The climate treaty’s Y2K problem
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Lavanya Rajamani considers the
outcome of the negotiations that took place at the Fifth Conference
of the Parties to the climate treaty.
The author is a doctoral student at the Law Faculty at Oxford University, a Project Director at the Yale Center for Environmental Law and Policy and Writer/Editor for the Earth Negotiations Bulletin. |
Ministers and diplomatsfrom 166 countries met in Bonn, Germany, between 25th October and 5th November 1999 for the Fifth Conference of the Parties (COP-5) to the United Nations Framework Convention on Climate Change (UNFCCC). They began work on what has been described as the climate change regime’s “Y2K” problem – the need to reach agreement on a host of key issues at the Sixth Conference of the Parties (COP-6) due to be held in the Hague, The Netherlands, in 2000. The resolution of COP-6 could make or break the Kyoto Protocol.
The Kyoto Protocol, adopted in December 1997, requires certain developed country Parties, listed in Annex I to the UNFCCC, to reduce their overall emissions of a basket of greenhouse gases by at least five per cent below 1990 levels in the commitment period 2008-2012.
COP-5, a stepping stone to COP-6, proved to be a mere brainstorming session. Though several decisions were adopted, there was limited progress on core issues. With few countries willing to give up their positions a year before the Buenos Aires deadlines, there was pitifully little negotiation. Parties presented their positions, discussed options for future consideration of the issues, resolved to intensify the process up to COP-6, then drew COP-5 to a close.
Conflicts that had made their appearance earlier in closed-door regional meetings were firmly placed on the table at COP-5. Parties exchanged views and noted similarities or differences in opinions on issues ranging from the design of the Protocol mechanisms to the participation of developing countries.
Decisions were adopted on, inter alia, the mechanisms, compliance, land use, land use change and forestry and adverse effects, though largely directed at determining a time frame and a process within which final decisions on these issues can be reached.
The high-level political segment did, however, provide a platform for the evolving political support from various quarters such as Japan and the European Union for the Protocol’s entry into force by Rio+10, 2002.
The Kyoto Protocol mechanisms
The creation of an operational framework for the Protocol mechanisms – such as the Clean Development Mechanism (CDM) and Joint Implementation – that strikes a balance between environmental integrity, cost-effectiveness and equity is critical to the fate of the Kyoto Protocol. Besides reaching agreement on the synthesis of Parties’ proposals that will serve as the basis for future negotiation, Parties made little progress at COP-5 towards this goal.
The European Union and the Umbrella Group (a fluid grouping of Annex-I countries including the United States, Australia, New Zealand and Canada) continued to maintain their truce on the much-touted conflict over a ceiling for the use of the Protocol mechanisms. Fresh conflicts, however, particularly within the G-77/China group, made their appearance.
Due to the potentially uneven flow of financial benefits from the CDM to countries within the G-77/China group, the group has been hard put to arrive at a common negotiating position. Clear fissures were evident on first principles such as the type of projects that the CDM should cover. While the Africa group wished to include emissions avoidance projects, others were unconvinced that such projects would result in emissions reductions “additional” to those that would occur anyway, as required under Protocol Article 12 (CDM). Several South and Central American countries expressed their preference for the inclusion of sinks projects but others opposed this, again on grounds that it would be difficult to judge “additionality” on such projects.
In the corridors, some large developing countries discreetly tested the waters on the possible inclusion of nuclear energy projects in the CDM. While most countries maintained a stoic silence on the issue, given its volatile nature, a few opposed such inclusion with revolutionary zeal.
The G-77/China group submission on the mechanisms left most issues open but specified that “the developing country party where the CDM project activity is proposed to be set up shall be the sole judge for deciding whether that project activity meets its national sustainable development objectives and priorities.” This, however, ignores the market dimension of the CDM. If investors do not wish to invest in nuclear energy projects, for example, they will merely take their investment elsewhere.
There is clearly a need for the Conference of the Parties to flesh out the notion of sustainable development, hitherto a vague and ill-defined notion, such that host countries are able to determine national sustainable development priorities and technology needs without having to assume the risk and value perceptions of the investors.
Conflicts were also evident on the issue of financing of CDM arrangements. In a written submission, most South and Central American countries unequivocally endorsed non-Annex I public and private funding associated with the notion of unilateral CDM deals. The G-77/China group’s paper prepared by India, however, in its careful elaboration of the respective roles of the developed and developing country Parties to the CDM seemed to exclude consideration of any such financing.
Activities Implemented Jointly
The discussion of Activities Implemented Jointly (AIJ) proved contentious. Parties debated whether to continue or conclude the AIJ pilot phase and review process. While the Africa group wished to continue the pilot phase with greater emphasis on geographical balance, certain Central American countries, the European Union and the Umbrella Group were keen to see this phase, in its present non-credited form, come to an end. The debate made clear that the most valuable lesson of the pilot phase, relevant to the mechanisms, is that without credits there would be a limited flow of investment.
Throughout the years the AIJ pilot phase has been in operation, the number of projects, countries covered and private investment flows have been limited. Indeed, Africa was all but bypassed in the pilot phase. In 1998, of the 123 AIJ projects in operation, only two were in Africa.
COP-5’s decision continues the pilot phase in its present form with a special reference to addressing the geographical imbalance in the distribution of projects. At the Umbrella groups’ insistence, the phrase “without prejudice to future decisions” was added so as to leave the door open for a future decision on crediting. Given, however, the ambiguous state of play with respect to crediting for AIJ projects, further investment in AIJ projects in the period between COP-5 and COP-6 is unlikely.
