Status of Climate Negotiations Bali to Copenhagen: AWG-KP: Kyoto Protocol AWG-LCA: Long-term Cooperative Action

Transcription

1 US Chamber of Commerce Emerging Technologies Committee Washington, DC, November 13, 2009 Status of Climate Negotiations Bali to Copenhagen: AWG-KP: Kyoto Protocol AWG-LCA: Long-term Cooperative Action Dr. Brian P. Flannery Exxon Mobil Corporation Norine Kennedy US Council for International Business 1

2 United States Council for International Business (USCIB) Unique role: advocacy group for international business issues 300 members: companies, law firms and associations (including US Chamber) Issues: trade, environment, tax, energy, standards International Institutions: UNGA, UNEP, UN FCCC, CBD, OECD, ISO,.. US Administration, Agencies, Congress Affiliations as US National Member: International Chamber of Commerce (ICC) International Organization of Employers (IOE) Business and Industry Advisory Committee to OECD (BIAC) USCIB brings: Multisectoral constituency Multi-disciplinary expertise IPR, trade, competition, technology, finance,... Multiple forums of engagement linkages Engagement with UN FCCC since ~Rio Conference 2

3 UNFCCC Climate Negotiations United Nations Framework Convention on Climate Change (UN FCCC) Kyoto Protocol Annex 1 Targets Annex 1 = Developed Countries Non Annex 1 = Dev ing Countries Bali Negotiations: Post 2012 Framework Track 1 Track 2 3 Kyoto Protocol (KP) xx New Annex 1 Targets ` UNFCCC Long-term Cooperative Action (LCA) To Agree in 2009 (Copenhagen, CoP 15)

4 Kyoto Protocol (KP) Annex 1 commitments to date: A1 agreed (but failed) to decide on aggregate emissions commitment Most national proposals on the table Many are contingent on actions by others, availability of offsets Target Australia: 5-15% below 2000 by 2020 EU: 20% (up to 30%) below 1990 by 2020 Japan: 25% below 1990 by 2020 USA: ~0% below 1990 by 2020 Inventory ( ) +29% -2% +6% +14% Total ~15% below 1990 by 2020 Domestic emissions without Land Use 4

5 Kyoto Protocol (KP) Developing country position: A1 aggregate reductions (incl USA) should be 45% below 1990 Through domestic actions without offsets Minimal changes needed simply amend Annex B A1 intent to merge two tracks at or after Copenhagen, exporting nearly all elements of KP into LCA texts ( Kyoto plus ); Russia: KP has no place in a post 2012 agreement Japan: one agreement with all major emitters EU: a single comprehensive agreement with all nations Australia: a single legal instrument, criteria for graduation Rejected by major G77-China countries Duration: 5, 8 years, two periods (5,5: 8,8) with review Other: CDM reform, New mechanisms, Gases, GWP, LULUCF 5

6 Long-term Cooperative Action (LCA) Scope and nature of possible agreements: Mitigation, Adaptation, Technology, Finance, Shared Vision Multiple non-papers: ~ 100+ pages, multiple contentious issues Mitigation and Adaptation actions by Developing Countries: National Adaptation Plans of Action (NAPAs) Nationally Appropriate Mitigation Actions (NAMAs) Need methodologies for Measurable, Reportable, Verifiable: Actions by developing countries Financing from developed countries: technology, adaptation, mitigation Form and content of US Commitment (not a NAMA) G-77 & China: US commitment should be like Annex 1 KP commitments Debate over long term shared vision Goal:??[emissions (50-80% of 1990 by 2050), 2 C, CO2 450 ppm]?? Enumeration of possible (co-operative) actions Establishment of principles, precedents: historical responsibility, climate debt, carbon space,... 6

