Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead by Africa Progress Panel

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead An information note prepared for members of the Africa Progress Panel OCTOBER 2009

Africa Progress Panel Information Note

The note has been prepared by the APP Secretariat with the support of the International Institute for Sustainable Development (IISD) drawing upon publicly available and official information.

For further information please contact: John Drexhage, Director Climate Change and Energy at IISD (jdrexhage@iisd.ca) or Dawda Jobarteh, Research Coordinator at APP (dawda.jobarteh@africaprogresspanel.org).

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

This information note addresses key issues of relevance to least developed countries that are currently under discussion in the run up to Copenhagen. It is being shared with the Panel Members prior to the critical negotiation discussions taking place in Barcelona (resumed ninth session of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG‐KP) and resumed seventh session of the Ad Hoc Working Group on Long‐ term Cooperative Action under the Convention (AWG‐LCA)). Negotiation positions are still evolving, and there remain uncertainties as to what can be achieved at the 15th Conference of the Parties (COP 15) in December 2009. The aim of this document is not to make recommendations or prescribe solutions. Rather it is to highlight the various positions that have emerged or are evolving around the key issues including mitigation, adaptation, financing and technology transfer. This note is intended to illuminate the processes underway and to assist efforts to ensure that Copenhagen results in agreements that meet the needs of least developed and African countries.

ACRONYMS AAU Assigned Amount Unit AOSIS Alliance of Small Island States AWG‐KP Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol AWG‐LCA Ad Hoc Working Group on Long‐term Cooperative Action under the Convention CCS Carbon Capture and Storage CDM Clean Development Mechanism COP 15 15th Conference of the Parties EST Environmentally Sound Technology EU European Union GEF Global Environment Facility IPR Intellectual Property Rights LCDS Low‐Carbon Development Strategies LDCs Least Developed Countries LULUCF Land Use, Land‐Use Change and Forestry MDEs Major Developing Economies MRV Measurement, Reporting and Verification NAMAs Nationally Appropriate Mitigation Actions ODA Official Development Assistance REDD Reducing Emissions from Deforestation in Developing Countries SIDS Small Island Developing States UNFCCC United Nations Framework Convention on Climate Change

Africa Progress Panel Information Note

Contents EXECUTIVE SUMMARY

RESOLUTION OF THE PARALLEL NEGOTIATING TRACKS

THE POSITIONS

DEVELOPING COUNTRY POSITIONS MAJOR DEVELOPING ECONOMIES THE ONLY INTERNATIONALLY BINDING AGREEMENT DEVELOPED COUNTRIES POSITION THE EUROPEAN UNION THE UNITED STATES

9 9 9 10 10 10

MITIGATION

EMISSIONS REDUCTIONS LOW CARBON PATHWAYS (DEVELOPMENT STRATEGIES) AND COMMON BUT DIFFERENTIATED RESPONSIBILITY MITIGATION IN THE LAND USE SECTOR REDD AND REDD+ AGRICULTURE EXPANDING THE CDM TO INCLUDE MORE LULUCF ACTIVITIES

11 15 15 16 17 17

ADAPTATION

POSITION OF THE AFRICAN GROUP

FINANCING

AMOUNT SOURCE OF FUNDS FUND‐BASED SOURCES INTERNATIONAL MARKET MECHANISMS INTEGRATION OF APPROACHES GOVERNANCE/MANAGEMENT OF FINANCING

21 22 22 22 23 23

TECHNOLOGY TRANSFER AND CAPACITY BUILDING INSTITUTIONAL ARRANGEMENTS INTELLECTUAL PROPERTY RIGHTS (IPRS) PUBLIC AND PRIVATE SECTOR INVOLVEMENT

24 25 25

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

CONCLUSIONS

KEY ‘STICKING POINTS’ FOR AFRICAN LEADERS RESOLUTION OF THE PARALLEL NEGOTIATING TRACKS MITIGATION ADAPTATION FINANCING POTENTIAL OUTCOMES FROM COPENHAGEN FINAL THOUGHTS

26 26 26 27 27 28 29

ANNEX ‐ COMPILATION OF COUNTRY POSITIONS

PRINCIPLES (GENERAL STATEMENTS), VISION AND LEGAL FORM RESOLUTION OF PARALLEL NEGOTIATING TRACKS MITIGATION ADAPTATION FINANCING MARKET MECHANISMS REDD/REDD+ AND OTHER MITIGATION IN THE LAND‐USE SECTOR TECHNOLOGY TRANSFER OTHER ISSUES

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Executive Summary The international community stands at a crossroads. The outcomes of the fifteenth Conference of the Parties (COP 15) in Copenhagen this December will ultimately determine the direction in which the international climate change regime will develop in the post‐2012 period. Since the signing of the Kyoto Protocol, many countries have formally recognized their commitment to address climate change in a meaningful and long‐term manner. Despite this, many discrepancies, disagreements, challenges and roadblocks have impacted negotiating rounds for the future regime in the lead‐up to Copenhagen. While some progress has been made on discussions around critical issues, to date this process has been excruciatingly slow and leaves many concerned about the potential for an outcome at Copenhagen. International determination to create a post‐Kyoto framework must not cease as our future, and particularly the future of the most vulnerable, depends on it. Recognizing the deeply interconnected nature of many of the aspects of the negotiations, this report is organized to address five main issue areas. These areas are:     

The Resolution of Parallel Negotiating Tracks; Mitigation; Adaptation; Financing (including Land Sequestration Activities and Market Mechanisms) and; Technology Transfer and Capacity Building.

The objective of this briefing note is to provide members of the Africa Progress Panel, and those with whom they might wish to share this brief, with information that will illuminate the processes underway and allow them to support constructive, informed and active participation by least developed and African countries at COP 15. It is intended to provide a synthesis, comparison and analysis of key issues that African leaders and negotiators might consider in their preparations for Copenhagen. In doing so, we hope that it contributes to an equitable, comprehensive and productive session in Copenhagen, leading to an agreement on the future of the international climate change action. A number of critical ‘sticking points’ for African Leaders are discussed within this briefing note. The resolution of the parallel negotiating tracks is an issue that has to be very carefully considered. Developed countries have stated that their preference is a single agreement out of Copenhagen, while developing countries are very reluctant to lose what has already been negotiated and agreed to with the Kyoto Protocol and with it the only legal international agreement that binds developed countries to emissions reductions.

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

In terms of mitigation, the issue of Annex I targets has been one of strong importance for African Group Parties. Currently, the gap between developed country proposals and what developing countries are calling for (Africa Group included) remains large. Regarding adaptation, ensuring submissions get proper recognition (including financing) and that African needs are addressed is of great importance especially considering that the focus of much of the developed world is on mitigation and not necessarily adaptation. Financing is another key issue, as the relationship between public and private sources, as well as access and differentiation of funding will be of utmost importance to those like the African Group. Finally, technology transfer and capacity building remain critical aspects of the negotiations for developing countries in particular. Institutional arrangements, intellectual property rights and the role of the public and private sector must all be addressed in this regard. The focus in Copenhagen for negotiators should be in reaching consensus on the substantive issues, rather than on the legal form of the agreement. For the African Group, Copenhagen will mark the first time that leaders will speak on the issues with one voice under a common position. The critical points that have been raised within this report highlight the need for and value of consolidated efforts towards an agreement in Copenhagen; one that addresses the needs of the most vulnerable in our world.

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Resolution of the Parallel Negotiating Tracks The two track negotiating process of the United Nations Framework Convention on Climate Change (UNFCCC) on the future of the climate change regime post‐2012 is designed to complete its work in December 2009 at the fifteenth Conference of the Parties (COP 15) in Copenhagen. This process was devised in Montreal in December 2005, when COP 11 established the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG‐ KP), and a dialogue on long‐term cooperative action to address climate change by enhancing implementation of the Convention. This dialogue evolved into the Ad Hoc Working Group on Long‐term Cooperative Action under the Convention (AWG‐LCA) at COP 13 in Bali in December 2007. The AWG‐KP would negotiate the structure of the Kyoto Protocol after the end of the first commitment period in 2012; and the AWG‐LCA would seek to reach an agreed outcome 1 amongst all Parties to the Convention on several “pillars” including:     

A shared vision for long‐term cooperative action, including a long term goal for emissions reductions; Enhanced action on mitigation of climate change; Enhanced action on adaptation; Enhanced action on technology development and transfer; and Enhanced action on the provision of financial resources and investment to support action on mitigation and adaptation and technology cooperation.

The two AWGs form the “Bali Road Map” on the future climate change regime post 2012. From Bali forward, these groups negotiated independently. Given that they negotiate closely related topics, coherence (or lack thereof) between these two parallel tracks was bound to become a contentious issue. This tension reached its zenith at the Bangkok Climate Change Talks in September‐October 2009. The European Union (EU) stated their preference for a single legal outcome from the parallel processes at Copenhagen, thus inferring an agreement would come out of the AWG‐LCA because of the need to include the United States. As the last of the developed countries to state their preference for a one track agreement, the EU’s comment became a flashpoint for fierce debate amongst developing parties who saw the statement as indicative of the “attempted murder” of the Kyoto Protocol by developed countries. Throughout the Bangkok session, any mention of merger, cooperation, or even discussion between the two AWGs immediately sparked fierce debate with developing countries opposing anything they believe would compromise the future of the Kyoto Protocol. This led to further slowdowns in 1

As opposed to the AWG‐KP which would only involve those parties that had ratified the Kyoto Protocol

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

the already extremely slow pace of consolidating the 200 page AWG‐LCA negotiating text. Resolving this issue will be key to the future of the climate change regime, and is rapidly becoming one of the most difficult issues in the negotiations as we move towards Copenhagen.

The Positions The fundamental questions to this issue are: “How do parties resolve the parallel negotiating track process?” and “What will be the implications for parties under the potential outcomes?” Fundamentally there is a developing/developed country divide, with further subgroups under each division. An analysis and comparison of these two sides, and their negotiating positions, follows below.

Developing Country Positions The African Group sides with the other developing country parties on this issue. The Group are supporters of the Kyoto Protocol and several of their members spoke both in sub‐group discussions and in the closing plenaries of both AWGs stating that they will not allow for any agreement or developments to occur that will lead to the weakening or end of the Kyoto Protocol. However, there are different motives for different developing countries, which are discussed below.

Major Developing Economies The Major Developing Economies such as China, India, Brazil, and others have an interest in the current division of parties in the Kyoto Protocol: Annex I and non‐Annex I. The requirement of binding emission reduction targets from only Annex I parties is a major advantage for Major Developing Economies. If this distinction were lost, (possibly through an agreement out of the AWG‐LCA) it could mean that countries such as India and China would have to take on binding emission reduction targets. This would mean that a firewall against taking on commitments would no longer exist for major developing countries, as it does currently under the Kyoto Protocol. Thus it is an inherent benefit for major developing countries to keep the current system in place.