Capacity building
Africa’s loss with regard to AIJ projects is perhaps at the root of its energetic attempts to spearhead the drive for capacity building in developing countries. The Africa group, with most developing countries, expressed a preference for capacity building to be country-driven rather than agency-driven, based on a bottom-up approach and focused on specific climate change-related needs. COP-5’s decision on capacity building takes the process forward by seeking to initiate a country-driven assessment of existing capacity-building initiatives with a view to a decision at COP-6.
The discussion on capacity building is, however, in critical need of direction and focus. If capacity building is, at its essence, a strengthening of institutional capabilities in developing countries so as to enhance their ability to develop in a sustainable manner then perhaps capacity building across multilateral environmental agreements is the way forward. There is greater investment in the climate regime than in, for instance, the desertification or biodiversity regimes, though some of the problems relating to those regimes are of far more immediate concern to developing countries. An initiative that builds capacity across multilateral environmental agreements would be far more cost effective and equitable than one that builds capacity exclusively in relation to the problematic of climate change.
Compliance
While most countries recognized the need for a facilitative and an enforcement component to the compliance system, they differed on the emphasis that should be placed on each component and on the nature of the sanctions that would follow proven non-compliance.
The most contentious debate in the Joint Working Group on compliance was on the pace of negotiations leading to the creation of a compliance system. Parties spent inordinate lengths of time discussing whether the Joint Working Group should “complete its work” or merely “make substantial progress” by COP-6. While most countries wished to accelerate the pace of negotiations, the OPEC group of oil-producing nations did not.
Saudi Arabia has, on innumerable occasions in the past, made it clear that it would permit progress on issues such as compliance and the mechanisms only if there was parallel progress on the issue of the adverse effects, in particular, of the implementation of response measures. As COP-5 had adopted a decision on adverse effects, Saudi Arabia made good on its promise and withdrew its opposition to an accelerated pace of negotiations with regard to a compliance system.
Parties finally, then, agreed to a decision that requests the Joint Working Group to complete its work so as to enable a COP-6 decision.
Adverse effects
The COP-5 decision on adverse effects seeks to continue the process of implementation of Articles 4.8 and 4.9 (adverse effects), focusing on information gathering on initial actions needed to address the specific needs and concerns of developing and least developed countries.
Most developing countries are unhappy with the progress on the issue of adverse effects. Limited progress on this issue has been, at least in part, due to the fact that two wholly distinct issues – the adverse effects on climate change itself and the adverse effects of the implementation of response measures – have been clubbed together. While the latter is an economic issue characterized by limited information, uncertainty and ethical concerns, the former is an increasingly well-documented problem in many countries, in particular, the small island states. The small island countries feel that while the adverse effects of response measures at best warrant further inquiry, the adverse effects of climate change warrant immediate action.
Land use, land use change and forestry
Under Protocol Article 3.3, net changes in greenhouse gas emissions through removal by sinks resulting from land use, land use change and forestry (LULUCF) can be used to meet Annex I Party emissions limitation and reduction targets. Protocol Article 3.4 provides for the future determination of additional human-induced activities that can be taken into account and several Annex I countries have proposed a long list of potential new activities.
A study conducted by the Wageningen University and presented at a side event at COP-5 estimated that if the full potential of 3.4 activities is exploited it would permit the United States, Canada, Australia and the European Union to comply with their emissions targets yet increase emissions by 3000 million tons of greenhouse gases annually.
The Intergovernmental Panel on Climate Change (IPCC) Special Report on LULUCF, due for release in May 2000, is expected to throw light on this otherwise complex and confusing area. Indeed, Parties have agreed to defer a conclusive decision on sinks till after consideration of the IPCC report. The IPCC, however, expressed itself as handicapped by the lack of sufficient country-specific data, especially with regard to additional activities. Coincidentally, there has been a distinct lack of enthusiasm among Annex I countries to provide country-specific data.
Participation of developing countries
The United States reiterated at COP-5 that it would take “meaningful participation from key developing countries” for the United States to ratify the Protocol. It also hinted at rewards for developing countries that voluntarily reduce their emissions.
The G-77/China group, however, in a pre-emptive move to shift the focus from the participation of developing countries to the implementation of Annex I commitments, sought to amend a COP-5 agenda item such that the “second review of adequacy of UNFCCC Articles 4.2(a) and (b) (commitments)” be changed to the “review of adequacy of implementation of 4.2(a) and (b).” Despite lengthy informal consultation on the issue, Parties deferred consideration of this item to COP-6.
The notion of voluntary commitments gained in content at COP-5 with the emergence of two distinct trends. Kazakhstan sought to add itself to Annex I and Argentina pointedly clarified that, although it was assuming voluntary commitments, it had no intention of abandoning its non-Annex I status. In the high-level segment, Argentina called on Parties to create a “bridge” to the Convention that would allow Argentina and other non-Annex I countries to participate in all the Protocol mechanisms.
There remains serious developing country resistance to the idea of voluntary commitments. Without China, India, Brazil and Indonesia, key nations on the upward emissions swing, any agreement would be pointless and they remain the most truculently opposed to the concept. Developing countries, fearing that technical assessments of the information contained in non-Annex I communications could lead to the determination of baselines for possible non-Annex I targets, ensured that COP-5’s decision circumscribed non-Annex I communications to the UNFCCC alone.
Further information
Lavanya Rajamani, Hertford College, Catte Street, Oxford OX1 3BW, UK. Email: lrajamani@hotmail.com.
On the Web
Comment on the climate negotiations and news of ongoing developments can be accessed via the Tiempo Climate Cyberlibrary Newswatch service.
On the Web: the climate negotiations lists further links.