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CAN Intervention - KP Closing Plenary - 6 Aug 2010

Kyoto Protocol: Closing Plenary
CAN intervention

6th August 2010

Distinguished Delegates,

Tuesday's workshop left no doubt that we are on the way to exceeding the dangerous
threshold of 1.5 degrees if current Annex B pledges become their commitments for the
second period and current loopholes remain.
The projected abatement shortfall is between 7 and 10 Gigatonnes.
If you want to come to a global agreement to avoid dangerous climate change, you will
take any opportunity close this gap.
We hear a lot in this working group about the importance of the other track. To the
Annex B parties assembled here our message is simple. If you wish to secure progress in
the LCA track in December, you must act here. You must commit to the second
commitment period of this hard-won Protocol. You must indicate before the next
negotiating session, your intention to do so. The effect this has on both tracks in these
negotiations will be worth it.
Only by doing so will the other outcomes you seek so intensely, and which the global
community at large seeks to intensely, be achieved.
The Kyoto Protocol is crucial to the world's efforts to successfully limit climate change.


EU: Time to Lead

Remember the days when the EU had a clear impact on international climate negotiations? It had focused, ambitious positions, communicated well in advance before coming to the UNFCCC talks, and it was convinced of the benefits a low-carbon economy would bring to its citizens. Those were the times when the EU could act as a strong and reliable partner for any progressive coalition of Parties.

Today the EU environment ministers gather in Luxembourg to discuss ways in which the EU can take the UNFCCC talks forward. As always ECO has plenty of good ideas, and is not shy in sharing them. So, European Union, here’s what you need to do now. For starters, the EU should upgrade its reduction target well before Cancún to at least a unilateral 30% below 1990 levels by 2020 well in time before Cancún. Really, no one was impressed last year by the EU’s leverage game with the conditional pledge, which only resulted in a series of ridiculous conditional pledges from other Annex I countries.

The recent EC Communication previously highlighted in ECO shows very clearly that a 30% target is easy to achieve and is in Europe’s own economic interests, regardless of what others do. Secondly, finding friends is vital. Looking critically at the current political environment and the domestic situation in the US, the best way forward to get a comprehensive legally binding outcome – sooner rather than later – will be for the EU to seek a joint understanding with climate leaders among the developing countries. Importantly, the EU needs to clarify its continued commitment to the continuation of the Kyoto Protocol. Thirdly, the vital ingredient needed for effective progress in Cancún is clarity on financing.

To begin with, the EU would be well advised to deliver on previously made promises, such as offering full transparency of new and additional fast start finance, including member state reporting. Securing adequate and predictable funding for developing countries will enable further negotiations on three important building blocks of technology, adaptation and REDD that can – with the money available – be finalised in Cancún. The EU’s impact has been clearly evident in progressing discussions on this matter in the past. An immediate priority must be exploring the options for sources of public finance, with a view to making choices by Cancún.

In the EU, revenues from EU ETS would easily provide an important source of additional and predictable funding. Last but not least, internal divisions on hot air and LULUCF accounting rules need to be addressed in support of environmentally sound international rules under the UNFCCC.

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Homework for Bonn III: 
New LCA Text

Just before ECO was going to bed, a fresh revision of LCA text landed. ECO congratulates the Chair for moving swiftly forward in facilitating the negotiations. Now delegates have something to take back home to their ministers, to prove that they weren’t just playing football with the Secretariat and the NGOs, and that they indeed have managed to recover from the Copenhagen hangover and started to negotiate.

The text includes hobby horses from all corners, but not every single idea from everyone, which is an indication that the Chair is doing her job. Now the ball is on the ministers’ side again. They must start filling the blank holes in the document and making choices, so that Parties can return to the Maritim in August well prepared and ready to hit the ground running – that is to say, start negotiating substance from day one. With only two negotiating weeks left before Cancun, the August session must take appropriate time for negotiating the crunch issues such as the legal form of the agreed outcome, which is an issue that cannot be left for the last hours of Cancún. Another crunch issue with high priority is the gigatonne gap between the current pledges and the 2 C and 1.5 C benchmarks. By August we expect countries to come forward with clear proposals on how to tackle this issue, which is of joint responsibility.

The core message for developed country ministers, after the lengthy elaboration of their pledges and related loopholes in the KP groups this session, is that they simply must score higher. ECO has looked at your potentials and knows that most of you have not even tried serious targets yet.

Finally, Parties should continue supporting the Chair in her challenging task of facilitating the negotiations. The fresh text, which compiles the views of the Parties, deserves to be reviewed with fresh eyes, after some refreshing football. Any attempts to derail the process with bad faith and delay tactics will earn a red card.

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Fossil #1: Saudi Arabia, 
Kuwait, Qatar, Oman

First place fossil goes to these four Parties for risking the good faith and integrity of the negotiations by blocking all attempts to secure a technical review of the 1.5 target and suggesting that vulnerable countries use Google to get information that they need/want. They did this in the teeth of emotional pleas from vulnerable countries and 
numerous rounds of diplomatic efforts to reach a compromise.

