Summary of the Tianjin climate change talks by United Nations Development Programme

Technical paper Summary of the Tianjin Climate Change Talks (4 October â&#x20AC;&#x201C; 9 October 2010)

Prepared by: Daniela Stoycheva- climate change policy advisor UNDP BRC Bratislava, Slovakia, 20 October 2010

Contents 1.

General observation .............................................................................................................................. 3

2. Outlines of the work of 12th Ad-hoc Working Group on long-term cooperative action under the Convention - AWG-LCA 12 ......................................................................................................................... 4 3. Outlines of the work of 14th Ad-hoc Working Group on further commitments for Annex I Parties under the Kyoto Protocol â&#x20AC;&#x201C; AWG-KP 14 ..................................................................................................... 9

General observation

From 4 to 9 October 2010, in Tianjin, China, took place the 12th session of the AWG-LCA under the UNFCCC and the 12th session of the AWG-KP under the Kyoto Protocol. This was the last meeting of the AWGs before the sixteenth session of the Conference of the Parties (COP16) and the sixth session of the COP serving as the Meeting of the Parties to the Kyoto Protocol (COP/MOP 6) in Cancun, 29 November - 10 December 2010. In general the just-completed Tianjin Climate Change Talks observed some modest progress. It could be characterized by a well-known Chinese proverb ―Qiu Tong Cun Yi‖ = ―Seeking common ground while preserving differences”. The Executive Secretary Cristiana Figueres in her report to the Secretary General described the negotiations the following way: “Tianjin succeeded in providing clarity on the contours of a Cancun outcome and Parties have generally accepted that such an outcome would address all building blocks of the Bali Action Plan, not prejudge prospects for a legally binding outcome, and respect two-track approach. Parties discussed each element of the Bali Action Plan (BAP) and now have greater clarity on what is achievable within each element – including on shared vision, adaptation, mitigation and the key operational elements of finance, technology and capacity building.” The focus of discussion amongst governments in Tianjin has been on defining the outcome from Cancun – balanced set of decisions on all the building blocks of the BAP under the Convention and agreed second commitment period under the Kyoto Protocol. The Mexican Presidency is steering the process towards a ―balanced package‖ of COP decisions, and South Africa (COP17 President) are also supporting this approach. However, governments have not agreed on the details of this package. There is an agreement only that there should be a balance in any single decision, in the set of decisions under the Convention and as well between these and the decisions under the Kyoto Protocol. The US is clear that for them, such a package is only acceptable if it includes clear provisions for monitoring, reporting, and verifying (MRV) of the mitigation actions in large developing countries. The EU is supportive of this approach, as it is Japan, Russia, and Australia. Developing countries continue to resist this, arguing ever more strongly that mitigation action should follow the principle of common but differentiated responsibility. Possible elements of the Cancun outcome were presented by the chair of the AWG-LCA, after consultations with Parties at the end took a form of her report only. The proposed elements are: I. Shared vision; II. Adaptation; III. Mitigation; IV. Finance, technology and capacity-building, with some sub elements. During this meeting, there were informal consultations conducted and two draft decisions prepared on the provisions for the EITs and Turkey, to facilitate their access to finance, technology transfer and capacity building in the post-2012 regime, considering their special circumstances, to be proposed for adoption in Cancun. Turkey’s draft contains a paragraph for their possible inclusion in the flexible mechanisms. This session produced a revised chair’s text under the KP (FCCC/KP/AWG/2010/CRP.3), which seems to have some progress towards clarifying the rules for estimating the commitments of the developed countries. The ―carry-over‖ issue (the reduced emissions from the first commitment period to be used in the second) is still a problem for the EITs as some Parties propose to forbidding/capping/levy the surplus of reduced emissions in EITs, 3

