UNFCCC COP 13MOP 3 Bali Report for Vietnam

UNFCCC COP 13/MOP 3 Bali Report for Vietnam NGO climate change forum

What is COP/MOP • United Nations Framework Convention on Climate Change (UNFCCC) holds annual Conference of Parties (COP) – includes all UN member states – encourages members to combat climate change • Kyoto Protocol signatories hold annual meetings (MOP) alongside COPs – obliges members to combat climate change • Bali 2007 was 13 th COP and 3 rd MOP Title of presentation (change in master layout)

Key points of the Kyoto Protocol • Only ‘annex 1’ (developed) parties have commitments to reduce GHG emissions • ‘Commitment period’ from 2008 -12 • ‘Non-annex 1’ countries participate through the CDM • Certified Emission Reductions (CERs) produced by CDM projects can be sold and exchanged • Additionality - would the project have been implemented without CDM? Title of presentation (change in master layout)

Bali conference in context: 4 th IPCC report • IPCC produces 5 -yearly reports on the state of the global climate and anthropogenic influence • 2007 report most unequivocal yet - global GHG emissions must be reduced 25 -40% below 1990 levels before 2020. • Atmospheric GHG concentrations must be stablised at 450 -550 ppm • This will not be sufficient to avoid indundation of small island states and low lying cities (HCMC) Title of presentation (change in master layout)

Bali conference in context: UNFCCC agenda • A post-2012 successor to the Kyoto Protocol which: – Includes all parties to UNFCCC – Includes firm targets based on findings of IPCC 4 – Consists of four elements: mitigation, adaptation, technology transfer, financing • Bali to reach unanimous agreement on a negotiation framework and timetable (roadmap) • Sign post-2012 agreement in 2009 (Copenhagen) Title of presentation (change in master layout)

Bali conference in context: Political environment • G 8 meeting - US admission of human-induced climate change – Launches ‘top emitters’ club – Gives WB remit to devise FCPF • Australian election - climate change a key issue • Nobel Peace prize (award ceremony during Bali conference) Title of presentation (change in master layout)

Key players • USA – Blocking agreement - insisted on commitments for developing nations and no specific targets – Technology transfer entails risk for domestic industry – John Kerry led parallel delegation – Al Gore advised leaving USA out of agreement, with an opt-in for new administration Title of presentation (change in master layout)

Key players • Canada, Japan and Australia - key US allies • EU – Insisted on inclusion of IPCC targets - roadmap must have a destination – More robust CDM mechanism • China – Unofficial rep of non-annex 1 parties – Highlighted contrast with US position – Favours looser regulation of CDM • Brazil - REDD mechanism to be deforestation only Title of presentation (change in master layout)

Key Decisions: Bali Roadmap • Unanimous agreement after an extra day • IPCC targets reduced to a footnote but roadmap ‘recognises that deep cuts will be required’ • G 77 pressure forced USA into a humiliating last minute u-turn but they still managed to remove all meaningful content • However, nothing is ruled out and there is every chance that Copenhagen 2009 will include commitments from all major emitters Title of presentation (change in master layout)

Key decisions: REDD • Reduced Emissions from Deforestation and Forest Degradation (REDD) - the major success story of the conference • Brazil dropped objections • Unexpectedly broad parameters - may include payments for conservation and restoration as well as reduced degradation • Previous objections to forestry mechanism (poor scientific basis and difficulty of monitoring) expected to be overcome by 2012 Title of presentation (change in master layout)

Key decisions: REDD • CERs will be long-term (unlike ARCDM) • Outstanding concerns (highlighted on ‘Forestry day’): – National accounting, not project-based - how to distribute benefits? – Local/indigenous use rights - not adequately addressed in the decision – Baselines - simple for avoided deforestation, complex for other scenarios Title of presentation (change in master layout)

Key decisions: REDD • The next two years of negotiations will address these concerns • Non-annex 1 Countries with an interest in REDD have until 2013 to prepare • COP 13 encouraged annex 1 parties to contribute to REDD preparedness • WB’s Forest Carbon Partnership Facility (FCPF) was created to channel such contributions in two stages: Readiness mechanism and Carbon Finance mechanism Title of presentation (change in master layout)

Key decisions: New CDM guidelines - Biogas • MOP 3 reinstated the mechanism that enables biogas projects to generate CERs under CDM • The mechanism was previously abolished because it was considered a proxy ‘avoided deforestation’ measure - substituting firewood • Reinstated mechanism assumes biogas plants substitute for kerosene • Generates less CERs per plant than previous mechanism • REDD may allow revival of original mechanism Title of presentation (change in master layout)

Key decisions: New CDM guidance - Energy efficiency • Allows for projects which result in improvements in energy efficiency of existing technologies - such as wood-fired stoves • Biogas and energy efficiency projects were lobbied for by G 77 nations (especially Nepal), with the support of EU. Brazil dropped their initial opposition Title of presentation (change in master layout)

Key decisions: New CDM guidance - ARCDM • Limit on small-scale ARCDM projects doubled to 16, 000 t. CO 2. This was pushed by African countries • But still many obstacles to ARCDM projects: – High risk for buyers – Temporary CERs - low value – Outlawed by EU Emission Trading System – Stringent monitoring requirements – High technical capacity required Title of presentation (change in master layout)

Key decisions: Adaptation Fund • Adaptation fund created from 2% levy on sale of CERs from all CDM projects - made operational at Bali conference • $36 million currently amassed - future revenues will be > $100 million annually • This is not sufficient to meet non annex 1 countries demands for adaptation projects • Additional funds available from Global Environment Facility (GEF), World Bank (eg FCPF) and regional bodies e. g. ADB Title of presentation (change in master layout)