Movement in Montreal

Climate Forests Investments Jan 1, 2001
Mark Nicholls

With the US staunchly refusing to get involved in any international climate regime that has mandatory emissions reductions, and developing countries hoping they can avoid mandatory targets themselves, hopes for progress at the latest UN climate change meeting in Montreal seem slim. But, as the Ecosystem Marketplace reports, ideas are circulating that could lay the foundations for progress. The wonder of the United Nations climate change process isn't that progress is so slow–it is that there is any progress at all. The snappily-titled Conferences of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) are a baffling–and Byzantine–combination of formal plenary sessions, 'contact group' meetings, and closed-door deal-making. This makes following the twists and turns of a COP an almost impossible challenge–and not only for reporters. Negotiators, environmental NGOs and business lobby groups struggle to keep up with a paperchase of agendas, draft decisions, and the ubiquitous 'bracketed text', indicating contentious wording. Added to this is the nature of UN negotiations themselves. Any one of the 190-odd member governments of the United Nations can, in theory, veto a decision by the COP, although this diplomatic nuclear option is, understandably, used sparingly. And on top of all these logistical and procedural challenges is a problem as complex and divisive as climate change: it's enough to make even the most optimistic environmentalist despair of the Framework Convention, and its daughter agreement, the Kyoto Protocol. But progress there has been, at this latest UN climate change jamboree, held this year in Montreal. For a start, of course, the Protocol finally entered into force this year. That means that this 11th Conference of the Parties in Montreal this week and next is–by another procedural wrinkle–the first Meeting of the Parties (MOP) to the Protocol. So the conference is known as "COP/MOP" to the cogniscienti. And that has given the environmental NGOs here in force this week some cause for cheer. Wednesday saw the 2001 Marrakech Accords–essentially, the rule book for many aspects of the Kyoto Protocol–adopted by the first MOP. The President of the conference, Canadian environment minister Stéphane Dion, described the development as "an historic step". Indeed, in honour of the accords' adoption, environmental NGOs here even took the possibly unprecedented step of suspending their daily 'fossil of the day' award–which honours the government which has done most in the preceding 24 hours to slow progress towards weaning ourselves off our fossil fuel addiction. No triumph at the COP is ever unalloyed, however. Frequent fossil-of-the-day winner Saudi Arabia did its best to "rain on the Kyoto parade", as Friends of the Earth put it, by insisting that the compliance regime that will apply to the Kyoto greenhouse gas reduction targets from 2008 to 2012 be subject to an amendment. The Saudis claim to be acting in the best interests of the Protocol–possibly another first–suggesting that the amendment is necessary to ensure that compliance is on as legally secure a footing as possible. It would, however, require all Kyoto signatories to re-ratify the agreement, which would further delay the process. A group has been set up to consider the issue, and most are confident that it can be resolved (once more demonstrating that progress within the UN system is, in fact, possible). The Marrakech Accords' adoption has been the one highlight of what most observers here consider to have been a rather slow week, with little drama, controversy or, indeed very much urgency. At the European Union's press conferences, Sarah Hendry, head of the UK delegation (and, because the UK currently holds the European Union presidency, the bloc's negotiating team) exudes the unflappable professionalism that typifies the British civil servant. On Friday, she told reporters that "things are moving forward in a business-like way," noting that, thus far, "we've managed to avoid the procedural wrangles that we've often seen in the past." But she warned–or should that be promised?–that "things will hot up" towards the end of this coming week. Indeed, these conferences tend to follow a similar trajectory, with teams of civil servants negotiating for the first ten days to lay the foundations for the 'ministerial segment'–the last few days of the COP when ministers and, in some cases, heads of government, jet in for what are often marathon negotiating sessions to break log-jams, cut deals, and–hopefully–end up with an international consensus that moves the world's climate change effort along some. So what is on the table for the next few days? A key issue for the emissions trading community is a reform package for the Clean Development Mechanism (CDM). One of the Protocol's so-called flexible mechanisms, the CDM is intended to encourage investment in clean energy, sustainable land-use and greenhouse gas-capture projects in the developing world. These projects can earn 'carbon credits', which companies and governments in industrialized countries can count towards their emissions targets. The first CDM projects were registered this year, and three have – finally – been awarded credits. But progress has been slow, with developers complaining of a drawn-out, overly bureaucratic process (see Kyoto's CDM: Frustration Mounts). Environmentalists, meanwhile, are concerned that, without careful regulatory scrutiny and tough application of the 'additionality' rules–designed to ensure that projects