The only internationally binding agreement The Kyoto Protocol is an internationally legally binding agreement with consequences for non‐ compliance that requires emissions reductions from developed countries. This holds weight with all developing country groups from Least Developed Countries (LDCs), to the Alliance of

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Small Island States (AOSIS), to the Group of 77 (G77) & China, and is not to be taken lightly. There is legitimate concern for developing countries as they consider whether to allow access to Kyoto flexibility mechanisms in a new agreement that could come out of the AWG‐LCA, or contemplate any move that might be seen to “weaken” the Kyoto Protocol. Developing countries are also concerned about the issue of “cherry picking”, whereby developed countries select the best items (such as the Clean Development Mechanism) out of the Kyoto Protocol to bring into the AWG‐LCA discussion, and leave behind those they oppose or find unpalatable. The concern is that the less palatable items will be all that remain and developed countries will simply allow the Protocol to dissolve. Further, countries such as the United States may gain access to Kyoto mechanisms despite never having ratified the Protocol, a major point of contention.

Developed Countries Position Developed countries favor the creation of a single regime under an agreement reached by the AWG‐LCA. An agreement that encourages the necessary global emission reductions needs to include the United States, one of the top two GHG emitters in the world. Most developed countries do not believe that the United States will ratify the Kyoto Protocol. An agreement under Kyoto without U.S. participation will not make the necessary emissions reductions, or allow countries to compete on a level playing field with the United States economically. Additionally, the United States, through its commitment to a system completely different from Kyoto architecture (including the abandonment of the assigned amount unit (AAU) as the basic emission unit) is basically seeking to create a system that is simply incompatible with the Kyoto Protocol. There are some divisions amongst developed countries over their commitment to the Kyoto Protocol.

The European Union The EU states that while its preference is for an agreement out of the AWG‐LCA, it respects its Kyoto Protocol commitments and remains committed to further reductions post‐2012. The EU maintains that its involvement in the AWG‐KP is sincere and that it stands by its commitments. It is perhaps for this reason—that the EU has been historically supportive of the Kyoto Protocol—that their statement in support of a one track solution (as opposed to a country that is out of compliance, such as Canada) set off such a firestorm of debate, and bring this issue to a head.

The United States

There should be no confusion on this issue: the United States will never ratify the Kyoto Protocol. While it may be possible for the U.S. to reach agreement on an international climate change regime, it will not be through the Kyoto Protocol, as there is absolutely no chance the

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

U.S. will ratify that agreement, given the division of political power amongst the executive (Presidential) branch and the Congressional (House of Representatives, Senate) branch. There will be a cost to bringing in the United States the International regime and that may include a necessary willingness to accept much of the terms that will be required to approve an international agreement within the US Congress. The U.S Senate will only accept a regime wherein major developing economies (and China in particular) would face the same conditions and consequences for non‐compliance as would be faced by the U.S. As one of the world top two emitters, bringing them on board is a necessity, but not one that will come without serious consideration and concession.

Mitigation There are three central issues with regard to mitigation, namely: emissions reductions, low carbon pathways or development strategies, and the issue of common but differentiated responsibility. Mitigation through the land use sector must also be considered here. The key issue remains the gap between where the countries like the United States are considering their targets and what developing countries are calling for in the ‐25% to ‐40% from 1990 range by 2020 (which other developed countries are already currently committing to).

Emissions Reductions There is a general divide between developing and developed country parties in the negotiations, but this division is not clear and often the debate breaks down on lines that are more complicated than this simple dichotomy. There are areas where the two blocks either overlap or the two groups are disjointed, as noted below. Mitigation targets by developed countries are perhaps one of the most easily defined metrics of the climate change debate, but also one of the most contentious. The central issue is that the IPCC review of literature shows a range of 25‐40% reductions by 2020 to ensure stabilization at 2 450 ppm CO2. There is a definite gap between this target and what is being proposed by Annex I parties. Several parties are hedging their targets on the presence of a “strong” international regime, making smaller commitments with the provision that they are willing to scale up should there be a strong international regime out of Copenhagen. While this may be seen as a positive in that there are stronger targets on the table, what is needed in an international agreement for 2

The IPCC Working Group III findings, which are referenced in the Bali Action Plan, note that global emissions of GHGs need to peak st in the next 10 to 25 years and be reduced to very low levels, well below half of levels in 2000 by the middle of the 21 century in order to stabilize concentrations in the atmosphere. Achieving the lowest stabilization level assessed by the IPCC would require developed countries as a group to reduce emissions in a range of 25 to 40 percent below 1990 levels by 2020.

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these parties to adopt these stronger targets has not been defined, although one element likely is the inclusion of the United States. Some parties have submitted much lower than what is needed, with no signs of accepting a target in the IPCC range. Even if all other parties were to adopt IPCC targets, the commitments 3 of countries like Canada (‐3%) and the United States (likely to be in the stabilization to ‐4% from 1990 range), will drag the developed country parties down as a group, meaning that even the low end of what the IPCC calls for will not be achieved. Most developed country parties propose targets within the IPCC guidelines, although most are 4 on the lower bound of the scale. Australia (‐25%) and the EU‐27 (‐30%) have both committed to the IPCC range, but their targets are conditional on the presence of an international regime. Other Parties have strengthened their targets in an effort to better conform to IPCC science. At Bangkok, both Japan (‐25%) and Norway (‐40%) committed to targets within the IPCC range, strengthening previous commitments that were lower than IPCC calls. In both cases these revisions were the result of a change in government. The African Group is ardent in its support of the ‐25 to ‐40 percent from 1990 by 2020 target, as is most of the developing country block. They speak towards the higher end of IPCC targets, with comments on the record calling for “at least” 40% below 1990 by 2020. All developing parties are calling for stronger commitments from all developed country parties. With respect to developing parties, there is increasing pressure on major developing economies (MDEs) to adopt binding mitigation targets. The accepted science shows that even if the developed parties were to reduce their emissions to zero it would not be enough to meet the necessary reductions by 2050. There has been much push back from the MDEs on this, stating that their role is as it was defined in the Kyoto Protocol and only developed countries are bound to reductions. No one is calling for binding emission reduction targets for the likes of LDCs, but if we are to meet our global targets some sort of agreement will have to be met where MDEs take on strong reductions. In their defence, they have expressed some openness to mitigation actions, but currently they are not at the level required. As side issue to this is there is currently no defined way for a country to “graduate” into Annex I status and take on binding reductions, another issue that requires solution. A side issue here is offsetting. African Group member South Africa has called offsets a “zero sum game” stating that developed countries should not be allowed to use international offsetting as a major component of their mitigation commitments, putting more focus on domestic efforts to reduce emissions. This view on a “cap” on offsetting is shared by other developing parties, most notably China. This is a view that the African Group may want to 3

Canada uses a 2006 baseline for its pledge of a ‐20% target for 2020, which roughly translates to about ‐3% from 1990. All percentages in this section are targets from 1990 levels by 2020 except Australia, which is a target from 2000 levels.

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

reconsider due to the global need to meet the African Group’s proposed 2020 targets, coupled with the fact that international offsetting can be more cost effective for reductions and can also assist developing parties in reaching their development goals. Essentially, placing a cap on offsets puts a cap on international investments. However, there may be a negotiated solution between developed and developing countries that can be reached on this issue. There has been much discussion over reforming the CDM either for the next commitment period, or for inclusion of an agreement out of the AWG‐LCA. There has been much discussion of inclusion of new items to the CDM such as nuclear power and Carbon Capture and Storage (CCS). There is little agreement on these specific issues, and no agreement at all on inclusion of the CDM in the AWG‐LCA discussions due to the view by developing countries that this will weaken or kill the Kyoto regime. These issues aside, it is important for negotiators to be willing to negotiate expansion or creation of mechanisms as they provide benefit for both developed countries in helping them meet targets, but also provide much needed investment and financial flows to developing countries, something that should not be ignored. Programmatic CDM also has the ability to fill some gaps and increase the representation of smaller projects, and may be more beneficial to smaller countries. With the issue of mitigation in general, it will be important to take on a “substance over form” perspective. It is becoming increasingly clear that an agreement on legal form may not be achievable by Copenhagen. If parties can focus on coming to agreement on the substance of mitigation issues, the legal form can then be agreed to after the fact. Having agreement on substantive issues will also provide negotiators with momentum needed to carry the negotiations forward after Copenhagen. Examples of impacts associated with global average temperature change Impacts will vary by extent of adaptation, rate of temperature change and socio‐economic pathway. The following graph, from the 4th Report of the Intergovernmental Panel on Climate Change (IPCC)

describes the potential impacts associated with global average temperature change. As has been discussed in this report, the potential negative impacts of continued climate change on water, ecosystems, biodiversity, agriculture, severe weather events and human health are serious. It has also become clear that human activity has impacted warming trends in the atmosphere and significantly contributed to current average temperature increases. The IPCC warns that warming above the 2 degree Celsius (annual) threshold could have catastrophic impacts on our environment and the world’s population, particularly in already vulnerable areas such as Africa. For this reason, mitigation is a fundamental step towards fighting climate change and ensuring that societies around the world become adaptive, resilient and capable of dealing with the numerous real and potential impacts of climate change well into the future.

Africa Progress Panel Information Note

Source: IPCC ‐ Climate Change 2007 Synthesis Report

Examples of some projected regional impacts in Africa By 2020, between 75 and 250 million of people are projected to be exposed to increased water stress due to climate change. By 2020, in some countries, yields from rain‐fed agriculture could be reduced by up to 50%. Agricultural production, including access to food, in many African countries is projected to be severely compromised. This would further adversely affect food security and exacerbate malnutrition. Towards the end of the 21st century, projected sea level rise will affect low‐lying coastal areas with large populations. The cost of adaptation could amount to at least 5 to 10% of Gross Domestic Product (GDP). By 2080, an increase of 5 to 8% of arid and semi‐arid land in Africa is projected under a range of climate scenarios (TS).

Source: IPCC ‐ Climate Change 2007 Synthesis Report

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

Low Carbon Pathways (Development Strategies) and Common but Differentiated Responsibility The discussion on low carbon pathways and common but differentiated responsibilities are closely related. The fundamental issue is that all developed parties feel that it important for developing countries, and particularly major developing countries, to take on lower carbon (sub‐business as usual at the very least) pathways to development in the short term, and emissions reductions in the longer term to 2050. This argument is primarily focused on the major developing economies, as their growth in emissions projected to 2050 will mean that even if developed countries reduce to zero that will not be enough to reach global 2050 targets. This is a view generally shared by all developed parties, and what they consider part of common but differentiated responsibilities. Developed countries draw a distinction and recognize that LDC and AOSIS states are not expected to take on emission reduction targets in the manner expected from major developing economies. Most of the major developing economies are reluctant to abandon the Kyoto divisions between Annex I and non‐Annex I parties with calls for binding emissions reductions only from Annex I parties. There is general acceptance that all parties must contribute to mitigation actions under shared responsibilities, but what exactly those responsibilities are is the central question and one that has a different definition by developed and developing countries. However, if major developing economies are not a part of the equation the impacts on least developed countries will be significant.

