Three days in Bonn, Doing Not Much
By Gareth Brydon Phillips
Representatives of the countries that have signed the United Nations Framework Convention on Climate Change spent three days in Bonn last week, attending workshops to advance their understanding of three concepts known as the Non-Market-Based Approaches (NMA), the New Market Mechanisms (NMM) and the Framework for Various Approaches (FVA). These three concepts have evolved from one piece of text agreed in Bali in 2007 which opened the door to “various approaches, including opportunities for using markets, to enhance the cost effectiveness of, and to promote, mitigation actions, bearing in mind different circumstances of developed and developing countries”.
The three concepts are expected to form a significant part of the Durban Platform which is to be agreed in Paris in 2015 and implemented no later than 2020, under which the countries agreed “to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all [countries]”. So, they are important for the fight against climate change because they may well help to define the kinds of tools countries can use to reduce their GHG emissions and the ways in which some countries may help other countries to reduce their emissions. This may sound somewhat obvious but there is a need to share the cost of reducing our emissions and to report activities in a transparent manner. So the workshops are designed to help countries share their ideas and expectations in an informal manner prior to the formal negotiations.
At the workshops, the countries were tasked with advancing their common understanding on things like the scope and objectives of the mechanisms / approaches and modalities and procedures for their implementation as well as coming up with some new names.
The progress on the definition and scope of the Non-Market-Based Approaches (NMA) was quite positive and the found quite a lot of common ground. This is good news because some 50% of sources of GHG emissions are not easily controlled under market based activities and to achieve our 2⁰C target, it’s very important that we bring them under management. There was wide agreement that some sources of GHG emissions such as agriculture and forestry were not well suited to the quantification standards required for market transactions and hence they would be well suited to the NMA. Countries found it helpful to hear about examples of other NMA such as taxes and subsidies, building standards, fleet standards and white goods labels and it was generally accepted that in practice, the NMA could be a repository of guidance and best practice examples as to how to go about designing, implementing and monitoring such activities and that such documentation could be used by countries to seek financial support from donor organizations and development banks. The NMA can help countries to achieve mitigation outcomes which, even though they cannot practically be monitored at source, they will be detected at the level of the national inventory (for example it would be hard to measure emissions from all the cars in the country but we know how much petrol and diesel is imported, produced and exported so we know quite accurately, how much has been used).
Progress on the New Market Mechanism (NMM) – in other words a carbon price – was not so good. It’s not that countries don’t want to agree, it’s just that there is a lot to discuss, and whilst these concepts have been evolving since 2007, they did not take their current form until relatively recently and as our understanding improves, new concepts arise. The EU made the point, several times, that they believe it is possible to establish some basic modalities and procedures in Warsaw, and that this was supposed to be done last year in Doha so the credibility of the UN climate talks. However, the EU have been pushing the NMM for the past four or five years and the rest of the countries seem in no hurry to oblige. Whilst Norway declared themselves willing to consider a target of carbon neutrality if they knew how and where they could acquire more units, Nicaragua pointed out, several times, that the second commitment period of the Kyoto Protocol is still un-ratified and that without clear demand for the use of emission reduction units, there could be no significant progress on the NMM.
There was agreement that we should build on our experiences with the Clean Development Mechanism (CDM) and I do think we are getting close to understanding how the NMM might operate – covering broad sectors of the economy , with baselines (perhaps using CDM approved baseline methodologies, CDM standardized methodologies or entity wide inventories as in the EU ETS) and allocation of allowances which are then tracked on a registry, some of which can then be transferred internationally. The challenge is that this implies that the covered sectors take on a cap – which is a significant, but in my opinion, inevitable step that many developing countries are not yet willing to contemplate. During the closing of the second day of workshops, Brazil pronounced itself pessimistic about achieving an outcome on the NMM in Warsaw. Several countries aligned themselves with this intervention. And then to seal it, an option “zero” was added to the Secretariat’s four options on the prompt start (option “zero” is that no prompt start will take place for the new market mechanisms).
The FVA is the least tangible of the mechanisms / approaches because in my opinion, everything should already be encompassed within market and non-market-based approaches, however, the countries don’t see it that way which is confusing. The FVA might be a) a set of rules and review, b) a minimum set of criteria or c) a platform for information sharing where countries report on activities they have undertaken to reduce emissions, and perhaps promote adaptation. At a later stage, this could be elaborated to include some sort of assessment and test of the environmental integrity of reported actions. Reporting would need to cover the tricky issue of double counting and double claiming (which is more complicated than it sounds) and, at some point in the further future (presumably when it’s too late), it might allow the transfer of units or mitigation outcomes between countries – though in my opinion I am not sure about the need for further transfers because as countries take on more commitments (as they must ultimately do) transfers are more likely to take place through linked emission trading schemes. Nevertheless, the co-facilitators felt that good progress had been made and there was a chance that agreement could be reached to establish the Framework of Various Approaches, which would then allow the countries to develop modalities and procedures in time for the negotiations in Paris in 2015.
So, in summary, it would seem that the NMA could progress, NMM is not looking good and the FVA is too close to call.
How does that bode for the climate change talks in Warsaw in November? Brazil was the only BASIC Party present. The US were missing because of the US Government shutdown. Russia was also absent. Without these big hitters, it would premature to pronounce on anything other than the fact that not much got done in reality, there remains a lot of ground to cover, Warsaw is only 4.5 weeks away and the two weeks of negotiations there will pass very quickly.
