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The UNFCCC Negotiations: Canadian Considerations in the lead-up to COP 15

Mitigation of Greenhouse Gas Emissions through Land Use Measures

March 16, 2009 ~ Winnipeg, Manitoba ~ Fort Garry Hotel

POLICY DIALOGUE: KEY MESSAGES

IISD’s first in a series of four policy dialogue sessions examined Canadian considerations in the lead-up to COP 15 in the area of mitigation of greenhouse gas emissions through land use measures. The objective of this policy dialogue session was to provide an opportunity for:

Civil society representatives to share their knowledge and perspectives regarding the design of the post-2012 climate regime, with particular attention in this first session paid to the issues, challenges and proposals related to mitigation through land use measures; and

The Government of Canada to provide their perspectives on Canada’s emerging negotiating positions in advance of each meeting of the Ad Hoc Working Group on Long-term Cooperation Action under the Convention (AWG-LCA).

The key messages from the policy dialogue session were: Mitigation through land use measures

The land use sector has the prospect to be a key contributor in reaching global emission reduction targets in a future climate regime, with the agriculture and forestry sectors representing approximately 30 percent of the total global potential emission reductions from all sectors. There are many cost-effective mitigation options in the land use sector that have not yet been fully embraced, but issues related to monitoring, measurement, leakage, permanence and verification continue to hamper the full mitigation potential of these sectors.

The current LULUCF rules need improvement. A comprehensive treatment of LULUCF for Annex I countries that is flexible enough to address national circumstances is needed. This may include an Agriculture, Forestry, and Other Land Uses (AFOLU) approach in a new agreement, whereby all emissions from agriculture are considered under one sector.

A consideration for Canada in accounting for emissions and removals in the LULUCF sector is separating out the effects of natural, non-anthropogenic emissions. The Forward Looking Baseline was put forward as a possible solution. Experts were divided on this tool, with some supporting it and others suggesting that it is not likely to be included in a Copenhagen agreement.

There is a need to expand the CDM to overcome deficiencies of the Kyoto Protocol and encourage action in the agriculture and forestry sectors in developing countries. We will need to consider mechanisms at the project and country level, and build on current experience such as the Alberta’s protocols and the Voluntary Carbon Standard (VCS) methodologies.

Emission reductions in the agriculture sector will take place in a world where global food needs and population increase. Emission reductions and productivity increases will have to go hand in hand,

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requiring consideration of conservation and sustainable agriculture, and the unique needs of developing nations.

Implementation will take place at the local level, and the forest and agricultural sectors in Canada are willing to participate. Clear rules and policy certainty are needed.

There is a need to identify synergies in the land use sector on a number of levels: o Wetlands management has to be considered in tandem with other land use mitigation

measures. Nitrogen management is a key issue in this respect. There is a need however to ensure that all of the necessary data is presented, not just on positive wetlands management initiatives, but also on wetlands degradation.

o Impacts on biodiversity must be considered. o In developing countries, impacts on economic development, rural livelihoods and food

security must be considered.

Canada is a leader in many respects in regard to forestry and agriculture, e.g., protocols for offsets and conservation agriculture. Technology transfer of Canadian expertise needs to be considered.

The Negotiations

A tight time frame and complex process present a real risk to developing a comprehensive and successful agreement in Copenhagen. It is likely that whatever is achieved in Copenhagen will be a general document that will require work to fill in the details after COP 15.

Very deep reductions are needed, and it is a daunting challenge. The Government of Canada believes in achieving reductions of 50 percent by 2050. The core of the debate is how to get the reductions that are required—and all discussions are related to that goal. There is a need for collaborative work between developed and developing countries in the next global climate change regime; this is challenging, but necessary to ensure the next agreement is effective.

The Government of Canada has put forward its views, but they are not hard and fast. They are work in progress, and thus open to discussion. Part of the purpose of these policy dialogues is to inform the Government’s position through an iterative process.

