Tag: Flexible Mechanisms
SBSTA Closing Plenary Intervention by CAN
-Delivered by Enrique Maurtua Konstantinidis
Thank you Co-Chairs,
We thank you and Parties for having a very focused session and urge the work to continue forward with the same motivation and attention.
Nevertheless going forward,
Parties must ensure that climate policies encompassing agriculture include considerations and safeguards that protect and promote food security, biodiversity, equitable access to resources, the right to food, animal welfare, and the rights of indigenous peoples and local populations, while promoting poverty reduction and climate adaptation.
The design of the framework for various approaches and new market-based mechanism must be based on the lessons learned from existing mechanisms. These mechanisms and framework will function under the convention and therefore have to be consistent with the rules and requirements of the convention. Using such mechanisms to meet emissions targets requires a strict accounting framework and increased mitigation ambition.
Lastly, the compromise on MRV provides a lesson for other streams, but the toothless safeguards reporting gives no assurance that safeguards will be implemented. The outcome on drivers is encouraging, but all parties must be clearly obligated to act, and the language on livelihoods not only contradicts the science but also threatens the involvement of indigenous peoples in REDD+.
ECO is amused by the blind belief in carbon markets the European Union maintains, while its own emission trading scheme has become a zombie. In the ADP, EU has argued that “new market mechanisms will deliver ambition”. Really? At home, Europe’s own emission trading is currently blocking ambition, and in fact encouraging a shift from gas to coal, as the emission allowance prices have crashed.
The reality is that demand for carbon market units is at an all-time low. Current prices are looming at around 0.4 Euro for Clean Development Mechanism (CDM) offset credits and at around 4 Euros for European allowances. The EU flagship policy is close to dead due to the reluctance of German Chancellor Merkel to fight for her legacy as a “climate chancellor”. This has allowed the conservatives in the European Parliament to block even the back loading of EU ETS (EU jargon for a temporary, short-term fix to the ETS).
Sandbag, famous for its brilliant carbon market analysis, estimated in its blog yesterday that in 2012 Europe's emissions fell 27% below 1990 levels, once offsets surrendered into the EU ETS are factored in. This renders EU’s 20% by 2020 target irrelevant, and means that the EU’s ETS will remain useless in the foreseeable future. This is very unfortunate, not only for EU’s own climate investments (which now lack an incentive) but also for climate finance, because low price and low demand means low revenues.
The EU always wanted to link up with emission trading schemes in China, California and the like. But now the question is, why would they link up with the EU, when all EU has to offer is a zombie market with no demand? Without a much more rigid climate target, or CO2 taxes that guarantee a minimum price for the pollution allowances, the market approach plays into the hands of those who want to invest in fossil fuels.
ECO wonders how Merkel, Tusk, Hollande and Cameron can explain their inaction to the citizens of Europe, who have been seriously affected by the unprecedented heavy rainfalls and consecutive flooding. Due to the lobby pressure of a few industries, the lives, homes and livelihoods of Europeans will be further put at risk.
But European leaders have a chance to fix it. This autumn, the European Commission will present a proposal for new 2030 climate and energy targets, and the time for the European leaders to make decisions is in March 2014. The COP in Warsaw will be the first litmus test for Tusk, Merkel (yes, there is an election before...), Hollande and Cameron on whether Europe will be able to phase out any investment into new, coal fired power plants, put renewable energies at the forefront of energy supply (and not catastrophic, highly risky nukes) and take energy efficiency seriously. The impact on the UN talks could be significant.
Europe will host two COPs within the next two and a half years. They have a particular responsibility to lead us to a good treaty in 2015. Continuing “business as usual” would mean putting the livelihood of millions of European (and other) citizens at risk.
*By compromise, ECO mean somewhere in between what is scientifically needed and what YOU tell us is currently feasible.
The Conference of the Parties,
Recalling Article 4, paragraphs 1, 3, 4 and 5 and 7 of the Convention,
Reaffirming the unwavering commitment of parties to keep global average temperature increase well below 2 degrees C above pre-industrial levels and the continuum approach between mitigation, adaptation, loss & damage and finance that is required to ensure equity before 2020.