Mitigation in the Land Use sector Closely related to broader mitigation negotiations, mitigation in the land use sector refers to actions that reduce emissions by sources or increased removals by sinks in forestry, agriculture and other land‐use sectors. Discussions related to mitigation in the land use sector take place under both working groups: 1) AWG‐LCA: Reducing Emissions from Deforestation in Developing Countries (REDD), and discussions on agriculture; and 2) AWG‐KP: CDM activities in Land Use, Land‐Use Change and Forestry (LULUCF). There is general agreement among AWG‐LCA members that carbon sequestration through LULUCF activities has the potential to form important mitigation efforts in developing countries, as well as allow host countries to realize co‐benefits. There is further agreement that land sequestration activities require strong measurement, reporting and verification frameworks. Differences in negotiating positions lie in the details of how best to include such mechanisms.

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The African position strongly supports including REDD and broader land‐use activities, including agriculture, in a future agreement.

REDD and REDD+ The Bali Action Plan notes that REDD is a key component of mitigation, and should be considered in a comprehensive post‐2012 approach to climate change. Key issues to sort out in the REDD negotiations are discussed below. Scope – Differences in negotiating positions remain on scope, including whether REDD should strictly be limited to the forestry sector, or include broader land use; and what exactly should be included in REDD+. The African Group has proposed a broad scope for land sequestration activities in the negotiations, while other countries, such as Brazil, wish to remain focused on forestry only at this stage. Many countries (e.g., Papua New Guinea, Philippines, Thailand, Guyana, Pakistan and Norway) support a phased approach that includes i) capacity building, ii) demonstration, and iii) full implementation. Technical issues – Action on REDD will require that countries reach agreement on reference emission levels, and other general measure, reporting and verification (MRV) issues, but the details can be sorted out after Copenhagen. Technical issues to consider are baselines, additionality, leakage, and permanence. One potential submission to consider is Brazil’s proposal for a Phase 1 and 2 approach to REDD, allowing additionality and leakage to be dealt with in the longer rather than immediate term. Link between NAMAs and REDD – Some countries, such as Brazil, Tuvalu and the United States, indicate that REDD should be part of Nationally Appropriate Mitigation Actions (NAMAs) and low carbon growth plans. Others, including India, Panama, Columbia and LDCs, argue that REDD and NAMA activities should remain independent of each other, due in part to the potential for competition between these projects and others for funding. Limitations on the use of offsets in the LULUCF sector in developing countries – The extent to which developed countries may be able to rely on offsets from REDD activities to meet their emissions reductions targets is another important issue, as it relates to the previously discussed offsetting issue and South Africa’s submission. As was previously discussed, greater limitations on oversight, verification and the general use of offsets will be reflected in lowered potential for investment opportunities. Stakeholder involvement – The involvement of a broad range of stakeholders in any REDD framework is an important issue. The involvement of representative stakeholders in the establishment of principles and baselines as well as reporting processes will be critical in moving forward in Copenhagen. The Philippines, Columbia, Guyana and others note the need to include

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

indigenous people. The Nairobi Declaration states that afforestation and sustainable agriculture must be included to ensure the participation of smallholder land users. Financing –Many developing countries, including Brazil and Venezuela, strongly support a fund‐ based approach; while most developed countries believe that reliance on the carbon market is the best way forward. Many countries, developed and developing, including the United States and Indonesia, support the integration of approaches. A phased approach—starting with capacity building and moving gradually to full participation in the carbon market—is viewed by most countries as the desired path forward.

Agriculture Agriculture is increasingly recognized as an important element of emission reduction action in developing countries. All countries agree that agriculture is important and should be included in a Copenhagen Agreement, the question is how? Text on mitigation in the agriculture sector has been included under “cooperative sectoral approaches and sector‐specific actions”. One option focusing on a general statement to include agriculture is supported by the Unites States. A second option, focusing on R&D and technology transfer, and calling for a program of work beginning in 2010, is supported by Uruguay, New Zealand, Argentina, Canada, Mexico, Bangladesh, Malawi and the EU. A number of developed countries also support including agriculture in the “shared vision” section of the negotiating text. A number of developing countries (including China, India, Brazil) do not want to identify specific sectors in this section. Most countries want agriculture included in a Copenhagen Agreement to enable research and the development of programs/activities to fully include agriculture in a future commitment period (i.e., the commitment period after the one that starts in 2013)—similar in a manner to the development of REDD. Africa has called for international incentives for sustainable land use, agriculture and forest management. However, the delay of an agreement at Copenhagen may unwittingly create greater negotiating space for agriculture within future rounds of negotiations.

Expanding the CDM to include more LULUCF activities Discussions in the AWG‐KP include expanding the CDM to include more LULUCF activities, including, inter alia, wetlands, soil carbon management in agriculture, and grazing land management. One of the reasons for expanding the CDM is to improve the equitable geographical distribution of projects, an issue for African nations. The Africa Group supports a broadened CDM with soil carbon sequestration activities. For example, Ethiopia expressed support for all land‐based options; and Senegal noted support for afforestation/reforestation and wetlands, depending on the definition; and noted interest in soil carbon sequestration and biochar. Others have noted the need for caution in supporting biochar, stressing that more research is needed on this technology. Japan is in favor of additional land‐use activities if they

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allow for more equitable distribution, and the EU will consider any proposal, but must consider if they are best addressed through a CDM or NAMA approach. Some developing countries, such as China and Brazil, support maintaining the status quo, by only including afforestation and reforestation activities.

Adaptation Position of the African Group In the Nairobi Declaration of African Ministers on Climate Change (June 2009)5 and following the Technical Session of the African Ministerial Conference on the Environment (AMCEN) Pre‐COP 15 (Second Meeting of the African High Level Expert Panel on Climate Change) held 19‐23 October 2009, the African Group has taken the following positions with respect to enhanced action on adaptation:  

 



recognition that adaptation as the first priority for Africa at the national and regional level; that the provision of financial, technological and capacity building support by developed country Parties for adaptation in developing countries is a commitment under the Convention that must be urgently filled, recognizing that climate change is an additional burden to sustainable development; that Africa’s adaptation measures should be based on the precautionary principle; that adaptation actions should emphasize improved risk management and climate disaster risk‐reduction and give consideration to indigenous knowledge; and that institutional arrangements must be equitable and transparent

The negotiations on enhanced action on adaptation to climate change and its means of implementation can be broadly divided into two inter‐related categories: the financing of adaptation, including the amount of funding required, who and how it will be provided, and the means by which it will be generated (these issues are addressed in section on financing); and guidance regarding the types of adaptation actions to be supported under a new international agreement. In regards to the latter, the main issues being discussed include: Implementation of adaptation– The LDCs, AOSIS and the Africa Group, as well as the G77/China, have called for action on adaptation to emphasize implementation, such as the immediate implementation of National Adaptation Programmes of Action. Submissions and statements by developed countries have placed greater emphasis on the creation of enabling 5

For access to the Nairobi Declaration, see: http://www.unep.org/roa/Amcen/Amcen_Events/3rd_ss/Docs/nairobi‐Decration‐ 2009.pdf

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

environments, assessment of impacts, vulnerability and adaptation, the development of national adaptation plans, and for the UNFCCC to play a catalytic and facilitative role. Underlying this emphasis is likely a desire by developed countries to ensure that the financial resources they provide to developing countries are used most efficiently and effectively. Actions by all Parties and those taken by developing countries– The UNFCCC commits all Parties to facilitating adaptation nationally and through international cooperation (Article 4.1) and for developed country Parties to help developing countries meet their obligations under the Convention (e.g., Art. 4.3 and 4.4.). The Africa Group has called for reference to action on adaptation by all countries to be contained in the pre‐amble of the adaptation section of the agreement, while the main text concentrates on the needs of developing countries. In contrast, the U.S., E.U. and Australia have called for the inclusion of commitments to action by all countries in the main text. Many developing countries are already being adversely affected by the impacts of climate change and may be seeking an international mechanism that will enable them to develop effective adaptation strategies based upon the sharing of knowledge, tools and policy approaches. Institutional arrangements under the Convention– Tabled options for the institutional arrangements governing adaptation include the establishment of a Subsidiary Body for Adaptation; an adaptation committee; an expert group/body on adaptation under either the proposed Subsidiary Body or adaptation committee; an adaptation advisory panel evolving out of the LDC Expert Group; a Financial and Technology Mechanism on Adaptation; or an Executive Board to supervise the proposed International Mechanism to Address Loss and Damage Risks. Broadly speaking, developed countries have favoured the retention and, where needed, revision of existing institutional arrangements. Developing countries, in contrast, have called for the development of new arrangements that give greater prominence to adaptation within the negotiations and enable developing countries to have greater influence on their decision‐ making processes. ‘Particularly vulnerable developing countries’– Within the negotiating text it has been suggested that Parties with economies in transition and/or other Annex I Parties with special circumstances be provided with financial resources to support their adaptation efforts, along with particularly vulnerable countries. The inclusion of reference to countries with economies in transition is supported by Parties such as Russia. The economic, social and capacity challenges of some of these countries are similar to those of some African, Asian and Latin American countries. The African Group has called for the definition of vulnerable countries to remain consistent throughout the text of the agreement. Integration– The integration of adaptation actions into sectoral and national planning has been put forward as guiding principles for efforts to enhance actions on adaptation. The need for an

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integrated approach has been supported by many developed countries, including the U.S., Norway and Canada. An integrated approach is viewed as being more cost effective and reflective of the strong relationship between development and vulnerability to climate change. The LCDs have cautioned against an over‐emphasis on integration at the expense of standalone adaptation measures. Brazil has stressed that “integration of adaptation into development is controversial.”6 This discussion could have implications for the means by which adaptation financing will be provided. Impact of response measures– Reflecting a longstanding debate within the UNFCCC negotiations, there continues to be disagreement over the inclusion of reference to the impact of response measures in the adaptation section of the negotiating text (as opposed to the mitigation section). The inclusion of this text is generally opposed by developed countries, but continues to be supported by Saudi Arabia. Its inclusion provides Saudi Arabia and similar countries with an opportunity to receive compensation for lost income due to international efforts to reduce consumption of fossil fuels. Establishment of national adaptation plans– Differences exist over whether the establishment of national and, where appropriate, regional adaptation plans should be mandatory or optional. Some developing countries have expressed concern regarding the potential of these plans, if mandatory, to become barriers to needed adaptation financing.

Overall the African Group has played a very active role in the Adaptation discussions, engaging in much debate and putting many policy ideas up for discussion, highlighting their view of adaptation as the utmost priority for the region. In nearly every aspect of the adaptation discussion the African Group, and its member countries, has been in the forefront of the discussion, something that has to continue to ensure that the international agreement meets their needs in this priority area. Indeed, the African group has both the moral authority and leverage to negotiate constructively on issues relating to adaptation.