Canada is interested in the AWG-LCA Chair’s perspectives. Canada’s position in the negotiations going forward will be less about making formal submissions and more about providing perspectives on the negotiating process. This is different from the Kyoto process.

A small number of countries are responsible for the majority of emissions, but the effects are felt everywhere, including those countries least able to adapt. Financing adaptation will be a very big issue, and for Canada, adaptation will focus on the poorest and most vulnerable. Canada’s ODA approach is based on developing country partners’ expressed needs, and could include adaptation, if requested.

Financing was a challenge before the economic crisis. Alternative approaches to financing will need to be looked at, and the economic downturn may actually present a good opportunity to do so.

In regard to emissions trading, the government has stated its preference for a North American system. Canada is finalizing its regulatory regime this year and the North American regimes must be workable and compatible.

On targets, negotiators expect a larger menu of options than during the Kyoto process, and anticipate that targets will be expressed in absolute terms. The Government of Canada will look at all of the options in Bonn, many of which are set out in the Chair’s paper.

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The UNFCCC Negotiations:

Canadian Considerations in the Lead-up to COP 15 Mitigation of Greenhouse Gas Emissions through Land Use Measures

March 16, 2009 ~ Winnipeg, Manitoba ~ Fort Garry Hotel

POLICY DIALOGUE REPORT

Introduction

On March 16, 2009, 57 participants met in Winnipeg for IISD’s policy dialogue session, Canadian Considerations in the Lead-up to COP 15: Mitigation of Greenhouse Gas Emissions through Land Use Measures. The aim of this policy session was to allow civil society representatives to share their knowledge and perspectives regarding the design of the post-2012 climate regime, with particular attention paid to the issues, challenges and proposals related to mitigation through land use measures (agriculture, forestry, reducing emissions from deforestation and degradation [REDD]); and the Government of Canada to provide their perspectives on Canada’s emerging negotiating positions.

IISD opened the workshop, and the morning sessions included a presentation on issues in mitigating greenhouse (GHG) emissions in the land use sector and a dialogue session where eight experts shared their views and insights. The afternoon session included a presentation on the outcomes of COP 14 in Poznan, and comments by and a question and answer session with Canada’s Chief Negotiator and Ambassador for Climate Change. The two presentations can be accessed from the IISD website: http://www.iisd.ca. David Runnalls, President and CEO, IISD, welcomed attendees and expressed IISD’s pleasure at being able to host this event, the first of a series of four high level policy discussions with civil society on climate change issues in the lead up to COP 15 in Copenhagen. Mr. Runnalls highlighted the respective roles of Environment Canada, which is funding the policy dialogue sessions, and IISD, which takes full responsibility for the choice of themes and content of the background papers. The goal of the four sessions is two-fold, to give Government of Canada an opportunity to share its thinking with civil society on the negotiating process and hear their suggestions and reactions, and to make people more aware of the critical issues facing the negotiators before Copenhagen.

Mitigation through land use measures

Dr. Daniel Martino, Intergovernmental Panel on Climate Change (IPCC) coordinating lead author for the Agriculture chapter in the Fourth Assessment Report, Uruguay, provided a presentation on “Mitigation through Land use Measures” The first part of Dr. Martino’s presentation highlighted the impacts of positive (e.g. conservation tillage) and negative (e.g. population increase) drivers of GHG emission trends in the agriculture and forestry sectors as well as the difference in baseline emissions along a developed/ developing country split. Large increases in emissions are the norm in the developing world, while reductions and even the development of net sinks are occurring in the developed world. A price structure showing the potential cost of carbon and its impact on emissions reductions through 2030 highlights the major impact carbon pricing can have on the reduction of emissions in the agriculture and

