CCS in the CDM: The Struggle for Climate Finance

In Cancun, Parties decided that CCS is eligible in the CDM – provided that certain issues such as leakage and liability are resolved. As delegates are negotiating the details of modalities and procedures for this very questionable project type, it looks like Big Fossil is winning once again. This despite the fact that the viability of CCS as a mitigation technology has yet to be proven.

Here in Durban, only a small number of developing countries have raised concerns about the potential long term impacts of CCS. All others have remained suspiciously silent (hello small islands of the world – where are you?) or are eagerly approving paragraph after paragraph. Somehow it doesn’t seem likely that they really wanted to negotiate night and day to ensure that the fossil fuel industry gets yet another cash cow to milk!

The current text does not exclude ”enhanced oil recovery” – EOR. This is a method to increase the amount of oil that can be recovered from an underground oil reservoir. By pumping CO2 underground, previously unrecoverable oil can be pumped up. This can increase the recoverable oil by 30 to 60%. Once all of the oil has been pumped, the depleted reservoir is used a storage site for the CO2.

On top of the huge profits from the sale of oil and the large fossil fuel subsidies, oil producers could make millions by selling CDM credits for the CO2 they store. Dear delegates, please get your priorities right! CCS in the CDM is unproven at commercial scale with plenty of scientific uncertainties. More work needs to be done for these lingering issues to be resolved. We do not need yet another loophole for generating carbon credits. Before rushing into setting up a new source for millions of carbon offsets, you might want to get yourselves some QEROs first!

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2020 and the Climate: Milestone for Success or Epitaph for Failure

We cannot afford to wait any longer to begin serious mitigation efforts.  The emissions reductions pledged in the Cancun Agreement currently set the world on a trajectory for a 4.3° C temperature increase by 2100. According to the new UNEP “Bridging the Gap” report, an additional 6 to 11 Gt CO2 in emissions reductions are needed in order to reach a 2° C goal.  The good news is, UNEP shows how to reach the goal with economically and technologically feasible solutions, though the timeframe for success is narrow.  If rigorous action is postponed until 2020, success will drift beyond our reach.

Without political incentives to invest in alternative energy, governments will continue to rely on fossil fuels to meet growing energy demands, locking in carbon intensive technologies over the next eight years.  According to the International Energy Agency, for every $1.00 avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 in order to compensate for the increased emissions.  Of course, any shortfall in mitigation will drive up adaptation costs and real impacts on lives to a much greater degree.

We need to give our world time for the transition to a low carbon economy. Emissions must peak by 2015 and sharply decline thereafter.  The task is formidable.  According to UNEP, “the highest average rate of emission reductions over the next four to five decades found in the [integrated assessment model] literature is around 3.5% per year.” But based on the C-ROADS model, emissions reductions would need to decline even more, at a rate of at least 4% per year between 2020 and 2050 to reach the 2° C target – a ramp-down rate well beyond historical experience.

Time is of the essence.  Clifford Mahlung, a delegate from Jamaica, said, “We’ve already waited too long.  I know countries need a little more time to get over their economic woes -- but eight years?”  And we need to agree strong package here in Durban to launch that effort now, as the climate clock is running faster and faster.

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Time to Get Serious About Loopholes

Here’s a quick reminder: According to the latest UNEP report, the weak pledges from Annex I countries get us only about a third of the estimated emissions reductions that are needed if we want to have a two-in-three chance of avoiding more than 2° C warming. Unfortunately we have even more bad news: loopholes!

Loopholes are weak rules that undermine reduction targets, usually resulting from political bargaining. The largest loopholes are:

  • The carry-over of ‘hot air’ due to the over-allocation of AAUs during the first commitment period.
  • ‘Creative’ accounting rules for forestry and land-use emissions (LULUCF) for Annex I countries.
  • CDM credits from projects that are either over-credited or not additional (would have been built anyway).
  • Double counting – attributing emission reductions to both developed and developing countries.
  • Emissions from aviation and shipping (“bunkers”) currently not accounted for under the Kyoto Protocol.

We took a closer look at the loopholes and compared their total size to the cumulative emission reductions that could be achieved with the current Annex I pledges. We found that the current ‘loopholes’ in the system could negate their pledges.

In the worst case, they could leave Annex I countries with sufficient allowances and credits to revert to a BAU trajectory, and could even enable the carry-over of surplus allowances beyond 2020.

As you can see, a graph says more than 1,000 words. Our findings match those of the UNEP Report, the Stockholm Environment Institute and others.

The size of these current loopholes is staggering. Strong action is required now to effectively and efficiently close these loopholes if we want to preserve the possibility of staying below 2° C warming. 