Financing Related to adaptation and mitigation of course is the issue of financing. The basic issue is the need for financial assistance for climate change mitigation and adaptation actions for those countries most vulnerable and with the least domestic resources for climate change. The financing debate includes: amount (with estimates in the hundreds of billions per year), source of funds (public, private or both), governance (new issue or an existing institution), and 6

IISD. 2009. Summary of the Bangkok Climate Change Talks: 28 September – 9 October 2008. Earth Negotiations Bulletin. 12: 439. p.9.

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

management (tools to deliver financial assistance). Each of these issues is critical—without a solid financial component an agreement on climate change will not be reached.

Amount There has been some convergence on the issue of “how much” with regard to financing. Most estimates fall between US $100‐200 billion per year for developing country activities and US 7 $200‐400 billion globally by 2020‐2030 . While there may be some convergence on amounts, it is generally the sourcing that remains the issue. Nearly all parties agree that financing commitments from developed countries must be scaled up, but the exact value is less discussed at this point by developed countries. Japan, for example, has stated that it is generally agreed that developed country commitments must be scaled up, but parties are providing few concrete details as to what this means, and few if any countries are willing to commit a dollar specific amount. For many developed countries the issue of increasing the amount of public dollars for developing country climate change efforts is a hard one to push on the domestic front, particularly at a time when the downturn in the economic situation has led to increases in unemployment and domestic hardship. There is a feeling in some countries amongst the public that domestic issues must be addressed and that sending additional money outside the country is not acceptable at a time of domestic need. For example, US provision of financing ahead of domestic (i.e. U.S. Senate) ratification of climate change legislation could be seen as counterproductive domestically. Not only are they facing the pressure of very high domestic unemployment measures due to the economic downturn (a negative factor in any attempt to provide international financing for climate change which is painted by critics as sending money “over there” instead of fixing problems at home), but any attempt to sign on to an international agreement without prior approval of the U.S. Senate could doom any future Senate vote as many Senators could extract their revenge by killing a treaty vote. This is a situation where it is much easier to ask permission first, rather than beg forgiveness after the fact. This is a factor that cannot be discounted in the debate over financing. The African position on financing is to encourage the international community to increase its financing commitment to Africa based on the African identified priorities of adaptation, capacity building, and technology transfer among others. The group calls for a financing commitment of 0.5% GDP from Annex II parties to reach climate change financing goals.8

See: Pendelton, A. and S. Retallack, 2009. Fairness in Global Climate Change Finance. London: Institute for Public Policy Research.

Please see Page 13, Section 3.3, Bullet 2 accessed from: http://unfccc.int/resource/docs/2009/awglca6/eng/misc04p01.pdf

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Source of Funds There are 3 main options on the table with regards to sources of funding, namely: i) fund(s) supported by public finance, ii) private sector finance through market mechanisms, and iii) a combination of the two.

Fund‐based Sources African Group countries have routinely called for climate change financing as a whole to come from stable, public sources. This view is shared by nearly all developing country parties and is a common principle in their negotiating block comments on financing. While some countries (most notably China) are able to take advantage of private financing for climate change activities, African Group members have made the point in the past that this is not an easily accessible revenue stream for their poorer LDC members. In particular, Uganda has stated in the negotiations the reluctance of private companies to invest in LDCs due to the risk involved. While many LDCs would like to access private funding streams, it cannot be relied on as a financing source of the same stature as public financing. Developed countries respond to this by stating that resources are limited and must be carefully targeted. In this way, some developed parties (such as Canada) have suggested targeting financing to the most vulnerable states. In the past, the African Group and other developing countries have called for no differentiation on access to funding amongst developing parties. However, there is some developing party support for differentiation; for example, Bangladesh (and the LDCs as a group) have called for 70% of funding for adaptation to be directed to LDCs, SIDS and African Countries. There is some inconsistency in the Africa Group calling for equal access and the LDCs calling for 70% of adaptation funds to be ear marked for LDCs, SIDS and African countries. Of the 40 LDCs, 33 are African. Any financing models that call for funding commitments from developing countries (such as the Mexican Green Fund) have been largely questioned by developing countries. In Bangkok, the G77 & China both highlighted the historical responsibility of developed countries to provide financing. In an alternate proposal that seems to have been well received, Norway has proposed that a portion of Annex I parties allowances (AAUs) be withheld and auctioned by an international body. The Norway proposal suggests that this system could generate up to $25 Billion USD annually and is worth close scrutiny.

International Market Mechanisms Developed countries prefer a defined role for private financing sources, particularly in the area of mitigation. They want public financing targeted more at adaptation, where there is less of a role for the private sector. Similarly, the African position advocates for the increase of market mechanisms where they support the priorities of adaptation, capacity‐building, research,

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

financing and technology development. In this way, the African Group may also consider new mechanisms such as efficiency standards or the Republic of Korea’s NAMA crediting. New Zealand also has a proposal for a NAMA crediting and trading scheme. Indonesia has called for the establishment of a new mechanism under the UNFCCC COP that would ensure the participation and access of all developing countries to resources gained from the auctioning of assigned emission allowances and/or a share of proceeds from market mechanisms. Developed countries are generally supportive of exploring new market mechanisms. The European Union proposed that developing countries with sectoral emissions targets participate in emissions trading; and noted that they want to re‐focus the CDM to make it more effective for LDCs. The African position also calls for improvements to the CDM to ensure equitable distribution of projects. Another area of interest would be discussions of the CDM evolving to be more of a development‐oriented mechanism; such as the development of a sectoral mechanism for more advanced developing nations, orienting the CDM more toward sustainable development.

Integration of Approaches Many countries both developed and developing (including the United States and Indonesia) support the integration of approaches. A phased approach—starting with capacity building, moving to demonstration projects, and finally full participation in the carbon market—is viewed by most countries as the desired path forward. The integration of approaches, including both public and private options for funding sources, may be the most comprehensive and constructive approach to any future climate change funding framework.

Governance/Management of Financing On the issue of governance there is no consensus or strong negotiating block divides other than if an existing mechanism is to be used major reforms will be needed to ensure proper governance and management. The key issue here is whether management of financing would be under the auspices of the World Bank (or similar institution), or the COP itself. Many developed countries prefer that governance be under the World Bank or a similar body. On the other hand, many developing countries, due to past experiences with implementation delays under the Global Environment Facility (GEF) and other concerns, would prefer financing be governed by the COP. Another key aspect of management for developing countries is the need for funds to be additional, not diverted from other budgets such as official development assistance (ODA). The EU and UK support this position, but there is a concern among developing countries that adaptation and mitigation funding will be converted from ODA budgets. The key for many 9

Nairobi Declaration on the African Process for Combating Climate Change: http://www.unep.org/roa/Amcen/Amcen_Events/3rd_ss/Docs/nairobi‐Decration‐2009.pdf

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developing parties will be making sure that any new or existing mechanism is properly representative of parties, is transparent and effective in additional delivering funding.

Technology Transfer and Capacity Building Many developing countries have identified technology transfer and capacity building as fundamental to the progress and potential success of any future climate change regime internationally. Technology transfer is a pillar of the Bali Action Plan. Capacity building evolved as a separate entity out of the technology transfer discussions in the Bonn Climate Change Talks in 2009. Developing countries insisted that capacity building required a separate section in the negotiating text; while developed countries argued that capacity building is cross‐cutting across all four pillars of the Bali Action Plan. The United States presented a ‘hub and spoke’ proposal on technology transfer at the Climate Change Talks in Bangkok, whereby a central research centre (the hub), works with multilateral development banks, universities, national laboratories, agricultural research stations in developed and developing countries (the spokes). This line of thinking could be seen as a productive frame for discussions on technology transfer and capacity building, as positive movement on these issues will involve a variety of actors at numerous levels working together. In regard to technology transfer, developing countries stress there are deep and fundamental concerns that have been under discussion for years and where they have seen very little progress. The G77 and China stress the need for real immediate action (such as transferring existing technology), on financing, institutional arrangements and intellectual property rights. The European Union has urged that the link between technology transfer and low carbon development strategies be strengthened. The African Group notes that developed countries have a commitment to provide technological and capacity building support to enable developing country action. In this way, the Nairobi declaration stresses the importance of increased support around the priorities of capacity‐building, technology development and transfer, including support for South‐South transfer of knowledge and particularly indigenous knowledge. The barriers to technology transfer should be addressed, and developed countries should provide technology based on principles of accessibility, affordability, appropriateness and adaptability. There are of course a number of issues to be considered in this regard, as discussed below.

Institutional arrangements The G77 and China have put forward a proposal that sets out institutional arrangements, functions of institutions, and elements of effective transfer of technology. The G77 and China’s submission includes the establishment of a new subsidiary body that would include panels on

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

technology needs assessment, coordination on enabling policies and measures, management of financial resources targeting development, transfer, and the diffusion of technology, as well as monitoring and assessment of performance. The submission includes a Multilateral Technology Acquisition Fund, a financial mechanism intended to develop public private partnerships by linking public finance with the carbon market, capital market and technology market to leverage larger amounts of private finance. This submission is important with regards to an institutional framework for technology transfer. In general, developed countries support building on existing institutions, while developing countries want new institutions.

Intellectual property rights (IPRs) Negotiations on technology transfer have also included critical discussions regarding IPRs. Developing countries have called on developed countries to remove IPRs and create a new fund to buy patents. Developed countries argue that intellectual property does not belong to governments, but to the private sector, and have pointed to the need for incentives for private companies that own the technology. Developing countries have called for reform of the international IPR regime, but the United Stated and several other developed countries oppose this, arguing that it may result in an undermined or weakened regime. There has been little to no progress on this issue in the lead‐up to Copenhagen.

Public and private sector involvement There is potential for both public and private sector involvement in technology transfer and capacity building. Recognizing the role of private sector, the EU supported national actions for development, demonstration, and deployment and the diffusion of Environmentally Sound Technology (EST) through assessment of technological needs and legal/policy frameworks. The United States promotes the need for greater public and private investments in technology research, development and deployment; and argued for the use of voluntary technology‐ oriented agreements in this regard, as in the previously mentioned spoke and wheel proposal.

Africa Progress Panel Information Note

Conclusions Key ‘Sticking Points’ for African Leaders There are a few issues to which African decision makers should give priority attention. Most of these issues are not new, but are areas where potential for conflict is high and prospects for resolution remain low through the Barcelona negotiations.

Resolution of the Parallel Negotiating Tracks The resolution of the parallel negotiating tracks is an issue that has to be very carefully considered. Developed countries have stated that their preference is a single agreement out of Copenhagen, and it is generally accepted that the United States will never ratify Kyoto, so this leaves the AWG‐LCA as the only option for them. In response, developing countries are very reluctant to lose what has already been negotiated and agreed to with the Kyoto Protocol and with it the only legal international agreement that binds developed countries to emissions reductions. This issue must be carefully considered to determine what is gained and what might potentially be lost in the climate change regime post‐2012. Fundamentally, the resolution of the parallel negotiating tracks will only be achieved if parties agree to address the substance of an agreement in Copenhagen, ahead of the legal form which such an agreement would take in the future.