which according to them was only due to the economy decline in the 90’s and compromises the targets for the post 2012 period. A set of draft texts (still with numerous brackets) and notes of facilitators (capturing the discussions in Tianjin, but not having any negotiating status) were produced under the Convention negotiations, to be compiled in an INF. document (informal). The old negotiating text (LCA/2010/14) from August will be carried to Cancun. There are number of additional meetings scheduled in an attempt to help the preparations for Cancun and to find a solution for some crunch issues: (i) informal consultations on MRV, 18-19 October, hosted by Mexico; (ii) forest preservation meeting, hosted by Japanese government, 26 October; (iii) pre-COP ministerial meeting, 4-5 October in Mexico City; (iv) ministerial meeting on technology, 9-10 November, hosted by India. It was announced that the next COP17 in 2011 will be hold in Durban, South Africa. 2. Outlines of the work of 12th Ad-hoc Working Group on long-term cooperative action under the Convention - AWG-LCA 121 The AWG-LCA had the purpose of discussing the revised negotiating text that had been prepared by the Secretariat under the responsibilities of the chairman and had been issued in August 2010 (FCCC/AWGLCA/2010/14). The basis for this text had been rigorously debated in the August AWG meeting. The text covered the building blocks of the Bali Action Plan: a shared vision for long-term cooperative action, mitigation, adaptation, finance and technology, as well as capacity building. Attempts were made to identify and work on issues that could be concluded during COP-16 in Cancun. Considerable work was carried out in drafting groups but these remain as ―draft texts and facilitators’ notes‖ and the changes made in Tianjin were not accepted by the final plenary session, will be compiled in an INF. document. As a result, the negotiating text for COP-16 remains the abovementioned document issued in August. Preparation of an outcome at COP 16: Following an opening Plenary in which Parties expressed the need for the adoption of a balanced set of decisions in Cancun based on the principles and provisions of the Convention and the BAP, Parties detailed their requirements for such a package, amongst others including: balance between the two negotiating tracks; ensuring that these decisions do not compromise the overall objective of a comprehensive and ambitious legally-binding outcome; a higher level of ambition for the USA; reducing emissions from deforestation and forest degradation in developing countries; and the role of conservation, sustainable management of forests and enhancement of forest carbon stocks (REDD+); a clear deadline for a legally-binding outcome; use of Kyoto Protocol rules for MRV and new rules for developing countries on national communications and frequency of greenhouse gas (GHG) inventories; massively scaled-up, accessible and additional funding for LDCs, and, on adaptation, the LDCs should receive 70% of the proposed 1.5% of Annex I Parties’ GDP for adaptation; progress towards an ambitious, comprehensive and legally-binding outcome in line with the 2°C objective; establishment of an adaptation framework and a technology

As there were no significant changes to the positions and the text in Tianjin, the information from the previous Technical Papers is to a great extend valid and sometimes in more details

mechanism together with their institutional arrangements; and most importantly the establishment of the Copenhagen Green Climate Fund. In order to clarify and manage the meeting, the Chair presented a paper on ―possible elements of the Cancun outcome‖, which was split by shared vision, adaptation, mitigation, and finance, technology and capacity building. This led to a hectic debate concerning ―balance‖; ―picking and choosing‖ topics; basing discussions on the Copenhagen Accord; the need for a ―Party-driven‖ process. South Africa presented the most constructive approach indicating the need for an overarching decision on the legal form of the outcome identifying elements of a comprehensive legally-binding agreement, as well as a set of substantive decisions to test implementation or readiness in areas where progress has been made, such as REDD+. Also they noted that part of the package must be a decision under the COP/MOP either adopting amendments to Annex B of the Kyoto Protocol or reflecting a commitment by Annex I parties to a second commitment period. The work in contact groups under the LCA was as follows: Shared Vision: The contact group considered, without agreement, a single shared vision, containing a global goal for emission reductions, or specific goals for each of the BAP elements; the review (of the long-term goal or of commitments and actions for achieving this goal); what should be reviewed (current emissions, expected emissions trends, economic circumstances and evolving capabilities and commitments and actions of both developed and developing countries). Four documents were produced but not forwarded due to lack of agreement. The first contained a proposed outline of a shared vision, as follows: the long-term global goal, which would contain a framing paragraph, principles and numerical expressions; the shared vision on the BAP building blocks, which would contain goals on adaptation, mitigation, technology, finance and capacity building; and a section on other elements. The second document included the proposed outline of the text on the review, to include: scope; factors to be taken into account; actions based on the review; and modalities and timeline. The third and fourth documents contain draft text capturing Parties’ discussion on some paragraphs of the shared vision and review sections in the negotiating text. Mitigation split into the normal groups based on the key paragraphs in the Bali Action Plan: Sub-paragraph 1(b)(i) of the BAP (developed country mitigation) tackled: continuation of the Kyoto Protocol; compliance systems, including for non-Kyoto Protocol Annex I countries; comparability of actions by developed countries; the legal nature of the outcome; graduation of countries into Annex I; the nature and content of the set of decisions to be considered for adoption at Cancun, and the implications for the Kyoto Protocol and the goal of a legally-binding outcome under the AWG-LCA; and the framework for mitigation commitments by Annex I countries. A note prepared by the facilitator containing ―reflections on the issues discussed at the meetings‖ was presented to parties. During the AWG-LCA closing plenary, several parties objected to the title and the note will now refer to the facilitator’s understanding of issues discussed. Sub-paragraph 1(b)(ii) of the BAP (developing country mitigation) discussed nationally appropriate mitigation actions (NAMAs) for developing countries; MRV of NAMAs; and MRV of support for implementing NAMAs. Various proposals were re-introduced, for example, reporting of all mitigation actions, both supported and autonomous; domestic and 5