Saudi Arabia even gave us a list of traded goods which would be in peril from a 1.5 target. See if you can spot which one is their true concern: rice, cocoa, tomatoes, coal, oil.  (If you’re stuck, look up their chief export on Google.)

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Honorary Fossil Award: BP-USA

BP-USA is awarded an Honorary Fossil Award from CAN International for fostering our addiction to fossil fuels, an 
addiction that is driving global warming towards dangerous climate change and lies behind the disaster unfolding in the Gulf of Mexico.

The consequences of forgoing a global agreement to move off fossil fuels and invest in a low-carbon future are clear – scientists have run the numbers.  Unless warming is checked temperatures will increase way beyond the threshold for catastrophic climate change. For some countries the toll is already mounting.

As the negotiations began here in Bonn, hundreds died in India and Pakistan during the hottest heat wave on record, with temperatures shooting over 50 C (122 F). This is bitterly ironic given that we have alternatives. Each year we delay, we pass by opportunities to invest in clean energy. The International Energy Agency has calculated the cost of passing by those opportunities at $500 billion a year. At same time $100 billion a year in subsidies are paid to fossil fuel companies worldwide.

Checking climate change and sustaining economic growth depends upon an international agreement to invest in clean energy. BP-USA, a leader in fossil-fuel development that has played out so disastrously in the Gulf of Mexico, is awarded an Honorary Fossil for failing to fulfill its responsibility to help break the fossil-fuel addiction it has fostered and address climate change.

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Green Shoots for the Financial Mechanism

As a low-key session in the all too familiar confines of the Maritim draws to an end, the pressures, ambitions and disappointments of Copenhagen are fading into the background. Green shoots are appearing in the LCA finance negotiations, where the dry discussions of institutions, functions, accountability and authority are turning into a rich and productive engagement. 

Largely stalemated since Accra almost two years ago, polarized positions are giving way to an open discussion and perhaps real movement towards agreement. ECO noted the Philippine delegation responding positively to the US proposal on the outline of a governance structure.  This is the clearest indication to date that the US may finally be willing to engage constructively in setting up a climate fund in accordance with contemporary best practices in global governance.

However, the history of international negotiations is littered with hard-fought but under-resourced funds and institutions. So while we celebrate progress towards agreement on the institutions, we can’t lose sight of the need for agreement on the innovative sources of public finance that can generate financing at the scale required, the need for developed countries to step up and take the lead with truly ambitious emissions reduction efforts, and for near-term global emissions peaking and reductions to levels that will ensure our children and grandchildren a blossoming planet.

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Cut the Nonsense

With an issue as serious as the survival of entire nations, you would think all governments would be able to negotiate the matter seriously and in good faith. However, as last night’s teeth-rattling exercise in negotiations dentistry showed, even agreeing a technical report about potential 1.5° C scenarios is not immune.

During the SBSTA evening session, Saudi Arabia managed to plow through every possible diversion, suggesting for instance that vulnerable countries just use Google if they want more knowledge about the scientific findings relating to their survival, or that it is beyond the capacity of the Secretariat to produce a summary of 
recent scientific studies. Finally they hit on procedural issues as a last 
resort. Keep in mind that early in the week Saudi Arabia agreed to having the report, as long as references to spillover effects were included (as is now in the proposed scope). Instead of the random chaos of Copenhagen, things are reverting back to previous form, and this makes a nonsense of important matters.

Deep feeling was expressed about 
potential impacts on developing countries that export rice, cocoa, tomatoes, coal, oil, manufactured goods, etc. Instead, many of those countries wish there was room for serious concern about the climate impacts to which they are most vulnerable and the increasing speed at which they are experiencing them. Recent science has sounded the alarm: the 2° path might not be enough to guarantee the survival of small island states and dynamic coastlines.

Google is all well and good, but every policy maker ought to know that ‘search’ is one thing and 
‘assessment’ quite another.

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Progressing the Nairobi Work Programme

Let’s face it, there hasn’t been that much progress here in Bonn to address the climate challenge. So ECO wants to share some thoughts about the Nairobi Work Programme (NWP).

The NWP was set up by decision 2/CP.11 to support all Parties in addressing vulnerability and impacts of climate change and adaptation. It was established as a 5-year programme and is due to end at COP 16. Through a succession of workshops involving Parties and observers – including NGOs – the NWP has created an open forum where information and experiences are shared in a cooperative manner across nine broad themes encompassing the whole range of adaptation needs. It has provided opportunities where observers can meet informally with Parties to discuss different approaches to similar challenges. Through an informal system of pledges, many different stakeholders have committed voluntarily to sharing knowledge and contributing in practical ways to capacity building. So it is not surprising that Parties are recommending to the COP to continue the NWP beyond Cancún. ECO also supports continuation of the NWP – it is one of the few activities under the UNFCCC that has actually made progress in building capacity to address the impacts of climate change. However, even a good thing can always be improved. 

