The state of negotiations on the Kyoto Protocol’s Second Commitment Period

1. The state of negotiations on the Kyoto Protocol’s Second Commitment Period Workshop of the Lead Coordinators of the African Group of Negotiators on Climate Change Addis Ababa, 15 August 2012

2. History of the CP2 Negotiations • Mandate of the AWG-KP derived from Article 3.9 of the KP:“Commitments for subsequent periods for Parties included in Annex I shall be established in amendments to Annex B.. ..in accordance with the provisions of Article 21..”. The COP/MOP shall “..initiate the consideration of such commitments at least seven years before the end of the first commitment period.” • Progress so far has been very slow – levels of ambition are very low, and some countries have pulled out – Canada from the whole KP, Russia and Japan from CP2, and Australia and New Zealand are still sitting on the fence. • Agreement in Durban to start CP2 on 1 January 2013, butmany loose ends to be tied up, some very technical, which will have a big influence on the outcome.

3. Decisions reached in Durban re CP2 • Decision 1/CMP.7 clearly states that CP2 SHALL start on 1st January 2013. • This decision was reached with an understanding that: • The 2ndcommitment period of the KP will be implemented with comparable obligations for A1 Parties who will not participate in the CP2 • Issues on which decisions were reached in Durban, but require elaboration in Subsidiary Bodies are captured in decisions 2/CMP.7 to 5/CMP.7 (Secretariat producing technical paper, and workshop in Bonn in October) • The outcome of this SB process will have a significant impact on the effectiveness of CP2

4. What happened in Bonn2012? • The key issue was the presentation of QELROs by Annex I Parties, as agreed in Durban. Only a few Parties (mainly the EU) presented QELROs with enough information. Some Parties presented too little information, and others presented nothing (notably NZ and Australia). • The length of the commitment period was at the center of the discussions as well, specifically the 8 year proposal with a midterm review by the EU, with the G77+China divided on the issue • The surplus AAUs issue also formed part of the difficult issues to be resolved; and entry into force provisions of the CP2 discussed in informal consultations. • Discussion began on how to implement some of the Durban decisions, which would require further CMP decisions to enter into force. These discussions are taking place in the SBs, NOT in the AWG-KP.

5. Current State of Play – Politics • US never ratified the KP, Canada is pulling out, Japan and Russia will not participate in CP2. • New Zealand and Australia have not submitted their quantified emission limitation reduction objectives for CP2. • As a result, the CP2 will cover only a small percentage of global emissions, but keeping the system alive is now more important than the outcome in 2020. • The many ‘loose ends’, even those which have been agreed on, are still being negotiated, and not only in the AWG-KP. • Many complex linkages across Tracks • The key challenge is timing – resolving the remaining issues by the end of Doha, and avoiding postponement or obstruction by Parties which are not as keen on CP2 as we are.

6. What do we want from the CP2, and what can we still get? • Most important goals for Africa: • Ambitious enough emissions reductions from Annex I countries to avoid climate damage • A long-term, legally-binding comprehensive regime to enforce this • Funding/finance for adaptation, and also mitigation • We have lost the battle on ambition for pre 2020 – some Parties have ‘jumped ship’, others have not specified QELROs, and the QELROs on the table are too weak • Finance/funding will be dealt with in the other track • So the remaining GOALS for us are to: • Ensure that the rules are maintained, so that whatever comes afterwards can be built on this • Ensure that the remaining technical discussions and outcomes do not weaken the targets even more • Ensure that there are no legal barriers to CP2 starting on the 1st January 2013

7. Expectations for Doha All obstacles to CP2 to be removed, especially: • AWG-KP17 expected to finalize QELROs, length of the CP, surplus Assigned Amount Units, other necessary amendments including entry into force, mid-term review, and conclude its work. • The SBs to conclude work on Durban decisions where required for start of CP2. • CMP 8to adopt Amendment to Annex B of the KP and other amendments necessary for CP2 to enter into force, including those on the unresolved technical issues. Any additional decisions required from the work of the SBs to be taken as well.

8. Unresolved technical issuesOne –Commitment period length, review, ambition • Length of commitment period: 5 or 8 years • The EU wants 8, but many developing countries are afraid that this will lock in low levels of ambition to 2020. • Developing countries will therefore only accept an 8-year period on condition that the question of ambition is addressed • Mid-term review • Provision could be made for a mid-term review of levels of ambition, in response to the review under the Convention, and the latest science • In order for this to address the question of ambition, a process would have to follow whereby Annex I countries increased their levels of ambition in response to the review • Mechanism to increase ambition without ratification • Thisin turn would require an amendment to the KP to allow countries to increase their levels of ambition during the commitment period, without requiring ratification by all Parties

9. Unresolved technical issuesTwo – Carry-over, New Hot Air, QELROs • Carry-over of surplus AAUs from CP1 to CP2 • Africa Group and AOSIS position on this is very close • More work needed to develop a common position with Brazil • EU now wants more of their surplus units to be carried over • Africa Group position remains that carry-over should be limited to 1% of AAUs, with possible allowance for countries with special circumstances • Avoiding the creation of new hot air in CP2 • Amendment to KP is necessary to prevent this • Easiest way to do this is to amend Article 3.7 (which requires an amendment anyway, since it refers only to CP1), as proposed by AOSIS • QELROs need to be finalised by all Annex I Parties in CP2

10. Unresolved technical issuesThree –Market mechanisms • New Market mechanism (proposed by EU) • To be discussed under the LCA • Can only be agreed if levels of ambition are increased • Amendment to allow CP2 Parties to use mechanisms under the Convention to meet their KP commitments • Only to be considered if levels of ambition are increased

11. Unresolved technical issuesFour- Legal issues • Provisional application of amendments and legal entry into force “Decides that pending the entry into force of the amendments contained in the Annex to this decision, any Party may notify the Depositary of its intention to apply the amendments provisionally.  Invites Parties which due to limitations set out in their national legislation choose not to make such notification to the Depositary in relation to provisional application, to express their intention to be bound by the amendments contained in the annex to this decision with a view to providing legal certainty and facilitating the implementation of the Protocol pending the entry into force of the amendments.”

12. Deliberation under the SBs following from Durban CMP decisions • Durban CMP decisions require work under the SBs to implement (LULUCF, Gases, etc), which in many instances would require additional decisions • In Bonn, the Secretariat was mandated to draft a technical paper which would provide a clear picture of which additional decisions would be required • This to be discussed at a workshop in October in Bonn • Some of these decisions need to be agreed in Doha to allow CP2 to start on time • The way in which implementation occurs could provide additional loopholes and weaken ambition, and so this process needs to be followed closely.

13. Africa Group positionsBangkok & Doha • Much continuity on major issues – ambition, carry-over, length of CP, etc • Lack of detailed engagement and response in some technical issues: • These change all the time • They don’t ONLY happen in the AWG-KP (e.g. the SBs) • New positions can best be developed as these come up by KP co-ordination group in prep for Bangkok, and during Bangkok / Doha, for agreement by AG plenary

14. Thank You Questions?