international MRV and ICA of supported actions, and domestic MRV and ICA of autonomous actions; and domestic reporting and verification of autonomous actions, and domestic reporting and international verification of supported actions. The ―usual‖ issues were raised on the registry/mitigation mechanism, whether it should be used to record all NAMAs of developing countries, both supported and autonomous or just those supported. Sub-paragraph 1(b)(iii) of the BAP (REDD+) included discussed on addressing forests more holistically, including ecosystem services; the need for REDD+ to contribute to adaptation; and concerns that a REDD+ mechanism would create a new system of offsets. The interim REDD partnership (formed in Oslo in May 2010) met a number of times in the sidelines of the Tianjin talks. Significant disagreement has broken out among parties over the inclusion of stakeholders in the partnership, with Papua New Guinea resisting pressure. This discussion has virtually brought the partnership discussions to a standstill, with many parties now waiting for the PNG-Japan Co-Chairs to be replaced in 2011. REDD+ negotiations have informally begun once again in the UNFCCC process, although the politics from the interim partnership meetings have slowed progress considerably. Some parties noted that they were uncomfortable about giving the Chair a mandate to draft a decision. Instead, they requested the Chair to document what has happened. Sub-paragraph 1(b)(iv) of the BAP (sectoral approaches and sector-specific actions) considered a general framework for cooperative sectoral approaches and sector-specific actions to enhance the implementation of Convention Article 4.1(c) (technology transfer), bunker fuels and agriculture. On bunker fuels, discussions focused on proposals on: the need to reduce emissions from shipping and aviation; the roles of the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO); an invitation to ICAO and IMO to report on their work to the COP; and the use of revenue collected from shipping and aviation for emission reductions. On agriculture, some parties highlighted that a successful outcome in Cancun on agriculture should: enhance the implementation of Convention Article 4.1(c); respect the relevant provisions and principles of the Convention; and promote a supportive and open international economic system. Sub-paragraph 1(b)(v) of the BAP (various approaches to enhance the cost-effectiveness of, and to promote, mitigation actions), the so called ―markets‖ group worked its way back towards the text that had remained unfinished at Copenhagen, vastly increasing both the size and the number of square brackets without addressing the substantive issues. In general, the discussions considered the need to ensure a balance between market and nonmarket-based approaches. The establishment of mechanisms and a work programme on markets and market readiness were also discussed. Parties agreed to forward the revised draft text to the AWG-LCA. Sub-paragraph 1(b)(vi) of the BAP (consequences of response measures) addressed and did not resolve whether or not there should be a permanent forum to report and evaluate the impacts and consequences of policies and measures implemented by Annex I Parties on developing countries, as well as its structure; whether consideration should be solely of impacts on developing countries and the need for international consensus on measures that would have an effect on international trade, in particular on developing country exports and ensuring that climate change trade-related measures taken by developed countries do not 6

