Bridges Weekly Trade News Digest • Volume 13 • Number 35 • 14th October 2009

Bangkok Climate Talks See Little Progress as December Deadline Nears

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The most recent round of multilateral negotiations on climate change concluded last week in Bangkok, Thailand.

A stone’s throw away, tropical storm Ketsana hit the Philippines, Vietnam, Cambodia and Laos; a tsunami rocked the foundations of Samoa; a 7.6 magnitude earthquake shook Indonesia; and a second typhoon collided into Parma, in the Philippines. Tens of thousands of lives were devastated in this cluster of developing countries as negotiators and observers discussed how to avoid the impact of disasters similar to these caused by the imminent - or perhaps not so - effects of climate change.

The two weeks of talks carried forward work initiated last month in Bonn, Germany where parties to the UN Framework Convention on Climate Change (UNFCCC) focused on two main tracks of negotiations: Kyoto Protocol discussions (AWG-KP) and a new climate deal (called the Ad-hoc Working Group on Long-term Cooperative Action or AWG-LCA). The latter is expected to generate a new international agreement under the UNFCCC to strengthen previously inadequate global efforts to address climate change.

Among the most contentious issues at the meetings in Bangkok was the question of the future of the Kyoto Protocol, the agreement that first established concrete targets for emissions reductions industrialised countries. A number of developed country parties have pushed for the Kyoto Protocol to be terminated after its first commitment period comes to an end in 2012. However, the agreement leaves open the possibility of subsequent commitment periods, and the parties have spent the last year negotiating the details for a second such round of emission-cutting obligations.

Developing countries push for Kyoto extension

But developing countries are loudly protesting the push by some industrialised nations to retire Kyoto. These pro-Protocol countries argue that the treaty should be continued because it represents the only concrete commitment that reflects the equitable responsibility of developed country parties to take the lead on climate mitigation. In the view of developing countries, a new agreement should complement a strengthened Kyoto Protocol by bringing the US on board and enhancing mitigation actions from developing countries through the provision of technology and financial support, as agreed under the UNFCCC.

“Please,” requested the delegate of the Maldives, “do not kill Kyoto.” His plea was joined by dozens of others. But another delegate reportedly noted that, considering the lack of progress in these meetings, the Kyoto Protocol already has one foot in the grave.

Those wishing to dispatch with Kyoto say that there is too much overlap between the two tracks and underline the need for more efficiency. They argue that the old agreement is inadequate as it does not include major economies like the US, China, and India.

This complex and heated debate - so fundamental to the international community’s next step on climate change - has slowed the pace of the negotiations at a critical juncture in the talks: fewer than a dozen negotiating days remain before officials meet in Copenhagen to make a final push for a deal. Not all countries are ready to show their cards, which means that the negotiations have tended to focus less on how much countries will do and more on how the international system can help.

Broadly speaking, the eventual agreement will include a three-part package: a political framework, a financing package, and a series of practical steps announced by all major regions to begin cutting emissions. The political framework comprises a stronger commitment for developed countries to cut their emissions sharply, complemented by some form of agreement from developing countries to significantly increase their mitigation actions at home. The mitigation push will require a dramatic increase in the transfer and sharing of climate-friendly technology between developed and developing nations, including a robust financing arrangement.

Trade issues keep a low profile

Several trade-related issues surfaced during the Bangkok talks, but on the whole they did not feature as prominently as they have in previous negotiating rounds. For the most part, the issues remained on the table without dramatic change. These include: the treatment of intellectual property rights (IPRs), as related to climate-friendly technologies; national measures, such as border tax adjustments; and sectoral approaches to addressing climate mitigation and adaptation, especially in the agricultural and energy sectors.

On the question of IPRs, a group of developing countries is asking rich nations to exempt clean technology from intellectual property rights so that developing countries can use such technology to cope with the adverse effects of climate change. They proposed the “use of the full flexibilities” in the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, including compulsory licensing, which some developing countries have applied to override patent-holders of life-saving drugs. But defenders of IPRs, including many developed countries and stakeholders from the private sector, argue that intellectual property rights are absolutely necessary for developing clean technology and maintaining a competitive environment in the sector.

In the negotiations on sectoral approaches, developed and developing nations continued to find common ground on agriculture. A small drafting group led by Uruguay and New Zealand put together some language that was annexed to the negotiating text and survived the final session.

A similar drafting group on bunker fuels - fuels used in global air and maritime transport - facilitated by Egypt and Canada had a much rockier road. Critics of the initiative say that caps on bunker fuels could undermine trade and tourism in developing countries, especially small island states. But bunker fuels are a major source of greenhouse gas emissions, and most countries agree that they require special treatment. Along similar lines, some countries have proposed a global agreement to address emissions from international aviation and maritime transport. Parties will continue to work on all sectoral approach issues at the next session.

The negotiating group that addresses cost-effective ways to mitigate greenhouse gas emissions is a key fault line in the negotiations. The group’s discussions have been dominated by proposals for a global carbon market and sectoral crediting mechanisms tied to ‘nationally appropriate mitigation actions’ (NAMAs) for developing countries. Many industrialised nations, particularly the European Union, assert that a robust carbon market would be an efficient means to reduce carbon emissions. They further argue that the market is the best way to finance mitigation and adaptation in developing countries, as the amount of funds required for both far exceed what is available in public coffers.

Broad discussions on financing continue to evolve as parties attempt to shape a possible architecture for global climate finance. Opinions in this debate are divided over whether there will be a financing mechanism that consolidates governance under one institutional framework, or if the UNFCCC will help to coordinate and report on financing that takes place through various national, regional and international financial institutions worldwide.

The financing debates are vital to the success of the talks: until there is more clarity on how much developed countries are willing to contribute, there will not be significant movement from the major and other developing countries to agree to mitigation in any form. But instead of clarifying quantity or source, most industrialised countries are debating the governance and monitoring of eventual finance.

Donor countries repeatedly indicate that they wish to be able to direct their funding towards the issues of their choice. One particularly sensitive issue in this debate is whether developing countries will be required, expected, or allowed to contribute finances voluntarily to whatever funds are provided

Border tax adjustments (BTAs), which emerged as a major issue of contention in the previous climate talks, were left almost untouched this session (see Bridges Weekly, 9 September 2009, http://ictsd.net/i/news/bridgesweekly/54721/).

The next meeting of the UNFCCC, set to take place in Barcelona from 2 to 6 November, will be the last chance for parties to carve out further consensus before the Conference of the Parties (COP) convenes in Copenhagen in December.

ICTSD reporting.