No cap on mechanisms

30/08/2001

On the issue of quantitative restrictions on the use of flexibility mechanisms by industrialised countries to meet their emission reduction commitments, once again the EU compromised on its position. It gave up on its demand of meeting at least 50 per cent of commitments through action at home. The agreement merely says that domestic efforts should constitute a significant element of industrialised countries' efforts to meet reduction commitments. Moreover, the facilitative branch, instead of the enforcement branch, will assess if a country abides by this provision. Industrialised countries can participate in these only if they have:

• put in place a national system to estimate emissions of ghgs and their absorption by sinks, at least a year before the start of the commitment period, that is, by 2007.

• included additional information needed to ensure compliance with emissions reduction objectives in their annual inventory of emissions of GHGS and their absorption by sinks.

Moreover, only those countries that have accepted the agreement on compliance (to be negotiated) can use credits obtained through these mechanisms. Japan and the us were not happy that participation in CDM projects by an industrialised country was made conditional to accepting the compliance agreement.

Defining the meaning of equity in the context of mechanisms, G77 and China pointed out that CDM allows an increase in emissions in industrialised countries and a decrease in developing countries. Therefore, instead of reducing the existing inequities in emissions between developing and industrialised countries, CDM further widens the gap. The agreement asks industrialised countries to undertake domestic action, as per their national circumstances, with a view to reduce emissions in a manner that helps in narrowing per capita differences between the North and the South.

JI and CDM: The agreement does not give a list of eligible projects under the two project-based mechanisms JI and CDM. Instead, the choice of projects is left to the host country, which will decide if a particular project furthers its sustainable development objectives. However, it asks industrialised countries to refrain from pursuing nuclear projects under both mechanisms. Countries like Japan, Canada, Russia and Australia wanted to include nuclear in CDM. The EU and G77 and China were against nuclear under CDM.

The EU did not want sinks under CDM, but a group of industrialised countries wanted to take credits for all types of lulucf projects within CDM. It was finally decided that for the first commitment period, LULUCF projects under CDM would be restricted to afforestation and reforestation projects. Credits from these activities should not exceed one per cent of an industrialised country's emissions in 1990. Negotiations for the second commitment period will decide how these projects will be treated in future commitment periods.

An executive board will supervise implementation of CDM. This board will be elected at COP-7 to ensure a prompt start for CDM. The board will consist of 10 members: one each from five UN regional groups, one from SIDS, and two each from industrialised and developing countries. It is also entrusted with the task of developing simplified procedures for specific small-scale projects to facilitate equitable regional distribution of CDM projects. Japan and Australia were not in favour of according preferential treatment to such projects.

Emissions trading: As a safeguard against overselling, it was decided that an industrialised country should keep at least 90 per cent of its assigned amount (the amount of GHGS that a country is allowed to emit under the protocol), or 100 per cent of five times its total ghg emissions in the most recently reviewed inventory, whichever is lower, as reserve. The umbrella group wanted to substitute the present percentage value in both choices by 70 per cent, while the EU and G77 and China wanted it to be as high as 98 per cent.

The second choice of retaining five times a country's emission in the most recent inventory increases the amount of 'hot air' available for selling. During the commitment period, countries like Russia and Ukraine are likely to emit much less than their emissions in 1990. It is highly probable that in their case the second option will be lower. Hence, they will be required to keep a lower amount in reserve resulting in a greater availability of hot air.

A formal complete decision on various aspects of this issue was not possible at Bonn and was forwarded for further consideration and adoption at the next round of formal negotiations in Morocco.

What price?
The Kyoto Protocol with the Bonn compromises is even less likely to address the problem of climate change. At best, it has some political worth, in showing the US that the protocol can live without it. "The EU made considerable concessions to get this deal but it was a worthwhile price to pay," said EU environment commissioner Margot Wallstr

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