transfer the burden of mitigation to developing countries or limit their social or economic development. Discussions were reflected in revisions to the negotiating text. The Adaptation discussion was notable at one point for the Chair’s comment that “we have exhausted the discussion of clusters and can now start to discuss the issues”. Topics addressed: the establishment of an Adaptation committee under FCCC; mechanisms to address loss and damage; support provided to developing countries, especially LDCs and small island developing states (SIDS); and reporting. Adaptation discussions have been held up by finance negotiations since Copenhagen. Parties are focused now on two main issues:  The creation of an adaptation committee to guide disbursement of funds from the adaptation section of the new fund. The G77 are keen to have this and increase the focus on adaptation finance; the US oppose the extra bureaucracy;  How adaptation funding will be allocated based on vulnerability. AOSIS, LDCs, and Africa argue for priority access; this creates a division with other G77 members—notably Pakistan—who argued that such categories do not reflect actual vulnerability. A future adaptation framework is likely to be based heavily on use of regional centers of excellence. Governments are agreed that centers of knowledge sharing and technical assistance are already well-placed to support governments in identifying vulnerability and regional adaptation actions. In line with a clear outcome from Cancun on adaptation (which could be held up by either the package question or clarity on the new fund), a number of parties are setting up interim adaptation partnerships. The US, Spain, and Costa Rica are leading one such partnership, which aims to provide technical assistance services to government on best practices and lessons learned. UNDP is engaged with the US in the design of this partnership. The Finance, Technology and Capacity Building groups addressed separately the three issues. Finance considered the establishment of a new fund (Climate Change Green Fund), should it be under UNFCCC and how should it be governed, the composition of an oversight body, fast-start finance (should this be referenced in a Cancun decision), long-term finance, MRV of support, and the role of the Global Environment Facility (GEF). The elements of a draft decision included: key points/principles; the modalities; the design process; governance; secretariat; trustee; reporting; standing committee on finance or new body; use of existing institutions; and incorporation of the fund and standing committee in a legally-binding outcome. Negotiations in Bonn and Tianjin this year have moved forward the discussion of creating a new fund under the Convention. Governments are now largely agreed that a finance decision in Cancun will set in play a process to begin setting up this fund, most likely by creating a steering committee/ad-hoc group of governments, multilaterals, and private sector partners. Some disagreement does remain over when the fund should come into operation. Mexico would like the fund to be legally created in Cancun, although this seems unlikely at this late stage. Many governments recognize the need for UNDP to be involved in this process.

In terms of the emerging structure of the fund, it seems likely that there will be a trustee, but then various operating/implementing components to the fund itself. This will probably be arranged into mitigation and adaptation activities, with money flowing through the MDBs for investments, the UN system for technical assistance and CB, and other partners (potentially including bilateral) for specific programmes as appropriate. The decision will certainly contain a strong focus on direct access, and reaffirm that the ultimate goal for implementation from the new fund is direct access. Disagreement remains in many areas: how the fund will relate to the GEF and Adaptation Fund, how the fund should be governed, where technology and capacity building are placed, and when the fund should come into operation. Generally the Green Fund continues to mean different things to different Parties. The standing committee, which is going to be established, will have to look at this next year. It is critical to note that the Green Fund will not be the be-all-and-end-all of climate finance in the future. Other structures will continue to exist and be created. The ongoing discussion between UNDP and the World Bank about setting up coordinated support to SIDS is just one example of this. What governments are looking for, however, is coordination and coherence within the delivery system. Parties await the outcomes of the Secretary General’s Advisory Group on Finance (SG’s AGF) for guidance on sourcing of finance for this fund. There is a strong possibility that these recommendations will not be able to be formally brought into the UNFCCC process, as the ALBA group reject that AGF as a part of the Copenhagen Accord. Nevertheless, the report will no doubt attract significant attention and enrich the knowledge on possible climate financial sources. Technology discussions focused on the mandate and composition of the Technology Executive Committee (TEC) and relationship to the financial arrangements as well as the proposed climate technology centre and network (CTCN). Little agreement was reached on the role of the TEC (broad policy advice or linked to funding of technologies); whether it is of equal standing or governing the CTCN; its size, technical expertise and capacity, and the terms of service. Various proposals were captured in texts. The typical discussion on whether the CTCN should be within or outside of the Convention with the usual divisions of views (developed countries believe that it should respond to the Subsidiary Bodies of FCCC). Discussions on a technology mechanism are well developed at this stage. Parties are agreed on the formation of a technology executive committee, global center with regional units, and network of innovation hubs. If the overarching political questions on the ―package‖ are resolved in Cancun, this mechanism would likely be launched soon after. UNDP, UNEP, WIPO and UNIDO have put together a joint proposal to host the technology centre. This would bring together the respective competencies of each agency in technical assistance and capacity building in a UN-REDD-style Secretariat. This concept has been shared with donors and G77 and received a positive reception. Two technology informal meetings will take place before Cancun to move this discussion forward. Capacity building covered institutional needs; how capacity building is reflected throughout the AWG-LCA text; and the need for performance indicators. The major issues 8