7 Key Elements of Copenhagen Deal Stronger targets for developed countries ( ??) Expanded offsets, including forests? Actions to limit emissions by developing countries Major emitters (China, India, Brazil) Advanced nations (Mexico, South Korea, Argentina, Singapore,...) Funding: size, source, eligibility, purposes, procedures US participation: emissions commitments, financial aid Expectations raised for developed countries: Major emission cuts: (25-40)% below 1990 by 2020 Financial aid: ~100 B$/yr adaptation, ~200 B$/yr mitigation Significant actions expected to be taken by major emitting developing countries?? Legally binding and ratifiable 7

8 Nationally Appropriate Mitigation Actions Multiple views, many incompatible proposals 8 Possible elements NAMAs (Developing Country Actions) Low carbon emissions plans Policies and actions (possibly in three classes) + Unilateral national actions (not dependent on external funding) + Actions to be taken subject to funding from developed countries + Actions taken through international GHG/carbon markets Cooperative sectoral approaches: focus on finance for technology transfer by sector an obligation for Annex 1 NAMACs: sectoral crediting mechanisms to participate in carbon/ghg markets through a (sectoral) part of their economy Sectoral crediting: (no lose, win-win): success leads to credits (like CERs) Sectoral trading: accepting a national sectoral cap (like AAUs) Issues: Delivering on finance, Matching proposed actions to finance NAMAC: establishing basis (in ~ 5 sectors, ~80 nations): hot air, wealth transfers, boundaries, competitiveness NAMACs and consequences for CDM MRV on NAMAs: finance and outcomes

9 Finance (Outside C-markets) Under LCA: Multiple views, many incompatible proposals Characterization: new, additional, adequate, predictable and sustained... Bilateral, regional, multilateral funding outside the convention (shall, shall not) contribute to fulfilling obligations 9 Uses, (windows to address), e.g. Adaptation Technology transfer Compensation Capacity building REDD (outside C-markets) Repay climate debt Cooperative research Adverse impacts of policy Sources: Assessed contribution from developed countries: (0.5-2)% of GDP Share of the proceeds from AAU auctions Share of the proceeds from CDM (2%), JI (8%), Trading (8%) Levy (2%) of financial market transactions to Annex 1 Parties Non-compliance financial penalties Linking sources to proposed actions Antipathy to c-markets, markets, preference for public finance Expectations: ~ (several) 100 B$/yr soon, much more later

10 Land Use and Forests: REDD, Offsets, Inventories IPCC 2007 estimates of Emissions from deforestation 1.6 GtC/yr, range ( ) Opportunity Terrestrial sinks carbon uptake 2.6 GtC/yr, range (-0.9 to -4.6) ~ 4GtC/yr Major applications Domestic emissions inventories, especially Parties with targets Offsets under Clean Development Mechanism Potential role in NAMAs, Sector crediting Discussions occurring as part of: KP, LCA, REDD Issues and concerns: Project or programmatic eligibility and baselines: Implications for carbon markets National sovereignty Possible sequence: progression through three phases capacity building, domestic programs, C-markets US may choose to develop its own international offset programs 10

11 Treatment of Technology Good news Recognized by all as critical to achieving success Private sector acknowledged as major contributor to develop and deploy Bad news Numerous complex institutional procedures, bureaucracies proposed + Centrally planned approaches for national low carbon strategies + Platform to manage RD&D activities under the UNFCCC + Creation of many new institutions, e.g. both top down and regional + Proposals for private sector participation in multiple advisory processes (±) Some developing countries cite IPR as a barrier to technology transfer and propose remedies (environmentally sound, adaptation): + Compulsory licensing + Revoke existing IPR + Exclude from future patents 11

12 Post-2012 UNFCCC negotiating texts As of November 6, KP & LCA texts not as advanced as limited time left before Copenhagen would suggest is necessary Progress has been made towards fewer pages, clearer choices, but same number of difficult issues Complicated and dense texts many contradictory interlinked parts Different stages of maturity how to cross finish line together Everything is bracketed nothing agreed until everything agreed Numerous (> 50) new institutions, funds and mechanisms proposed Business referenced implicitly and explicitly throughout Legal form of COP15 outcomes not clear different proposals with different ratification/entry into force implications A back pocket text might emerge (and probably will) 12