None of the technical issues around the loopholes are insurmountable.  If developed countries are serious about fulfilling their responsibility to lead the fight against climate change, they need to put ambitious targets on the table that are in line with the science and do away with all these rotten loopholes. 

There is no plan(et) B. Every passing day of inaction closes the door that much further on preventing catastrophic climate change.

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Words to the Wise

At one point in her Thursday briefing for NGOs updating the 50+ issues under negotiation, the Executive Secretary spoke of how various texts were “maturing” since Panama.

What an interesting choice of words! As we prepare to head into the second week, ECO hopes that attitudes mature along with the texts. Maturity implies a certain wisdom and yet at times this week there has been a distinct lack of such in these talks.

For example, it is unwise to continue to stall on ambition while the evidence for dangerous climate change mounts, the vulnerability of communities around the globe increases, and the time to protect ecosystems and the people who depend on them drains away.

It is unwise to stall on a second commitment period for Kyoto, putting that instrument at risk and undermining political will throughout the negotiations.

It is unwise to block a mandate towards a comprehensive legally binding agreement, sending signals beyond the ICC that the international community is less than fully committed to solving the climate crisis. And finally it is unwise to backtrack from implementing Cancun when the hard-won gains on finance, MRV and the Review are so vital to the future of the climate response regime.

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Launching the ‘Ambition Work Programme’


We are hearing delegates are having sleepless nights because of the yawning gap between current mitigation pledges and what’s needed for a credible 2° C pathway. Perhaps not all of them are genuinely worried because of the implications for humanity.

Some may just feel uncomfortable to be reminded that they have not done the homework they gave themselves back in Cancun. Developed countries promised to look at options and ways to increase levels of ambition, and then actually increase them. It really isn’t a hard concept to grasp.

There may be some further relief in paras 36-38 and paras 48-51 of last night’s new texts. Both texts include a key line: the recognition of the existence of the ambition gap. Parties that attempt to block this recognition into a COP decision can expect to be in a bright spotlight on this matter.

The next logical step is contained in the new text on developed country ambition: to launch work to address (as in “close”) the gap.

The new UNEP report clearly identifies this possibility. But instead, we see some tendencies toward stalling rather than making progress towards the 2° C objective. Work needs to start now, as every year of further waffling and delaying tactics will make the task much harder.

Closing the ambition gap will require effort on all sides -- both developed and developing countries.

Developing countries have pledged more mitigation until 2020 than developed countries but can do more (and certainly must be provided sufficient and reliable support to do so). Not all developing countries have pledged their NAMAs yet, and some countries may well be able to increase ambition of already pledged NAMAs.

It would be really good for the work programme to have a deadline set for COP 18 in Qatar as well as a set of clearly articulated outcomes. Otherwise we could end up here forever (or at least until the world melts around us).

By COP18, Parties should have studied all possible options to close the ambition gap, and developed countries should have moved up their pledges in line with science, i.e. to more than 40% below 1990 levels by 2020.

As for inputs, why not ask parties to provide submissions on how to share out the 25-40% reductions, have the Secretariat compile a technical paper, and then negotiate the targets and how to square them with the existing pledges.

In turn, developing countries can register NAMAs that will result in emissions reductions well below business as usual (with sufficient support).

Much work remains to operationalise the NAMA Registry, to establish guidelines for NAMAs, and to register both NAMAs and support. Once these not insignificant tasks are completed (with substantial progress when we meet in Bonn in May 2012), the Secretariat will need to assess whether there is a shortfall in support, and how much this amounts to.

One element of the ambition work programme that Parties should launch here in Durban includes those low carbon strategies that developed countries should launch and implement to achieve near-zero decarbonisation by 2050.

And developing countries need to be encouraged (whilst receiving the support they need) to develop their own strategies. SBSTA should turn toward working out the guidelines for those strategies. All this would provide a significant first step in a more productive

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CAN Intervention LCA Opening Plenary Durban, November 28, 2011

Thank you Chair,

I am speaking on behalf of the Climate Action Network.

In Cancun, Carbon Capture and Storage (CCS) in the CDM was approved as long as nine critical issues concerning CCS were addressed and resolved in a satisfactory manner. These regulatory issues remain a long way from being resolved. CCS in CDM carries significant environmental and legal implications, particularly for the host countries.We urge parties to carefully re-assess the critical issues and not to rush into dangerous project implementation of an unproven technology.

