Presentation at the study meeting on 23rd October 2011 by Tomoki Takahashi.

1. 2011/10/23 Tomoki Takahashi

2. Agenda
1. Introduction
2. Present Situation
a. COP16
b. AWG-LCA 14 1st session
c. AWG-LCA 14 2nd session
d. AWG-LCA 14 3rd session
3. Position of Countries

3. 1. Introduction

4. What is it?
Various approaches, including
opportunities for using markets, to enhance
the cost-effectiveness of, and to
promote, mitigation actions, bearing in
mind different circumstances of developed
and developing countries
→ TOO LONG!!!

5. Simply put…
New approach or mechanism
◎ Objective
enhancing the cost effectiveness of
promoting
mitigation actions
◎ Type
Market-based and Non-market based

6. In Bali Action Plan
(b) Enhanced national/international action on mitigation of
climate change, including, inter alia, consideration of:
(i) Measurable, reportable and verifiable nationally
・
・
・
(v) Various approaches, including opportunities for using
markets, to enhance the cost-effectiveness of, and to
promote, mitigation actions, bearing in mind different
circumstances of developed and developing countries;

7. 2. Present situation
a. COP16
b. AWG-LCA 14 1st session (Bangkok)
c. AWG-LCA 14 2nd session (Bonn)
d. AWG-LCA 14 3rd session (Panama)

8. COP16
The Conference of the Parties
(a) Decided to consider the establishment, at its 17th
session, of one or more market-based and one or more
non-market-based mechanisms
(b) Requested AWG-LCA to elaborate these mechanisms, with
a view to recommending draft decisions to the COP for
consideration at its 17th session
(c) Invited Parties and admitted observer organizations to
submit to the their views and information by 21 February
2011

9. COP16
Market-based mechanism takes into account
(a) Ensuring voluntary participation of Parties, supported by the
promotion of fair and equitable access for all Parties;
(b) Complementing other means of support for nationally
appropriate mitigation actions by developing country Parties;
(c) Stimulating mitigation across broad segments of the economy;
(d) Safeguarding environmental integrity;
(e) Ensuring a net decrease and/or avoidance of global greenhouse
gas emissions;
(f) Assisting developed country Parties to meet part of their
mitigation targets, while ensuring that the use of such a
mechanism or mechanisms is supplemental to domestic
mitigation efforts;
(g) Ensuring good governance and robust market functioning and
regulation;

10. AWG-LCA14 Bangkok
◎ COP16
Invitation of information on various approach from
Parties and admitted observer organizations
◎ AWG-LCA 14 1st session (Bangkok)
Synthesis Report
It synthesizes the information submitted by Parties and
admitted observer organizations.
1. Evaluation of existing mechanism
2. Possible evolution of market-based mechanisms
3. Possible evolution of non-market-based mechanisms

11. AWG-LCA14 Bangkok
◎ Summary of the report
1. Evaluation of existing mechanism
Market-based Non-market-based
Enhancing of the
○ ×
cost effectiveness
Promoting × ○
Market-based
CDM, JI, ETS…etc
Non-market-based
Feed-in-tariff, Regulation, Education…etc

12. AWG-LCA14 Bangkok
2. Possible evolution of market-based mechanisms
・Inadequacy of existing mechanisms
⇒ New mechanisms should be Build upon them
・ The base will be Trading or Crediting.
・Main focus is placed on national or bilateral
mechanisms. (The role of COP is help them)

13. AWG-LCA14 Bangkok
3. Possible evolution of non-market-based mechanisms
・Improved version of the existing mechanism
・Reducing or removing of emission-intensive activities
and enhancing of non-emission-intensive activities with
policy or finance
・Others specific approach (creating national center,
removing barrier of intellectual property)

14. AWG-LCA14 Bonn
 AWG-LCA 14 1st session (Bangkok)
Synthesis of the information submitted by Parties and
admitted observer organizations
 AWG-LCA 14 2nd session (Bonn)
Note by Facilitator
Reflection of the facilitator’ s assessment of issues to
be addressed by Parties for the fulfilment of Cancun
agreements

15. AWG-LCA14 Bonn
Contents
1. Possible structure of one or more
decisions on market-based
mechanisms
2. Possible structure of one or more
decisions on non-market-based
mechanisms
3. Possible work prior to COP 17

16. AWG-LCA14 Bonn
Possible structure of decisions
(a) Reference to consistency with Convention principles, guidance
from decision 1/CP.16, paragraph 80, and complementarity
with Kyoto Protocol mechanisms; (1,2)
(b) Consideration of eligibility criteria and a cap on using
offsets;(1)
(c) Elaboration of specific mechanism(s), with further guidance on
scope, characteristics and governance;(1,2)
(d) Elaboration of a framework under the Convention to guide the
bottom-up development of mechanisms by Parties;(1)
(e) Launch of work (process and timing) to develop modalities and
procedures for each new mechanism;(1,2)
(f) Consideration of the use of mechanisms being contingent on
legally binding targets reflecting increased levels of ambition
(e.g. under a second commitment period of the Kyoto Protocol
or equivalent).(1)