Mitigation The issue of Annex I targets has been one of strong importance for African Group Parties. Currently the gap between what developed countries have proposed and what developing countries are calling for (Africa Group included) remains large. While some developed parties are strengthening their 2020 targets of late, this is mainly on the back of increased international offsetting strategies. It will be important for the African Group to consider its call for Annex I parties to meet 40% reductions by 2020 in light of calls for a cap on international offsets. It is of utmost importance that IPCC science is respected in Annex I commitments, and for this reason the African group might find in its interest to reconsider its opposition to access to international offsets. International mechanisms can provide more affordable reductions and can often suit the development priorities of developing countries, which should not be discounted by African Group countries. There might be a reasonable road for compromise on this issue that should not be ignored. The issue of common but differentiated responsibilities will also be carefully debated. How developed and developing countries are to contribute to global climate change actions, whether the Annex I, non‐Annex I breakdown of responsibilities may be changed for the coming post‐

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

2012 regime, and what exactly the responsibilities of all parties will be going forward will have an impact on all countries. These issues will also have a direct impact on what role individual African Group members will play in the post‐2012 regime.

Adaptation Adaptation is the central priority for the African Group. Ensuring adaptation measures receive proper recognition and financing and that African needs are addressed is of great importance especially considering that the focus of much of the developed world is on mitigation as the central priority. It will be important to those for whom adaptation is a central priority to ensure its place in the next climate change regime meets the needs of parties. As previously discussed, adaptation is one issue area in which the African group has both the leverage and moral authority to voice their concerns.

Financing It is generally accepted that private financing will be more directed at mitigation efforts than adaptation, so ensuring proper global commitments for adaptation financing from public and other (i.e. market) sources will be of utmost importance to those like the African Group for whom adaptation to climate change is the central priority. The African group has many members of the LDC group within its membership. It is these countries that are most in need of financial assistance. Therefore, it will be important for the African Group to consider its uniform approach against differentiation with regard to targeting financing to the most vulnerable countries. The common position against differentiation of funding does not seem to be in the greater interest of the people living in many LDCs, whose needs are both diverse and critical to addressing climate change more broadly. This may be an issue where independent parties may be better able to represent their views, as opposed to a unified group position. Finding a role for private financing under the agreement will be important given the current global economic situation coupled with unprecedented levels of funding required for climate change. It is important to recognize that there will be private financing sources available and parties must ensure that there is opportunity for all parties, even LDCs to access these sources. Given the difficulties in attracting private investment for some countries it is also important to ensure that private financing is backed up with a competent, transparent and effective regime for climate change financing assistance for all parties, based on public financing commitments by countries. Proposals on financing must be carefully considered. The Mexican Green Fund proposal has a lot of support from developed countries, but due to its commitments on developing countries to contribute, has met with a good deal of skepticism and opposition from the G77 & China. The Norwegian auctioning proposal has support, but is based on the auctioning of AAUs. Given the

Africa Progress Panel Information Note

U.S. would prefer to do away with AAUs, this would seem to be a deal breaker with them. There may be a way to both support the Norway proposal and have the U.S. on board if the U.S. were to develop its own domestic funding source for international climate change financing. The Waxman‐Markey bill had a system that may work in its section on avoiding deforestation. It is essential to truly work for a compromise and negotiate an agreeable outcome for all parties, as no one proposal currently seems to fit all party needs as an agreement without a financing component is no agreement at all. Proposed new market mechanisms are under discussion and could have the potential to divide developing country parties. For example, some developing countries have benefitted greatly under the current CDM system, and could be reluctant to see the scope of the system broadened to restore a geographical balance. Other nations have not been able to benefit from the CDM in its current state. Discussion of reform of the CDM to become more “development” oriented will need to be tracked by the African Group. The introduction of new market mechanisms may allow for diversification in this regard. Many countries will also have to prepare themselves, and where necessary build capacity to be more able to access the benefits of CDM and other mechanisms in the future.

Potential Outcomes from Copenhagen There are three general possibilities for an outcome at Copenhagen, none of which should be disregarded or ignored at this point. I.

II.

Amendments to the Kyoto Protocol with an additional commitment period This would be the preferred outcome for the developing countries with a vested interest in the current system. Since many of the mechanics of the protocol are already negotiated, an amendment to the Protocol would in theory be the easiest to negotiate. However, if the US were to propose a regime that is significantly different from the Kyoto Protocol, many parties may not sign it on the basis that the regime would be inherently different from the Kyoto Protocol. That said, the U.S. will not ratify the protocol as is and the rest of Annex I will not agree to any amendments that do not include the U.S. as an active participant in the post‐2012 agreement. One single outcome from the AWG‐LCA (or from a merged AWG‐LCA and AWG‐KP) This is the stated preferred option of the EU and other developed countries, and would potentially involve ‘cutting and pasting’ aspects of the Kyoto protocol into this new single agreement. However, like the first option, it would be very difficult to negotiate this outcome given the vested interests of developing countries in the Kyoto Protocol as it is. If there were to be a single outcome it would only be through very intense negotiating and visible evidence that a new system would be just as stringent, if not

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

III.

stronger on developed countries and explicitly meet developing countries needs. The outcome in Bangkok showed that this discussion is one upon which developing countries have clearly drawn a ‘line in the sand’. A broad political agreement/declaration from the AWG‐LCA In this case, the AWG‐LCA agreement may be a political declaration (at least in the short term) given the difficulty in negotiating a legally binding agreement out of the AWG‐LCA by Copenhagen. A broad agreement at Copenhagen on some of the substantive issues (i.e. financing, adaptation, etc), coupled with a political declaration would show commitment to addressing the future of the two negotiating tracks in the longer term, if a solution is not met at COP 15. A declaration‐type agreement could also provide much needed momentum to negotiators as they continue negotiating post Copenhagen. Given the polarization of the other two options, this may be one way to work to a potential compromise.

Final Thoughts The focus in Copenhagen for negotiators should be in reaching consensus on the substantive issues, rather than on the legal form of the agreement. This sentiment has been echoed by the African group, particularly in discussions on adaptation. If parties can come to agreements on substantive issues such as mitigation, adaptation, and financing this will greatly advance the process. The content of the agreement should be the priority over legal form. Working through substantive issues at Copenhagen will ensure that the negotiation process remains strong and can continue towards an agreement. Should this be the case, the legal treaty would not be in the works until after COP 15. This will be a tall order, even under the best scenario. For the African Group, Copenhagen will mark the first time that leaders will speak on the issues with one voice under a common position. The critical points that have been raised within this report highlight the need for and value of consolidated efforts towards an agreement in Copenhagen; one that addresses the needs of the most vulnerable in our world. The informed and active participation of all actors in Copenhagen is critical to ensuring the momentum to move forward on an international climate change regime into 2010 and well beyond.

Africa Progress Panel Information Note

Annex - Compilation of country positions

Principles (General Statements), Vision and Legal Form Resolution of Parallel Negotiating Tracks Mitigation Adaptation Financing Market mechanisms REDD/REDD+ and other mitigation in the land‐use sector Technology transfer Other Issues

Information in the Annex was derived from publically available and official documents accessed prior to 25 October 2009.

Annex I

The African Group

Indonesia G77 & China South Africa

India

China

Australia

Canada US1

Principles (General Statements), Vision and Legal Form All Parties shall support long‐term cooperative action to achieve an aggregate reduction in global GHG emissions of 50% by 2050 (no baseline). Submission notes that the shared vision should be a summary of the agreement reached. Significant action will be needed from major economies. Other processes such as G8, MEF, Pacific Islands Forum can provide useful input to the process (Australia agreed). Stated that China’s position on not allowing unilateral measures would require renegotiating Article 3.5 which does not prohibit such measures. Measures such as this should be discussed under the WTO, not the UNFCCC. ‐ The text in this section is different from the others in that it is political instead of operational, it should send an inspirational and positive message Keep increase of temperature below 2 degrees Celsius, requiring global reverse emissions trend by 2020 and reduction by at least 50% below 1990 levels by 2050. However this text should be in an operational part of shared vision. ‐ Suggested as well a developed country goal of 85‐90% reductions by 2050 AWG‐KP’s work programme is iterative and comprehensive, needs to consider LULUCF, mechanisms, etc. Support stabilization at 450 ppm or lower, global emissions peak no later than 2020. Two options: entirely new protocol or combination of amended Kyoto Protocol (KP) and new protocol from AWG‐LCA. Need consistency between the two AWGs. Submission lists principles for a shared vision and states that it is most urgent to establish a mid‐term target for developed countries of reducing emissions 40% below 1990 levels by 2020. (shared by India) China called for inclusion language recalling Convention Articles 3.1, 3.5, 4.3 and 4.7. China has also called for language stating that developed countries cannot impose unilateral tax measures against goods and services imports on the grounds of climate change. Prefer non‐binding outcome from the AWG‐LCA, only limited number of technical amendments necessary for second commitment period of KP (supported by India). Vision should include: enhanced provision of financial resources by developed countries to meet agreed full incremental costs, promotion of technology development, diffusion and transfer, by operating the IPR in a manner that encourages development of climate‐friendly technologies, enhancing adaptive capacity of developing countries, and effecting deep long‐term emissions reductions, based on an equitable allocation of the global atmospheric resource … while enabling developing countries to exercise their Right to Development and rectifying unsustainable life‐styles in all countries. India cautioned against the use of declarations reached in other forums (G8, MEF). They can add momentum to the UNFCCC process but should not circumvent the process. Stabilization of 450ppm level by 2020 as basis for long‐term emissions reduction goal Text in this section should provide overarching coverage of all pillars in the Bali Action Plan. Supports Africa2 Quantified emission reduction commitments (QUERCs) for all Annex I countries such that developed countries as a group achieve at least the top of the range indicated by IPCC in order to achieve the lowest stabilization levels (includes all developed countries, not only KP members). ‐ Developed country goals: 40% reduction from 1990 by 2020 and at least 80% by 2050 Needs balance between adaptation and mitigation actions. Need for new and predictable means of implementation. Shared vision must build an inclusive, fair and effective climate regime. Must address all building blocks of the BAP. Must include long‐term goal for GHG emissions reductions of at least 50% from ‘historical levels’ by 2050. Should address gender equity and special needs and interests of youth.

All figures in the US submission are left blank, with number not specified and elements to be elaborated in Appendices. Most appendices are empty. The submission notes that further submissions may follow. South Africa states that its submission to the AWG‐LCA should be read in conjunction with African group submission. The text of the African Group Position is available at http://unfccc.int/files/meetings/ad_hoc_working_groups/lca/application/pdf/african_group_submission_lca_april_2009.pdf.

