Climate Change Leadership Forum reports

• August 2008

Update on International Climate Change Issues for New Zealand

Climate Change Leadership Forum report number: 8

Briefing for the Climate Change Leadership Forum
Prepared by Government Departments
Date: 29 July 2008

1. Executive Summary

The purpose of this briefing is to provide the Climate Change Leadership Forum with an update of the international negotiation process since the last briefing on this issue in February 2008.  This information is intended to support ongoing work by the Forum. 

Two negotiating sessions have been held so far this year (April and June), with two more formal sessions scheduled (late August and December).  To date this year: 

• The April meeting developed a work programme through to the end of 2008 for the Ad Hoc Working Group on Long Term Cooperative Action under the Convention (AWG-LCA) covering finance, adaptation, technology, and a shared vision for long term cooperative action, leaving, inter alia, specific work on a long term global goal, comparability of effort, and mitigation actions by developing countries for the work programme in 2009.
• The Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) has continued to advance its work on the means available to Annex I Parties to reduce their emissions, and has begun to negotiate methodological issues (e.g. global warming potentials and rules for land use, land-use change and forestry post 2012).
• From the June meeting it is clear that the AWG-LCA is moving much more slowly than AWG-KP.
• Preparations for the second review of the Kyoto Protocol (scheduled to take place during the session in December) were advanced at the June meeting, with a further workshop to take place before December.
• Other issues e.g. sectoral approaches, emissions from international aviation and maritime transport, and, reducing emissions from deforestation in developing countries (REDD), continue to generate a wide divergence of views.

An increase in negotiating time will likely be required in 2009.

2. Introduction

Since agreement to the Bali Action Plan in December 2007, and the briefing prepared for the Climate Change Leadership Forum in February 2008, a number of negotiating sessions have already taken place.  There are two more formal and some informal negotiating sessions yet to occur before the end of 2008. 

The purpose of this briefing is to update the Forum on the international negotiation process. This information is intended to support ongoing work by the Forum.  The briefing is structured as follows:

Section 3    Ad Hoc Working Group on Long Term Cooperative Action under the Convention (AWG-LCA)
Section 4    Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP)
Section 5    Review of the Kyoto Protocol under its Article 9
Section 6    Processes outside the UNFCCC

Note that information provided to the Forum in the February paper on the development of a New Zealand position on future commitments, agriculture, and land use, land-use change and forestry, and related international issues (environmental sustainability and markets for New Zealand products, and treatment of fuels for international transportation) remains relevant.

3. Ad Hoc Working Group on Long Term Cooperative Action under the Convention (AWG-LCA)

The first session of the AWG-LCA held 31 March to 4 April in Bangkok agreed a work programme for 2008 that will see the five elements of the Bali Action Plan discussed in informal plenary sessions at each of the three remaining sessions in 2008 complemented by eight in-session workshops on some of the key issues. 

During the second session of the AWG-LCA held 2 to 12 June in Bonn, workshops were held on:

• Advancing adaptation through finance and technology, including national adaptation programmes of action;
• Investment and financial flows to address climate change;
• Effective mechanisms and enhanced means for the removal of obstacles to, and provision of financial and other incentives for, the scaling up of the development and transfer of technology to developing country Parties in order to promote access to affordable environmentally sound technologies; and ways to accelerate deployment, diffusion and transfer of affordable environmentally sound technologies.

The second session of the AWG-LCA also called for the preparation of four technical papers to help inform the negotiating process.  The papers will focus on:

• Challenges and opportunities for mitigation in the agriculture sector;
• Adaptation-related activities within the United Nations system;
• Mechanisms, including innovative insurance tools, that can be used to manage financial risks from direct impacts of climate change in developing countries;
• Financial and investment flows to address climate change.

