UNFCCC Negotiations Update At the Half-way mark on

UNFCCC Negotiations Update At the “Half-way mark” on the Road to Copenhagen Norine Kennedy United States Council for International Business (USCIB) 1 Nov 5, 2008 Are we there yet?

Context - UNFCCC negotiations United Nations system NAFTA APEC OECD §Ban Ki Moon §UN General Assembly §UN Environment Programme (UNEP) §UN Commission on Sustainable Development (CSD) Etc… MEM APP 2 Nov 5, 2008 G 8 EU

UN Climate Negotiations United Nations Framework Convention on Climate Change (UN FCCC) Kyoto Protocol (KP) 2008 -2012 Annex 1 (dev’ed country) targets Bali Action Plan (BAP): Post 2012 Framework mandate Kyoto Protocol (KP) 2013 -20 xx New Annex 1 Targets (AWG-KP) 3 Nov 5, 2008 UNFCCC Long-term Cooperative Action (AWG-LCA) To Agree in 2009 (Copenhagen, Co. P 15)

Bali Action Plan (BAP): 2 -Track Mandate · Kyoto Protocol (AWG KP): post 2012 targets for Annex 1 (developed) countries, no reduction commitments for non-Annex 1 (developing) countries · UN FCCC (AWG LCA): Long-term cooperative action – Shared long-term vision (medium and long term targets? ) – Actions: Mitigation Adaptation Technology Finance – New elements + Sectoral approaches + Shift from “Annex 1” and “non Annex 1” to “Developed and Developing” + Developing Countries agree to consider commitments · Aim to adopt agreement in 2009 (Copenhagen Co. P 15) 4 Nov 5, 2008

BAP Negotiation: Key Positions & Issues · National and bloc positions consistent – – – Developing countries resist taking absolute emissions targets EU calls for +2ºC limits, requiring steep cuts by all nations Japan seeks a new framework with global participation Russian ambiguous about participation in Kyoto post 2012 US rejects participation in Kyoto debate, active in AWG LCA Australia promoting accession criteria for developing countries · Issues – Kyoto (AWG KP): + Targets and duration of next period + Future accession to emissions commitments by non-Annex 1 Parties + Spillover impacts: emissions leakage, trade, jobs – Long-term action (AWG LCA) + “Comparable” effort by developing countries + Funding by developed countries for adaptation, technology + Process and terms to access funding · Role and timing of US participation under next Administration 5 Nov 5, 2008

Other issues… · Addition of new gases: HFCs · Consideration of CFC emissions (Montreal Protocol) · New GWPs or some other index · CDM reform (sic) – – – Inclusion of nuclear Exclusion of CCS Sectoral CDM (±) Technology Lists. . . · Land Use, Land Use Change and Forestry (LULUCF) – In Annex 1 countries national obligations – In CDM projects · Reducing Emission from Deforestation in Developing Countries (REDD) · How to fund adaptation & mitigation in developing countries – A share of the proceeds from trading allowance auctions – Global carbon tax (“solidarity”) 6 Nov 5, 2008

Technology and UNFCCC · Experts Group on Technology Transfer (EGTT) under Subsidiary Body on Science and Technology (SBSTA) – Developing indices of technology transfer – Discussion/consideration of + Establishing Technology Panels (as in Montreal Protocol) + Soliciting National Technology Plans (to inform technology transfer) + Creating a permanent Subsidiary Body for Technology · BAP and AWG LCA – Technology for mitigation and adaptation – “Normal” technology transactions “don’t count” · Protection of Intellectual Property is a growing topic – Barrier or enabler of technology transfer? – Parallel s drawn to HIV Aids drugs – Claims of too high costs and barriers, but no examples (yet) – Calls for Annex 1 Parties to establish IP buy-out funds – Little recognition of role of IP in stimulating innovation – Annex 1 Parties try not to add oxygen – NGOs, non-Annex 1 Parties suggest review/relax IP protection, reference to compulsory licensing 7 Nov 5, 2008

Sectoral Approaches (SA) – Country views · EU - Aviation and marine bunker fuels · G 77 & China: Sectoral approaches under the convention – Sole focus on SA as a vehicle for technology transfer per § 4. 1. c – No support for sectoral caps or standards of any type · Japan – No longer calling for sectoral caps as an alternative to Kyoto – Continues to push for sectoral analyses and methodologies, + To Identify emissions reduction opportunities + As a tool to build bottom up national emissions targets on common basis · US cites APP as an example, potential pilot for sectoral approaches · Overall: no concerted push by Parties for sectoral cap, targets or standards: global or national (except EU on bunker fuels, aviation) – Recognition of differences in national circumstances, priorities – Desire to preserve national flexibility – Developing countries resist backdoor emissions commitments 8 Nov 5, 2008

Sectoral Approaches: Diversity Roster of Sectoral approaches under UN FCCC/KP – Regulatory + National/Regional + Transnational sectoral agreements (highly unlikely) – Market + Establishing caps w/opportunity for emissions trading – Sectoral caps (EU aviation and bunker fuels) – National no lose caps (CCAP) + Offsets: Sectoral CDM – Cooperative actions (includes voluntary) + Sectoral methodologies for nations, e. g. , mitigation potential (Japan) + Identification of opportunities and barriers (APP) + Technology transfer, esp. funds (G 77+China) 9 Nov 5, 2008

Potential Outcomes · AWG KP: New Annex 1 Commitments – An amendment to the Kyoto Protocol with + An Appendix listing new targets for Annex 1 Parties + Changes or additions to some provisions, e. g. on next revision + Changes or enabling decisions, e. g. on GWP, reports, reviews – Entry-into-force would require + Agreement of each affected Party to their new target + Adoption at mo. P (requiring 3/4 of those present and voting) + Ratification (requiring 3/4 of Kyoto Protocol Parties) · AWG LCA: Shared vision, building blocks – One or more protocols, or simply decisions of Co. P ? – New institutions, reports, methodologies, reviews ? – New funding ? · Linkages between the 2 tracks: when and how? · Filling in blanks and details after COP 15? 10 Nov 5, 2008

Next Steps 10 weeks (or more) of negotiation through Co. P 15 2009 · Co. P 14, December 1 -12, 2008 Poznan – Design, approve UNFCCC negotiating workplan for 2009 – Outline content for inclusion in outcomes (Chairman’s views) + Opportunity for submission ongoing – Polish govt effort to highlight technology & sectoral approaches via Sectoral Summit, Nov 27 -28 (Happy Thanksgiving) – ICC & WBCSD Day of business · Conclude workshops, issue framing views by March 30 -Apr 9, 2009 · Develop initial negotiating text by June 1 -12, 2009 (? ) · G 8 2009, MEP and APP processes, UNEP GC 2009, among others 11 · Co. P 15, December 2009, Copenhagen – Danish govt seeks to funnel/orchestrate ngo input via Danish organized pre-meetings + Science, Stakeholders and Business (May 2009) Nov 5, 2008