Prospects of a new climate agreement

Prospects of a New
Climate Agreement

BEIRUT, LEBANON

EPTiKAR

Prospects of a New Climate Agreement IndyACT / November 2010

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

Bonn 4- Bonn 6- Bangkok Barcelona Bonn 6- Bonn 8- Tianjin
Arab Countries Average
09 09 10-09 11-09 10 10 10-10
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
Declared commitment to limit global temperature rise to 2˚C, and endorsed
emissions reduction targets for 2050. Latest meeting (June 2010) additionally
G8 addressed the need to reach low carbon and climate resilient economies.
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
G20 COP16 was reiterated.
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
Major Economies Forum on announced, which together will eliminate the need to build more than 500
Energy and Climate (MEF) mid-sized power plants.
Environment and climate ministers from 43 countries (May 2010) discussed
concrete steps to reach an ambitious outcome at COP 16. Germany, South
Petersburg Climate Africa and the Republic of Korea launched an initiative to support developing
Dialogue countries in elaborating environment- and climate-friendly growth strategies.
Seeks to reduce global energy intensity by 40% by 2030 and ensure universal
UN High-level Energy and access to modern energy services (from low-emissions sources if possible).
Climate Change Advisory Latest meeting (July 2010) focused on new public-private partnerships and
Group other ways to support these goals.
UN High-level Advisory Seeks to identify sources of longer-term financing for developing countries,
Group on Climate Change with a view to scaling up support to reach 100 billion dollars per year by 2020
Financing in addition to 30 billion dollars until 2012. Latest meeting held in July 2010.
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
Montreal Protocol (UNEP) benefits.
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
United Nations Convention pressures on climate-vulnerable ecosystems; and enhancing ecosystem
on Biological Diversity resilience and the contribution of biodiversity to carbon stocks, thereby
(CBD) contributing to climate change mitigation and adaptation.
United Nations Process at the origin of the UNCBD, UNCCD and UNFCCC (Rio Earth Summit,
Commission on Sustainable 1992). Latest meetings consisting of a preparatory process for the Rio+20
Development (CSD) conference (2012) identified climate change as one of the main cross-border

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challenges threatening prospects for sustainable livelihoods.
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
United Nations General their vulnerabilities and strengthening their resilience through, inter-alia, a
Assembly (UNGA) robust post-Kyoto agreement.
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
World Trade Organization trade in climate-friendly products, and exchanged views on national
(WTO) experiences in carbon footprint schemes.
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
International Civil Aviation framework for development and deployment of alternative fuels; and
Organization (ICAO) creating a carbon dioxide standard for aircrafts by 2013.
Marine Environment Protection Committee focuses on setting up a
International Maritime comprehensive regulatory regime aimed at limiting or reducing greenhouse
Organization (IMO) gas (GHG) emissions from ships. Latest meeting held in September 2010.
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
Asia-Pacific Partnership on target of reducing energy intensity by at least 25 percent by 2030 and
Clean Development and increasing forest cover in the region by at least 20 million hectares of all
Climate (APEC) types of forests by 2020.
The 2009 Commonwealth Heads of Government Meeting titled “Partnering
Commonwealth of for a more equitable and sustainable future” included a special session on
Independent States (CIS) climate change.
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
Africa-EU Energy Cooperation Programme (RECP) aimed at enhancing industrial and business
Partnership (AEEP) cooperation in the energy sector between the two continents.
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
Asia-Europe Meeting promoting sustainable forms of production and consumption, through
(ASEM) 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
16 | E P T I K A R


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 3 rd 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.

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