Bridges Weekly Trade News Digest • Volume 14 • Number 20 • 2nd June 2010

Year-End Climate Goal in Question as Bonn Meetings Begin

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The annual mid-year negotiations of the UN Framework Convention on Climate Change (UNFCCC) got underway in Bonn, Germany this week. Officials will spend eleven days and nights churning through issues with the ultimate aim of establishing new multilateral rules on climate change. Such an agreement was expected to come at the climate conference in Copenhagen last December, but that push fell through when countries failed to reach full consensus on the “Copenhagen Accord,” which had been brokered by a small group of leaders.

At the Bonn meetings, negotiations are being held in four distinct negotiating groups: two Subsidiary Bodies of the Convention and two Working Groups - one that is addressing the second commitment period of the Kyoto Protocol (AWG-KP) beginning after 2012 and the other the high-profile group on Long-term Cooperative Action (AWG-LCA), which aims to advance discussions on a new climate deal.

After Bonn, countries will set their sights on the next Conference of the Parties, scheduled for December in Cancun, Mexico. Some observers are already saying that commenting that there is still too much unresolved. Among them, outgoing UNFCCC Executive Secretary Yvo de Boer who considers that a more realistic goal would be to conclude a deal at COP 17, which will take place at the end of 2011 in Cape Town, South Africa.

“I think developing countries especially would want to see what an agreement would entail for them before they are willing to turn it into a legally-binding treaty,” de Boer said last week in a teleconference with journalists. “So I think if we are to get to a treaty, South Africa a year later, is much more realistic.”

Some countries are also beginning to shift the finish line. Despite a recent statement from the BASIC countries - Brazil, China, India, South Africa - to push for the completion of a legally binding global climate treaty in Cancun, China now appears to have reconsidered. In a statement two weeks ago, Xie Zhenhua, one of China’s top climate change officials, confirmed that China has now also set its sights on COP 17 for sealing a deal.

Nevertheless, an array of developing and developed countries made statements in the opening of the Bonn negotiations expressing their optimism that Cancun can produce a legal result. Countries pushing for such an outcome include Small Island Developing States, the Environmental Integrity Group - Korea, Lichtenstein, Mexico, Monaco, Switzerland - and a cluster of progressive Latin American countries. The US also said that it supports a legally binding outcome, as long as it is applied “symmetrically” to all countries, with the exception of least developed countries.

Bonn: a key barometer

During meetings this week and next, officials will work to achieve greater clarity on the future of the Kyoto Protocol. .The status of the Protocol has been a divisive issue in the negotiations thus far. Developing countries insist that any movement away from the Kyoto framework will result in a weaker agreement.

The Long-Term Cooperative Action Group is considering a new draft negotiating text prepared by its chair, Margaret Mukahanana-Sangarwe. The text covers the same issues that parties negotiated last year leading up to Copenhagen. These include the question of mitigation for all countries, how to address adaptation, scaling up technology development and transfer, and securing adequate financing to support developing countries. Overall, Bonn will be an important barometer for assessing how swiftly parties are willing to move on advancing a legal agreement. Some issues - such as REDD-Plus which seeks to protect forested land, a new Technology Mechanism, various approaches to Capacity Building and, to some extent, financing - appear to be coming together more quickly than others; some countries think that these issues could be “early harvest” items for the Mexico COP, should parties not be ready to sign off on a full package deal.

“Fast-Start” financing scrutinised

Another key issue to watch will be the extent to which developed countries live up to financing promises they made in Copenhagen. De Boer has challenged countries to put their money where their mouths are.

“The priority for the industrialised countries is to deploy the [US$] 30 billion they pledged from now until 2012 in short-term finance to kickstart climate action in developing countries,” de Boer said. “Now, of course, times are harsh, especially in Europe, but raising 10 billion a year for three years amongst all industrialised countries is not an impossible call.”

The fast-start financing was agreed to by parties as an add-on to the hastily assembled Copenhagen Accord. The promise was offered as a token of good faith to developing countries, which are expected to bear the brunt of climate change.

During the first day of the AWG-LCA, various developed countries announce that they would, as promised, increase their short-term financing for climate change.

The EU pledged €2.8 billion annually for fast-start financing from 2010 through 2012, while the US and Canada announced climate financing increases of their own, some of which would include fast-start financing.

The details of the financing - how funds will be disbursed and to whom - remain scant (see Bridges Trade BioRes, 30 April 2010). Funds might go through existing institutions, such as the Global Environment Facility (GEF) and the World Bank Climate Investment Funds (CIFs).

New funding mechanisms discussed

Discussions regarding overall financing under the AWG-LCA also began today, with the chair putting forwards a series of discussion questions on how to get a financing mechanism - such as a new institution - set up before, or during, Cancun.

This discussion, however, showed a split between the participating countries. Developed country signatories of the Copenhagen Accord are pushing for the establishment of a Green Climate Fund, as discussed in Copenhagen. Others are referring to this new mechanism in more generic terms, such as a Financial Facility that will include a special board with designated responsibilities that remain undefined.

Regardless of the fund’s name, controversy remains about what the new institution will do, how it will be run, and how it will function relative to other bodies.

Financing sources are also being discussed, with developing countries asking developed countries to commit to a 1.5 percent GDP assessed contribution. Developing countries are also asking that the new financing mechanism include a monitoring, reporting, and verification (MRV) function to ensure the delivery of pledges, along with some sort of compliance mechanism, in the event that developed countries do not pay up.

Cancun unlikely but not impossible

Despite a shroud of doubt hanging over the talks, experts say that the 44-page text could be ready for Cancun if the political will exists. However, recent political meetings suggest that certain issues will require protracted negotiation.

Currently, the numbers on the table do not add up to limiting global warming to a maximum 2 degree Celsius temperature rise - a scientifically established marker set by the Intergovernmental Panel on Climate Change (IPCC) as the top limit of warming that the planet can sustain without catastrophic effects. That limit was noted in last year’s Copenhagen Accord and supported by some countries, but Small Island Developing States, many African countries and other particularly vulnerable countries and communities say that even 2 degrees is too much and are now calling for an internal study on the option of a 1.5 degree marker.

Whatever the degree marker, all countries - and especially the high emitters of the world - will need to come up with ways to rapidly reduce their CO2 emissions, a task that directly impacts the cost of economic growth and therefore has no easy solutions. Yet the cost of inaction, studies say, will be far higher than making the investments now on mitigation.

More information

To access the schedule of meetings for the mid-year Bonn meeting, click here.

ICTSD reporting.