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forestry sectors, as well as the large potential of these sectors to assist in meeting global GHG reduction goals. Synergies with sustainable development practices were also highlighted. The second part of the presentation outlined the limitations of the IPCC Fourth Assessment Report including limited spatial resolution of potential estimates, underestimated mitigation potential in livestock systems, and the lack of quantification of possible synergies between mitigation options such as the impact of increased agriculture land productivity on deforestation. There are large uncertainties in the report, such as the impact of the pine beetle on the boreal forest in Canada. Dr. Martino examined global carbon stocks and flows, outlining the large impact agriculture and forestry mitigation action could have on reducing atmospheric carbon dioxide levels. While this action would not be an immediate or complete solution, it does present a great potential for positive impact. Closing remarks noted the failure of Kyoto mechanisms to take advantage of the emissions reductions in the land use sector—sectors that have significant cost-effective mitigation potential. He noted that the issues of permanence, measurement, baselines and trading restrictions that must be addressed for this mitigation potential to be realized in the future regime.

Expert Dialogue: Issues and considerations in addressing mitigation through agriculture and forestry

The session was facilitated by John Drexhage, Director, Climate Change and Energy, IISD, who encouraged an open dialogue based around questions put forward by the facilitator. Participation in the discussion included seven experts and Dr. Martino, as well as members of the broader audience, whose comments and inputs are also included in the this section. The experts engaged in the dialogue are listed below.

Karen Haugen-Kozyra, Climate Change Central (C3) Ian Wishart, Keystone Agricultural Producers (KAP)

Chris Henschel, Canadian Parks and Wilderness Society (CPAWS)

Paul Lansbergen, Forestry Products Association of Canada (FPAC)

David Lobb, University of Manitoba (U of M)

Federal Government Respondents: Marie Boehm, Agriculture and Agri-Food Canada (AAFC)

Peter Graham, Natural Resources Canada (NRCan) What are the implications for Canada in the discussion of sinks?

NRCan: Canada made a recent submission to the UNFCCC on improving incentive structures in Land Use, Land-use Change and Forestry (LULUCF) and providing better accounting in regard to when and where removals are counted. The incentive structure would separate out the effects of natural emissions (non-anthropogenic disturbances such as fire and insect infestations). A Forward Looking Baseline, a type of net-net approach that factors out non-anthropogenic emissions, is a potential solution distinguishing between emissions and removals due to human activity and those that occur due to natural causes. The intent of the submission is to address situations in a country like Canada that may be unfairly penalized because of natural emissions (e.g., the mountain pine beetle), becoming a net source rather than a net sink because of an uncontrollable situation.

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AAFC: It is a different situation in agriculture where natural disturbances are less pronounced, and comparisons are easier to make over time periods.

CPAWS: Problems with the Forward Looking Baseline mean that it is not likely to be included in final positions for Copenhagen. These problems include that baselines are open to manipulation, and that the approach involves putting all business-as-usual activities into the baseline and only accounting for activities deliberately designed to reduce emissions. The European Union has put forward a proposal to address this issue, building in an insurance mechanism that would help account for extreme changes and unpredictability. Such a mechanism could offset a pine beetle type of event.

FPAC: In regard to the international negotiations, there is logic to having domestic and international strategies linked. The forestry industry has no problem with a forward looking baseline which factors out natural disturbances. It is important to note that natural disturbances will become more frequent and severe with climate change.

C3: Alberta has a system for carbon sequestration based on net-net accounting. The risk of reversal and permanence issues have to be addressed and impact on the size of contributions to an insurance mechanism. A good example is the history of no-till farming.

KAP: The use of a pool of credits to cover risk is a good mechanism and something that Manitoba would be interested in. Offsets are a transition tool, and we need an adequate period of adaptation or we could suffer from data shock. We are not entirely comfortable with the Forward Looking Baseline. Another issue for consideration is the trend away from wetlands protection. Nutrient loading is a major issue in Manitoba and a major risk along with climate change. Synergy is needed between the two issues. The international regime will set climate change targets but we have to consider local issues in the integration of measures and we must send a clear message to farmers to get results.

CPAWS: Supportive of incentives for wetlands management; the question is how to implement.