The CDM Executive Board has just approved a revised methodology for HFC-23 destruction projects under the CDM. The revised methodology still provides exorbitant profit margins of these projects that undermine the phase-out of HCFC-22 under the Montreal Protocol

A promising solution would be to simply pay for the incremental costs of HFC-23 incineration in all HCFC-22 production plants in developing countries, implemented under the Montreal Protocol. Alternatively, HFC-23 destruction in new HCFC-22 plants could be tied into developing country Nationally Appropriate Mitigation Actions (NAMAs)

On MRV, we look forward to a strong outcome in Durban that includes robust guidelines for biennial reports, IAR, ICA, Annex I accounting, reporting of REDD+ safeguards, and a common reporting format for climate finance. CAN is also deeply committed to guaranteeing access to information and stakeholder participation, in other words, transparency, in the IAR and ICA processes beyond the proposals currently reflected in the draft decision text. 

Thank you Mr Chair

Youth and the Future


Yesterday was Young and Future Generations Day, and among the many events that took place, one message came across loud and clear: The time for political inaction has run out.

Young people have a critical role to play in the negotiations, one that is often underutilized. As the primary stakeholders in the outcomes of this conference, youth have a right to demand more of negotiators, of the targets they are setting, and of the process. Youth are pushing for policies that not only insist upon necessary emissions reductions, but also confront the roots of inequity that exist in the current systems.

UNFCCC Executive Secretary Christiana Figueres warned youth not to pick up the bad habits of negotiators and stay ambitious in a session titled “An Intergenerational Inquiry”. In response, 16-year old Mokgadi Seemola silenced the room stating, “Because of some of the wrong decisions some negotiators have made, my dream is shattered.” Drought has devastated her South African community and now she faces the harsh realities of climate change. She had hoped to share the world she grew up in with her children, and that is now impossible. This and the many other bold statements delivered by youth provided a much needed bridge between the often impersonal act of developing text and the larger context and human face of global climate change.

The negotiators at this conference have heard the message: There is no more time.

The question that remains is: What action will they take?

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The A-Z of MRV

Robust measurement, reporting and verification (MRV) is a critical part of the Durban outcome. But 24 hours before the new text is out, with Parties hard at work, ECO is concerned that key MRV elements are at risk of falling off the table.

First, let’s review the fundamentals: The reason we’re all learning the MRV alphabet soup is to support the implementation of commitments and actions, build confidence and ensure the environmental integrity of the regime. Seems obvious, right? Yet some of the proposals on the table would seriously undermine these objectives.

In addition, MRV must respect the framing principle of ‘common but differentiated responsibilities and respective capabilities’ and reflect differentiation between developed and developing countries while aiming for good reporting from both. ECO worries that some developed countries are trying to erase those lines. 

And finally, as critical as MRV is to the Durban outcome, it’s just one piece of the picture whose outlines were drawn by the Bali Action Plan. MRV must always be viewed as part of the bigger picture of increased mitigation,
finance, technology transfer and capacity
development commitments.

Critical MRV elements that must be in the Durban outcome include:

  • Procedural transparency and meaningful stakeholder participation, including the ability to make written submissions to technical analysis experts and the SBI; pose questions in an SBI review session open to Parties and observers, and unrestricted access to all information (inputs and outputs).
  • Common accounting rules on emission reductions and enhanced removals for Annex I countries.
  • A process to clarify the assumptions underlying the pledges of all countries (e.g. gases, sectors, base years, assumptions on BAU) to be able to accurately assess the gigatonne gap and ensure comparability for Annex I countries. (More coming from ECO on these hot button issues.)
  • MRV outputs must be timely and include enough detail to enable a meaningful first periodic review between 2013 and 2015. Biennial reports, biennial update reports, and the first international assessment and review (IAR) and international consultation and analysis (ICA) should be completed as early as possible in 2014.
    Enough detail must be provided in biennial reports (BRs) and biennial update reports (BURs) to conduct an effective global assessment, including clarity on assumptions, underlying pledges and projections until to 2050, in 10-year increments.
  • The technical review teams, SBI and the COP should have the ability to comment on the status of implementation and issue recommendations in order to assist Parties in the implementation of their pledges and to improve reporting.
  • A compliance process for Annex I countries, including consequences for non-compliance such as suspension from the flexible mechanisms.
  • Improved MRV of finance through the adoption of a common reporting format in biennial reports and in the future revision to the guidelines for national communications.
  • Enhanced support for developing countries to produce their biennial update reports and national communications, and to participate in international consultation and analysis (ICA).
  • A summary of REDD+ activities, including actions, methodologies, accounting, safeguards and information systems should be included in biennial update reports and national communications.
  • Time-specific provisions to revise guidelines for national communications by COP 18 and for BRs, BURs, IAR and ICA based on lessons learned, by COP 22 in 2016.
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Who’s Afraid of Provisional Application?