Reaffirming the urgency to address the current imbalance in mitigation and adaptation finance – in light of recent studies showing the adaptation and loss and damage costs in developing countries will very likely be well in excess of US$100 billion per year by 2020.
Reaffirming the need to raise mitigation ambition levels between now and 2020, and achieving emission reductions on the order of 8-13 Gigatonnes of emissions in the pre-2020 period, beyond existing commitments and actions registered under the UNFCCC.
Supporting the authoritative assessments demonstrating that staying well below 2°C will require several hundred billion of incremental finance per year and the shifting of trillions of dollars of existing private sector investments into low carbon technologies and solutions.
Emphasising that the commitment by developing countries to provide $100 billion for developing countries will be delivered in the form of new and additional public finance, through budgetary allocations from developed countries, supplemented by revenues from alternative sources of public finance
Emphasising the shortcomings of the main revenue stream for the Adaptation Fund in relation to the expected low price of CERs under the Clean Development Mechanism and the need for new and additional commitments by developed countries.
1. That developed country Parties shall provide jointly new and additional public finance amounting to an average of US$20 billion annually for the period 2013-2015, for mitigation and adaptation actions, including for REDD, technology and capacity building.
2. That for the periods of 2016-2018 and 2018-2020, developed country parties shall scale up financing in a linear manner from the current levels to reach $100 billion annually in public finance by 2020.
3. That developed countries shall allocate at least 50% of overall public finance to meeting developing country adaptation needs.
4. To establish a formal process to capitalise the GCF with an initial collective pledge of (…)** by COP19.
5. To call on the relevant bodies to design and implement global measures to raise new streams of public climate finance, particularly through:
i) Redirection of at least 100% of Annex 2 fossil fuel subsidies
ii) Carbon pricing mechanisms applied to the international aviation and maritime transport - in accordance with the principal of CBDRRC and existing commitments under the UNFCCC.
1. The pledges to the Adaptation Fund of (…)** collectively made by Annex 2 Parties for 2013/2014, as contained in Annex C of this decision, and those made by other Parties.
2. The initial pledges to the Green Climate Fund of (…)** collectively made by Annex 2 Parties as contained in Annex D of this decision.
3. The recent declaration by 11 EU Finance Ministers to earmark at least 100% of the revenue raised through their Financial Transaction Tax to the Green Climate Fund.
** "there is not enough space on this page to specify the number of billions ECO is expecting"
For official CAN positions, please refer to www.climatenetwork.org
Carbon markets are in the dumps and policy makers and market participants alike are scrambling to come to their rescue. This weekend, ECO spent two days with delegates to discuss the future of the Clean Development Mechanism (CDM) and what changes to its underlying modalities and procedures are needed to make the CDM fit for the future. The number of delegates that showed up on Sunday at 9 AM showed us that there is hope.
Let’s start with the good news. For the first time, human rights impacts of CDM projects and harmful impacts of large power supply projects in the CDM were discussed openly! Now dear delegates, it’s time to move into action mode: start by kicking coal out of the CDM, find a way to phase out large scale power projects, improve the stakeholder consultation process, establish a grievance mechanism and move the whole CDM far beyond offsetting!
But ECO is worried that certain Parties that host many CDM projects did not seem to like the proposed changes. Some of them posited that everything was all right with the mechanism and that people who raised doubts about additionality were only showing their ignorance. ECO suggests that a little less self-congratulation would be in order given the number of academic studies that have concluded that there are in fact substantial problems. If you want a future for the CDM you need to improve its reputation by addressing the problems, not ignoring them. This old-fashioned thinking will certainly not help the CDM to recover and scale up but will once and for all give it the lethal injection.
Joint Implementation has been in the shadow of the CDM for many years. Yet close to 800 million JI credits have been issued to date. Strong reforms are needed for JI. Almost all of them under track 1 have very limited transparency or integrity. Despite the poor quality of JI offsets, they are used extensively. Strong reforms are needed for JI. The experience with JI track 1 shows that a new, unified track needs to have strong international oversight. Also, issuance of JI credits for emissions reductions after 2012 should only be possible once the host country has issued its AAUs for the second commitment period. The future 2015 regime will require market mechanisms to work in a different world where many developed and developing countries will have mitigation commitments.