U of M: There are a number of issues with permanence and reversal. Much of the work that has been done assumes a flat normal landscape, but this is not the case in reality. There is a tremendous lack of information, and completeness of accounting is an issue. As we understand the interactions between wetlands and croplands and the movement of substances such as nitrogen, we will develop a better understanding of the impact on things such as methane emissions. The role of wetlands will evolve. From a policy standpoint there is currently too much uncertainty.

AAFC: Agreement that there is a need to include wetlands. Understanding and implementation is a major issue. However, we need more information on the effects of degradation as well as good wetlands impacts. We cannot go forward with only the positives or it will look like we are cherry picking information.

C3: Alberta has studied degradation and developed protocols based on data. Wetlands management and emissions reduction will have to happen in tandem and nitrogen management is a major aspect. Bundling these issues can help to make improvements.

KAP: The lack of data is real and available data often conflicts. We know that restoration generates a positive outcome, but at the same time there is a push for increased productivity. We need to increase our understanding and move forward on this issue.

CPAWS: We must also look at emissions from the conservation of forests. It is important to build in an expectation of mitigation from this sector. This is a major concern for countries that have a large agriculture and forestry sectors. Firm rules are needed to accomplish mitigation and they must be promoted and adjusted to ensure mitigation in this sector

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Why should the atmosphere care where mitigation comes from?

CPAWS: The cost of the mitigation activity and economic potential. It is important to consider the cost of mitigation activities and at the same time make sure we are not flooding the market with credits. Currently the rules do not work well.

FPAC: We want broad participation and emission reductions from all sectors. The question becomes what is economical and the cost for an expected level of reductions. The agriculture and forestry sectors represent approximately 30 percent of potential emission reductions and will have to be part of the solution.

World Vision: LULUCF activities were frozen out of the Kyoto process because of the EU focus on industrial emissions. This is not good for both North America and the developing world as a huge potential was missed. This issue and potential must be examined in the upcoming negotiations.

Pembina Institute: Deep reductions from the LULUCF sectors are needed in addition to deep reductions from fossil fuel use. Overall targets must be discussed at the same time as the approach to the LULUCF sector. In regards to permanence, a biological sink is not the same as an awarded offset, there is no clear equivalence. Companies cannot be getting “something for nothing.”

Climate Action Network: Climate change is happening faster than expected. A comprehensive approach includes stimulation of reductions across the economy. There is a lot of complexity and uncertainty to the situation.

Soil Conservation Council of Canada: It is important to recognize the difference between biological and man-made sources. A lot can be gained from Alberta’s approach on this issue, and the farming community is ready to help if sent the right signals. Discussion of uncertainties and accounting

U of M: If you want to get a result from the field when measuring nitrous oxide in soil, you could get it by knowing when and where to sample. Strict protocols that are regionally developed are required. When dealing with policies, you need to look at both sides, e.g., restoration of wetlands and degraded land. We are getting a better picture at farm level, but will not be ready for COP 15.

IPCC: There is much to learn from CDM in regard to baselines and uncertainties. There are over 1500 CDM projects and a large pipeline of projects. But there are not many LULUCF projects—only one reforestation project has been registered. Part of this may be because of problems with methodologies, monitoring, establishing baselines. There are many uncertainties with the land use sector, but the IPCC has developed very sound methodologies at country level that have been tested over many years. Land use emissions and removals can be managed and estimated. When working on country scale, uncertainties are reduced to a manageable level.

KAP: Uncertainty tends to disappear with large volumes and scale. There is a need to shift thinking all the way along the chain—from international policy makers to consumers. The world can set a big international number and goal, but mechanisms are needed to link this goal to the marketplace or will get results of Kyoto—nothing. This is a complex issue, and there is no easy way to make it simple. But anxiety can be reduced in the farming sector with a clear set of rules and a clear estimate of mitigation potential. A problem is the current flexibility in rules, where countries can pick and chose what to include. There are not likely to be market signals if emissions and removals in this sector not included in international agreement.