that arose included: whether capacity building should be in a separate chapter or part of other sections; whether there should be a new or use of existing institutions. Only a note entitled ―Points of discussion on capacity-building‖ was agreed. The Closing Plenary session descended into disarray after the AWG-LCA Chair’s report concerning the possible components of a package of decisions to take forward to Cancun in which she noted that a set of draft decisions was close to being agreed that did not prejudge the AWG-LCA outcome and respected the two-track approach under the two AWGs. The subsequent discussions on the legal status and structure of the draft text and notes by the facilitators resulted in the titles being changed on the mitigation (to ―Facilitator’s understanding of issues discussed‖), a chapeau added stating that the understandings have no bearing on the negotiations and a final agreement that negotiations will continue on the basis of the old negotiating text document (FCCC/AWGLCA/2010/14). 3. Outlines of the work of 14th Ad-hoc Working Group on further commitments for Annex I Parties under the Kyoto Protocol – AWG-KP 142 The AWG-KP considered the draft proposal that resulted from the August meeting (FCCC/KP/AWG/2010/CRP.2). This included a number of draft decisions on emission reduction numbers for developed countries and associated issues and also Land Use Land Use Change and Forestry (LULUCF), use of the CDM credits for the period post-2012, carry-over of surplus AAUs as well as inclusion of new gases. The AWG-KP in Tianjin was characterized by a dispute over its mandate that remained unsolved; it did not address any substantive issues and concluded by making small updates to the text which was reissued (FCCC/KP/AWG/2010/CRP.3). This will be the text considered at CMP-6 in Cancun. The Scale of emission reductions from Annex I parties, covered the standard issues of transforming pledges into QELROs (Secretariat’s technical paper FCCC/TP/2010/3); length of commitment periods and the base year; the carry-over of AAUs; fixing LULUCF rules before agreement on further commitments. On carryover of surplus AAUs, the Secretariat presented a table of options and parties clarified their proposals. The Russian Federation said any proposal to eliminate or limit carryover is inconsistent with the Kyoto Protocol. Parties considered the options in the Secretariat’s paper, as well as other party proposals, such as: raising ambition; not carrying over surplus AAUs; capping AAU carryover; and imposing a levy on carryover of AAUs. The Legal matters group considering the possible gap between the Protocol’s first commitment period (2008-2012) and subsequent commitment periods was the most controversial, demonstrating the clear differences between the Parties. Many larger G77/China Parties stressed that the mandate of the AWG-KP was limited to consideration of amendments to Article 3.9 (Annex I parties’ further commitments) only. Many developed countries, and AOSIS, stated that all amendments should be considered on the grounds that they are consequential to taking on further obligations. After much discussion, it was finally agreed that discussion could cover all issues. As a result, proposals to amend

As there were no significant changes to the positions and the text in Tianjin, the information from the previous Technical Papers is to a great extend valid and sometimes in more details

Articles 4.2 and 4.3 (joint fulfillment of commitments), Articles 9.1 and 9.2 (on the review of the Protocol), privileges and immunities, compliance procedures, and entry into force were discussed. The “Other issues” group generated a number of ―spin-off‖ groups on the topics LULUCF, the flexibility mechanisms, and methodological issues: LULUCF covered harvested wood products (with the deletion of the option to include HWP under the CDM); accounting for forest management; forest management reference levels including comparability and consistency, and the proposed review procedures; force majeure; accounting for wetlands; and the base year for additional activities. An updated text was developed. Flexibility mechanisms discussed, as usual, carbon capture and storage (CCS) and the CDM, standardized baselines, new market mechanisms and discount factors on certified emission reductions; the regional distribution of CDM projects; supplementarity; carryover of surplus AAUs and the share of proceeds. There were no changes in positions from Parties but an additional preamble paragraph added supporting the continuation of the use of the mechanisms; the basket of methodological issues relooked at work on new greenhouse gases and global warming potentials. The group on Potential consequences of response measures of climate change considered, as always, on whether to create a permanent forum to address potential consequences of the policies and measures in Annex I on developing countries, or to use existing channels, such as national communications and the review process under the Subsidiary Body for Implementation (SBI). The split between G77/China requiring a new body and developed countries supporting the use of existing channels was evident. The Final plenary ended with Parties forwarding to Cancun a revised Chair’s proposal (FCCC/KP/AWG/2010/CRP.3) that contains a series of draft decisions for continued negotiations. The Russian Federation noted that progress in the AWG-LCA track is not sufficient and that in the absence of certainty on a global agreement under the Convention, they would be unlikely to support a second commitment period. It was also noted that the Korean Ambassador would continue informal consultations on issues of common interest between the AWG-LCA and AWG-KP (the ―Common Space‖ discussion). South Africa also noted the need for an over-arching decision covering both the AWK-KP and AWGLCA.