Non‐Annex I, including MDEs

Annex I

Non‐Annex I, including MDEs

African Group

G77 & China

China

‐

‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐ ‐ ‐

‐ ‐ ‐ ‐

Canada

Resolution of Parallel Negotiating Tracks Canada is out of compliance with their Kyoto targets and has no plans to purchase offsets to make up the difference. The practice of missing targets and not making purchases to come into compliance is being called “the Canadian Route”. Proposed targets for 2020 fall far short of IPCC science calls. Did not intervene in either AWG closing plenary, but would likely be reluctant to support any outcome that did not include the U.S. as a major participant in the future regime. Not stated at Bangkok, but generally accepted they would never ratify the Kyoto Protocol under any circumstances or administration (U.S. congress would prevent this from happening). Developed countries must take the lead in a new agreement. There must also be a role for MDEs in taking on emission reduction measures. Not sure yet exactly what the outcome of Copenhagen will be on the Kyoto Protocol. Prefer a single legal outcome from Copenhagen. Firmly committed to the Protocol and called for its elements to be integrated into a new agreement. Believe that international climate change goals would be most efficiently achieved through the merger of the two international tracks into a single legal agreement. Do not want to be seen as trying to kill or end the Protocol, only seeking to build upon what is already there and strengthen it. Has “deep concerns” over what they see as attempts by developed countries to destroy the Kyoto Protocol. Will not allow developed countries to “escape” their commitments at Copenhagen. Firmly committed to the Bali Action Plan. China likened the two negotiating tracks to train tracks, stating that if you remove one track the vehicle travelling on it is in danger. The Protocol is the standard for mitigation for developed countries. Concerned about discussions of options that are not based on continued legal existence. Any end to the Kyoto Protocol is a “completely unacceptable” outcome. This statement was supported by all developing country negotiating blocks. Want a “fair and effective international climate change regime with a strong Kyoto Protocol”. The AWG‐LCA negotiating track must remain separate from the AWG‐KP. Strong supporters of G77 & China on this issue.

Annex I

Canada

Mitigation All parties, shall with a view to achieving at least 50% GHG emissions reduction: ‐ Establish long term GHG limits or reduction pathway. ‐ Submit verified national inventory of emissions by source and removal by sinks of all non‐MP GHG ‐ national schedules include long‐term GHG limitation or reduction pathways, quantified emission limitation for 2020 Register NAMAs that require support by technology transfer, and capacity‐building cooperation, subject to MRV. 2020 Targets remain consistent with “Turning the Corner” ‐ 20% from 2006 levels by 2020 (the only country to adopt a baseline alternate to 1990). ‐ 60‐70% reductions relative to 2006 by 2050. ‐ Not conditional on outcome of Copenhagen. ‐ Base year of 2006 is chosen for reason it is the first year for which complete data is available. ‐ Reductions almost entirely to be derived from domestic sources. ‐ Expect fuller rollout of regulatory plans in the fall. ‐ Still no clear picture as to whether Canada will move from Intensity to absolute targets. ‐ Proposes a 1990 “base year” with the ability of a country to adopt a unique “reference year” or plural “base years”. ‐ Propose a section on mitigation for all parties. ‐ Formulate low carbon strategies and articulate emissions pathways to 2050, with differentiated targets. o Developed parties: quantified targets for 2020; and minimum target for 2050 to be achieved by long term low‐carbon strategy  Expected that even if the Senate does not approve legislation US will come to COP 15 with stabilization to ‐4% from 1990 by 2020 target. Argument in Senate is more over mechanisms than targets. o Developing parties whose national circumstances reflect greater responsibility: quantified NAMAs for 2020; low‐carbon strategy for 2050; include dates by which such countries will take on developed Party‐type commitments. o Other developing country parties shall implement NAMAs and develop LCSs consistent with their capacities. ‐ Mitigation subject to MRV to ensure scaled up financial support (notes different types of MRV without specifics). ‐ MRV should not be confined to NAMAs themselves, but should also take into account their context to understand the net results and the direction of global emissions. ‐ Supported legally binding medium and long‐term quantifiable reductions with a timetable (appendix, schedule or register). ‐ Developing countries, except LDCs, shall provide annual inventories. ‐ COP shall establish terms under which developing countries may offer emissions/removal credits. ‐ Agreement does not affect establishment of emission trading linkages among parties. ‐ Discussion of pledges should also include what actions are put in place to support them. Need all parties to work together on low carbon development strategies Developed countries to collectively reduce emissions by 30% below 1990 levels by 2020 (must show leadership). ‐ EU will unilaterally reduce emissions 20% from 1990 by 2020 and 30% in context of global efforts. ‐ Need binding targets for Copenhagen (eliminate option on voluntary commitments). ‐ Assume continuation of CDM in their projections, but not LULUCF. Developing countries shall develop specific low‐carbon development strategies (LCDS), including long‐term strategy and emission pathway, and NAMAs for short and mid‐term action. ‐ LCDS covering all key emitting sectors to be in place by 2012. ‐ Financial support for LCDS in least developed countries. ‐ Coordinating mechanisms for: technology assessment of propositions, matching actions to support financing, and validating matched action and support. ‐ Register for NAMAs and corresponding support, modalities to be elaborated by COP. ‐ OECD and others with similar level of development from non‐Annex 1 should also take on emission targets. ‐ Notion of NAMAs generating offsets should not be excluded. ‐ Opportunities to increase efficiency and sustainability through sectoral approaches should not be ignored. Need coordination between AWG‐LCA and AWG‐KP approaches and prefer a single legal outcome at Copenhagen. Presented that earlier starting points and longer durations lead to more gradual pathways and smaller QUELROs, which may impact level of ambition of Annex I

Non‐Annex I, including MDEs

Indonesia

G77 & China

India

China

Australia

Developed countries ‐ Must make deeper cuts reflecting historic responsibility and allowing developing countries development space. ‐ Supports “polluter pays” principle. ‐ Annex I countries to reduce 40% rel. to 1990 levels by 2020, including quantified targets and effective policies and concrete actions. ‐ MRV of commitments, based on Nat. GHG emissions inventory, nat. communication, relevant Kyoto Protocol procedures. Developing countries ‐ NAMAs country driven, in conformity with country needs for sustained growth and poverty eradication and subject to determination by each country. ‐ NAMAs supported by TT, financing, and capacity building by developed countries. Support shall be new, additional adequate, predictable and sustained. ‐ MRV only for mitigations per se and to be undertaken by nat. entities under UNFCCC guidance in accordance with nat. circumstances and practices ‐ NAMAs are distinct and separate from mitigation commitments in magnitude and legal nature. ‐ Need to be able to choose mitigation actions based on national circumstances. Developed countries shall as a group reduce emission by more than [X] percent of 1990 levels by 2020 under second commitment period of Kyoto (X defined by AWG‐LCA). AWG‐LCA should develop individual targets for Annex I countries not party to the protocol. Proposed that Annex I party commitments should be calculated based on “discharge of historical responsibility” which points to reductions of 79.2% below 1990 by 2020. Developing countries may (voluntarily) propose mitigation actions, provided that full incremental costs are met by developed countries. Opposes proposals to define “developing countries” and support deletion of all language not compatible with the convention. Proposals on mitigation from all parties are in conflict with the BAP and the convention. Oppose proposals for mitigation from all parties. ‐ There is, and must be, a significant difference between the commitments between developed and developing countries Discussion from several members over imposing a cap on the amount of offsets that developed countries can use towards their mitigation targets (opposed by developed countries). Developed countries ‐ Developed countries to take on nationally appropriate mitigation actions or commitments (NAMACs) including quantified emission limitation and reduction objectives, subject to MRV. ‐ Compliance mechanism to build on Kyoto Protocol compliance mechanism. ‐ Establish new body for MRV of NAMACs. ‐ Reducing emissions under domestic legislation is not consistent with the Bali Action Plan.

countries. Supports inclusion of CCS in the CDM. Two types of provisions: general obligations and schedules to register national mitigation commitments and actions as legal annexes to the treaty, which could provide for both binding and non‐binding commitments and actions within the same schedule. National commitments and actions in schedules for each country. ‐ Comparable mitigation efforts including quantified emission limitation and reduction objectives (QUELROs). ‐ Goals, policies and measures that underpin QUELROs. ‐ Expected emission reduction pathways, including mid‐ and log‐term goals. ‐ Enabling domestic measures such as emission trading regimes and renewable energy targets. ‐ Could allow more advanced non‐Annex I Parties to register mitigation commitments, such as sectoral commitments without joining Annex I. ‐ Could include national pathways for transitioning towards low carbon economies for all countries. Operation of schedules ‐ Standardized format for comparability. ‐ Provide for MRV of commitments and actions. ‐ Process and timeline for negotiation of schedules. ‐ Review for environmental integrity. ‐ Amendments to non‐legally binding components at any time; legally binding components to be reviewed at fixed intervals. Sectoral approaches can assist in meeting obligations but should not replace economy‐wide commitments or be imposed on countries.

African Group

South Africa

Brazil

Developing countries ‐ NAMAs supported by technology, financing and capacity building needed, subject to MRV. ‐ New body for such MRV of support for NAMAs. ‐ NAMAs should be voluntary and cannot be used for offsetting by developed countries (China agreed). Supports the “polluter pays” principle. On MRV: international verification is inconsistent with Convention’s principles (China, India agree). Unilateral actions by developing countries are not NAMAs (still important to recognize). Want section on historical responsibility in the chapeau. Developed Countries must take on quantified, economy‐wide reduction commitments with clear medium and long‐term commitments. Sectoral approaches should be voluntary and compatible with an open international economic system (for G77 & China). Preferred “no decision” on the inclusion of CCS in the CDM (possible to include it as a NAMA). Developed countries ‐ Annex I to achieve 40% reduction below 1990 by 2020 and at least 80‐95% reduction by 2050. ‐ Comparability of efforts means comparable targets and comparable compliance. ‐ Domestic cap and trade is not in itself a commitment. ‐ 1990 as baseline for all post 2012 commitments by Annex I parties. ‐ Questioned the proportion of offsets coming from flexibility mechanisms (developed countries picking the developing country low hanging fruit) as an approach that will leave only the most expensive domestic mitigation options for developing countries. Want a cap on use of flexibility mechanisms. Institutional arrangements for compliance and comparability ‐ Annex I commitments subject to MRV, meaning QUERCS that are absolute and verified. ‐ Technical assessment of comparability of efforts by the Technical Panel on Comparability. ‐ Strengthen MRV under KP (Arts 5,7,8) to apply to Annex I QUERCS . ‐ Strengthened and broadened compliance system including legally binding consequences for non‐compliance. Developing countries ‐ Oppose differentiation amongst developing countries ‐ Register for NAMAs, including SD‐PAMs, to facilitate identification, mobilization, and matching of the fin., tech, capacity and other support required to implement NAMAs and enable international recognition of developing country mitigation action ‐ Key elements: o NAMA registration is voluntary. o Level of dev country effort commensurate with level of support received (support to reach 220 billion USD per year by 2020). o Dev count. may choose from variety of NAMA actions, including SD‐PAMs, REDD, programmatic CDM, no lose sectoral crediting and others. o Include list of indicative mitigation actions. o MRV of NAMAs requires more consideration. o Concern over double counting with NAMAs linked to carbon market. ‐ Technical panel under the convention to assess assumptions, methodology and required support for proposed action. ‐ Technical panel report on technology and funding needs will trigger requests to the Conventions financial and technology mechanisms. A “firewall” between mitigation commitments by developed countries and mitigation actions by developing countries. ‐ Quantified emission reduction commitments for all developed countries. ‐ MRV for emission reduction commitments. ‐ Mitigation commitments by developed countries that are at the top of range of IPCC science. ‐ Same numerical terms as outlined for Africa (above). Developing countries choose from a ‘toolbox’ of NAMAs that are voluntary. Reportable through national communication if done with own resources. Separate registry for those multi‐laterally supported.