17. AWG-LCA14 Bonn
Possible work prior to COP17
The Need for
Technical workshop
Technical Papers

18. AWG-LCA14 Panama
 AWG-LCA 14 2nd session (Bonn)
Reflection of the facilitator’ s assessment of issues to
be addressed by Parties for the fulfilment of Cancun
agreements
 AWG-LCA 14 3rd session (Panama)
Parties Compilation
Summary of the submission from Parties and
organizations and the base of discussion in COP17

19. AWG-LCA 14 Panama
 Parties Compilation
Option 1
(146 paragraphs)
Option 2
147. Decides to consider, at the eighteenth session
of the Conference of the Parties, the establishment
of various approaches, including opportunities for
using markets, to enhance the cost-effectiveness of,
and to promote, mitigation actions, bearing in mind
different circumstances of developed and developing
countries;
Option 3
148. No decision on this matter.

20. AWG-LCA 14 Panama
Not Summarized yet…
16. Stimulating mitigation across broad segments of the
economy;
17. Stimulating mitigation across broad segments of the
economy, which constitute a significant proportion of a
country’s emissions or a significant proportion of a country’s
GDP, and can contain sectors or subsectors;
⇒ It will be summarized before COP17 and used as the base
of discussion.

21. 3. Position of Countries

22. Market-based Mechanism
Supporters
◎ Common View
・Considering different circumstances of countries
・Need for financing and technology transfer
・Importance of environmental integrity
・complement of existing market-based mechanism…etc
◎ Different View
・Wide range or Strict rules?
・Schedule
Opponents

23. Wide range or Strict rule?
◎ Supporters of a wide range of mechanisms
Australia
・All Parties to the Convention should have full access to
expanded and improved market mechanisms to achieve their
mitigation actions and commitments.
・The post-2012 framework should accommodate a broad
range of potential market mechanisms to harness all
possible mitigation opportunities.
Japan
・ New market-based mechanisms should allow wide
spectrum of approaches,
・ Market-based mechanisms provide opportunities to
reduce GHG emissions in the area where the abatement
costs are relatively low.

24. Wide range or Strict rule?
◎ Supporters of a wide range of mechanisms
Republic of Korea
・ However, such rigorous MRV may be prohibitively costly
and time-consuming or simply infeasible with regard to large-
scale mitigation actions, for the interactions among mitigation
actions will make it much more complicated to identify the
pure reduction/avoidance of those actions.

25. Wide range or Strict rule?
◎ Supporters of strict rules
AOSIS(Alliance of Small Island States)
・ ambitious, legally-binding emission reduction
targets, taken at the international level, are essential to drive
a global carbon market
・ stringent baselines for new participants are essential,
・ inventories must be
transparent, consistent, comparable, complete and accurate
for the sectors
Poland (on behalf of the EU and its member States)
・ the units resulting from the new market-based
mechanisms need to represent real, measurable, verifiable
and additional emission reductions.

26. Wide range or Strict rule?
◎ Supporters of strict rules
China
・ Emission reduction commitments of the developed country
Parties shall be achieved mainly through domestic efforts
and the market-based mechanism could only play a
complementary role.
Saudi Arabia
・ There must be an agreed maximum percentage of total
mitigation by Annex I countries (measured by total GHG
reduction) that can be undertaken outside national borders.
・ Lower cost mitigation opportunities (low hanging fruits)
should be left for the developing countries, as part of their
voluntary endeavor to contribute to the global mitigation
effort.

27. Schedule
Poland (on behalf of the EU and its member States)
・The EU looks forward to the establishment at COP 17 in
Durban of a new market-based mechanism for developing
countries consisting of a common core set of rules and
procedures at the international level.
Japan
・Parties should aim to adopting at the COP17 decisions
which will provide directions on the new mechanisms
Peru
・Peru also proposes to explore, develop and implement the
contents of these approaches, including its modalities and
procedures established no further than COP18.

28. Opposing view
Bolivia
・The issue of new market mechanisms is one of the critical
elements why Bolivia rejected the draft Decision of Cancun.
・In none of the contact groups there was a clear
negotiation, much less even an acceptance, of these issues.
・Any kind of carbon markets are unacceptable, because
they are against the integrity of climate policy, and only
worsen the actual climate crisis.
Venezuela
・They are simply a means for shifting the burden of
mitigation from developed to developing countries.

29. Reference
・FCCC/AWGLCA/2011/4
・Note by the Facilitator (Bonn)
・FCCC/AWGLCA/2011/MISC.2
・FCCC/AWGLCA/2011/MISC.2/Add.4
・FCCC/AWGLCA/2011/MISC.3
・Parties. Compilation (Panama)

30. Thank you for listening!