developing country actions and to what effect is one of the key MRV issues. Parties must

resolve these issues by Cancun. There are many ways this could be addressed, suffice it to make two

points here:


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>Developing country National Communications should be reviewed by expert review teams (ERTs) The quality of developed countries’ inventories has increased dramatically over the last decade in large part due to the expert review process. Developing countries will need time and support to develop robust inventories and the expert review process can play a significant facilitative role in enhancing their capacity to report. The composition of Expert Review teams must have balanced representation (as is current practice). Expert reviewers can also assist in building capacity for policies and measures and low carbon action plans. In-country reviews are likely to be the most beneficial and this option should be open to developing countries. As the extent of the review process is being widened both in terms of countries and number of reports, it will be crucial to enhance the capacity of the review process, including: nominating and making available more reviewers, training more reviewers (especially from developing countries), providing financial resources to support the review process and expanding the capacity of the secretariat to support this process. >A facilitation mechanism should be established to assist developing countries Lack of capacity may become an issue that inhibits developing countries from implementing and reporting on their desired mitigation actions. A mechanism should be established to address instances where discrepancies exist in the implementation of NAMAs and/or their anticipated outcomes. The purpose of the mechanism should be to amicably resolve any discrepancies through the provision of further technical, financial or other assistance.

By Cancun, Parties should:

Agree that developing countries’ national communications should be reviewed by expert review teams, with an alternative option for in-country reviews based on internationally agreed guidelines.

Establish a facilitative mechanism to assist developing countries in achieving their goals

Commit to enhancing the capacity of the review process itself (training for national experts, etc).

It is imperative that Parties use the full negotiating time available to make significant headway on this

issue.

Documents

Prospects of a new climate agreement