The up coming session (the third session of the AWG-LCA), to be held 21 to 27 August in Accra, Ghana, will hold in-session workshops on:

• Policy approaches and positive incentives on issues relating to reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks in developing countries
• Cooperative sectoral approaches and sector-specific actions, in order to enhance implementation of Article 4, paragraph 1(c) , of the Convention

The fourth session of the AWG-LCA, to be held in December in Poznan, Poland (in conjunction with the 14th Conference of the Parties) will finalise the AWG-LCA’s work programme for 2009 and hold in-session workshops on:

• Risk management and risk reduction strategies, including risk sharing and transfer mechanisms such as insurance;
• Cooperation on research and development of current, new and innovative technology, including win-win solutions;
• Shared vision for long-term cooperative action. 

4. Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP)

An in-session workshop on the means available to Annex I Parties to reach their emission reduction targets was held during the first part of the fifth session of the AWG-KP which met 31 March to 4 April in Bangkok in conjunction with the second session of the AWG-LCA. The workshop focused on:

• The “Kyoto Mechanisms”: international emissions trading and the project-based mechanisms (the Clean Development Mechanism and Joint Implementation);
• The rules to guide treatment of land use, land-use change and forestry (LULUCF);
• Possible approaches targeting sectoral emissions; 
• Greenhouse gases, sectors, and source categories to be covered.

The second part of the fifth session of the AWG-KP, held 2 to 12 June in Bonn in conjunction with the third session of the AWG-LCA, focused on further detailed discussion of the means available to Annex I Parties to reduce their emissions and began negotiating methodological issues. 

The current state of the negotiations, reflecting the discussions in both the first and second part of the fifth session of the AWG-KP are summarised below:

The Kyoto Mechanisms:  Parties have agreed that emissions trading and the project-based mechanisms would continue and that they could be “appropriately” improved.  In considering appropriate improvements, due attention should be given to the environmental integrity of the Kyoto Protocol, the contribution of the mechanisms to sustainable development and that the use of such mechanisms should be supplemental to domestic actions by Annex I Parties.  A number of issues relating to the Kyoto mechanisms may be considered for possible application within the first commitment period.  The report from the fifth session contains, as a basis for further discussion, a non-prejudicial compilation of views from Parties on possible improvements to the Kyoto mechanisms.

LULUCF: There is agreement that sinks (land use, land-use change and forestry or LULUCF) should continue to be available to Annex I Parties to meet their emission reduction targets.  There are significant differences of view over whether, and to what extent, the rules for LULUCF should be amended for the second commitment period.  New Zealand raised the issues we have with the current rules (described in the earlier paper on international issues prepared for the Forum), and recognise that some of the changes others want would have a significant impact on New Zealand.  The report from the fifth session contains, as a basis for further discussion, a list of options and issues for LULUCF, being a non-prejudicial compilation of views from Parties.  Parties have been invited to submit relevant information to allow a better assessment of the implications of the options and issues identified.

Sectoral approaches:  The AWG-KP has discussed how sectoral approaches could be used by Annex I Parties, possible broadening of the coverage of greenhouse gases, sectors and source categories, and how approaches to the treatment of emissions from international aviation and maritime transport (international bunker fuel emissions) could be used by Annex I Parties as a means to reach their emission reduction targets.  The AWG-KP noted that approaches targeting sectoral emissions could be used by Annex I Parties as a means to reach, but not replace, their emission reduction targets.  The report from the fifth session contains, as a basis for further discussion, a non-prejudicial compilation of views from Parties on possible approaches targeting sectoral emissions and on greenhouse gases, sectors and source categories to be covered.

Methodological issues:  The AWG-KP has initiated its consideration of methodological issues, including methodologies to be used for estimating emissions and the global warming potentials (GWPs) of greenhouse gases, and on the possible impact of these considerations on the total emissions of Parties.  The AWG-KP will continue its work on these issues at the next session taking into account a non-prejudicial compilation of views from Parties on relevant methodological issues as contained in an Annex to the report from the fifth session.  Of note, the Annex includes consideration of the implications of updating GWPs with the most recent information from the Intergovernmental Panel on Climate Change (IPCC) as well as consideration of the implications of applying global temperature potentials (GTPs) as a new metric.

