New Trends in UNFCCC Negotiations: Mitigation Agenda Update and Key Challenges for Developing Countries

1. ecbi Mitigation GHG emissions What is new in the UNFCCC negotiations? Sandra FREITAS european capacity building initiative initiative européenne de renforcement des capacités for sustained capacity building in support of international climate change negotiations pour un renforcement durable des capacités en appui aux négociations internationales sur les changements climatiques

2. Overview • Update of the mitigation agenda under • The AWG-KP and • The AWG-LCA • Key challenges on the way toward Durban and what at stake for developing countries?

3. The mitigation agenda AWG - KP AWG - LCA Enhanced action on mitigation (1bi to 1bvi of the BAP) Nationally appropriate mitigation commitments or actions by developed country Parties Nationally Appropriate mitigation actions by developing countries REDD+ Cooperative sectoral approaches and sector specific actions Markets Economic and social consequences of response measures Further commitments for Annex I Parties under the KP (2nd commitment period) • Amendments to the KPI • Improvement of LULUCF rules • Emissions trading and project-based mechanisms (CDM & JI) • Methodological issues • Potential environmental, economics and social consequences, including spill over effects, of tools, policies, measures and methodologies

4. The KP mitigation agenda

5. The second commitment period – Where we stand Cancun Agreements: two decisions under AWG-KP • 1/CMP.6 – Outcome of the work of the AWG-KP at its sixteenth session • 2/CMP.6 - Land use, land-use change and forestry • Draft decisions on mechanisms, baskets and potential consequences for continued negotiation

6. The second commitment period - where we stand • The Cancun Agreement: “agrees that the AWG – KP shall aim to complete its work pursuant to decision adopted”in 2005 in Montreal “as early as possible and in time to ensure no gap between the first and the second commitment period of the KP” (1/CMP.6) • Agreed on using 1990 as base year; reaffirmed use of IPCC aggregate target of 25-40% reduction by 2020. • AWG-KP 16a Bangkok – • AWG-KP 16b June in Bonn , introduction of a revised proposal by the chair -, CRP.1 document, to facilitate negotiations.

7. Strategic technical issues • Ensuring there is no gap between the first and second commitment period • Time is running out to ensure the commitment periods follow each other consecutively, therefore discussions on provisional application of KP need to be considered. • Avoid the gap between first and second CP : Proposed to be applied “to all Parties immediately upon the conclusion of the first commitment period under Article 3, paragraph 1, of the KP, and shall continue to apply on a provisional basis until the entry into force of the amendments for each Party” • Amendments to the KP • Agreeing on Annex I parties’ aggregate and individual QELROs • Amending other articles in the KP to include for example: new gases; increase the share of proceeds to other mechanisms (JI and ETS); addressing the issue of carry-over of surplus emissions (from Russia, Belarus, Ukraine and Eastern Europe). • Two countries (Russian Federation and Japan) have written to UNFCCC stating they will not take further targets under the 2nd commitment period of the KP • LULUCF • How to ensure the rules are agreed before the target and not delaying action to ratify the second commitment period

8. Amendments to the KP and pending issues • How to raise the level of ambition of Annex I mitigation targets • The length of the commitment period – 2013-2017 or 2013-2020 • The aggregate reduction by Annex I parties – 25%; 30%; 45%; X% by 2020 and 80%; 95%; X% by 2050. • Assessment of the implications of the carry-over of assigned amount units to the CPII on the scale of emission reductions to be achieved by AI Parties in aggregate for the CPII: SB 37 to recommend appropriate actions to be taken by CMP 8 • Limiting the amount of LULUCF credits that can be used to meet targets (proposal by AOSIS) • Whether units derived under KP mechanisms can be used by any Party to the Convention • New market mechanism – including sectoral mechanism • Increasing share of proceeds for other mechanisms – Joint Implementation and Emissions Trading System • Non-Annex I targets - allows non-Annex I countries to take on targets in some sectors of their economy. • New gases added to Annex A: Nitrogen trifluoride (NF3); Trifluoromethyl sulphur pentafluoride (SF5CF3); Fluorinated ethers (HFEs); Perfluoropolyethers - Perfluoropolymethylisopropyl ether (PFPMIE)

9. Land Use, Land Use Change and Forestry • Cancun Agreement decision asked Party’s to submit their preferred accounting option (reference level) for forest management by 28 February 2011 • All KP Annex I countries submitted their reference levels – most countries wanted projected reference level 2013-2020; Japan – continuation of current KP rules; Norway, Russia, Belarus, Ukraine – similar to accounting other emissions i.e. net-net against 1990. • In May, these reference levels went through expert review process • Expert reviewed reference level for due in August/September • A number of decisions will be needed in Durban: • On whether to include harvested wood products • How to exclude emissions from natural disturbance events such as fires or extreme storms • Which accounting option for forest management will be agreed • A number of countries have set their conditions for their 2020 on the outcome of the LULUCF rules such as Russia and New Zealand. • Tuvalu and AOSIS have proposed a cap on the amount of credits from LULUCF to ensure these credits do not undermine the emission reductions necessary to meet the climate goal.