Annex I

Australia

Canada

Adaptation ‐ Country driven action in the context of SD priorities and plans. ‐ Promote national level enabling environments. ‐ Decision making tools and methodologies for vulnerability assessments and land use planning. ‐ Integrate CC considerations with disaster risk reduction, poverty reduction, and SD to maximize synergies. ‐ Build on Nairobi Work Programme. Adaptation framework divided into sections on: implementation of adaptation and enabling activities; finance and technology; and institutional arrangements. A section on finance emphasizes: the need for funding from a variety of sources and policies to promote funding from private sector sources; need to build developing country capacity to access larger pools of financing. Priorities ‐ Develop national action plans on the basis of nat. priorities and strategies. ‐ Identify major vulnerabilities. ‐ Multi‐sectoral planning including prioritization. ‐ Assessment of impacts, vulnerability and adaptation. ‐ Support for integrating adaptation into development strategies and planning. ‐ Need for multiple solutions. Support common adaptation obligation for all parties Focus of adaptation must be on the most vulnerable countries. Integrate concept of a framework for action on adaptation along these lines: ‐ Institutional arrangements: to include regional centers and networks, other international organizations and processes. ‐ Modalities: scale up sources and delivery of fin from multiple channels… ‐ Review of progress in resilience building and reducing vulnerability. Adaptation measures should be integrated into national, regional and local planning. The best adaptation strategy is a workable mitigation regime. UNFCCC should catalyze and support implementation of nationally driven adaptation actions – develop principles and guidelines. ‐ Country driven strategies involving all stakeholders. ‐ In the context of broader SD. ‐ Prioritize support to most vulnerable and those lease able to respond. ‐ Informed by continuous learning and evidence based vulnerability assessment processes. Implementation ‐ Provide funding through mechanisms such Australia’s International CC Adaptation Initiative. Mechanisms to support long‐term adaptation planning ‐ National adaptation strategies: provide support to part. Vulnerable developing countries upon request to develop NAS which should include: objectives of adaptation actions, consider dynamic and long‐term adaptation needs, emphasize programmatic approaches... ‐ Streamline NAS reporting with reporting under nat. communications. ‐ Avoid one size fits all approach, such as a generic global mechanism. Institutional arrangements: ‐ UNFCCC Adaptation Advisory Panel (AAP): Transform Least developed country expert group into AAP made up of relevant technical and policy adaptation specialists. ‐ Regional Centers ‐ as hubs for information exchange, stakeholder coordination, and focal point for linking expertise with needs – could be enhanced into platforms for activities under the Nairobi Work Programme and those recommended by the AAP. Monitoring and reporting ‐ Based on mutual accountability; use NAS to report on effectiveness and undertake reviews of approaches.

Non‐Annex I, including MDEs

The African Group

G77 & China

South Africa

Indonesia

India

China

Adaptation programme must implement support and facilitate actions that reduce vulnerability and build resilience of developing countries to impacts already occurring and those expected in the future. ‐ Must be undertaken in the context of the principles and commitments of the Convention.

Comprehensive adaptation framework with focus on most vulnerable (LDC, SIDS, African and countries affected by CC impacts) Objectives: enhance adaptation implementation and climate resilient development; provide fin resources, tech transfer in all developing countries, in part most vulnerable. Principles (among others): ‐ Adequate, predictable, stable, timely financing at full costs and grant based. ‐ Financial resources additional to ODA. ‐ Developing country access to means of implementation at different levels. ‐ Cover full cost for adaptation technology and for stand‐alone adaptation projects . Institutional Mechanism: ‐ Subsidiary body under Convention with majority from developing countries. ‐ SB functions include tech advice; assessing adaptation financing and planning, enhance tech development and transfer. ‐ Regional centers in developing countries to facilitate implementation, capacity building, knowledge sharing, tech. development diffusion and transfer. Means of Implementation: ‐ Provide means on continuous basis. ‐ Coherence in funding under the Convention and outside. ‐ Establish Adaptation Fund within G‐77/China’s proposed “Financial Mechanism for Meeting Financial Commitments under the Convention,” based on assessed contributions from Annex I countries, ensuring sufficient funding for all developing counties to: [list of activities]. Monitoring and Evaluation: ‐ Monitor financial resources provided by developed countries, technology transferred, utilization of fin resources and effectiveness of activities, and sufficiency of fin and technology support to developing countries. ‐ Oppose reference to reviewing national adaptation plans. National coordinating body to address all aspects of means of implementation ‐ National focal point to support all climate change projects that have received assistance from developed countries. ‐ Focus on building institutional capacity for implementing NAMAs and coordinate and facilitate national adaptation measures. ‐ Funded through specific international resources/separate pool to be created as direct line item in the Secretariat’s budget. Appropriate mechanisms at national, sub‐regional, regional and international level, with executive (EB) board under UNFCCC for the management, delivery and easy access of resources. EB to be supported by advisory board on issues of methodologies guidance on add costs, project design, etc. Financial resources should be adequate agreed full costs, predictable, timely and stable with provisions of direct simplified and expeditious access to developing countries. Each developed country shall contribute 1% of GDP to financial mechanism referred to above in order to enable developing countries to implement NAMAs. Need for comprehensive mechanism to support adaptation by addressing adequate timely flow of new and add resources as well as deployment and diff of technology Financial support must be supported by developed country contributions as part of commitments under Convention and include innovative international and regional mechanisms. Requested reference to ecosystem‐based management and coastal areas. Dynamic relationship between oceans and climate change should be reflected in the outcome. Highlights proposal on implementation as a “coherent and systematic program” of how to address short, medium and long‐term impacts of climate change. (Supported by African Group) Supports text in preamble that all countries require adaptation actions, but also a focus in the text on developing countries. Also need binding commitments from developed countries on the subject of adaptation (G77 & China also supports the latter point). ‐ Focus on activity over process (implementation) ‐ Also must focus on resilience and capacity building Adaptation actions in developed countries must be supported by developing countries (obligation of the Convention).

Annex I

Non‐Annex I, including MDEs

China

Canada

Financing Principles/priorities ‐ Promote full range of management tools and financing options[…], including innovative managerial and financial techniques ‐ Provide financial support to most vulnerable parties and populations, in part including to LDC and SIDS. ‐ Promote access to technologies, knowledge and experience […] , including through enabling environments for technology adoption. ‐ Recognition that public sector financing is likely to be inadequate, must consider how governance can improve access to private funding. ‐ Public funding is most effectively used for purposes such as adaptation and capacity building. Institutional Arrangements COP to consider need for additional arrangements noting that these must: be efficient, effective and transparent; make use of existing national platforms; be flexible and encourage learning by doing; and encourage international organizations to integrate adaptation into development plans, programs and priorities Support for Mexican “Green Fund” proposal. Submitted proposal for a multilateral fund that would include the following: ‐ Continuation of the GEF as operating entity. ‐ Priorities and eligibility determined by COP. ‐ Consistent with Convention Article 11. ‐ Governance representation from contributors and recipients in a balanced manner. ‐ All parties except LDCs would contribute with respect to capability (contributions not mandatory). ‐ Need to reference MRV on compliance. Recognition of the need for increased public support (convergence on principles of equity and common but differentiated responsibilities). Noted majority of parties have taken concrete action leading to concrete impacts. Should focus financing on those who need it most (the poorest of the poor). Support for Mexican “Green Fund” proposal. The private vs. public discussion is a “false argument” neither is more important than the other. Emphasis on different approaches including a contributory approach based on an agreed scale, market‐based approaches based on auctioning arrangements or combination of these and other options. Region specific mechanisms needed for LDCs and SIDS. Support strengthening the role of the carbon market. Supports earlier proposal by G‐77/China ‐ Developed countries to make adequate contributions for convention implementation. ‐ Assessed contributions by developed countries by percentage of GDP (0.5‐1% in addition to existing ODA). ‐ Developed countries to fulfill commitment in measurable, reportable and verifiable manner‐ funds pledged outside don’t count. ‐ Funding to be used to enhance action on adaptation, mitigation, and tech development and transfer. ‐ Institutional arrangement shall include: Adaptation Fund; Mitigation Fund, Technology Acquisition Fund and Capacity Building Fund. Could develop innovative financial instruments to address risks from climate change. Support deletion of option of green fund or world climate change fund. Increasing emphasis on the private sector would lead to unpredictable funding. Propose removing references to levies on international transactions. (Along with India) concerned about potential double counting from purchases of international offsets by developed countries. US proposal does not address shortcomings of current financing system.

‐ Must be country driven. ‐ Must address concerns of all vulnerable groups whose adaptive capacity is low (incl. gender and youth concerns). ‐ Must reflect indigenous Knowledge and practice. Programme is complementary to and consistent with the G77 and China proposals on financing and technology transfer. By 2020 need financial flows of at least $67 billion /year to support.

Several developing countries

African Group

LDCs

Uganda

South Africa

India

Market mechanisms Sectoral crediting: for developing countries with absolute sectoral emission thresholds (which may be proposed as part of LCDS) – CER or fungible units may be issued for reductions beyond the threshold (COP to elaborate modalities). Sectoral trading: developing countries with sectoral emission targets (which they may suggest as part of their LCDS) may participate in emissions trading (subject to conditions). NAMAs should be complemented with market mechanisms. Need common vision for how market may develop taking into consideration market mechanisms created under the Protocol and those being proposed under the AWG‐LCA. Supported retaining the option related to the development of standardized baselines. Preference for Copenhagen would be an outcome that incorporates key elements of the Kyoto Protocol (including mechanisms) and includes new elements. Expressed concerns about regional equity for the CDM in Kyoto Protocol discussions. Markets have enabled more cost effective reductions and the CDM has been able to stimulate investment. Inclusion of new mechanisms could make a significant contribution to the future regime ‐ Want to ensure the applicability of the CDM in the an outcome of the AWG‐LCA. Many developing countries spoke out against the discussion of existing mechanisms in the AWG‐LCA. Algeria states that if Countries wish to use Kyoto mechanisms they can ratify the protocol. Several parties oppose “cherry‐picking” elements of the protocol. Many developing and developed countries are concerned about regional equity (Columbia, New Zealand, Micronesia). Cambodia has noted the need to consider the specific needs of LDCs.