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FPAC: Policy certainty is important, and the domestic level is where implementation takes place. A failure of Kyoto was that key parties were missing. The new U.S. administration may mean a shift in momentum and help broaden coverage. Principles for the forest industry going forward are harvest legally, regenerate promptly, promote recovery of waste, reduce GHG and other emissions, and welcome independent scrutiny of forest management practices.

C3: Are carbon market mechanisms appropriate for land use? Technically, it is a complex process to measure carbon, nitrous oxide and methane emissions from cattle. Over the past 10 years, systematic analysis and research has been undertaken, and Canada is a leader in taking estimates and building tier two analysis. Workable market mechanisms require conservative estimates and agricultural factors, and sectors that will use these conservative factors can take action. Reduced tillage offsets are a large part of the response, but emission reductions from ruminant fermentation can also have big impact. Alberta has four protocols in regard to animals, including feeding, and storing and spreading manure. Reducing length of age to slaughter could also make a large difference in reducing GHG emissions globally.

NRCan: There is baggage from the Kyoto Protocol. Even if we have an idea of the perfect rules, we will not get there before Copenhagen. The UNFCCC moves at speed of consensus, and new ideas generated by other countries need to be accounted for. A comprehensive treatment of LULUCF for Annex I countries that is flexible enough to address national circumstances is needed. Simplicity can be negotiated to some extent; and much of the complexity is a result of past negotiations. How can developing country (particularly least developed country) approaches be addressed without sacrificing integrity in a Copenhagen deal?

The Canadian Foodgrains Bank noted that they have worked with CIDA on small farmer adaptation and resilience, and asked how we measure emissions mitigation at the small farmer level.

C3: The developments at the 4th World Congress on Conservation Agriculture in New Delhi in February 2009 showed the need to desperately understand these challenges. Agricultural production must double within a decade. Canada has a lot to offer through technology transfer. Canada has seen much benefit from production improvements through conservation agriculture measures.

AAFC: An agriculture workshop on mitigation is planned for March 2009, for first time in the international climate change meetings. As developing countries become more involved they are looking for synergies. Why is recognition of deforestation actions through CDM problematic?

IPCC: Recognizing deforestation actions through the CDM can be problematic because past trends are not a predictor of future developments. It is also very difficult for many developing countries to have a national strategy because they may be up against very powerful illegal operations and a lack of control over their land. Project level actions may be more realistically achievable. Issues like leakage also present major complications for including deforestation under the CDM. Insurance mechanisms or buffer approaches are needed to overcome the permanence issue to stimulate CDM projects. Afforestation is more attainable than deforestation projects. There are many initiatives now moving forward, such as the Voluntary Carbon Standard (VCS) methodologies.

FPAC: Domestically, the ownership of forests has to be considered—private vs. public. There is not one approach for every circumstance and permanence requires a quantification of time. Insurance is an option but not yet workable. Other options may be more workable in the short term.

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Pembina: It seems the problem with deforestation is linked to demand and leakage can cross international borders. It might be quite costly to stop deforestation for this reason. How are economic estimates done for REDD?

NRCan: There are a range of approaches and some cheap REDD credits are available. Some countries are simply incapable of effectively reducing emissions. Expanding the scope of the CDM could assist some countries only able to work at project level. More capable countries may want to work at a market level. Should the agriculture discussion be on its own or a part of LULUCF discussions?

U of M: GHG mitigation approaches must be considered based on the specific gas (methane, carbon dioxide, nitrous oxide) considered.

AAFC: The difference between Agriculture, Forestry, and Other Land Uses (AFOLU) and LULUCF answers the discussion question. The agriculture sector estimates all GHGs together and reports them separately. Under Kyoto these considerations were nil, but they will not be under the new ppost-2012 agreement.

IPCC: It is possible today to combine the two under 3.4 of the Kyoto Protocol. Annex 1 countries can opt to include croplands management to mitigate climate change. These countries identify units of land subject to mitigation measurement. So far very few countries account for that.