10. FLEXIBLE MECHANISMSEmissions trading and the project-based mechanisms • Cancun Agreements affirmed the use of emissions trading and the project-based mechanisms under the Kyoto Protocol shall continue to be available to Annex I Parties as a means to meet their quantified emission limitation and reduction objectives 1/CMP.6 • Key issues for Clean Development Mechanism: • If the units can continue to be created after 31 December 2012 and if only KP Parties can use units or others that have not ratified the 2nd commitment period • Whether nuclear activities are allowed (CCS activities are being discussed under the SBSTA in accordance with decision 7/CMP.6) • Whether discount factors should be used for certain projects • Key issues for Joint Implementation: whether to allow nuclear activities • Other issues • To allow carry-over or banking which relates to Article 3.13 of the Kyoto Protocol (surplus emissions) • Share of proceeds for units for the Adaptation Fund • Emissions trading and new market based mechanisms • Supplementarity – creating a level of required domestic action and how much (X or 30%) can be used by the flexible mechanisms • Standardized baselines in the CDM is under consideration by the CDM Executive Board

11. FLEXIBLE MECHANISMSEmissions trading and the project-based mechanisms • Other issues that may be considered in other foras • Use of CERs from project activities in certain host Parties: • Use of CERs from project activities in certain host countries: LDCs, SIDS and Africa or in developing countries with reporting obligation and request the EB to include update on actions taken relating these measures in its annual reports • For the period after 2012, if there is no satisfactory international agreement which increases the EU emissions reduction target to 30%, the limit on CDM will be from CERs from projects registered before 2012 by a CDM host country or, if registered after 2012, only from projects in Least Developed Countries (LDCs). • Standardized baselines in the CDM is under consideration by the CDM Executive Board • Co-benefits still to be considered by CDM EB and JI Supervisory Committee

12. METHODOLOGICAL ISSUES • There are now 2 options in this draft decision text • New gases : links to amendment of Annex A on including new gases and the updated emissions of these gases in the IPCC AR4 (table 2.14 of the Errata to the contribution of WGI to AR4) • Common metrics: the issue of whether to continue to use Global Warming Potential (GWP) (as in the IPCC’s AR4) or alternative metrics such as Global Temperature Potential (GTP). GTP is still in its infancy and this draft decisions requests more work on this matter. • Application of the 2006 IPCC guidelines: consistent with the revised UNFCCC AI reporting guidelines to be adopted through the process for regular use starting in 2015 and the supplementary methodologies for LULUCF • Cross cutting issues: SBSTA to assess implications of actions that guide the reporting issues and address any transitional issues arising from actions taken.

13. POTENTIAL CONSEQUENCES • AI are urged to support NAI to strengthen institutional capacity and regular framework to better understand the potential consequences ( anticipation, attribution and quantification of potential consequences) • Deepen understanding by : • Regular and systematic provision by all Parties of information on potential and observed impacts of policies and measures via NATCOM • Assessment of potential and observed impact by relevant national institutions, international organization, UNFCCC • Two options are considered here: to establish a permanent forum or use existing channels, including NATCOM and report on observe impacts and specific needs and concerns relating to social, environmental and economic consequences of mitigation actions taken by Parties. • A forum on response measures was held at SB34 and will continue at SB35 in accordance with paragraph 93 of decision 1/CP.16 – however this calls for a permanent forum.

14. The LCA mitigation agenda

15. The Cancun Agreement

16. Mitigation action by developed countries • The Cancun Agreements called for proposed targets to be compiled in document FCCC/SB/2010/INF.1 • many countries pledged target with differentiation between unilateral pledge and conditional pledge • wide range of reference years from 1990/1992/2000 and 2005 • often unclarity of applied rules (e.g. LULUCF, use of flexible mechanism units ) • Workshops held in Bangkok and Bonn to clarify assumptions and conditions, further workshops to be decided and to call for increased ambition

17. Developed country reporting: biennial reports • Parties are required to develop text on biennial reports and International Assessment and Review (IAR) for agreement in Durban. • Issue of developing text on IAR is to have clarity on what will actually be reviewed. • Furthermore, the KP has extensive decisions on MRV and the Cancun Agreements decided to enhance the provisions on MRV for Annex I countries. It is essential that the KP provisions are not weakened. • Possible elements • Progress in achieving emission reductions • Mitigation actions to achieve targets and emission reductions achieved • Projected emissions • Provision of financial, technology and CB support to developing countries • Timeline • Guidelines and modalities to be completed ( part of the revision of guidelines and modalities for NATCOM) by Durban • Submissions of biennial reports: 2012, 2013 – should be done biennial and next AI national communications are due on 1 January 2014.