Developed countries have a responsibility to provide financing for damage caused by climate change and this forms the basis for their financing commitments. Preference for single fund with windows for mitigation, adaptation, technology and capacity building. Need $67 billion for adaptation programme per year by 2020. “Developed countries have a commitment to provide financial, technological and capacity building support to enable developing country action”. Financial mechanism: ‐ Underpinned by principle of equity and common but differentiated responsibilities. ‐ Operate under and be accountable to the COP. ‐ Balanced representation of all parties. ‐ Enable direct access to funding by recipients. ‐ Strengthen Developing country capacity. Developed countries must commit to 0.5% of GDP for developing country action. New and innovative private and public sources. Expressed reservations about the Mexican proposal calling for financing contributions from developing countries (supported by G77 & China).

Establish fund operated by an entity under an Executive Board (EB) to be appointed by the COP. ‐ Developed country assessed contributions of at least 0.5% GDP, with individual contributions based on responsibility and capability. ‐ Contributions either from earmarked public funds, from country‐specific auctioning of emission allowances or other means considered feasible. ‐ Parties shall have direct access to the fund. ‐ Funds pledged to other entities don’t count. ‐ Separate windows for mitigation, adaptation, technology cooperation, each assisted by thematic assessment unit. ‐ EB shall manage certification and registry system for receiving resources. Should be no differentiation between developing countries as to access to climate change funds (in response to Canada’s comment on the need to focus on the poorest of the poor). [This comment was made on behalf of the African group, which is interesting because it contains some of the poorest LDCs, could be indicative of the power and influence the MDEs have over these LDCs with foreign direct investment]. Proposed a “naming and shaming” compliance regime that would list defaulters initially and eventually lead to penalties as a second step.

India

Australia

Canada EU

African Group

Indonesia

REDD/REDD+ and other mitigation in the land‐use sector REDD‐plus is defined as actions that reduce emissions by sources or increase removals by sinks in the land use sector in developing countries. COP shall develop REDD‐plus framework. Suggested elements are contained in Appendix 5 of the submission, including: ‐ Use of latest IPCC guidelines as basis for GHG emissions and removals from the land use sector. ‐ Flexibility for staged approached beginning with most appropriate categories of land use. ‐ Include: self‐financed actions, capacity building or technology transfer; and actions that may become eligible for market‐based approaches. ‐ Reference levels that adjust over time, guided by a long‐term pathway resulting in sustainable level of carbon stock. ‐ Consistent with MRV. ‐ Encourage to find ways to relive pressure on forest land resulting in GHG emissions. View REDD as a subset of NAMAs. Called for discussion as to whether forest activities are better considered under CDM or REDD (Brazil agreed). REDD+ support shall be performance based and provided on the basis of verified results , while promoting SFM and enhancement of carbon stocks. Incentives must generate co‐benefits, including biodiversity protection, increased resilience and improved livelihoods. Link between REDD+ and low carbon development strategies. In regard to the CDM, willing to consider any proposal to expand eligible LULUCF activities, but must consider if a CDM or NAMA approach is needed. Called for a forest carbon market in the post 2012 regime. Also supports: voluntary participation; robust simple and transparent MRV; effective and efficient government framework to minimize transaction cost; capacity building that supports non‐climate outcomes. In regard to the CDM, supports a broader range of opportunities in the LULUCF sector. Activities qualifying for positive incentives: ‐ Stabilization of forest cover (a) ‐ Conservation of forest carbon stocks (b) ‐ Reduction in deforestation rates (c) ‐ Enhancements of forest carbon stocks (d) Agreed methods to claim positive incentives . Separate approaches for: ‐ Market based financing for change in carbon stocks (incremental stocks and reduced deforestation), including d) and c) above; and ‐ Non‐market based approaches for baseline carbon stocks, including a) and b) above. Believe that it is premature to link REDD with NAMAs; need to define REDD and then determine if it fits under NAMAs (supported by Thailand).

India noted that market‐based mechanisms are not meant to address regional equity; specific mechanisms are needed for this. Tuvalu expresses the need for caution with new offset mechanisms, indicating they do not real to real emission reductions, but just displace responsibility. ‐ Major part of financing must be derived from public funding ‐ Generate new and additional resources from auctioning assigned emission allowances and/or share of proceeds from market mechanisms Institutional arrangement. ‐ Must establish new mechanism under UNFCCC COP . ‐ Ensure participation by all parties in identification, preparation and implementation as well as monitoring of result. ‐ Process for identifying and validating country needs. ‐ All developing countries must have direct access to funds. ‐ Delivery of funds subject to MRV. ‐ Agreed level of full incremental costs as basis for providing support. Africa should have opportunity to participate in market‐based mechanisms; although the major source of funds should come from the public sector.

Annex I

Canada

Algeria for the African Group

Developing Countries

South Africa

Brazil

China

Indonesia

Urges a link between technology transfer and low carbon development strategies. Identified three critical components:

Technology transfer Recognizing role of private sector investment, capacity and expertise, parties shall: ‐ National action for development, demonstration, deployment (DDD) and diffusion of Environmentally Sound Technology (EST) through, assessment of technology needs and legal and policy frameworks. ‐ Enhance and strengthen international technology cooperation. ‐ Recognize international technology co‐op efforts outside of the convention. Needs a country driven approach. Submission has bracketed text referring to provisions on: national action to support DDD of ESTs; cooperative action to promote DDD of ESTs; promoting greater public and private sector investments in technology research, development and deployment. Has argued for the use of voluntary technology‐oriented agreements. Oppose any changes to the IPR regime and any text that sought to undermine or weaken the regime Proposed a “hub and spokes” approach to technology transfer. ‐ Rests on 3 pillars: 1) to increase diffusion; 2) to increase access; and 3) to enhance domestic capacity to take up new technology. The technology institution would have 6 critical functions:  tools for technology road‐mapping and needs assessment;  training;  linking to finance;  exchange of information and cooperation;  policy analysis and support; and  capacity building. The “hub” itself would be a physical centre staffed by experts; the spokes will be multilateral development banks, universities, national labs, agricultural research stations, etc. The new institution could be supported by existing institutions and in‐kind contribution from governments.

Engage REDD+ in NAMAs. Financing for capacity building, market readiness, and addressing drivers of deforestation and forest degradation in addition to market based approaches. ‐ Along with Papua New Guinea, Guyana, Norway and others, supports a phased approach for REDD+, i.e., capacity building, demonstration, and full implementation. Supports voluntary participation. States that REDD should not be an offset mechanism. Should only consider afforestation and reforestation under the CDM. Should only consider afforestation and reforestation under the CDM. Views REDD as an important part of NAMAs; MRV for NAMAs will apply to REDD and financial solutions for NAMAs will be the same as REDD. Want focus on forests (As opposed to REDD+). Suggested wider consideration of both sinks and sources. Limited willingness to consider positive measures. Philippines, Papua New Guinea, Thailand, Guyana and Pakistan, among other, support a phased approach for REDD+. Philippines, Columbia and Guyana note the need to consider indigenous peoples. LDCs view that REDD+ should be separate from developing country NAMAs. A REDD‐Plus mechanism should accommodate different national circumstances and respective capabilities. Adequate, predictable and sustainable funds are needed from a variety of sources, including global carbon markets. In regard to the eligibility of LULUCF activities under the CDM, most African nations support broader eligibility. Senegal supports afforestation/reforestation; wetlands (depending on definition), soil carbon management in agriculture; Ethiopia open to all LULUCF options.

‐ ‐

Non‐Annex I, including MDEs

Indonesia

Brazil African Group

India

G77 & China

China

Other Issues ‐ Specific input on emissions from international aviation and maritime transport. ‐ Specific input on HFCs. ‐ Framework to address impacts and economic and social consequences of response measures. ‐ Approaches for cooperative actions on mitigation: sectoral and market based approaches. Several Countries (Chief among them Uruguay and New Zealand) have been pushing for a place for agriculture in the agreement, These countries highlighted the importance of agriculture’s mitigation potential in the contact group on mitigation on 1(b)(iv) of the BAP. Uruguay proposed a program of work on agriculture under SBSTA in 2010. It would appear that agriculture has found a place in the text; but it is highly unlikely, given the short negotiating time remaining, that a well defined role will be worked out for the next commitment period.

‐ accelerated global openness to environmentally‐sound technologies; ‐ increased access to technology information and know‐how; ‐ high quality technology planning for low‐carbon growth. Noted that IPRs incentivize technology development New Subsidiary body under the Convention ‐ Panels on: technology needs assessment, clearing house for technology information, coordination on enabling policies and measures, management of financial resources targeting development, transfer, and diffusion of ESTs, capacity building, and monitoring and assessment of performance. ‐ Functions: advice and guidance, coordination of actions and policies, guide and supervise special technology transfer fund based on public finance. ‐ Governance: COP to determine committee and panel members. ‐ Technology needs assessments and action plans for development and transfer of ESTs. ‐ Multilateral Technology Acquisition Fund: financial mechanism to develop public private partnerships by linking public finance with carbon market, capital market and technology market to leverage larger amounts of private finance. [list of policy instruments to be included]. IPRs present a barrier to technology transfer. Want an outcome that focuses on action. Require further examination of the proposals brought forward by developing countries. A technology mechanism should lead to action (must go beyond information exchange). Arrangement for providing financial and technical cooperation […] in order to enable actions [Categories of full costs met; Categories of full incremental costs met]. Executive Board on technology as new subsidiary body which shall develop strategy and technology action plans, elaborate modalities and procedures for implementation, recommend a work program based on expected assessed contributions … Technology fund under Financing mechanism. Oppose attaching conditionality to funding for technology transfer. Developed countries to commit to deployment, diffusion and transfer of technology based on accessibility, affordability, appropriateness and adaptability principles. Developed countries commit to full costs in accordance with 4.3 of the Convention.

Reaching an Agreement at Copenhagen: Negotiating the roadblocks ahead.

About the Africa Progress Panel The Africa Progress Panel (APP) was formed as a vehicle to maintain a focus on the commitments to Africa made by the international community in the wake of the Gleneagles G8 Summit and of the Commission for Africa Report in 2007.Under the chairmanship of Kofi Annan, it is paying equal attention to the implementation of Africa's commitments as set out in the Constitutive Act of the African Union and landmark international agreements. In 2008, a secretariat was established in Geneva. The Panel’s members continually assess new opportunities and threats to Africa’s development, including how far previous commitments of Africa are being met. They use their judgment and experience to highlight pressing concerns, inspire honest debate amongst leaders and civil society, help mobilise resources and prompt effective action. The Panel is composed of the following members: Mr. Kofi Annan (Chair) Mr. Tony Blair Mr. Michel Camdessus Mr. Peter Eigen Sir Bob Geldof Mrs. Graça Machel Mrs. Linah Mohohlo General Olusegun Obasanjo Mr. Robert Rubin Mr. Tidjane Thiam Professor Muhammad Yunus The Secretariat supports Panel members and a network of partners through a number of products and activities. This publication was produced by the Secretariat.

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