The NWP has synthesised a lot of information and made it available to Parties and observers, but it still has some gaps to be filled. Here are some issues that the NWP should address in the next phase.  Has the programme had an impact on those most affected by climate change – the vulnerable communities in the LDCs and SIDS? How could the NWP be enhanced to meet their needs? How can a wider range of stakeholders, including indigenous peoples, be engaged to share their knowledge?

In a spirit of participation, there will be an informal meeting including observers, and an opportunity for all stakeholders to make submissions to the Secretariat, to collect views on the performance of and future scope of the NWP. ECO recommends that Parties engage more in the NWP and fully recognize its lessons not just on adaptation but also on cooperation in other areas of work under the UNFCCC.

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As Ludwig observed the evening SBSTA session, his mood changed from mid-week ennui to the edge of irritation.  Clearly, what the OPECs need to do is take a lesson from the Annex I forest management folk. After all, fossil fuels are merely dead vegetation and we all know that emissions from dead vegetation need not be accounted for, or else only voluntarily. A well constructed forward-looking baseline, with all BAU fossil fuel burning incorporated into it, would obviate the need to account for any fossil fuel emissions. Zero carbon economies would then be attainable almost immediately with no behavioural change required whatsoever.  Oil would  take its proper place as the new biofuel.  There is the small matter of staying below any temperature limit at all, but in the event we could easily agree a global deal by Friday and make life a lot simpler.  Of course, as the saying goes, if the rising water swamps the other end of the lifeboat, your side will also drown.

The 30% Solution

Last week ECO talked about the paper published last month by the European Commission, which analyses what a move to a 30% emissions reduction target on 1990 levels by 2020 would mean for the EU. The paper makes a good read and leads to a quite unequivocal conclusion.

The recession has made emission reductions much cheaper than originally estimated. At €81 billion per year by 2020, the total costs of a 30% reduction would be only €11 billion more per year than originally estimated for a 20% decrease. A move to 30% would also reduce spending on pollution control by €3 billion annually. In addition, health co-benefits would be as much as €8 billion in 2020.

Furthermore, the current 20%-by-2020 emissions trajectory would require major and expensive catch-up later on to attain the legislated emission reductions of 80-95% by 2050 at optimal cost.

Shorter-term economic impacts would also result from staying with the 20% target. Cash-strapped EU governments may rightly be scared by the estimate that revenues from the auctioning of emissions allowances may fall by up to €70 billion. Conversely, achieving a 30% emissions reduction target would reduce imports of oil and gas by €40 billion in 2020 at a reference price of $88 per barrel.

Keeping the 20% target would further perpetuate the low carbon price that has resulted from reduced production and over-allocation of emission permits to industrial sectors. The lower the carbon price, the lower the incentive for change and innovation.  While Europe traditionally considers itself a leader in green technologies, this cannot be taken for granted. Other countries are catching up fast.

The conclusion is loud and clear: the EU should move to the 30% target level without further delay.  Unfortunately the same old voices are doing their best to stifle Europe’s lean, green future, using the same old threats about job cuts and production losses if Europe moves to a higher target and others don’t.  But this is empty rhetoric.

First, the economic models used in the communication cast doubt on these claims, estimating an impact on production under a 30% reduction target at around 1% for most sectors if other countries stay with their low end pledges under the Copenhagen Accord. That is the worst case scenario.

Second, how much can you really trust stakeholders who are clearly profiting from the current EU climate regime whilst being required to make minimal emissions reductions?

Analyses by the European Commission and the IEA indicate that emissions of the EU ETS regulated sectors will be about the same level in 2020 as in 2008 if the EU sticks with the 20% target. Industry would make virtually no emissions reduction effort but still reap huge profits.

A recent study cited evidence of windfalls for energy-intensive industries from effectively charging customers for allowances they received for free, to the tune of €14 bn for the refining, iron and steel sectors during 2005-2008.

Another trick has been to accumulate piles of unused emission allowances that can be banked and resold. It is estimated that 10 of the EU’s most polluting firms alone are sitting on stashes worth over €3 billion.

With profits like these, it’s small wonder that these are the voices fighting so hard to maintain the 20% regime. At the same time complaining about the lack of a level playing field, some companies are actively trying to undermine climate action outside of the EU. Members of the industry group Business Europe, for example, have been exposed for lobbying against the regulation of greenhouse gas emissions by the US Environment Protection Agency (EPA), and in favour of offshore drilling in the draft US climate legislation. One European company is responsible for the worst oil spill disaster ever in the US.

The actions of these companies are a cynical ploy to undermine all climate action on an international scale. The EU must heed the message of the recent Commission document, and not fall foul of the same lobby tactics which led to the weak outcome of Copenhagen.

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