This issue is currently being discussed in SBSTA, where Parties are establishing a new market mechanism and a Framework for Various Approaches that should make emission reductions units that are achieved by various mitigation systems internationally tradable and eligible for meeting national emission reduction targets.
Some countries have put forward good proposals to avoid double counting. But ECO is missing support for centralised governance and international consistency of standards and how to achieve net mitigation benefits. And let’s not forget, before we can agree on anything, we need an international accounting framework and clearer and more ambitious pledges.
After this weekend’s CDM reform workshop, ECO has new hope for the CDM’s ability to address human rights. For the first time in the history of the CDM, Parties had an open dialogue about the impacts of CDM on human rights. It is important to recall that Parties agreed to “fully respect human rights in all climate change related actions.” The review of the CDM Modalities and Procedures provides a critical opportunity for the CDM to make this a reality.
A case in point…The Barro Blanco project is a hydroelectric dam that is currently under construction on the Tabasará River in western Panama. Once completed, the dam is projected to flood homes, schools, and religious, historical and cultural sites in Ngäbe indigenous territories, threatening the Ngäbe’s cultural heritage. In addition, the dam will transform the Tabasará River – critical to the Ngäbe’s physical, cultural, and economic survival – from a flowing river to a stagnant lake ecosystem. This will severely affect the Ngäbe’s lands and means of subsistence, and result in the forced relocation of many families.
CDM rules require investors to consult with local stakeholders and to take their comments into account during the registration process. However, the company did not consult the Ngäbe communities regarding the Barro Blanco project and its impacts. In February 2011, the Ngäbe, in collaboration with civil society groups, submitted comments to the CDM Executive Board. The comments documented the Ngäbe’s concerns, in particular the fact that the Ngäbe were not given notice of the consultation process and were never consulted. Despite concrete evidence that the Barro Blanco project violated CDM rules on stakeholder consultation, in 2011, the CDM Executive Board registered the Barro Blanco as a CDM project.
Now that Barro Blanco has been registered, there is no process that allows the Ngäbe to raise their concerns regarding the project’s social and environmental impacts. Over the past two years, the SBI has been negotiating an appeals procedure that would allow stakeholders to challenge registration decisions under the CDM. However, ECO is dismayed that, as discussions currently stand, this procedure would not provide a means of recourse for affected communities once a project is under construction or operational.
More than 6,500 projects are registered under the CDM, and these projects will be operational for many years to come. ECO calls on Parties to revise the CDM Modalities and Procedures to: establish international safeguards to protect human rights; strengthen requirements on how to conduct local stakeholder consultations; establish a grievance process that allows affected peoples and communities to raise concerns about harms associated with CDM projects; and develop a process to deregister projects where there are violations of CDM rules.
To learn more, join us at a side event on CDM and human rights TODAY at 6:30 pm in Room Solar. You will meet on Monday at 6:30 pm, wWeni Bakama, a Ngäbe activist, and other panelists who will discuss how we can integrate human rights protections in the CDM.
Delivered by Simon Bradshaw, Oxfam
Thank you for giving us the opportunity to speak. My name is Simon Bradshaw, and I’m speaking on behalf of Climate Action Network. I would like to talk about new market mechanisms.
Here in Bonn, Parties will discuss rules for a new market mechanism and a Framework for Various Approaches. Both require international oversight to ensure environmental integrity and sound accounting of credits.
The experience with Joint Implementation has shown what happens if countries can unilaterally register projects and issue credits with limited oversight or transparency. We recommend that a UN body is appointed as a standards-setting organization that also approves unit issuance.
Double counting is a serious issue with the proliferation of programs and credits.Credits need to be fully accounted through a rigorous, robust and transparent common accounting framework. Clear rules should ensure that units are only counted by the buyer and not by the seller Clear and specific rules regarding the complementary relationship between CDM, new market mechanisms and other regional trading mechanisms need to be established.
Last but not least, countries should clarify that such new mechanisms should secure net atmospheric benefits.
The year is not even halfway through and we have already seen devastating floods in Argentina and the melting of Arctic sea ice being linked to not only Australia's harshest ever summer, where they needed new colours to define “hot” on the map, but also a frozen spring in Europe. Climate impacts like these were hitting all corners of the planet, as carbon pollution in the atmosphere pushed through the landmark of 400 parts per million - levels the world has not seen for millions of years.
