January 2012

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International Policy Tracker: A roundup of COP17 at Durban

Now the world has had chance to consider the outcomes, the 17th annual UN Climate Change Conference (COP17) has been hailed as both an achievement – and as a failure in terms of addressing the issue of significant reduction in global emissions before the world gets locked on a high carbon path. What happened and what are its implications?

Jonathan Shopley has already given an account of the process and outcomes from Durban itself on The CarbonNeutral Company’s blog, but here is the larger discussion boiled down to the highlights.

COP17 started on Monday 28 November and concluded on Sunday 11 December, 36 hours beyond its scheduled end and the longest conference till date.

What needed to be discussed and agreed?

The fate of the Kyoto Protocol

The first commitment period of the Kyoto Protocol (2008 – 2012) ends this year. The negotiating process to decide whether it will continue to have a second commitment period started in 2006, but no agreement had been reached when the previous COP16, in 2010 in Cancun, concluded.

Pending action from previous agreements

Primarily, agreements from Cancun, including clarity on:

• The governance and practical implementation of the $100 bn/year Green Climate Fund (GCF)
• Controversial points such as the inclusion of REDD+ actions and Carbon Capture and Storage
• (CCS) technologies in current, or future, market mechanisms

The future direction of the overall negotiating process

Will it be a joint, single track process that includes both developing and developed nations and binds each of them to targets? Or will some dissenting nations continue to hold out from giving firm commitments, leaning on the crutch of common but differentiated responsibility (CBDR)?

Individual country targets and commitments

What exactly will be the legally binding emission reduction targets and mitigation and adaptation plans for each country?

What were the key decisions and outcomes?

Second commitment period of the Kyoto Protocol agreed

Consensus was reached on extending the Kyoto Protocol to a second commitment period from 2013 to either 2017 or 2020 - the exact end date needs to be agreed by the parties at COP18. However, negotiations continue throughout 2012 on individual country targets, to be concluded by COP18. Operational details such as the carryover of unused emission allowances (AAUs) to the second commitment period also need to be sorted. Any break in continuity between the end of the first commitment period and all details of the second being finalised probably wouldn’t have legal implications, as measures beyond 2012 are mostly in place and the mechanisms of the Kyoto Protocol continue.

Everybody watching the outcome of COP17 with regard to the Kyoto Protocol must have heaved a sigh of relief at the news; however, the agreement is much reduced in force as Japan, Russia and Canada withdraw from the Protocol, refusing to be bound to a second commitment period. Australia and New Zealand may also exit, leaving the Protocol little more than a shell with combined targets reduced to 15% from the original 30% emission reductions of the first period.

‘The Durban Platform’ adopted as the new negotiating process

A new negotiating process was established, christened the Durban Platform. Drafting of the new global pact to replace the Kyoto Protocol will start in 2012 in Qatar, be finalized in 2015 and come into effect from 2020. With other negotiations (Kyoto second commitment period and the Convention Track from COP13) scheduled to come to a close in 2012, there will remain a single track of negotiations from 2013 onwards.

For the negotiations to converge to a single track with the Durban Platform is a significant achievement, as this will bring legal parity to the way developed and developing countries are treated. Under the new pact both sets of entities will have binding emissions reduction and mitigation commitments ‘with legal force’.

Climate Finance and Other Mechanisms

• Green Climate Fund (GCF)
  Progress on the operational aspects of the proposed $100bn/year GCF was another achievement. The operational documents were prepared throughout 2011 so that the operating and governance principles could be agreed upon in Durban. Now the tender process to select the host country has begun, and will be in place by December 2013 (COP19). In the interim, the UNFCCC Secretariat and the Global Environment Facility (GEF) will be responsible for the functioning of the GCF.
  
  There is a long way to go before this fund actually becomes a reality and has the hoped for impact. The money still has to be raised and sources of finance need to be determined (public or private?). In the meantime, some funding may trickle in from large donors or money raised by mechanisms such as including aviation and shipping within carbon trading schemes.
  
  The outlook for the fund is long term, nevertheless, the timelines have been defined for the fund to be operational and it is still on the table.


• New Market Mechanisms
  It was agreed that a new market mechanism will be defined to promote mitigation action for both developing and developed countries. Its form is still undetermined, but it could be a sector-based mechanism complementing the project-based CDM approach. In keeping with the historical track record of the negotiations, even though a work program for the mechanism will be established by COP18, a final decision and implementation could be some years away.
  