13 Negotiating Texts: LCA, as of 11/12/09 ALL TEXTS STILL ON THE TABLE AND OPEN FOR COMMENT Compiled and Consolidated Texts: Inf pages of compilation (government proposals) Inf pages post-consolidation in Bonn (0809) Attributed compilation text identifying source for proposals Non Papers amount to approx 90 pages in total: Shared Long-term Vision - #52 Adaptation - #53 Mitigation - #28 (overview); #50 (dev ed country commitments); 51# (dev ing country commitments; #39 (REDD); #49 Sectoral approaches; #42 (market mechanisms); #44 (economic and social consequences) Technology #47 Capacity Building -#46 Financing - #

14 Technology in LCA non-papers Referenced throughout non-papers Non-papers : #47, #42 contain most IPR-related language #47 Technology Options for Para 8 refers to: + compulsory licensing + patent exclusion for ESTs + patent sharing + preferential pricing and sharing pools Proposed Institutions: + Technology Assessment Panels + Technology Development and Transfer Leveraging Facility + Executive Body on Technology and Finance + Regional centers / technology innovation centers + Hub and Corps Capacity building and cooperation + Voluntary and public private partnerships 14

15 Going into Copenhagen: Failure is Not an Option COP15: December 7 18 = A complicated overcrowded agenda 15,000 in attendance, 40+ heads of state, media and NGO Broad differences, lack of time may prevent legal agreement Formal efforts to agree on negotiating text bogged down Distrust of intentions for Kyoto Protocol Process has moved off-line under facilitation of Danish Presidency Developed countries Emissions actions by all major emitting countries (assist most vulnerable) Expanded offset pool Funding primarily via public finance and carbon markets (all sources open) Merge the tracks for a single, comprehensive agreement Developing countries (blocs vying to maintain seat at final negotiation) Deep emissions cuts by developed nations Aid and technology transfer as a condition for action Wary of carbon markets; prefer public finance under their governance Keep two tracks; maintain Kyoto for targets by developed nations 15

16 US Position and Role 16 Prior to Barcelona: Remains outside KP, participating through LCA Seeking a legal agreement with numbers, requiring US ratification Proposes to register US contribution based on agreed national actions (legislation, regulation) and to report on progress not a commitment to achieve an outcome, as in KP obligations Needs similar contribution to act on emissions by major developing nations, and to report on progress Indicates that finance will occur primarily through private sector via carbon markets, not public finance May develop its own programs for international offsets No US proposal for emissions or funding on the table At and post Barcelona In the absence of legislation, considering the need to develop administration proposal for emissions reductions (finance?) Participation(?), role of President Obama The Nobel factor

17 Possible Elements of a Political Agreement A politically accountable statement of objectives and/or shared vision for longer term Appendices detailing: Emissions reduction proposals by developed countries Emissions actions proposed by developing countries Prompt start of new institutions, especially for finance Burden sharing proportions for donor nations Decisions launching new institutions (particular emphasis on technology institution with prompt start finance) Decision to transform political agreement into a legally binding agreement for ratification by agreed date (2010?) While a political agreement saves face for developed countries, developing countries (+NGOs) have set stage for potential walkout, and are setting themes for blame game 17

18 After Copenhagen Anticipate lengthy follow-on negotiations If necessary, for a legally binding agreement In any event, procedures for: + Offsets, especially forest and land use + New institutions, especially finance + Measurement, reporting and verification (MRV) + Actions in developing nations + And numbers Ongoing roles for Major Economies Forum, multiple bilateral, multilateral dialogs, engagement of IEA, World Bank,... Industry exploring potential for recognized Business Advisory Process 18

19 Ongoing and Emerging Business Issues Differentiated national obligations and policies Competitiveness implications of major wealth transfers Treatment of state-run vs private companies in developing nations Calls by some developing countries to relax IPR New measurement, reporting and verification procedures Private sector role in advisory processes to new institutions 19

20 20 Thank You