FPAC: The growing demand for forest products is an issue, specifically paper. Tropical countries remove rainforests in favour of plantations, and leakage occurs if you attempt to stop it.

Farm Stewardship Association of Manitoba: There are 7,000 farmers in Manitoba and 25,000 in western Canada. Each farmer is also a resource manager and knows decreased productivity results if you degrade the land. The impacts of decrease livestock production on grazing land, which includes impacts on forests, water and grasslands, must be considered.

KAP: Leakage can be an issue because corporations will simply move to places with less regulation. The issues are the same in developing and developed countries with farmers as resource managers. We must consider the negative impacts of putting pressure on the agricultural sector. Global food shortages may occur if farmers receive a price for carbon mitigation that outpaces growing return.

World Vision: Unintended consequences are important to consider including impacts on biodiversity. Countries look at mitigation potential based on intact forest landscape. The context is important.

Saskatchewan Soil Conservation Association: Conservation agriculture involves more than just annual cover. It includes perennial cover of an organic source. When considering reductions we must consider the need to double food production over the next 20 years to meet global needs.

World Vision: Farmers need to be able to afford to farm the right way. Often they want to but do not have the means. If we act properly we can get negative leakage as others adopt sustainability measures they see their neighbours undertaking. What might come out of COP 15 to recognize peat value? (asked by the Canadian Boreal Initiative)

FPAC: We do not believe protection of forests is the best approach to storing carbon in forests. Protection assumes once you harvest wood there is no carbon storage. If you regenerate forests you regenerate the sink. Harvested products also store carbon.

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CPAWS: There is a net carbon benefit to protecting intact forests. As for peat there is a proposal to add it as a new accounting activity. It is in several submissions to the UNFCCC.

AAFC: There is a proposal on net wetland restoration. Incentives for peat land restoration should only be for land that has no other designated use. What are people assuming for action in terms of time, 2020, longer term, 2050?

AAFC: Broader, more comprehensive data is needed to do high quality reporting. We want a Copenhagen statement that includes comprehensive reporting.

KAP: Thought should be given to creating marketplaces. The most we can hope for is regional marketplaces currently. Bring stability in, and then move forward with a wider approach.

Outcomes of COP 14

Deborah Murphy, Associate, IISD outlined for the audience the outcomes of COP 14 in Poznan, the midway point between Bali and Copenhagen. Over 9000 delegates discussed over 90 agenda items through six bodies. The most significant breakthrough at Poznan was the operationalization of the Adaptation Fund. Parties agreed to shift into full negotiating mode in the lead up to Copenhagen. The AWG-LCA and AWG-KP both agreed to 2009 work programmes that included four, and maybe five, meetings. There was considerable contention over the issue of how to bring the two bodies into one process, but this was not resolved. Perhaps the most prominent issue going forward will be resolving the developed/developing country divides that are becoming apparent on several key issues. A tight time frame and complex process present a real risk to developing a comprehensive and successful agreement in Copenhagen.

Update from the Government of Canada

Michael Martin, Canada’s Chief Negotiator and Ambassador for Climate Change, began by stating that after the Bali conference in 2007, the Government decided they had to strengthen their effort on the international stage. The position of chief negotiator was created to ensure all aspects come together effectively, reflecting that the negotiations are a very complicated process.

The ultimate goal for the process is to achieve a global climate change regime that is effective. Very deep reductions are needed, and it is a daunting challenge. The Government of Canada believes in achieving reductions of 50 percent by 2050. Strong population growth and increased demand for food and energy will exacerbate the problem.

Mr. Martin expressed that while many less developed countries are not the primary contributors to global GHG emissions; they feel the most prominent effects of climate change. A small number of countries are responsible for the majority of emissions, but the effects are felt elsewhere, often by those that are least able to adapt. Financing adaptation will be a very big issue. There is a need for collaborative work between developing and developed countries for the next global regime. This is a very challenging part of the discussion but one that is necessary to ensure the next agreement will be effective.