  Nevertheless, this decision is another example of changed attitudes and the recognition of the equal importance of a bottom-up approach that countries are now willing to jointly consider. Furthermore, a parallel work program will review any existing or planned market mechanisms to determine whether they meet the criteria of ‘real, permanent, additional and verified mitigation outcomes’. Provision of an international benchmark such as this review framework could provide the platform that countries may need to link their individual mechanisms.


• Technology Mechanism
  An agreement was reached to make the technology mechanism fully operational by 2012-13 and decisions on the Terms of Reference (ToR) of its operational arm, the new Climate Technology Centre and Network (CTCN) were taken. The host organisation for the CTCN, which will provide the platform for multilateral cooperation between nations, governments, academic and business sectors, will be selected by a tender process by (hopefully) COP18. A Technology Executive Committee (TEC) will also be established as the Technology Mechanism’s strategic arm. The impact of the mechanism on ‘technology cooperation’, and its actual contribution to technology development and transfer to developing countries, will only become clear as it matures. Hopefully, financial, political and practical support necessary for the mechanism to succeed will be forthcoming from the GCF and partner organisations and industrialised nations.


• Agreements on REDD+ and Carbon Capture and Storage (CCS)
  In a significant step forward for both Deforestation and Degradation (REDD+) and CCS technologies, they were not just discussed, but appropriate decisions taken to lend them credibility and acceptance under the UNFCCC process.
  
  REDD+ activities can be financed from various sources, including public, private and other alternate sources. Most importantly, it was agreed that market-based approaches can now be developed that support REDD+ activities – a decision that could help resolve the uncertainty surrounding REDD+ carbon ‘credits’. Even if a formal mechanism for REDD+ is not adopted under UNFCCC, it has opened the door for innovative ways to ensure that these activities provide permanent and sustainable emission reductions with social benefits.
  
  CCS projects can now be developed under the Clean Development Mechanism (CDM) – a key achievement for CCS technology developers. The issue of long term permanence of emissions sequestered by CCS has been provided for in a clause that mandates keeping 5% of the carbon credits in reserve until onsite monitoring proves that no GHGs have leaked out of the ground 20 years after the crediting period of the project has ended. It must be noted that the current low prices of CDM carbon offsets may still be a deterrent in the successful implementation and commercialisation of CCS projects, so perhaps additional ways need to be found to make these projects financially viable.

Finally – will Durban achieve the required emission reductions?

COP17 was a success if measured with the yardstick of progress compared to the previous summits. The UNFCCC process was kept intact and even strengthened as countries showed renewed faith in the necessity and advantages of a global, top-down approach and accordingly compromised on national interests to reach these common agreements. Collective responsibility was finally accepted in principle, as the single negotiating track from 2013 will give each nation, developed or not, the onus to make appropriate commitments. The bottom-up approach was not ignored either, with the decisions on new market mechanisms and progress on the issues of how to treat CCS technologies and REDD+ activities.

Furthermore, the extension of the Kyoto Protocol sent a positive signal to the carbon markets. Along with concrete progress on the GCF, the extension of the Kyoto Protocol was a key requirement for countries such as China and India who want to ensure that developed countries continue to be held to their commitments. So, the decision helped achieve the agreement to collaboratively work towards the common goal by breaking the prevailing deadlock between the developed (US) and developing (China, India) world and enabled the countries to stay at the negotiating table instead of walking away from the process altogether. In fact, Durban saw a significant change in attitude and approach, with nations eschewing national interest for the first time in favour of reaching the common goal.

However, Durban had no impact on the level of ambition needed to sufficiently reduce emissions and stay within the 2°warming scenario agreed at Cancun. National targets and mitigation actions were conspicuous by their absence from the discussions and there is little reason to expect aggressive target setting by countries once the negotiating process concludes. There was no progress on the issue of how to deal with emissions from international aviation and shipping either. The earth has already lost several years of crucial action, as the negotiations have stretched over the years with no common consensus even in principle till Durban.

Looking forward to COP18 a year hence, one can only hope for unexpected progress with much higher emission reduction targets for countries, just as the commitment to the process was unexpectedly raised by the participants at Durban.

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