18. Developed country reporting: International Assessment and Review Cancun Agreement established a process for IAR under the SBI • Parties are invited to consider modalities and procedures for IAR • Many different views on IAR – some don’t want comprehensive ERT process and compliance committee review of national inventories and others want to keep existing systems and experience under the KP. Build on enhanced review processes currently in place, address comparability of efforts among developed countries, build confidence that actions implemented are in line with pledges , ensure information provided is complete, comparable, transparent and accurate. • Inputs to IAR: biennials reports, NATCOM, reports prepared by expert review team as part of reviews of annual GHG inventories ; use of existing roster of experts for the purpose of in depth review and assessment • Further work needed on : accounting rules, process of assessing compliance and/or addressing non compliance vs. facilitative process guide by principles like : non intrusive, non confrontational, non punitive • Distinction between IAR and ICA: includes compliance; addressing LULUCF and Market mechanisms

19. Mitigation action by developing countries • The Cancun Agreements called for proposed NAMAs to be compiled in document FCCC/AWGLCA/2011/INF.1 • 48 countries are included in the Compilation of information on NAMAs to be implemented • wide range of proposals from nation-wide to project based • Range of reductions from reduction targets against per unit of GDP; reductions which deviate from business-as-usual scenarios; absolute reductions against a base year; and some countries with specification • no specification of support required to implement proposed actions, however most set financial support as a condition for implementation • Most countries outlined which sector they would like to undertake NAMAs: Energy, Industrial, Transport, Agriculture, Forestry and Waste. • A small group of countries want to continue to use the CDM under the Kyoto Protocol to meet their reduction pledges • Workshops held in Bangkok and Bonn to clarify assumptions and conditions • Registry with NAMAs to be established by the secretariat

20. Mitigation action by developing countries – The registry Latest discussion focused on clarifications needed to allow the registry to meet its objective in terms of content, input and modalities for the facilitation of support (and assessment of support gap) • Registry considered as a place to register NAMAs and to receive support from developed countries • Modalities of support, including discussion on various sources of fund inside and outside of the Convention? • Support for both the preparation and implementation of NAMAs? • Actions, programs and policies to be submitted in the registry and deliverable would be implementation of the actions, rather than emissions reduction (although information on emissions reduction could be presented in the registry) ? • Role of registry as MRV mechanism, especially in regard of MRV of support? • Need to have a process of recognition or are actions recognized upon submissions ? • Type of tool: web data base or more than that? • Template to be proposed by the secretariat

21. Developing country reporting: biennial reports • Scope and content of biennial update reports (BURs) • updates of national GHG inventories • national inventory report • information on mitigation actions • needs and support received • Difference to developed countries biennial reports: • Need for flexibility in reporting respect to countries capability ( layered approach and differential timetable) • Developing countries BURs shouldn't be more onerous in terms of content, frequency than those of developed countries • Way forward: submissions of views, GEF to provide a report outlining ways in which the support could be provided and expert meetings

22. Developed country reporting: International Consultations and Analysis • International Consultation and Analysis (ICA) is much more advanced than (IAR) as this was included in the Copenhagen Accord and discussed in 2010. • Cancun Agreement decides to conduct ICA of biennial reports under the SBI the international consultations and analysis will aim to increase transparency of mitigation actions and their effects, through analysis by technical experts in consultation with the Party concerned and through a facilitative sharing of views, and will result in a summary report • Non intrusive, non punitive and respectful of countries national sovereignty • Objective is to increase transparency of mitigation actions through a facilitative information sharing process which also seeks to build capacity in developing countries through analysis by technical experts • Issues to be addressed: • Voluntary process or subjection to the commitment by all developing countries under the UNFCCC? • Timeline for ICA: will it be biennial? • Process: technical analysis and international consultation or international and technical analysis?

23. Key challenges on the way to Durban • The road to a successful Durban is paved with several obstacles related to the future of Kyoto, inscribing the targets in a legally-binding agreement, finance and adaptation… • What type of MRV systems will be developed for both AI and non AI countries will impact on the environmental integrity of the climate regime • Developed countries need to increase their level of ambition urgently • Developing countries should be empowered and assisted to shape their NAMAs and develop a framework to support actions from the ground up, • Scaling up early actions will contribute to quickly achieve reductions from BAU and to inform the negotiations on NAMAs.   • The progress shown by many developing countries in designing early mitigation actions is promising and essential to meet the climate goal

24. Welcome fruitful exchanges Thank you.