The Government of Canada has put forward its views, but they are not hard and fast. They are open to discussion and that is part of the purpose of these policy dialogues, to inform the Government’s position through an iterative process.

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Question and answer session with the Chief Negotiator

Manitoba Hydro: Are there any other processes than the IISD Policy Dialogues that the Government will be holding to facilitate discussion with Canadians? Has the government determined the composition of the Canadian delegation for COP 15?

Michael Martin: Minister Prentice has met with provincial ministers and has indicated that the federal-provincial working group will be chaired by the chief negotiator. The exact composition of the Copenhagen delegation is still up for debate. The Minister is very open to people bringing ideas forward as to enrich the content of the discussion. Canadian Foodgrains Bank: What is the role of CIDA, how is additionality built into agriculture and what is the role of financing for adaptation?

Michael Martin: CIDA is at the centre of climate change and development policy. To the extent that development partners prioritize climate change we will engage them in that regard. If we do not build climate resilience into development policy it will be difficult to leverage resources. Not sure exactly how to address financing, but it will be important. World Vision: How do we speak for those parties that have trouble being heard? Where is behavioural change in the negotiation process? What was the key message of the recent scientific conference in Copenhagen?

Michael Martin: It is hard to address the first question as a public servant. Carbon pricing will be a key element in behavioural change. Technology will also affect how we live our lives and the changes we have to make. As for the scientific conference, the message for urgency was already there, but it is a reminder of the need to act. Canada is optimistic about a positive outcome at Copenhagen. Pembina Institute: What has Canada submitted to the UNFCCC? Are there are plans to make late submissions in areas not addressed? The Minister has signaled intention to align to the United States, what plans or processes are in place to coordinate policy?

Michael Martin: Canada made a submission on LULUCF, but will not make further submissions before Bonn. We see a different intervening role going forward, and we are looking to have input into the negotiating text and its revisions. On U.S. cooperation, the Minister of the Environment and the Chief Negotiator were in Washington recently to follow up on the Obama/Harper announcement on technology. There is a good feeling of optimism about working together on clean energy. The support structure below the cabinet level is not yet well established in the U.S.; thus the full extent of cooperation is yet to be seen. Canadian Boreal Initiative: Canada has the richest peat reserves. Is there potential for recognition of the value of peat lands in the future regime?

Michael Martin: We are moving forward on the data issue surrounding peat and wetlands. In general we have to ensure effective management of the landscape. We need domestic strategies first, and then we can take them to the international arena. We must move forward with action domestically while we resolve these issues internationally. For example, Ontario did not wait for full carbon pricing before shutting down their coal plants.

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Pembina Institute: There is a heavy degree of generality in the government’s positions and submissions. Canada has not given details on burden sharing or financing. These are central issues that will have to be addressed in the negotiations.

Michael Martin: There are some areas where we have specific views, and there are others where we are trying to understand the nature of debate. We must do analytical homework, listen to other country positions, and build up capacity first. As we work our way through, details of our approach will come out. Greenpeace: The Canadian Government has set a weak target for 2020. Will Mr. Martin explain the LULUCF submission and the next steps on the North American trading agenda?

Michael Martin: Canada has been clear on its 2020 target. The comparability of targets will play out in Bonn. As for the LULUCF submission, the core of the debate is how to get the reductions that are required—all discussions are related to that goal. The specific LULUCF issue is addressing the natural disturbances issue and the accounting gap. As for trading, the government has stated its preference for a North American system. Canada is finalizing its regulatory regime this year and the North American regimes must be workable and compatible. IISD: How critical is Bonn? How closed will the text be after that and what will be open for discussion?

Michael Martin: Bonn is critical for making submissions that contribute to the Secretariat’s work, and Canada will be anxious to see the Chair’s perspective. The next step is not about making submissions but providing perspectives on the negotiating process. This is different from the Kyoto process. World Vision: World Vision’s main concern is the large adaptation needs of the developing world. World Vision is supportive of large reductions and have seen firsthand the frailties and failures of the Kyoto Protocol (such as the problems with CDM). Not all developing countries look at these issues the same way. There are opportunities to address these problems and we support a rigorous approach to address the concentration of GHGs in the atmosphere.