If only we could apply climate change provisionally!

For the last couple of days, we have heard a number of developed countries make allusions to constitutional concerns about provisional application of the amendment for a second commitment period under the Kyoto Protocol.

While commending these parties for continued support of a multilateral, legally binding, rules-based regime, we are nonetheless confused.

ECO keeps a copy of the Vienna Convention on the Law of Treaties by its bedside (for those restless nights after the informals) and has the impression that provisional application is a widely used tool of international law.

A quick Google search confirmed this and there are a slew of examples in which provisional application has been used, such as:

* The 1994 United Nations International Tropical Timber Agreement, which was provisionally applied by a number of countries including Belgium, EU, Finland, France, Germany, Japan, Luxembourg, Netherlands, Spain and the UK.

* 1994 Energy Charter Treaty, which Australia, Iceland and Norway are currently applying provisionally. (Of course, Russia was applying it provisionally until 2009 – which just serves to reinforce the point that provisional application is needed as a mechanism to avoid a gap but ratification is ultimately needed).

* The Agreement Relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea

* The International Coffee Agreement (particularly important for those late night sessions!)

* A number of bilateral agreements, such as the 1996 Agreement between the European Community and New Zealand on sanitary measures applicable to trade in live animals and animal products (which was applied provisionally until its entry into force in 2003) and the 2006 Agreement between the European Community and New Zealand on certain aspects of air services .

* And who can forget the mother of all provisional applications – the 1947 General Agreement on Tariffs and Trade (GATT) was applied provisionally through the Protocol of Provisional Application from 1948 until the WTO agreement entered into force in 1995!

ECO just can’t understand what makes the climate change regime different. Why couldn’t we apply the amendment for the second commitment period provisionally?

Durban needs to deliver a mandate for a legally binding instrument under the LCA.  For a balanced outcome we must pair legal with legal – thus provisional application of a legally binding amendment under the Kyoto Protocol is crucial.

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Taking the High Road to a Mandate

ECO has long insisted it is necessary to agree a second commitment period of the Kyoto Protocol. All developed countries under the KP should ratify their new 5-year QEROs (quantified emission reduction obligations), base year 1990, having a level of ambition consistent with a fair share towards their agreed 2º C goal. Yet it is clear that the multilateral system will need to evolve through time toward becoming a truly adequate, fair, legally binding global agreement.

The essential complement in Durban will be extension and clarification of the mandate of the AWG-LCA for a comprehensive legally binding agreement as the agreed outcome. This mandate must enhance implementation of the Convention, not overhaul it, building explicitly on and fully respecting its principles so that Parties do indeed, in a fair framework, fulfill the promise of the ultimate objective of the Convention: “stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system”.

This mandate at a minimum must include:

(1) The result of the negotiations, specifying that Parties are building on and moving beyond the Bali Action Plan’s “agreed outcome”, showing that the world is prepared to affirm and act on the ultimate objective of the Convention by working towards a legally binding instrument with legally binding commitments.

(2) Reaffirmation and full respect of the principles of the Convention to guide the negotiations, which must include equity and common but differentiated responsibilities and respective capabilities, as well as environmental integrity and adequacy

(3) End date. ECO repudiates the calls from some Parties that negotiations should begin in 2015. Much needs to be done to develop essential elements of finance, adaptation, technology and of course mitigation going forward towards the legal agreement. Negotiations are not yet guided by a timeline or clear agreed goal. Agreement reached in 2015 would allow time not only to build a framework analogous to the Kyoto Protocol, but that span of time would allow more effective development of content closer to that achieved over the four years of negotiations between the adoption of the Kyoto Protocol and the Marrakesh Accords. And entry into force in 2018 would allow a more rapid response to new science.

(4) The scope, building on the Bali Action Plan, Cancun Agreement, and the Kyoto Protocol acquis.

(5) The process to fulfill the mandate.

ECO expects the Chair to address these principles in the draft legal decision text to come out of Friday’s ‘informal informal’ under the ‘principles’ bullet.

Ambition can and must be ratcheted up massively, in particular by developed countries, to jointly achieve real emissions reductions of at least 40% by 2020. A legally binding instrument under the AWG-LCA is needed to secure full participation by the US, which has repudiated the KP, the only existing international legally binding instrument to reduce emissions and ensure that responsibilities for  technology and financing support for developing countries are made legally binding.

The mandate will also show that all Parties are taking action under common rules and guidelines that can showcase successes. The world must respond in a clear and unambiguous way to the urgency from the IPCC Fifth Assessment Report (AR5). A mandate is needed here in Durban to provide a common framework for these principles and dramatically scaled up response to our climate crisis.

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