that would have gone ahead regardless of the CDM can't qualify for credits–huge volumes of 'business-as-usual' emissions reductions could be used to offset higher emissions in the North. Most agree, however, that the CDM Executive Board is woefully under-resourced, and it's likely that more funding will be made available. Progress is also anticipated on elaborating the rules of Joint Implementation (JI)–the CDM's sister mechanism–which applies to similar projects in those industrialized countries that have taken targets under the Protocol. But the big story in Montreal is, of course, the vexing issue of what happens after 2012, when the first Kyoto 'commitment period' comes to an end. When the Protocol was agreed in Japan in 1997, the assumption was that future commitment periods would be negotiated, setting progressively lower GHG targets on industrialized countries, and bringing in developing nations as their economies reached the requisite level of maturity. The Protocol also required that those negotiations begin no later than this year. Of course, between 1997 in Kyoto and 2005 in Montreal, the US elected an administration which has not only pulled the US out of the treaty, but has also shown at best skepticism towards, and at worst contempt for, the ever-more compelling scientific evidence of man-made climate change caused by the burning of fossil fuels. With the White House disputing the science, President Bush has made it clear that he will not risk a fraction of a percentage point of economic growth in fighting climate change, preferring voluntary agreements with industry that seek only to curb emissions of GHG per unit of GDP. He also questions the value of an agreement that doesn't set reduction targets on big developing country emitters, notably fast-industrialising China and India. The developing world, in turn, refuses to countenance targets that they argue may slow their economic growth, unless the world's richest nation and biggest polluter goes first. But despite this apparent negotiating grid-lock, ways forward are being discussed, and some even detect signs of progress. Much debate this week has been around one of those arcane aspects of the UN process so beloved of old COP hands–Should post-2012 negotiations take place under the auspices of article 3.9 of the Kyoto Protocol or rather as part of the broader UN Framework convention on Climate Change. Those arguing that negotiations should take place under the auspices of the Kyoto Protocol point to one clear advantage – those discussions wouldn't include the US. Because it has not ratified the Protocol, it has no seat at the table, and can do nothing to block discussions. However, others argue that it is still possible–indeed vital–to bring the US back into the international fold. They say negotiations should take place under the parent agreement, the 1992 Framework Convention on Climate Change, to which the US remains committed. But with the US lead negotiator Harlan Watson reported to have a mandate from the White House to block any and all progress towards a binding international climate regime post-2012, it is difficult to see discussions under the Convention advancing very far. Nonetheless, observers are hopeful that talks behind the scenes may at least identify possible paths, if not yet lead to any breakthroughs. Discussions in the corridors at the end of the week revolved around a so-called 'non paper' prepared by COP president Dion about how to proceed under the Protocol. More radical solutions are also on the table. Much interest was generated by a proposal put forward by Papua New Guinea and Costa Rica to allow developing countries to earn carbon credits for 'avoided deforestation'. This concept was rejected in 2000 because of concerns that little could be done to stop 'leakage'–that is, the transfer of deforestation from protected areas to other parts of forest systems. Such a proposal could, its advocates argue, bring developing countries willingly into accepting targets (as they would be able to earn money for forest conservation), and provide relatively cheap credits for industrialized countries such as the US. "This is game-changing move that challenges the US assertion that developing countries do not want to participate in carbon markets," said Annie Petsonk of US NGO Environmental Defense. "When you see nations ranging from Saudi Arabia to Nigeria to Japan, Europe and Australia, some of whom were also opposed to Kyoto, enthusiastically embracing the tropical countries' offer, it is time for leadership from our own Administration." So what, then, is the likely outcome of the post-2012 debate? Negotiators went into the COP playing down expectations of dramatic progress in Montreal. And, by and large, observers and negotiators are cautious on any kind of a breakthrough. But, according to seasoned COP-watchers, there is the hope that the conference will conclude next week with a clear timetable for two or three years of discussions that will culminate in some kind of 'son of Kyoto' (although few expect it to look much like Kyoto 2008-12). They detect a willingness among key developing countries to move the process forward, and they expect to see parallel discussions that will both try to draw the US back into an international climate regime, and make progress without it. Slow progress, then, but progress nonetheless. Mark Nicholls, a regular contributor to The Ecosystem Marketplace, is the London-based editor of Environmental Finance magazine, and consulting editor to its sister publication, Carbon Finance. First posted: December 5, 2005