Michael Martin: Adaptation action will focus on the poorest and most vulnerable countries. An additional $100 million has been provided for adaptation needs. There is a complex debate over credits and CDM, and the integrity of the CDM has to be ensured. We need to understand how to target financing at smaller and the poorest countries. CPAWS: Are there thoughts on how to build in requirements for LULUCF before credits occur?

Michael Martin: We have talked about this before and it is part of the discussion. Management systems send the right signals. We will see how far we get and make some decisions. Saskatchewan Soil Conservation Association: We are interested in building on the Delhi proclamation related to AFLOU projects. What will Canada do to ensure that conservation agriculture initiatives are incorporated into various mechanisms?

Michael Martin: The first UNFCCC workshop on agriculture will be held in a few weeks, and the technical paper prepared by the Secretariat will be useful in the process. We have to think carefully about these issues as there is strong mitigation potential in the agricultural sector; and we need to also consider development agendas, food security and other goals.

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Soil Conservation Council of Canada: We feel that a carbon tax is harmful to the agricultural sector as farmers/producers pay the tax “both ways” in their growing cycle. Many farmers view mitigation as part of the adaptation process, and adaptation is the future of agriculture. Farmers are willing to look at ways to sequester carbon, and see the opportunity as a potential asset. The agricultural sector has to be at the table in the policy development process for it to be effective. Regional flexibility will also be essential, and solutions must be biophysically sound. Is there a move to fill in the science gaps on nitrous oxide and methane?

Michael Martin: The next step in the industry framework to reduce GHG emissions is the drafting of regulations. The technology fund starts at $15 per tonne of carbon dioxide and will rise. Important policy questions must be worked out on emissions trading going forward. We must factor the offsets system into how to drive pricing signals. It seems people are moving generally towards cap-and-trade as opposed to taxes. Canada does not support a carbon tax system. There is a good sense from the IPCC as to what the science is telling us; however this work is not complete.

AAFC: Ten to fifteen years ago we did not work on nitrous oxide emissions, and have come a long way in a short time developing understanding of the impact of human activities on climate. The environmental pillars going forward are climate change and water. AAFC policy and funding is driven by these dual concerns. Pembina Institute: What is the role of heads of government in achieving success in Copenhagen?

Michael Martin: Looking back a few years this issue was not even on the radar at high level discussions. It is almost unthinkable now to have high level meetings and not address climate change. It is a big part of the G8 agenda. Leaders provide political momentum, and it is important to dedicate time, but there must also be work on substance in order to achieve success. IISD: In tough economic times traditional sources of financing shrink. New revenue options must be examined. To what extent will G8 Finance Ministers play a role and what targets are being looked at for 2020, 2050? What form will the target discussions take? Will it be very different from Kyoto?

Michael Martin: We cannot presume the role of finance ministers. Last year there was a lot of work on climate change financing, however this was in different economic times. Financing was already a challenge before the economic crisis, which will also have a definite effect. We will have to look at alternative approaches to financing and this may actually be a good time to do so. On targets, we expect a larger menu of options than during the Kyoto process, but at end of day targets are expressed in absolute terms. We will look at all of the options in Bonn, many of which are set out in the Chair’s paper. Given the nature of negotiations, we think there will be a general agreement in Copenhagen with more to fill in later.

Closing comments

David Runnalls commented that a number of economic stimulus packages have a great deal of funds targeted at sustainable development initiatives. While it may be difficult to look for positive messages in the current economic times, this is certainly a positive development. Climate change and sustainable development have also made their way onto the global agenda in a prominent way. Governments are prepared to devote time, funding and effort for climate friendly actions.

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Mr. Runnalls closed the policy dialogue session by thanking the participants and noting their broad range of perspectives. He invited them to stay informed about the IISD policy dialogue process through IISD’s website and Climate-L list serve.