And here we are in Bonn again to work out how to get those levels down, not up. With as few as five sessions left before we need to agree to a comprehensive climate plan in 2015, it is high time to roll up our sleeves, put on hold short term interests and work together to refocus the planet away from burning destructive fossil fuels and onto a path to a safe future.
Delegates – you are going to have to earn your Maritim cheese sandwiches! As much remains to be done before COP19 in Warsaw. You need to continue the good work started last month by mapping out the structural and technical elements of the 2015 climate plan to be captured in a draft decision at Warsaw, whilst committing to concrete steps to increase ambition before 2020.
At the Bonn meeting in April, equity took centre stage. Parties seem to recognize at last that there won't be any ambitious 2015 deal without equity (and no equity without an ambitious 2015 deal). ECO is pleased that the ADP co-chairs, in the informal note on the last Bonn session that contained their reflections of the perceived common ground on Workstream 1, have confirmed the “the principles of the Convention will apply and need no reinterpretation in the 2015 agreement.” This is, for ECO, of course a very important common ground that ADP 2 needs to build on.
It should not be forgotten in the myriad of issues that the Parties need to push in this session to agree to an international mechanism to deal with communities and cultures that will suffer from irretrievable loss as a result of climate change.
Short Term Ambition
Current mitigation commitments have us on a catastrophic 4 degree pathway. Clearly, raising ambition before 2020 must be a priority. And International Cooperative Initiatives are no replacement for increased mitigation and finance pledges. And 2014 is the year for your increased ambition to shine – the KP Ministerial Roundtable next year should be an opportunity for all developed Parties – not just KP Parties – to increase their current, embarrassingly low levels of ambition. And Ban Ki-moon’s Summit likewise offers a good opportunity for developed countries to increase commitments, and developing countries to increase pledges. Of course this will require facilitation by additional means of implementation for developing countries, which is meagre at this time.
The first volume of the IPCC 5th Assessment Report in September will provide the perfect backdrop for such an increase in ambition, as well, of course, for quality input into the First Periodical Review.
The AOSIS proposal on energy efficiency and renewable energy deserves significant attention at this Bonn session. It calls for technical level workshops on implementing renewable energy and energy efficiency-based mitigation options here in Bonn, followed by a submission process and a ministerial meeting at Warsaw, offering plenty of opportunity for countries to consider how clean technology can drive an increase in their pledges. There are, indeed, no shortage of ideas on how countries could increase their ambition. (The UNFCCC technical paper on short term ambition reductions offers a whole range of ideas on how short term pollution reductions could be achieved.) All in all, the conditions look promising for 2014 to be the year of short term ambition increase for all.
Carbon markets will be an important topic: Both the CDM and JI are scheduled to undergo reform. The CDM needs to phase out project types that are clearly not additional (large power, for example) and ban project types that are clearly harmful, such as coal power. Human rights need to be respected by all projects. JI, the troubled brother of the CDM, needs much stricter rules, period. The over 95% of JI credits that have been issued under track 1 lack transparency and integrity, to put it politely.
Why we would want to increase the supply of market units by creating new mechanisms is still a bit curious, given that current prices for CDM and JI credits are at 20 Euro cent. Nevertheless, Parties will discuss new market mechanisms (NMM) and a FVA (Framework for Various Approaches). Ensuring quality through clear and conservative rules, international oversight and comprehensive tracking and accounting rules are key.
Never will so many delegates pay so much for Maritim cheese sandwiches. And we don’t mean in Euros (though we all pay quite a bit for them as it is) – we are talking about the sweat on your iPads. ECO expects you to draft decision text for the Warsaw Finance Ministerial, outlining a pathway, including mid term targets, to get to the US$100 billion by 2020. And delegates, the time has come, as the walrus said, to speak of many things. Including where, how and when finance fits under Workstream 1. In order to ensure that sufficient means of implementation are assured to support the level of mitigation and adaptation ambition necessary for the 2015 agreement, these discussions must begin soon.
Much more is needed, of course; expect a few more recipes for success over the next 2 weeks. But for now, all this typing is making ECO hungry...