The first part of the sixth session of the AWG-KP will be held 21 to 27 August in Accra, Ghana, in conjunction with the third session of the AWG-LCA.  According to the agreed work programme for the AWG-KP, the up coming session is scheduled to adopt conclusions on:

• Analysis of means to reach emission reduction targets and identification of ways to enhance their effectiveness and contribution to sustainable development:
• Emissions trading and project based mechanisms;
• Land use, land-use change and forestry;
• Greenhouse gases, sectors and source categories;
• Possible approaches targeting sectoral emissions.
• Consideration of relevant methodological issues

The resumed sixth session of the AWG-KP to be held in December in Poznan, Poland (in conjunction with the 14th Conference of the Parties) will take up the following issues:

• Analysis of mitigation potential and identification of ranges of emission reduction objectives of Annex I Parties.
• Consideration of further commitments by Annex I Parties.
• Work programme for 2009.

The resumed sixth session of the AWG-KP is due to adopt conclusions on:

• Consideration of information on potential environmental, economic, and social consequences, including spillover effects.

Comment
It is clear that the AWG-LCA is moving much more slowly than AWG-KP.  As noted above, according to the work programme for the AWG-KP, conclusions in several areas are due to be adopted at the next two sessions.  However, the AWG-KP has already agreed that its work will be iterative, recognising that it may be necessary to revisit issues in the light of discussions on other issues.  Also, conclusions themselves can take various forms, including, for example, that more work will be needed, or that agreement at this stage is not possible, etc.

5. Review of the Kyoto Protocol under its Article 9

The second review of the Kyoto Protocol will take place at the UN Climate Change Conference to be held in Poznan, Poland in December 2008. The scope and content of the second review was agreed at the Bali meeting in December 2007, and will focus on enhancing implementation of the Kyoto Protocol and elaborating a number of elements, including adaptation. 

Preparations for the second review of the Kyoto Protocol were advanced at the June 2008 meeting in Bonn, with a further workshop to take place before December.  In order to avoid duplication of work the preparations for the second review take into account the work programmes of the AWG-LCA and the AWG-KP.  The second review will address issues on which appropriate decisions could be adopted at the Poznan meeting for implementation starting as soon as possible, and identify issues that require further consideration and refer them to the appropriate body.

The review will focus on:

• considering a levy on joint implementation and emissions trading to assist in meeting the costs of adaptation in the same way as is currently done for the clean development mechanism;
• determining the necessity of simplifying existing procedures for countries to voluntarily join Annex I, and take appropriate action;
• considering additional short-term arrangements to address the issue of privileges and immunities for individuals serving on constituted bodies established under the Kyoto Protocol, as well as a long-term solution (in the form of appropriate treaty arrangements consistent with international law) with a view to concluding such arrangements by the 5th meeting of the Parties under the Kyoto Protocol (CMP5);
• examining the effectiveness and functioning of the flexibility mechanisms, including ways and means to enhance an equitable regional distribution of CDM projects, and how the current institutional arrangements, governance, rules and procedures of the CDM and joint implementation may be improved in the first commitment period;
• in view of work already underway in the subsidiary bodies, taking appropriate action on the issue of the minimization of adverse effects, including the adverse effects of climate change, effects on international trade, and social, environmental and economic impacts on other Parties.

6. Processes outside the UNFCCC

 G8 Summit Declaration from Toyako, Japan, July 2008
The G8 met in Toyako, Japan from 7 to 9 July 2008.  The G8 declaration on Environment and Climate Change emphasises the role of major economies in addressing climate change, and stresses the principle of “common but differentiated responsibilities and respective capabilities” in several paragraphs.  The main points from the Declaration are as follows:

• The G8 reconfirms the significance of the IPCC 4th assessment report, welcomes the decisions taken in Bali and states that enhanced commitments or actions by all major economies are essential for tackling climate change;
• The G8 seeks to share with all Parties to the UNFCCC the vision of, and together with them to consider and adopt in the UNFCCC negotiations, the goal of achieving at least 50% reduction of global emissions by 2050, recognizing that this global challenge can only be met by a global response, in particular, by the contributions from all major economies;
• The importance and urgency of adopting appropriate measures to stimulate development and deployment of innovative technologies and practices is emphasized;
• Making progress towards the shared vision, and a long-term global goal will require mid-term goals and national plans to achieve them, reflecting a diversity of mitigation and adaptation approaches;
• The G8 will help support the mitigation plans of major developing economies by technology, financing and capacity-building, and, in order to ensure an effective and ambitious global post-2012 climate regime, all major economies will need to commit to meaningful mitigation actions to be bound in the international agreement to be negotiated by the end of 2009;
• Sectoral approaches are useful tools among others for achieving national emission reduction objectives including through dissemination of existing and new technologies in a manner compatible with economic growth, and to improve energy efficiency;
• The G8 recognises that what the major developed economies do will differ from what major developing economies do.  The G8 acknowledges its leadership role and states that each G8 country will implement ambitious economy-wide mid-term goals in order to achieve absolute emissions reductions reflecting comparable efforts among all developed economies;
• The G8 emphasizes the importance of expeditious discussions in the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO) for limiting or reducing GHG emissions in the international aviation and maritime sectors;
• Several paragraphs deal with the importance of energy security, energy efficiency, renewable energy, clean energy, and the sustainable production and use of bio-fuels including research into second generation bio-fuels.  Nuclear energy is a recognised as a choice by some countries and the G8 reiterates that safeguards (nuclear non-proliferation), nuclear safety and nuclear security are fundamental principles for the peaceful use of nuclear energy;
• The G8 will continue and enhance cooperation with developing countries in their efforts to adapt to climate change, committing to support urgent actions to mainstream adaptation into broader development strategies and encourage developing countries to integrate adaptation into their development policies;
• The G8 will establish an international initiative with the support of the IEA to develop roadmaps for innovative technologies and cooperate upon existing and new partnerships, including carbon capture and storage (CCS) and advanced energy technologies.  To accelerate these and other efforts, G8 members have so far pledged over the next several years over US$10 billion annually in direct government-funded research and development.

Major Economies Meeting (MEM), Japan, July 2008
President Bush launched his “major emitters” process (very quickly renamed “major economies”) in May 2007, with the first meeting taking place in September 2007.  Three meetings have been held since then with the most recent taking place immediately after the G8 summit in Japan in early July.  Whilst providing an environment for discussion separate from the formal UNFCCC negotiation process, recent reporting suggests that the MEM will not be a decision-making forum.

The declaration from the MEM in Japan states that its process is to contribute to efforts under the UNFCCC as the global forum for climate negotiations.  It further notes that the contribution and cooperation of the MEM is rooted in the objective, provisions, and principles of the UNFCCC.  The MEM recognises the need for urgent action and the Bali Action Plan's directive for enhanced implementation of the Convention between now and 2012, and commits to taking the actions summarised below without delay.  The declaration states that the MEM will:

• Work together on mitigation-related technology cooperation strategies in specific economic sectors, promote the exchange of mitigation information and analysis on sectoral efficiency, the identification of national technology needs and voluntary, action-oriented international cooperation, and consider the role of cooperative sectoral approaches and sector-specific actions, consistent with the Convention;
• Direct its trade officials responsible for WTO issues to advance with a sense of urgency their discussions on issues relevant to promoting cooperation on climate change;
• Accelerate enhanced action on technology development, transfer, financing, and capacity building to support mitigation and adaptation efforts;
• Support implementation of the Nairobi Work Programme on impacts, vulnerability, and adaptation to climate change;
• Improve significantly energy efficiency, a low-cost way to reduce greenhouse gas emissions and enhance energy security;
• Continue to promote actions under the Montreal Protocol on Substances That Deplete the Ozone Layer for the benefit of the global climate system;
• Intensify its efforts without delay within existing fora to improve effective greenhouse gas measurement; and,
• Will continue to work constructively together to promote the success of the Copenhagen climate change conference in 2009.